Lenders to Cirque du Soleil Entertainment Group are working on an offer to replace the bid made by TPG and other shareholders of the company, which is restructuring under bankruptcy protection.

The lenders are set to present a binding “credit bid” to a committee of Cirque’s board by Tuesday, a court hearing was told Friday. Credit bidding involves canceling outstanding debt as part of an offer to acquire a debtor’s assets. Cirque’s creditors have said previously they would also be willing to inject as much as $375 million to help the company restart.

Montreal-based Cirque filed for protection in Canada last week after the coronavirus pandemic forced it to close shows around the world, triggering a fight for control of one of the best-known brands in live performance.

The company had entered into a stalking-horse agreement with its existing shareholders -- including TPG, China’s Fosun International Ltd. and Caisse de Depot et Placement du Quebec -- for a $300 million capital injection. The creditors’ group rejected that offer, which would have left them with a 45% equity stake.

A stalking horse bid sets a minimum bar for other bidders. If approved by the Cirque committee, the creditors’ offer would head for a court hearing on July 17.

As of March 31, Cirque owed its first lien creditors $901 million and its second lien creditors $154 million. It also owed $32 million to the Caisse and an equal amount to Fonds de solidarite des travailleurs du Quebec.

Cirque had $1.47 billion in liabilities at the end of 2019, about five times shareholders’ equity.

Quebecor Inc. and Cirque founder Guy Laliberte have expressed interest in investing in the company.