US pharmacy chain Rite Aid Corp. announced plans to close more locations and filed for bankruptcy in an effort to reorganise debt.
Rite Aid stated in a statement that it has acquired a commitment for $3.45 billion in additional funding from certain lenders as part of a court-supervised procedure, without providing any details. In addition, it announced that it had reached a restructuring agreement with holders of its senior secured notes and named Jeffrey S. Stein as its CEO, citing his track record of turning around businesses.
It released a statement stating, “This financing is expected to provide sufficient liquidity to support the company throughout this process.”
The chain, which is headquartered in Philadelphia, Pennsylvania, has been struggling with more than $3 billion in long-term debt. After the US government claimed to have filled illegal prescriptions for opioid pills, the issue got worse.
Low-Grade
Low-Grade
In August, S&P Global Ratings further downgraded the company, citing “potentially significant” claims from opioid litigation and a heavy debt load expiring from 2025.
Numerous national drugstore chains, such as Walgreens Boots Alliance Inc. and CVS Health Corp., have already consented to pay substantial fines for their roles in the opioid crisis. The two companies agreed to pay more than $10 billion in settlements with over a dozen states late last year.
Rite Aid listed $1 billion to $10 billion in assets and liabilities in its Chapter 11 bankruptcy case filed on October 15. The business said that money will be available for disbursement to unsecured creditors and claimed that it had over 100,000 creditors.
Based on trade-payable claims totaling approximately $667.6 million, McKesson Corp. is the largest unsecured, non-insider creditor, according to the filings.
Rite Aid declared that it would complete the restructuring deal under the supervision of the court. It would put it into effect right away.
MedImpact Healthcare Systems Inc. will purchase all of Rite Aid’s Elixir Solutions division.
