- Rite Aid Corporation is proceeding with a financial restructuring plan under Chapter 11, aiming to reduce debt and increase financial flexibility.
- Rite Aid has acquired $3.45 billion in new financing to support its transformation.
- Jeffrey S. Stein has been appointed as the new CEO and Chief Restructuring Officer of Rite Aid.
- MedImpact is set to acquire Rite Aid’s Elixir Solutions business, which is not included in the Chapter 11 process.
As part of its business transformation, Rite Aid Corporation has announced an agreement in principle with senior secured noteholders for a financial restructuring plan under Chapter 11 of the U.S. Bankruptcy Code. This move will significantly reduce the company’s debt and increase financial flexibility, fostering progress on key initiatives.
Despite this, Rite Aid continues to offer healthcare services across its retail and online platforms to its nearly one million daily customers. The company is leveraging the court-supervised process as a forum to accelerate its store footprint optimization plan, resolve litigation claims equitably, and access additional liquidity.
Coinciding with the restructuring process, Rite Aid has procured a $3.45 billion commitment from its lenders. This financing will enable the company to maintain operational liquidity throughout its transformation.
In leadership news, Rite Aid has appointed Jeffrey S. Stein as its new CEO, Chief Restructuring Officer, and board member. Mr. Stein replaces interim CEO Elizabeth Burr, who will remain on the board. Stein has expressed his determination to advance the company’s transformation initiatives and turnaround strategy to ensure Rite Aid’s continued delivery of healthcare products and services in the future.
As part of the restructuring plan, Rite Aid plans to close additional underperforming stores and reduce its rent expense, thereby enhancing its overall financial performance. A&G Realty Partners will assist with this store closing and lease restructuring program.
Rite Aid is also set to part with its Elixir Solutions business. MedImpact Healthcare Systems, Inc., an independent pharmacy benefit solutions company, will acquire Elixir Solutions after acting as the “stalking horse bidder” in a court-supervised sale process. Elixir Insurance remains unaffected by this transaction or the Chapter 11 process.
Kirkland & Ellis LLP, Guggenheim Securities, and Alvarez & Marsal are serving as advisors to Rite Aid during its restructuring.