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PHILADELPHIA — Rite Aid Corp. announced Tuesday that it has received approvals from the U.S. Bankruptcy Court for the District of New Jersey for its “First Day” motions related to the company’s voluntary Chapter 11 petitions filed on October 15, 2023.
Jeffrey Stein
The Court granted interim approval to access up to $3.45 billion in debtor-in-possession financing from certain of its lenders. This financing is expected to provide sufficient liquidity to support the Company throughout this process. Among other things, the Court has authorized the Company to continue to pay associate wages, salaries and benefits without interruption, pay vendors and suppliers in full for goods and services provided on or after the filing date of October 15, 2023, and otherwise continue to deliver leading healthcare products and services across its retail and online platforms.
“We are pleased to have received Court approval of these critical First Day motions, which will enable Rite Aid to continue serving our customers and meeting their pharmacy needs throughout this process,” said Jeffrey Stein, chief executive officer and chief restructuring officer of Rite Aid. “With the support of certain of our lenders and the majority of our bondholders, we look forward to moving through this process and emerging as a stronger company, well-positioned for long-term success. We thank our associates, partners, suppliers and vendors for their continued support and our associates for their hard work and dedication.”
As previously announced, Rite Aid reached an agreement in principle with certain of its senior secured noteholders on the terms of a financial restructuring plan that will allow the Company to accelerate its ongoing business transformation. Implementing the contemplated restructuring plan will significantly reduce the Company’s debt, increase its financial flexibility and enable it to execute on key initiatives.
Additionally, as previously announced, Rite Aid has also entered into an agreement with MedImpact Healthcare Systems, Inc. (“MedImpact”), an independent pharmacy benefit solutions company, pursuant to which MedImpact will acquire Rite Aids’ Elixir Solutions business. Under the terms of the agreement, MedImpact will serve as the “stalking horse bidder” in a court-supervised sale process under section 363 of the U.S. Bankruptcy Code. Accordingly, the proposed transaction is subject to higher and better offers, court approval and other customary conditions.
Elixir Solutions is operating normally and continuing to serve clients, plan sponsors, members and customers as usual. Elixir Insurance is not included in Rite Aid’s Chapter 11 process or the proposed transaction with MedImpact, and it is continuing to operate and serve members as usual.
Rite Aid said it had received a commitment of $3.45 billion from some creditors and lenders to support its business operations as it restructures. In one of the court filings, the retailer also supplied a list of 347 stores with unexpired leases that it said it wants to exit. The locations span the country and include closings in New York; Los Angeles; Las Vegas; San Diego; Toledo, Ohio; Pittsburgh; and Portland, Oregon.
Rite Aid said its “store-portfolio rationalization process has accelerated in recent months,” and that during the 12 months ended Sept. 30 it had closed 210 stores. It was unclear if all or any of those 210 stores are part of the 347 Rite Aid said it wants to exit leases.
