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Secures Interim Approval to Access Up to $3.45 Billion in Debtor-in-Possession Financing
Continues to Serve Customers and Deliver Healthcare Products and Services Across Retail and Online Platforms
Rite Aid Corporation (OTC:RADCQ) ("Rite Aid" or the "Company") today announced 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.
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 S. 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.
Additional Information
Additional information regarding the Company's court-supervised process is available at www.riteaidrestructuring.com. Court filings and other information related to the proceedings are available on a separate website administrated by the Company's claims agent, Kroll, at https://restructuring.ra.kroll.com/RiteAid; by calling Kroll toll-free at (844) 274-2766, or (646) 440-4878 for calls originating outside of the U.S. or Canada; or by emailing Kroll at RiteAidInfo@ra.kroll.com.
Kirkland & Ellis LLP is serving as legal advisor, Guggenheim Securities is serving as investment banker and Alvarez & Marsal is serving as transformation officer and financial advisor to the Company.
