Rite Aid files for bankruptcy again amid financial woes
The retailer intends to engage in a strategic sale process aimed at maximising value and initiated voluntary Chapter 11 proceedings within the US Bankruptcy Court for the District of New Jersey to aid this process.
During this process, Rite Aid customers can continue to access pharmacy services and products both in-store and online, which includes prescription fulfilment and immunisations.
The company is also working to transfer customer prescriptions to other pharmacies.
Rite Aid CEO Matt Schroeder said: 'While we have continued to face financial challenges, intensified by the rapidly evolving retail and healthcare landscapes in which we operate, we are encouraged by meaningful interest from a number of potential national and regional strategic acquirors.
"As we move forward, our key priorities are ensuring uninterrupted pharmacy services for our customers and preserving jobs for as many associates as possible.'
To facilitate its ongoing sale process, Rite Aid has obtained commitments from some current lenders to provide $1.94bn in new financing.
This funding is expected to be adequate when combined with cash flow from operations throughout the court-supervised sale process.
Additionally, Rite Aid plans to sell or capitalise on any assets not disposed of through the court-supervised procedure.
In order to maintain business operations during this period, the retailer has sought approval from the court for several standard motions, including the continued provision of employee wages and benefits.
An internal letter was issued by Schroeder to inform Rite Aid employees about impending job reductions after unsuccessful attempts at securing further financing from lenders, reported Bloomberg News.
Rite Aid employees will retain their pay and benefits throughout the bankruptcy proceeding.
Previously in October 2023, Rite Aid filed for Chapter 11 protection after disclosing losses amounting to $750m for the preceding fiscal year.
The prior bankruptcy allowed the company to reduce $2bn in debt, shut down numerous stores, sell its pharmacy benefit management business Elixir, and reach settlements with lenders, drug distribution partner McKesson, and other creditors.
Moreover, that bankruptcy addressed numerous lawsuits accusing Rite Aid of neglecting warning signs while dispensing questionable prescriptions for addictive opioid pain medications.
"Rite Aid files for bankruptcy again amid financial woes" was originally created and published by Retail Insight Network, a GlobalData owned brand.
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