American drugstore chain, Rite Aid has filed for bankruptcy. They have also put up parts of their business for sale as an attempt to restructure while dealing with losses and opioid-related lawsuits.
Rite Aid stores would still fill prescriptions while it goes through the Chapter 11 process, but it would be able to close all underperforming stores.
Going through Chapter 11 will help “significantly reduce the company’s debt” while assisting to “resolve litigation claims in an equitable manner,” Rite Aid late Sunday.
The Pharmacy chain has been dealing with annual losses for several years and they have closed multiple drug stores across the country.
It has said it expects a net loss of as much as $680 million in the current fiscal year, which will end next spring.
The company’s filing in the U.S. Bankruptcy Court in New Jersey listed $8.6 billion in total debts and $7.6 billion in assets.
The company also said it obtained $3.45 billion in fresh financing from some of its lenders, which will help support the company through the Chapter 11 process.
According to Rite Aid, they are working on a plan to restructure their financial situation.
Gabelli Funds portfolio manager Jeff Jonas expects the company to close several hundred locations.
“All those people will get new jobs immediately,” he said. “You hate to say that someone’s bankruptcy is a positive, but it kind of is.”
A few years ago, Rite Aid braced up its share price with a 1-for-20 reverse stock split that took more than a billion shares off the market, but it has dwindled over the years.
