Rite Aid (NYSE:RAD) stock is on the move Monday after the pharmacy chain filed for Chapter 11 bankruptcy protection in New Jersey.
The bankruptcy filing from the company comes as it plans to use the period to undergo a restructuring. To assist it with this process, Rite Aid has announced that Jeffrey Stein is its new CEO. He’s also serving as its Chief Restructuring Officer and has joined the board of directors.
Rite Aid is going through this bankruptcy process for a few reasons. That includes slowing sales, as well as the fallout of opioid litigation. The company will use the bankruptcy to deal with these issues, which will include a store footprint optimization plan.
Rite Aid notes that it has already secured financing of $3.45 billion to support it throughout the bankruptcy filing. The company also expects additional money to come from its planned sale of Elixir Solutions to MedImpact.
Management Commentary on the RAD Stock Bankruptcy
Stein said the following about the Rite Aid bankruptcy filing in a press release:
“With the support of our lenders, we look forward to strengthening our financial foundation, advancing our transformation initiatives and accelerating the execution of our turnaround strategy. In doing so, we will be even better able to deliver the healthcare products and services our customers and their families rely on – now and into the future.”
RAD stock is down 5.6% as of Monday morning and is down 80.6% since the start of the year.
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On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
