(Bloomberg) – According to people who know the situation, Rite Aid Corp. has low cash and is preparing to sell its own Chapter 2 bankruptcy in Chapter 2, less than a year after Chapter 11 appears.
Retailers with liquidity shortages are seeking a debtor loan to fund themselves in the process, people say. The process may see certain locations in certain areas sold to bidders, and areas that are not sold will be completely tormented.
Some say the company is working with Guggenheim Securities for help.
When Guggenheim declined to comment, a Rite Aid representative did not immediately respond to a request for comment.
Rite Aid is one of many retail companies that have been struggling for the past two years as consumers reduce spending due to inflation and higher interest rates. Fabric and Crafts retailer Joann Inc. won court approval in February after filing Chapter 11 for the second time in a year. Party City Holdco Inc. also filed for bankruptcy last year two years after its first reorganization.
According to Bloomberg, in March, Rite Aid held talks with the provider’s asset-based loan to fully access the facility as it requires cash to replenish inventory. In exchange, the company promises to achieve certain financial and operational goals and is expected to close more locations.
Rite Aid emerged from bankruptcy in September after closing hundreds of stores in September, cutting about $2 billion in debt in the process and addressing its role in the opioid pandemic. The company was taken over by creditors and received about $2.5 billion in exit financing to support its business.
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