Rite Aid Wednesday afternoon disclosed it was no longer in compliance with New York Stock Exchange “continued listing standards” and needs to take measures to boost its share price to regain good standing.
The price of Rite Aid shares was trading at less than 55 cents a share Wednesday afternoon as the drugstore chain struggles financially amid reports a bankruptcy restructuring and hundreds of store closures loom.
“Under the NYSE rules, the company is provided with certain cure periods and the company’s common stock will continue to be listed and traded on the NYSE during the cure periods, subject to the company’s compliance with other continued listing requirements,” Rite Aid said Wednesday in a statement. “The current noncompliance with the NYSE listing standards does not affect the company’s ongoing business operations or its U.S. Securities and Exchange Commission reporting requirements, nor does it trigger any violation of its material debt or other obligations.”
Rite Aid, which operates more than 2,200 drugstores across 17 states, has been losing money for several years now and closing scores of unprofitable stores in hopes of improving operations. There have also been recent media reports that Rite Aid is considering renegotiating with creditors regarding terms of a bankruptcy plan.
On Wednesday, Rite Aid said it was looking at several options.
“The company has been engaged in reviewing and continues to review strategic alternatives to recapitalize, refinance or otherwise optimize its capital structure, which may ultimately result in the company pursuing one or more significant corporate transactions or other remedial measures,” Rite Aid said. “The ongoing review includes an evaluation of available options to regain compliance with the NYSE’s continued listing standards. The company can provide no assurances that it will be able to regain compliance with the NYSE’s continued listing standards or otherwise and maintain the listing of its shares on the NYSE or the results of the ongoing review.”
It’s not the first time Rite Aid has faced delisting from the NYSE.
In 2019, Rite Aid shareholders approved a “reverse stock split” in an effort to keep the company’s stock from being delisted by the NYSE. Back then, Rite Aid’s share price had plummeted to less than $1 following two failed mergers that contributed to the demise of CEO John Standley.
Rite Aid is now operating with its second CEO since the Standley era. Rite Aid is now run by interim chief executive Elizabeth “Busy” Burr, who replaced Heyward Donigan in January.
Rite Aid on June 29 reported a quarterly loss of more than $306 million as the drugstore chain grapples with the loss of customers from its Elixir pharmacy benefit business. Rite Aid, which has closed more than 140 unprofitable stores in the last two years, reported a fiscal first quarter loss of $306.7 million, or $5.56 per share, for the period ended June 3, 2023. That compares with a loss of $110.2 million, or $2.03 per share in last year’s first quarter.
Read the full article here
