Rite Aid filed for Chapter 11 bankruptcy on Sunday, a move that would halt lawsuits the drugstore chain is facing over its alleged role in the US opioid crisis, and named a new chief executive.
The company said it has received a commitment for $3.45 billion in new financing from some of its lenders, which will provide enough liquidity to support it through the bankruptcy process.
The Chapter 11 filing will also allow Rite Aid to resolve litigation claims in an “equitable manner”.
Apart from the opioid lawsuits, the pharmacy chain has been struggling with total debts of $8.6 billion as of June 3, according to a court filing with the US Bankruptcy Court for the District of New Jersey, some of which is due to be repaid in 2025. Rite Aid also listed total assets of $7.65 billion.
Rite Aid appointed Jeffrey Stein as its new chief executive and chief restructuring officer, replacing interim chief Elizabeth Burr.
Mr Stein has been appointed to the company's board and Ms Burr will also remain on the board, it said.
Rite Aid will close more of its underperforming stores and will transfer employees at affected stores to other locations where possible, the company said, without providing further details.
Along with other pharmacy chains, Rite Aid has been named as a defendant in lawsuits that alleged they helped to fuel the opioid crisis in the US.
The US Department of Justice sued Rite Aid, accusing it of missing “red flags” as it illegally filled hundreds of thousands of prescriptions for controlled substances, including opioids.
The company operates more than 2,000 retail stores across 17 states in the US, although it is much smaller than rivals such as Walgreens Boots Alliance and CVS Health.
The Chapter 11 filing makes Rite Aid one of several companies that have filed for bankruptcy as they face lawsuits over the opioid crisis in the US.
Mallinckrodt, which is also facing litigation over its marketing of generic opioids, filed for its second bankruptcy in August and is in talks with major investors about selling some or all of its business units.
Rite Aid entered an agreement with MedImpact Healthcare Systems for the acquisition of its Elixir Solutions business. MedImpact will serve as the “stalking horse bidder” in a court-supervised sale process.
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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Company Profile
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Started: 2019
Co-founders: Ahmad Hammouda and Seif Amr
Sector: FinTech
Headquarters: Egypt
UAE base: Hub71, Abu Dhabi
Current number of staff: More than 150
Funds raised: $22 million
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Top New Zealand cop on policing the virtual world
New Zealand police began closer scrutiny of social media and online communities after the attacks on two mosques in March, the country's top officer said.
The killing of 51 people in Christchurch and wounding of more than 40 others shocked the world. Brenton Tarrant, a suspected white supremacist, was accused of the killings. His trial is ongoing and he denies the charges.
Mike Bush, commissioner of New Zealand Police, said officers looked closely at how they monitored social media in the wake of the tragedy to see if lessons could be learned.
“We decided that it was fit for purpose but we need to deepen it in terms of community relationships, extending them not only with the traditional community but the virtual one as well," he told The National.
"We want to get ahead of attacks like we suffered in New Zealand so we have to challenge ourselves to be better."
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What: Brazil v South Korea
When: Tonight, 5.30pm
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The flights
There are various ways of getting to the southern Serengeti in Tanzania from the UAE. The exact route and airstrip depends on your overall trip itinerary and which camp you’re staying at.
Flydubai flies direct from Dubai to Kilimanjaro International Airport from Dh1,350 return, including taxes; this can be followed by a short flight from Kilimanjaro to the Serengeti with Coastal Aviation from about US$700 (Dh2,500) return, including taxes. Kenya Airways, Emirates and Etihad offer flights via Nairobi or Dar es Salaam.
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