ve lost more than 45percent of their market value. Adding to this, in October of 1999, Rite Aid announced the completion of its extension and restructuring of its $2.7 billion outstanding banking debt, and its consummated sale of $300 million of its 8 percent convertible pay-in-kind preferred stock to an affiliate of Leonard Green and Partners. As a result of the reorganization of debt, two things have occurred: 1.) The $1.3 billion bank debt which was scheduled to mature and the $300 million which was due on demand at the time of maturity on October 29,1999, has been extended to November 1, 2000 2.) Rite Aid will be free of almost all loan payments until mid-2002. Investigations have plagued Rite Aid in the areas concerning past operating practices and the reorganization and reconstructing of debt has not helped to lessen suspicion. As a result of investigations due to suspicions, Rite Aid’s safety rank was lowered to a four, which is below average.In addition to the financial restructuring and the needed aid of banking facility extensions, Rite Aid will pay $2.8 million in a lawsuit settlement to 12 counties in the city of San Diego. These counties alleged that Rite Aid used misleading advertising and engaged in unfair competition. All things taken into consideration and tallied, Rite Aid is approximately $3 billion in debt. A $1 billion boost from lenders has helped ease the concern and financial straps at Rite Aid, and will be used to repay debt and fix up stores. To strengthen the company’s rank, and with a new management team intact in many key departments, Rite Aid intends to debut 300 locations in the year 2000. It will take time for the new operating procedures to filter through the system, but significant parts of Rite Aid’s infrastructure, including its retail stores and distribution network are up to date and should be well-positioned to produce improved operating result in time (Standard & Poors)...
