Rite Aid issues 14.65 million shares in exchange for 2.4 million 5.5% convertible preferreds

By Jennifer Chiou

New York, May 21 - Rite Aid Corp. issued 14,647,085 of its common shares in exchange for 2,404,020 shares of its 5.5% series I mandatory convertible preferred stock, according to an 8-K filing with the Securities and Exchange Commission.

Rite Aid said that the exchanges were in the form of four individually negotiated transactions that occurred on Tuesday.

Of the common shares issued upon conversion, 13,597,378 shares will have been issued based upon a conversion ratio of 5.6561 shares per preferred, while 1,049,707 shares will have been issued in lieu of future dividends and as an inducement for the conversion, the company said.

Rite Aid added that this includes the exchange of 370,000 preferreds for 2,247,569 common shares, expected to settle on Thursday.

Following these transactions, 2,415,980 preferreds will remain outstanding.

The company added that the remaining preferreds will automatically convert into common shares on Nov. 17. The conversion ratio will be no fewer than 4.7134 common shares and no more than 5.6561 common shares per preferred.

Rite Aid is a drugstore chain based in Camp Hill, Pa.

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