GNC Revises Bankruptcy Plan With $770 Million Sale Agreement

GNC Holdings Inc. has revised its bankruptcy reorganization plan, reflecting China-based shareholder Harbin Pharmaceutical Group Holding Co.'s agreement to submit a $770 million stalking horse bid for its business.

The deal includes a $550 million cash payment, $210 million in second-lien loans, $10 million in convertible notes, and the assumption of other liabilities, the nutrition supplement retailer said in its court filings at the U.S. Bankruptcy Court for the District of Delaware.

Should Harbin’s bid receive court approval, it would be entitled to a $22.8 million termination fee and up to $3 million in expense reimbursements if GNC decided to pursue another transaction or restructuring deal.

GNC filed for bankruptcy in June with about $900 million in funded debt and $111 million in unsecured liabilities. The company said it hired advisors to help wind down about 726 store locations throughout the U.S. and Canada.

As part of its reorganization, the company planned a dual-track scenario where it will restructure its balance sheet through a standalone plan or asset sale. It secured $130 million in new liquidity to finance its bankruptcy proceedings.

A sale hearing is scheduled for Sept. 14.

The case is In re GNC Holdings Inc., Bankr. D. Del., No. 20-11662, plan filed 8/7/20.