GNC Holdings files $760 million Harbin stalking horse bid agreement

By Caroline Salls

Pittsburgh, Aug. 10 – GNC Holdings, Inc. filed the $760 million stalking horse purchase agreement reached with Harbin Pharmaceutical Group Holding Co., Ltd. as part of a notice filed Friday with the U.S. Bankruptcy Court for the District of Delaware.

Under the stalking horse agreement, Harbin will pay $550 million in cash, issue $210 million in second-lien loans.

Harbin will also issue $10 million in subordinated PIK convertible notes to GNC’s general unsecured creditors under the company’s plan of reorganization.

The stalking horse agreement also calls for the payment in full of GNC’s debtor-in-possession financing at closing, provided that $200 million will be repaid to holders of tranche B-2 term loans.

For any shortfall in cash consideration to the term loan B lenders below $200 million, the second-lien loans amount would increase dollar-for-dollar to ensure that the term loan B lenders receive no less than $410 million.

If the GNC debtors are performing better than projected through closing so that the cash available exceeds $200 million, that excess would be used to pay down some of the notes.

If Harbin is not the winning bidder for the GNC assets, it would receive a $22.8 million termination fee and a $3 million expense reimbursement.

A hearing on approval of GNC’s entry into the stalking horse agreement will be held on Aug. 19.

The sale hearing is scheduled for Sept. 17.

GNC Holdings is a Pittsburgh-based health, wellness and performance retailer. The company filed bankruptcy on June 23 under Chapter 11 case number 20-11662.

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