GNC Holdings completes sale of all assets to Harbin Pharmaceutical

By Sarah Lizee

Olympia, Wash., Oct. 7 – GNC Holdings, Inc. completed the sale of substantially all of its assets to stalking horse bidder Harbin Pharmaceutical Group Holding Co., Ltd., according to an 8-K filed Wednesday with the Securities and Exchange Commission.

Under the stalking horse agreement, the debtors transferred substantially all of their assets, other than their Canadian assets, to GNC Holdings, LLC (New GNC) and transferred substantially all of their Canadian assets to GNC Canada Holdings ULC, a wholly owned subsidiary of New GNC. At closing, Harbin indirectly purchased 100% of the issued and outstanding equity interests in New GNC.

Proceeds are being used to, among other things, pay off all amounts owing under the $100 million debtor-in-possession term loan credit agreement, the $100 million of roll-up term loans and all amounts owed under the $275 million DIP amended and restated ABL credit agreement.

Following confirmation of GNC’s plan, the debtors expect to distribute roughly $126 million in cash and $184 million in second-lien notes issued by New GNC to the company’s tranche B-2 term lenders, which, together with the $100 million term loan roll-up, would constitute an approximate recovery of $410 million to the company’s tranche B-2 term lenders and $4.5 million in cash and $20 million in subordinated notes to be issued by New GNC to the debtors’ unsecured creditors.

The plan also contemplates that all outstanding shares of its common stock and preferred stock will be cancelled under the plan, with shareholders receiving no distributions.

GNC Holdings is a Pittsburgh-based health, wellness and performance retailer. The company filed bankruptcy in the U.S. Bankruptcy Court for the District of Delaware on June 23 under Chapter 11 case number 20-11662.

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