Reader's Digest, the publisher of the coffee table book, plans to file Chapter 11 bankruptcy to their reduce debt by 75 percent.
Senior secured lenders will exchange a “substantial portion” of $1.6 billion in debt for equity. Some of them will provide a $150 million bankruptcy loan, debtor-in-possession financing, to ensure the company has enough liquidity during its reorganization.
Reader’s Digest, based in Pleasantville, New York, said that the so-called pre-packaged bankruptcy wouldn’t apply to operations outside the U.S. and the agreement with lenders will cut debt to $550 million from $2.2 billion. It said it continues to be in compliance with its financial covenants.
RD is a monthly general-interest family magazine co-founded in 1922 by Lila Belle Wallace and Dewitt Wallace. Reader's Digest is the best-selling consumer magazine in the USA, with a circulation of over 5.5 billion copies in the United States, and a readership of 38 million.
Let's hope things work , and the famous RD is not shelved.