Reader’s Digest parent company files for bankruptcy
RDA Holding, the parent company of The Reader’s Digest has filed for bankruptcy for the second time in four years.
The company filed for a Chapter 11 bankruptcy in New York this week under an agreement that will result in converting approximately $465 million of secured notes to equity. The Company hopes to exit Chapter 11 with roughly $100 million of debt – about an 80% reduction in its level of indebtedness.
The filing is limited to the U.S. business and is expected to conclude in less than six months. The Company’s international operations, which include publishing 75 magazines across the globe, are not part of the filing.
“After considering a wide range of alternatives, we believe this course of action will most
effectively enable us to maintain our momentum in transforming the business and allow us to capitalise on the growing strength and presence of our outstanding brands and products,” said Robert E. Guth, the Company’s President and CEO.
“The Chapter 11 process, which will facilitate a significant debt reduction, will enable us to continue to redefine our business by focusing our resources on our strong North America publishing brands, which have shown a new vitality as a result of our transformation efforts, particularly in the digital
arena.”
The filing is not expected to impact the Company’s day-to-day operations. The Company will continue to market and publish all of its U.S. publications during this process, as well as its international publications.