The US publisher of Reader's Digest magazines has said it will file for Chapter 11 bankruptcy as it looks to get rid of up to 75% of its debts.
The arrangement, which has been agreed with lenders, comes as it struggles in a weak advertising market.
The move will apply only at its US businesses. Operations elsewhere will not be affected, while the US edition will continue to be published.
Chapter 11 gives firms time to juggle their finances while continuing trade.
'Hammered out'
Reader's Digest has been trying to cut costs since it was bought in 2007 by a group led by Ripplewood Holdings.
If approved by a bankruptcy court, Reader's Digest will see its debt cut to $550m from $2.2bn.
Annual interest payments on remaining debt will also be reduced to less than $80m, from about $145m.
"Our deal has already been negotiated and hammered out with a majority of our creditors," said chief executive Mary Berner.
"It doesn't affect our employees, it doesn't affect the vast majority of vendors, it doesn't mean we'll do mass layoffs, it doesn't mean we're going to be selling off assets. It's business as usual."
The company says Reader's Digest is the largest-selling magazine in the world.
It also sells books, other magazines, recorded music and home videos.
No comments:
Post a Comment