Reader's Digest to file for bankruptcy protection
Reader's Digest, publisher of the monthly magazine which claims the
largest circulation in the world, announced plans on Monday to file for
bankruptcy protection in agreement with its major lenders.
The Reader's Digest Association said the restructuring agreement
calls for a "substantial portion" of its $1.6 billion in debt to be
swapped for equity and ownership of the company to be transferred to the
lender group.
As part of the agreement, Reader's Digest said it would file for
Chapter 11 bankruptcy, which protects a company from its creditors while
it restructures.
It said the Chapter 11 filing only applies to its US businesses and
not its operations in other countries.
"The company has strong brands and products, a leadership position in
many markets around the world and a solid plan for the future," said
Reader's Digest president and chief executive Mary Berner.
"Restructuring our debt will enable us to have the financial
flexibility to move ahead with our growth and transformational
initiatives," she said.
The Pleasantville, New York-based Reader's Digest was purchased by
Ripplewood Holdings in March 2007.
It publishes 94 magazines, including 50 editions of Reader's Digest.
WASHINGTON, AFP
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