Reader's Digest Association releases restructuring plan

Share this content:
Reader's Digest Association (RDA) has announced a restructuring plan through which a number of its lenders will take a stake in the company in return for reducing the debt. The agreement is expected to lower RDA's total debt load from $2.2 billion to $550 million.

As part of the agreement in principle, RDA anticipates implementing the restructuring under court supervision through a voluntary, pre-arranged filing under Chapter 11 of the United States Bankruptcy Code, which it expects to complete quickly while operating business as usual. The company has elected not to make a $27 million payment due on some of its debt, instead using the 30-day grace period on the payment to continue negotiations and work on the filing.

"The obligation that dates back to our going private is so steep that it's consuming all of our cash that it's making it difficult to grow," said William Adler, VP of global communications for RDA. "The pre-arranged Chapter 11 filing is designed to go through quickly with minimal disruption. The goal is to have all the parties lined up and all the key parts in advance and to move through it swiftly without impact to the company, our suppliers or our vendors."

None of RDA's marketing initiatives will be affected, nor will any of its partners or employees. RDA has made cuts to staff this year already.

"We don't plan to stop any of our business operations, we don't plan to close any offices or plants, we don't plan any mass layoffs," Adler said. "This is extremely focused on the balance sheet and the long-term debt."
Loading links....

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

DMN's Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here