PLEASANTVILLE, N.Y., Aug. 24 (UPI) -- The publisher of Reader's Digest Magazine said Monday it has followed through on plans to file for Chapter 11 bankruptcy protection.
The Reader's Digest Association Inc. of Pleasantville, N.Y., said in a release its previously announced bankruptcy filing plans were carried out Monday. It said more than 80 percent of its senior secured lenders had signed on to the agreement in principle.
"Our business operations remain solid, with anticipated fiscal 2009 revenue only down by low single digits, currency neutral, despite the recession," said Mary Berner, RDA's president and chief executive officer. "We look forward to emerging with a restructured balance sheet and as a financially stronger organization that is positioned to pursue our growth and transformational initiatives."
The company said its senior lender group has committed $150 million in new debtor-in-possession financing, which is convertible into exit financing upon emergence. RDA said it believes the financing gives it sufficient liquidity during the reorganization process and beyond.
RDA's lenders have agreed to exchange a substantial portion of its $1.6 billion in debt for equity and establishes new terms for the $550 million in debt that will remain on RDA's balance sheet upon exit.