Reader’s Digest Association Inc, whose namesake magazine has been a staple of dentists’ offices for generations, said on Monday it planned to file for Chapter 11 bankruptcy for its US businesses as part of a prearranged plan with lenders to cut debt by 75 percent.
The media company, known worldwide for its family magazine filled with general-interest and inspirational stories, has been trying to cut costs since it was bought in 2007 by an investor group led by Ripplewood Holdings LLC.
The bankruptcy would take the form of a prearranged filing, which comes after a company has already reached deals with lenders to reduce debt.
The deal, if approved by a bankruptcy court, would allow Reader’s Digest to slash its debt load to US$550 million, from the current US$2.2 billion.
The arrangement would also allow the company to reduce its annual interest payments on remaining debt to less than US$80 million from about US$145 million, president and CEO Mary Berner said in an interview.
“Our deal has already been negotiated and hammered out with a majority of our creditors,” Berner said.
The arrangement “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, based in Pleasantville, New York, has said Reader’s Digest is the largest selling magazine in the world. The company has offices in 45 countries and sells books, magazines, recorded music collections and home videos.
Among other offerings, it also publishes the food magazine Every Day with Rachael Ray.
Ripplewood will have no ownership stake going forward either in the US or internationally.
Under the plan, the company will work with lenders to swap a portion of its US$1.6 billion in senior secured debt for equity, and transfer company ownership to the lender group.
The agreement, which is subject to court approval, also includes a commitment from some members of the senior lender group to provide US$150 million in debtor-in-possession financing, which would help fund operations during the reorganization.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2