THE PUBLISHER of Reader’s Digest US magazine has filed for bankruptcy in America in an effort to cut its $465m (£300m) debt pile.
RDA Holdings, the parent company of the 91 year-old general interest magazine, applied for the measure on Sunday night in New York, the second time the company has done so in four years. RDA said a restructuring would enable it to cut around 80 per cent of its debts, leaving it owing around $100m.
The restructuring, supported by Wells Fargo, will see most of the debt turned to equity.
RDA had also filed for bankruptcy in August 2009, citing a fall in advertising revenues as its readers shifted to the internet, but emerged the year after a restructuring. It had gone public in 1990 but was sold to private equity firm Ripplewood Holdings in 2007 for around $1.6bn.
“After considering a wide range of alternatives, we believe this course of action will most effectively enable us to maintain our momentum in transforming the business,” RDA chief executive Robert Guth said.
Reader’s Digest, which features recipes, financial advice and health tips, claims around 25m readers in the US.