Reader’s Digest Completes Financial Restructuring
The Reader’s Digest Association, a multi-brand and multi-platform media company, announced that it has successfully completed its financial restructuring and has emerged from Chapter 11 with an improved capital structure and a renewed focus on its strongest, most profitable businesses.
“Today we begin the next chapter in our company’s storied history with a more sustainable financial structure and a renewed mission to create vibrant, relevant products and enhanced customer engagement,” said Robert E. Guth, CEO of Reader’s Digest Association. “I extend my sincere thanks to our employees for their commitment over the past several months as well as to our loyal customers and valued business partners for their continued support. We look forward to working with our new owners and are excited about our future.”
As a result of the restructuring the company has reduced its debt burden by over 80% to approximately $100 million, largely through a debt to equity conversion of its secured notes.
As previously announced, the company’s new business model will focus on its North American print and digital business, building engagement and excitement amongst its loyal customers. Additionally, it will serve its international markets through a combination of owned and licensed relationships, and intends to continue to migrate to a fully licensed structure over time.
In connection with the restructuring, two new board members from GoldenTree Asset Management, Steven Shapiro and Ted Lodge, and one new director appointed by Empyrean Capital Partners will join current board members Bob Guth and Nick Cyprus. Guth, the company’s president and chief executive officer, will also serve as chairman of the board. The company expects to name another two directors to the board.
Previously on abfjournal: Court Approves Reader’s Digest Plan of Reorganization, July 1, 2013