New York: Reader's Digest Association Inc, known for its namesake magazine, said it filed for Chapter 11 bankruptcy protection for its US businesses as part of a prearranged plan with lenders to cut debt.
Reader's Digest said it has secured $150 million in new debtor-in-possession financing, which is convertible into exit financing upon emergence.
Operations in Canada, Latin America, Europe, Africa, Asia and Australia-New Zealand will not be part of the filing, the company said in a statement.
The magazine publisher said it expects its fiscal 2009 revenue to be down by low single digits.
Early last week, Reader's Digest reached an agreement in principle with a majority of its senior secured lenders on the terms of a restructuring plan to reduce its debt burden and strengthen the company financially.
Under the plan, the company will work with lenders to swap a portion of its $1.6 billion in senior secured debt for equity, effectively transferring ownership to the lender group.
Reader's Digest, based in Pleasantville, New York, is the latest media company to be hurt by an economic slowdown that has cut ad spending and hampered companies' abilities to repay debt.
(For updates you can share with your friends, follow IBNLive on Facebook, Twitter and Google+)
displayed with permission. Use of the CNN name and/or logo on or as part of CNN-IBN does not derogate from the intellectual property rights of Cable News Network in respect of them.