The publisher of Reader's Digest said Monday that it has emerged from bankruptcy protection with much less debt and a new board of directors.
The Reader's Digest Association Inc. was able to exit Chapter 11 protection in about six months because it negotiated a prearranged reorganization plan with key lenders prior to entering bankruptcy court.
Reader's Digest is still one of the most popular magazines with a circulation of just over 7 million. Yet while it hasn't seen the same precipitous declines in advertising that other magazines and newspapers have suffered, its circulation has been halved since 1995. That's when the Internet began to take hold and pull Americans' attention away from more traditional media.
The company said Monday it was able to lower its $2.2 billion debtload by 75 percent and boost its capital levels. It has access to $525 million in financing after refinancing certain bonds, which also will save the company $30 million in interest costs annually. There's another $50 million available in a revolving credit line.
Reader's Digest named a new, eight-member board as well. The company's chief executive, Mary Berner, will sit on the board.
Reader's Digest, a fixture in many American homes for decades, has struggled to reinvent itself in the digital age. In the second half of 2009, circulation fell by 13 percent to 7.1 million, according to the Audit Bureau of Circulations.
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