Washington, Aug 18: The Publisher of world's largest-circulated magazine, Reader's Digest has decided to file for bankruptcy under Chapter 11 in the US as it aimed at reducing its burden by 75 pc and to strengthen its future financial position.
The company said in a statement that it has reached an in-principle agreement with its lenders to reduce its debt from $2.2 billion to $550 million and its 'Debt-for-Equity Restructuring Plan' is supported by a majority of the lenders.
Chief executive Mary Berner said, "Our deal has already been negotiated and hammered out with a majority of our creditors."
She also said, "It 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."
Reader's Digest, world's largest-circulated magazine, publishes 94 magazines, including 50 editions of Reader's Digest and sells approximately 40 million books, music and video products across the world each year.