Reader”™s Digest Association Inc. has emerged from Chapter 11 bankruptcy with 75 percent less debt and a substantially lowered gross operating leverage, company officials said.
The Chappaqua-based company has $525 million in exit financing from a recently completed bond refinancing that will provide the company with an estimated $30 million in cash interest expense savings annually compared with the credit facility it had arranged at the start of the restructuring process. Moody”™s Investors Service assigned RDA and the company”™s exit financing a B1 Corporate Family Rating and Standard & Poor”™s issued a B rating to the company’s exit financing. RDA also has access to an additional $50 million of revolver credit.
“This is a very important day for our company, and emerging with a de-levered balance sheet and a strong new capital structure is a significant step forward as we continue to transform RDA into a global media and marketing leader,” said Mary Berner. RDA president and CEO. Berner thanked the company”™s employees around the world for their work and focus “throughout an incredibly challenging time” and its strategic partners and suppliers for continuing to deliver RDA products and services during the restructuring.
Berner said the company now is focused on free cash flow and return on investment and “committed to maximizing value creation.”
Tom Williams, RDA senior vice president and chief financial officer, said the company is targeting improved performance through continued supply chain and other cost initiatives, expanded use of digital content and promotional channels to reduce customer acquisition costs, centralization of services and revenue growth through integrated product and service offerings.
