Reader’s Digest UK files for administration
Reader’s Digest UK (RDA UK) is to file for administration after failing to secure a deal to reduce its £125m pension deficit.
The administration follows the decision by the UK Pensions Regulator not to support an agreement between RDA UK, the trustees of its pension scheme and the UK Pension Protection Fund (PPF) to settle a longstanding pension scheme liability.
The agreement would have involved a lump sum payment into the pension fund by parent company RDA plus an equity stake in RDA UK, which would have relieved RDA UK of significant financial obligations associated with its underfunded UK pension scheme.
Without the agreement, RDA UK is unable to meet those financial obligations and the company cannot sustain its UK operations.
RDA UK is working with its parent company and administrators to help ensure an orderly process and maximise creditor returns.
The pension issue is specific to the UK entity and does not involve any other RDA company. No other RDA operations are expected to be impacted by the administration.
Reader’s Digest dropped out of the Top 10 actively purchased titles in the most recent ABC figures last week, and is down 20.4% year on year.
RDA put its US arm into Chapter 11 bankruptcy protection as part of a restructuring plan agreed with lenders to try to reduce its debt burden.
The Reader’s Digest Association publishes 92 magazines worldwide including 50 editions of Reader’s Digest
