The Tata group has decided in principle to sell Reader's Digest to the New Delhi-based Living Media, which publishes India Today and other magazines.
However, before the sale, RDI Print & Publishing is to be split into two companies. Only the publishing arm will be sold to Living Media. According to industry sources the company would go through a restructuring prior to the sale.
The Tatas propose to split the firm into two and sell the subscription, software, records, database and the brand rights to Reader's Digest for India and Nepal.
The residual company will be left with investments, including those in some other Tata group companies, and real estate assets which have a book value of around Rs 50 crore. The market worth of these investments is expected to be higher.
Samrat Investments, an arm which owns stakes in other Tata companies, will also be retained. The residual parts and Samrat can later be merged into another Tata company, but a final call on the issue is yet to be taken.
Titan Industries holds about 80 per cent equity in Reader's Digest India, while the rest is owned by Tata Infomedia and some other group companies. The group's exit from Reader's Digest is in line with its decision to stick to core businesses.
RDI Print & Publishing is a profitable company with a circulation of around 400,000 copies a month in India and Nepal.
On a turnover of Rs 20 crore, profits are close to Rs 4 crore. Currently, Reader's Digest is printed at the India Today group-owned Thomson Press.