On Tuesday, Cengage Learning, a text book publisher said it filed for reorganization. The said move was under Chapter 11 bankruptcy protection. The company believed that filing would allow it to restructure its balance sheet and trim down its debt.

Cengage's debt was about US$5.8 billion. The publisher added that the restructuring contract was made with a group of moneylenders who currently hold around US$2 billion of its balance due. Cengage said the lenders would support an agreement that would remove more than US$4 billion in debt from its balance sheet.

The company stated it has sufficient cash on hand and strong cash flow. Therefore, it would not intend to obtain debtor-in-possession financing. The transaction would further allow it to continue using the cash flow to finance the business.

In March, Cengage said it borrowed US$430 million to ensure that it had enough liquidity.

Cengage Learning also kept its restructuring, financial and legal advisers. It hoped to get help in assessing its operations.