Kodak deal with creditor paves bankruptcy exit
New York: Eastman Kodak has announced a deal to hand over film and printing businesses to its British pension fund, clearing a key lender's claims that will allow it to exit bankruptcy reorganisation.
Kodak said yesterday it was selling its personalised and document imaging businesses to the UK Kodak Pension Plan, its largest creditor, for USD 650 million and the settlement of USD 2.8 billion of claims against the photography pioneer.
The units to be divested include Kodak's retail film products, its photography paper products and 105,000 kiosks worldwide where customers can take film to be developed.
The deal resolves all potential claims against Kodak, while providing the company the liquidity it needs to exit the Chapter 11 bankruptcy process, said Antonio Perez, Kodak chairman and chief executive.
"This clears the path for our emergence from bankruptcy," he said in a statement.
Following the reorganisation, the slimmed-down Kodak plans to sell large commercial-scaled digital printers and printing plates.
Kodak will also continue to sell film for movie productions.
The divested businesses would be placed "with a new owner that recognises their value and is focused on their growth and success," Perez said.
Steven Ross, chairman of the pension fund, said in the statement that the deal "provides security for and delivers the greatest value to the KPP members."
Kodak said it would file the plan with the Bankruptcy Court on April 30.
The process will take "a period of some months," Kodak spokesman Christopher Veronda said.
Kodak will then be a "smaller company focused on business-to-business" transactions, he added.
Kodak filed for bankruptcy protection from its creditors in January 2012, after 131 years in business, as the company fell behind rivals in digital photography.
The Rochester, New York-based company, started in 1892, led the way in popularising the cameras, film, slide projectors and home videos that preserved the memories of generations of Americans and others around the world.
Kodak was among the early developers of digital imaging, but lost ground to rivals as the company failed to adapt its business lines.