Eastman Kodak Co said on Monday it has reached a $793 million financing
deal with bondholders that could take the one-time photography giant out
The deal, which still needs bankruptcy court approval,
will come in the form of new loans from Centerbridge Partners, GSO
Capital Partners, UBS and JPMorgan Chase & Co, Kodak said in a
statement. The financing is contingent on the company receiving at least
$500 million for a patent portfolio it has been trying to sell for more
than a year, Kodak said.
The package should allow Kodak to emerge
from bankruptcy in the first half of 2013, Antonio Perez, Kodak's chief
executive, said in the statement.
"The significance of this
agreement for Kodak is that it establishes a clear path for our
emergence as a stronger, more focused company," Perez said.
will likely be a different company exiting bankruptcy than it was going
in. In addition to selling its patent portfolio, Kodak must sell all or
part of its document imaging and personalized imaging businesses in
order to convert the loan into post-bankruptcy financing.
would mean a restructured Kodak would largely be out of the consumer
business, focused instead on its commercial imaging businesses.
filed for Chapter 11 protection in January in hopes of selling its
intellectual property portfolio, but bids have been lower than hoped. It
remains in talks for a patent sale with potential buyers, including
Apple Inc and Google Inc. Kodak said in Monday's statement it is
"confident" the patents will fetch the $500 million required under terms
of the loan.
The financing package is comprised of $467 million
in new loans and $317 million in a dollar-for-dollar exchange for
amounts outstanding under Kodak's current notes.
group beat out a separate contingent of second-lien bondholders that had
offered financing, a person close to the matter told Reuters earlier.
second-lien holders on Monday filed court papers objecting to Kodak's
request to keep exclusive control of its bankruptcy process through
February 28, a move that would allow it to seek court approval of the
financing deal without other creditors being able to propose alternative
Kodak said it hopes to gain court approval of the plan at a hearing sometime in December, but no date has been set.
© Thomson Reuters 2012