Tuesday, April 30, 2013

Kodak to Sell Two of Its Businesses in $2.8 Billion Deal

Eastman Kodak Company announced on 29 April 2013 a comprehensive settlement agreement with the U.K. Kodak Pension Plan (KPP), its largest creditor, with respect to its Chapter 11 Plan of Reorganization. Under the agreement, which will be filed with the U.S. Bankruptcy Court, Kodak’s Personalized Imaging and Document Imaging businesses will be spun off under new ownership to KPP.

Photograph: Stefan Wermuth/Reuters

The settlement agreement provides, among other things, for the spin-off of Kodak’s Personalized Imaging and Document Imaging businesses to KPP for cash and non-cash consideration of $650 million. Certain proceeds will be used to support the emergence of Kodak from Chapter 11 and the growth of its Commercial Imaging business. The agreement also settles approximately $2.8 billion of claims by KPP against Kodak and certain of its affiliates.

Kodak has 105,000 digital kiosks that develop and print digital photos around the world, and there is growing demand for photographic paper, manufactured in Harrow on the outskirts of London, for digital prints. KPP will also control Kodak's document management business. The company will seek court approval for the plan on Tuesday.

Antonio Perez, Kodak chairman's and chief executive officer, said: "The KPP transaction moves us past several key hurdles in our reorganization, resolving all potential claims worldwide, assuring continued operations outside of the United States, placing our personalized imaging and document imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11."

Steven Ross, the chairman of KPP, said: "KPP and Kodak have been working collaboratively since the beginning of the case, and this acquisition provides security for and delivers the greatest value to, the KPP members. Overall, this settlement gives the KPP members greatly improved future prospects whilst being good for Kodak's employees, its creditors and for UK businesses."

(Kodak to Sell Two of Its Businesses in $2.8 Billion Deal, via The Guardian)

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