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Bankruptcy court approves Kodak financing agreement

Rochester Business Journal
January 23, 2013

Eastman Kodak Co. on Wednesday received approval from a U.S. bankruptcy judge for a previously announced financing agreement, marking a key step in the firm’s effort to emerge from bankruptcy in mid-2013.

U.S. Bankruptcy Judge Allan Gropper in Manhattan approved the financing, which authorizes Kodak to borrow up to $844 million. It strengthens Kodak’s position to successfully execute its remaining reorganization objectives and finalize its plan of reorganization, officials said. The financial commitment comes from the institutional investors that make up the steering committee of the Second Lien Noteholders Committee.
 
“The court’s approval of this financing commitment puts Kodak in a strong position to emerge from Chapter 11,” said Antonio Perez, chairman and CEO. “This agreement, in conjunction with the recently approved sale and licensing of our digital imaging patent portfolio, lays the financial foundation for our plan of reorganization and a successful emergence from Chapter 11 as a profitable and sustainable company.”

Perez added the company is making “tangible and meaningful progress” as it moves through the final phase of its restructuring.
 
The financing includes new money term loans of $455 million, as well as term loans of up to $375 million issued to holders of senior secured notes participating in the new money term loans in a dollar-for-dollar exchange for amounts outstanding under the company’s pre-petition second lien notes.

The financing hinges on certain conditions, including the successful completion of the sale of Kodak’s digital imaging patent portfolio for no less than $500 million. The Bankruptcy Court recently approved the sale of this portfolio for $527 million, and the completion of this sale is expected in February 2013.
 
Upon meeting certain additional conditions, the approved financing also provides Kodak the option of converting up to $644 million of the loans into exit financing due five years after emergence.

(c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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