George Eastman
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Nearly $3 billion sale will address final issues in the imaging company's bankruptcy.
The last two big items on Eastman Kodak Co.'s bankruptcy to-do list — settle a shortfall of nearly $3 billion in its United Kingdom pension and sell a pair of businesses — are being handled in one fell swoop, as Kodak hopes to sell those businesses to the pension fund.
The bankrupt printing and imaging company on Monday said it had tentatively worked out a deal with its U.K. pension plan that would see the pension plan buy Kodak's Document Imaging and Personalized Imaging operations. Kodak would receive $650 million and the pension plan, in turn, would write off roughly $2.8 billion in claims it has against Kodak.
With those businesses, the pension plan would pick up roughly 3,200 full-time permanent Kodak workers — roughly a quarter of its 13,000 employees worldwide. Kodak on Monday declined to say how many of the 3,500 Kodak workers locally would be part of that sale.
Document Imaging revolves primarily around Kodak's various document scanners. Personalized Imaging includes the businesses that made Kodak a worldwide household name — camera film and photographic paper.
In a statement Monday, Kodak CEO Antonio M. Perez said the sale "moves us past several key hurdles in our reorganization, resolving all potential claims worldwide ... pacing 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."
Kodak pension fund spokesman John Kiely said the pension fund won't run the businesses directly, but will put together a management team to run them. And in a statement, KPP Chairman Steve Ross said the DI and PI businesses "will deliver long-term cash flows to support the plan's obligations. The financial stability that KPP will provide for the Personalized Imaging and Document Imaging businesses will be beneficial to those businesses' employees, customers and partners."
Kiely said specific plans for the DI and PI businesses — including how to grow them — still have to be worked out. But the U.K. pension plan, having talked with current management and looked at projections, is confident DI and PI can grow, he said. Pension fund managers "obviously gone through an exhaustive due diligence process," Kiely said.
The new deal with KPP seemingly would supersede a deal Kodak announced earlier this month to sell its DI business to Japanese electronics company Brother. Kodak had said when the Brother deal was announced that there was a chance other, better offers might come along and that Kodak would pursue those.
Once those businesses are sold, Kodak would be primarily a commercial printing company, selling digital printing presses and related equipment and supplies. It also would keep its entertainmentimaging business — that being film for motion picture and television productions.
Kodak spokesman Christopher Veronda said under the terms of the KPP deal, Kodak would continue to own and operate some Eastman Business Park operations dedicated to film manufacturing, since they primarily handle entertainment imaging, with Kodak making consumer and professional films for the KPP. Kodak's Harrow, England, plant for color photography paper would be sold as part of the deal.
The KPP deal comes just under the wire as Kodak has set a Tuesday deadline for itself to file its plan with U.S. Bankruptcy Court spelling out how it expects to get out of its current Chapter 11 bankruptcy. That plan will spell out, among other things, how many cents on the dollar individual creditors would receive.
Matt Daneman also writes for The The (Rochester, N.Y.) Democrat and Chronicle
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