Kodak inches closer to emergence with UK pension plan settlement
It's been a big week for Kodak. The U.S. bankruptcy court approved the company's previously announced comprehensive settlement agreement with its United Kingdom pension plan Thursday.
The settlement includes the spin-off of Kodak’s personal and document imaging businesses to U.K. pensioners, and represents a big step in the company’s bid to emerge from chapter 11.
The U.K. Kodak Pension Plan (KPP) is the company’s single largest creditor with respect to its chapter 11 plan for reorganization.
In addition Kodak announced today that it’s reached a deal with three major banks for nearly $900 million of financing to fund operations after it emerges from bankruptcy.
The agreement with JP Morgan Chase, Bank of America, and Barclays will allow Kodak to repay loans, finance its exit from chapter 11, and provide it with cash and working capital post-bankruptcy.
Kodak spokesman Chris Veronda says the deal offers more favorable terms for the company than its existing financing.
“There’s $695 million that’s senior secured loans, in other words it’s secured by assets of the company. Another $200 million of secured debt is a revolving loan, basically it can be drawn up and down like a credit card,” he says.
Veronda says it’s been an eventful week for the company, and it looks like they’re on track to emerge from bankruptcy as planned.
“Certainly it’s been a great week in our reorganization. The new financing’s combined with other significant milestones including the rights offering and the settlement around Eastman Business Park, and it speaks to a bright future for Kodak and we anticipate emergence in the third quarter.”
Kodak has experienced some pushback recently against its reorganization plan, but the company has highlighted its intention to emerge from chapter 11 on schedule.
The deal with the three major banks still remains subject to court approval.