Eastman Kodak and its US subsidiaries have filed voluntary petitions for chapter 11 business reorganization in the US Bankruptcy Court for the Southern District of New York. The business reorganization is intended to bolster liquidity in the US and abroad, monetize non-strategic intellectual property, fairly resolve legacy liabilities, and enable the company to focus on its most valuable business lines.
Kodak has obtained a fully-committed, $950 million debtor-in-possession credit facility with an 18-month maturity from Citigroup to enhance liquidity and working capital. The company believes it has sufficient liquidity to operate its business during chapter 11, and to “continue the flow of goods and services to its customers in the ordinary course”. Subsidiaries outside the US are not subject to proceedings and will honour all obligations to suppliers, the company states.
Chairman and CEO Antonio M Perez said: “Kodak is taking a significant step toward enabling our enterprise to complete its transformation. At the same time as we have created our digital business, we have also already effectively exited certain traditional operations, closing 13 manufacturing plants and 130 processing labs, and reducing our workforce by 47,000 since 2003.
“Now we must complete the transformation by further addressing our cost structure and effectively monetizing non-core IP assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company. The Board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak.”
The restructuring is expected to be completed during 2013.
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