The bankrupt printing and imaging firm Eastman Kodak Company (OTCMKTS:EKDKQ) announced today to have worked out a deal with its UK pension fund that will help it come out of bankruptcy protection. Kodak will sell its document imaging and personal imaging business to the British pension plan for $650 million, plus the pension plan will write off the claims of $2.8 billion that it has against Kodak.
The agreement is yet to be approved by the Bankruptcy Court in Manhattan. Kodak plans to file a draft plan on Tuesday to come out of bankruptcy. The draft will provide details about how the it plans to get out of the Chapter 11, and how much on the dollar individual creditors will get.
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Earlier this month, Eastman Kodak Company (OTCMKTS:EKDKQ) reached an agreement with Brother of Japan to sell its digital imaging business for $210 million. The latest agreement will supersede the Brother of Japan deal. By purchasing those two units, the pension fund will get about 3,200 full-time Eastman Kodak Company (OTCMKTS:EKDKQ) employees, which is about 25 percent of its total global workforce. The personal imaging business revolves around camera films and photographic paper. The document imaging business includes various document scanners.
The Kodak pension fund said it won’t run the DI and PI businesses directly – it plans to form a management team to run them. The pension fund said that the two businesses will provide long term cash flows that will help meet the pension plan’s obligations.
After exiting the two businesses, Eastman Kodak Company (OTCMKTS:EKDKQ) will be a commercial printing company. The company will also keep its entertainment imaging business which produces films for motion pictures and TV productions.
Eastman Kodak Company (OTCMKTS:EKDKQ) launched its first camera way back in 1888, and the company had about 150,000 employees worldwide by 1988. But the Rochester, New York-based company could not maintain its lead as Japanese electronics companies started eating into its market share. The company tried shifting its business to digital imaging, but was unsuccessful. Eastman Kodak Company (OTCMKTS:EKDKQ) finally filed for bankruptcy in January 2012.