The Eastman Kodak Company (OTCMKTS:EKDKQ) could exit its bankruptcy as soon as September 3 after a New York judge approved the company’s bankruptcy plan. The plan does not see the iconic company emerge as the photographic giant it once was, however. The Eastman Kodak Company will resume business as a smaller digital imaging company, according to a Bloomberg piece on the decision.
Allan Gropper, the judge that oversaw the proceedings, agreed to a plan that will see unsecured creditors that own Eastman Kodak Company (OTCMKTS:EKDKQ) debt paid between four and five cents on the dollar for their holdings. There is an estimated $2.2 billion in unsecured loans outstanding at the former photography innovator. Secured debt will be paid in full by the company.
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Camera business dead
Kodak is one of the most significant imaging companies of all time, helping to popularize the medium to people around the world. That company no longer exists according to the plan outlined in today’s proceedings. Eastman Kodak Company (OTCMKTS:EKDKQ) will reenter the world of the living as a digital imaging company. It will not have any consumer facing business.
Eastman Kodak Company (OTCMKTS:EKDKQ) fell behind in the photography business in the twenty-first century. Film cameras were just not as popular as more modern digital cameras, and Kodak stuck to its traditional products. With the advent of mobile phone cameras, the company’s disposable models have all but disappeared from store shelves.
The company finally entered bankruptcy last year after a decade of very poor performance. The new Kodak is almost unrecognizable according to the company’s plans for future business.
The new Kodak
The new Kodak is planning on selling $406 million in stock once it resumes operation. The new business will be a leader in its field according to a statement from its lawyer. The reorganization has been funded by the sale of many of the company’s assets. Those sales have left it with very few avenues in which to do business.
The new Eastman Kodak Company (OTCMKTS:EKDKQ) is expected to be worth between $785 million and $1.38 billion. The company will focus on digital imaging and printing solutions for corporate customers. The new business is far removed from the Kodak that was an important part of Americana for so many years, but some bondholders, at the very least will be pleased with today’s decision.