Kodak Emerges from Bankruptcy as a Smaller Company Focused on Commercial Printing
The Eastman Kodak Company, the corporation made famous as a film giant, announced that it has emerged from Chapter 11 and restructured its business model 20 months after filing for bankruptcy protection.
Antonio M. Perez, chairman and CEO of Kodak, explained that the company would move forward with a streamlined operation centered around digital imaging. "We have emerged as a technology company serving imaging for business markets—including packaging, functional printing, graphic communications and professional services," he said. "We have been revitalized by our transformation and restructured to become a formidable competitor—leaner, with a strong capital structure, a healthy balance sheet, and the industry's best technology."
Last week's news marks the end of a tumultuous two years for a company that was once synonymous with the photography industry. Following years of declining film sales and a slow adoption of digital photography, Kodak filed for bankruptcy in January 2012, citing a need to re-imagine the business in the face of $6.75 billion in debts. A series of sales and shut-downs followed, with the company selling its online gallery and document imaging businesses, while closing the doors on its desktop printing and iconic camera divisions. The company also sold more than 1,100 digital patents, initially valued at approximately $3 billion, to a consortium of businesses including Google and Apple for $525 million.
In the last few months, Kodak completed the final steps in its Chapter 11 restructuring, including the spin-off of its Personalized Imaging and Document Imaging businesses to Kodak Pension Plan, a longstanding pension plan of Kodak's U.K. subsidiary. The company also successfully closed on its agreement for $695 million in term exit financing, paid off its DIP lenders and second lien noteholders in full and completed its rights offerings, receiving approximately $406 million of new equity investments from participating unsecured creditors.
Moving forward, a slimmed-down Kodak will primarily serve the commercial print sector. The company's business will be divided into three divisions, packaging, graphic communications and printing, which utilize different facets of its printing technologies. The company will also continue to support its document imaging business.
In addition to market changes, the company will also see leadership shifts, with Perez telling the Associated Press that he expected to step down as CEO within the next year. "I love this company. I Iove what we have done," Perez said. "But now it's time."
Before he steps down into an advisory role, Perez expects to see the company's business take a turn for the better. "We are setting a trajectory for profitable growth," he said. "We have the right technology at the right time as printing markets increasingly transition to digital."