Kodak to Exit Bankruptcy Now To Focus On Printing

Kodak to Exit Bankruptcy Now To Focus On Printing 

A plan which cuts about $4.1 billion of debt for Eastman Kodak was approved by US bankruptcy judge Allan Gropper yesterday. The plan allows Kodak to reorganize itself into a company that will actually provide no consumer products but will instead focus on printing technology for corporate customers. This is good news for the company on the whole by saving it from extinction, but it does nothing to compensate shareholders. Only secured claims will be paid in full. Unsecured creditors will take a huge hit at 4-5 cents on the dollar but again, shareholders like you or I are completely out of luck.

The plan hinges on Kodak being able to sell $406million in stock. That’s 85% of the company’s equity which is being backstopped by a large group of creditors. This reorganization plan will shift focus to touchscreen sensor technologies and motion picture film production.

Kodak has been selling printers to consumers for years now, a lot of them with a focus on printing digital photographs, but that’s still not going to be its focus. Instead, it wants to put a renewed push on the enterprise for printers that will be used in the corporate landscape, Bloomberg said. It will also sell parts that will be used in touch screens deployed in tablets and smartphones, Bloomberg explained. The company doesn’t really have much of a choice to even look back at its old days as a photography company. It shut down 13 of its factories and laid off nearly 50,000 employees that were involved in those efforts.

Kodak, as a result, is much slimmer now. It has just 8,500 employees who will be tasked with the company’s big turnaround. Other focuses will include “packaging, functional printing and professional services,” Kodak’s CEO and chairman Antonio Perez told Bloomberg.

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Write by: RC - Tuesday, August 27, 2013