Investors Centerbridge Partners, GSO Capital Partners, UBS and JPMorgan Chase have offered to provide a $793m junior debtor-in-possession (DIP) facility provided Kodak meets certain conditions and milestones.
These include the long-awaited sale of its digital imaging patent portfolio for "no less than $500m", a figure which Kodak was reported to have turned down in the summer when it was holding out for more than $2bn from the patent auction.
Kodak said it was confident it could now successfully complete the patent sale as it hailed the new DIP facility, $567m of which can be converted into exit financing, as a "key element in the steps to enable the company to successfully emerge from Chapter 11".
Kodak’s vice president of corporate strategy and commercial marketing Chris Payne would not be drawn on how much the digital imaging patent portfolio might ultimately generate for Kodak, stating that "a range of prices" had been discussed.
"We’re confident that we’ll conclude a successful sale of the patents in a timely manner," Payne told PrintWeek. "What’s more is what we’re going to do with that money. It’s just one of a number of jigsaw pieces that we’re putting in place to successfully run our commercial printing operation."
The DIP facility is made up of separate term loans of $476m and $317m and includes provisions allowing for the conversion of $567m into exit financing, provided Kodak completes its reorganisation by 30 September 2013, resolves all of its UK pension obligations and completes all or a portion of the sales of its Document Imaging and Personalised Imaging businesses.
Payne would not offer additional details on the planned sale of the company’s Document Imaging and Personalised Imaging businesses, except to state: "We’re encouraged because we have a lot of bidders for both of the businesses and we expect to conclude the sale at some point before we emerge from bankruptcy."
As far as the UK pensions are concerned, Payne said he was unfamiliar with the details and therefore could not say if they would be resolved in a deal similar to the one reached by Kodak's North American retirees a few weeks back. "It’s another piece in the jigsaw puzzle," he added.
Media coverage of the DIP financing highlighted that some of Kodak’s bondholders are allegedly unhappy with what they perceive has been the company squandering the past 10 months.
However, Payne dismissed those complaints, suggesting they were an inevitable part of the process. "What we announced was that a collection of our bondholders, including Centerbridge and others, clearly want to fund us because they see value in the business," he explained. "Because we selected some and not others, you’re going to see an uptick in those who don’t like it and would like to be more involved as we moved forward."
He also dismissed many in the financial community as well as the media who are skeptical of Kodak’s chances of emerging from Chapter 11 and becoming successful company focused primarily on digital commercial printing.
"I spend most of my time with customers and our customers are not skeptical at all," Payne emphasized. "They’re pleased with where we’re going and they’re supporting us in a way that is beneficial to them and to us."
