Eastman Kodak announced that it has reached a deal to secure $793 million in loans from Centerbridge Partners, GSO Capital Partners, UBS and JPMorgan Chase. The deal, which would help the company emerge from Chapter 11 protection in the first half of 2013, is based on the condition that Kodak sell its digital imaging patent portfolio for no less than $500 million.
The commitment letter also contains provisions allowing for the conversion of up to $567 million of the loans into exit financing provided that Kodak meets certain conditions, including the consummation of a plan of reorganization by Sept. 30, 2013, the resolution of all of Kodak’s U.K. pension obligations and the sale of Kodak’s document imaging and personalized imaging businesses.
Kodak obtained proposals from separate lending consortia in a competitive process conducted recently.
“The additional liquidity from this financing will enable Kodak to accelerate its momentum as we continue to successfully execute on our reorganization objectives and emerge in the first half of 2013,” said Antonio Perez, Kodak’s chairman and chief executive officer. “After receiving significant interest from potential lenders, we reached agreement with Centerbridge Partners, GSO Capital Partners, UBS and JPMorgan, all of whom have proven track records in lending to companies that successfully reorganize.”
“The significance of this agreement for Kodak is that it establishes a clear path for our emergence as a stronger, more focused company,” he added.
The financing is subject to bankruptcy court approval at a hearing in December.