By Ben Fox Rubin
Eastman Kodak Co. (EKDKQ) reached a deal with three major bank
to be provided with $895 million in debt financing following its
planned emergence from bankruptcy, a vital lifeline to help the
ailing company retool its businesses and repay its outstanding
debts.
J.P. Morgan Chase & Co. (JPM), Bank of America Corp. (BAC)
and Barclays PLC (BCS, BARC.LN) will serve as "joint lead
arrangers" for senior secured term loans of up to $695 million.
Additionally, those three banks will act as arrangers for a new
senior secured asset-based revolving credit facility of up to $200
million, and have committed to provide $130 million of this
facility.
"This comprehensive financing package will enable Kodak, at
emergence, to repay its secured creditors under the current senior
and junior Debtor-in-Possession loan facilities, finance its exit
from Chapter 11, and meet the company's post-emergence working
capital and liquidity needs," the company said Thursday.
It added that the new financing is expected to provide Kodak
with more favorable terms than an existing rollover exit financing
commitment.
Chief Executive Antonio M. Perez said the new package, combined
with other restructuring efforts, "will position Kodak for a bright
long-term future."
On Wednesday, Kodak said it planned to launch a $406 million
rights offering, the proceeds of which would be used to repay its
bondholders on its way out of bankruptcy.
The rights offering marks a shift in Kodak's restructuring
strategy, which previously envisioned Kodak exiting Chapter 11
protection under the control of the bondholders.
Now, instead of handing the bondholders equity, Kodak would use
the planned sale of its new common stock to raise the cash needed
to pay off their $375 million claim. Kodak said the money that the
rights offering raises would also help it boost the recoveries of
its other creditors.
Kodak, of Rochester, N.Y., sought Chapter 11 protection in
January 2012. Since then, it has been working to sell assets and
shed unprofitable business lines to reorganize around its
commercial-imaging business, which includes digital printers and
motion-picture film.
--Jacqueline Palank contributed to this story.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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