By Yogita Patel
Eastman Kodak Co. (EKDKQ) has completed the syndication of $695
million in bankruptcy-exit financing, bringing the iconic company
one step closer to emerging from Chapter 11 protection.
The financing--which includes a $420 million first-lien term
loan and a $275 million second-lien term loan--was arranged by J.P
Morgan Chase & Co. (JPM), Barclays PLC (BCS) and Bank of
America Merrill Lynch. The banks have also agreed to arrange $200
million in asset-backed financing, $130 million of which they would
provide.
Kodak estimates that the financing will save it $25 million in
interest in the first year of post-bankruptcy operations.
Kodak said it will file the necessary loan documentation with
the U.S. Bankruptcy Court in Manhattan "in the coming days."
Rochester, N.Y.-based Kodak filed for Chapter 11 protection in
January 2012 after years of facing challenges from competitors amid
the rise of digital technology. Kodak laid the groundwork for an
exit strategy earlier this year with the sale of a trove of
digital-imaging patents for $527 million--a price far lower than
what the company had hoped to get from the intellectual property
but an important step that moved forward its bankruptcy case by
settling patent litigation that could have further the
reorganization process.
Kodak is hoping to leave bankruptcy next month and will use the
loans, cash on hand and proceeds from a $406 million rights
offering to repay bondholders. A group of key creditors will
control the reorganized company with an 85% stake.
Kodak plans to reinvent itself as a commercial-imaging firm that
specializes in digital printing and motion-picture film.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com.)
Write to Yogita Patel at yogita.patel@dowjones.com
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