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Kodak to seek court approval for $406 million rights offer

By TROY L. SMITH
 - 6/19/2013 9:05:32 AM

Eastman Kodak Co. has announced that a group of creditors has agreed to invest $406 million in a rights offering for common stock once Kodak emerges from Chapter 11 bankruptcy.

Kodak officials said, in a statement late Tuesday, the creditors have agreed to backstop the rights offering of 34 million shares of Kodak’s common stock for a price of $11.94 a share. That would give the creditors 85 percent equity of Kodak once the company emerges from bankruptcy.

The company said it will seek approval of the backstop agreement in U.S. bankruptcy court next week.

Kodak said it will use the money to fund distributions under its revised reorganization plan, which includes repayment to the company’s second-lien creditors, who will not receive equity under the reorganization plan.

“Attracting this additional funding is a strong vote of confidence in both Kodak’s Plan of Reorganization and in the actions we have taken during our restructuring to create a solid future for our company,” said Antonio Perez, CEO and chairman of Kodak, in the statement. “This agreement, which serves as a critical component of the capital structure for the emerging Kodak, positions us to comprehensively settle our obligations with our various key creditor constituencies.”

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