Eastman Kodak has agreed to hand over its photography and other businesses to its own UK pension fund as the troubled film giant struggles to emerge from bankruptcy.
The company, based in Rochester, New York, announced Monday that it will hand over control of its camera-film and document-imaging businesses to UK retirees in a deal to settle $2.8bn in obligations.
Kodak invented the digital camera, which ultimately destroyed its business. After years of falling sales and missed opportunities the company declared Chapter 11 bankruptcy last January.
The UK's Kodak Pension Plan (KPP) is the bankrupt firm's largest creditor, and without a deal it would have been difficult for Kodak to emerge from bankruptcy. The company will receive cash and other assets worth $650m as part of the deal.
Kodak put its camera-film and other businesses up for sale last year as it moved to focus on areas including commercial printing, services and packaging. While sales of the films that made Kodak famous have collapsed since the advent of digital photography, the businesses still made $1.46bn last year.
Kodak has 105,000 digital kiosks that develop and print digital photos around the world, and there is growing demand for photographic paper, manufactured in Harrow on the outskirts of London, for digital prints. KPP will also control Kodak's document management business. The company will seek court approval for the plan on Tuesday.
Antonio Perez, Kodak chairman's and chief executive officer, said: "The KPP transaction moves us past several key hurdles in our reorganization, resolving all potential claims worldwide, assuring continued operations outside of the United States, placing our personalized imaging and document imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11."
Steven Ross, the chairman of KPP, said: "KPP and Kodak have been working collaboratively since the beginning of the case, and this acquisition provides security for and delivers the greatest value to, the KPP members. Overall, this settlement gives the KPP members greatly improved future prospects whilst being good for Kodak's employees, its creditors and for UK businesses."
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