MirkoBoeddecker
For those who would like more details, here is Kodak’s official press release from this morning:
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[size=5]Eastman Kodak Company announces comprehensive agreement with UK pension scheme; this brings the conclusion of Chapter 11 proceedings a step closer [/size]
[size=1]Under the agreement, the Personalised Imaging and Document Imaging businesses will be transferred to the UK Kodak Pension Plan (KPP), KPP claims amounting to US$2.8 billion will be settled, and funds will be raised to enable the Commercial Imaging business to complete the Chapter 11 proceedings [/size]
ROCHESTER, N.Y., 29 April – The Eastman Kodak Company (“Kodak”) today announced a comprehensive settlement agreement with the UK Kodak Pension Plan (KPP), its largest creditor, in connection with its Chapter 11 reorganisation plan. Under the agreement, which will be filed with the relevant U.S. Bankruptcy Court, Kodak’s Personalised Imaging and Document Imaging businesses will be transferred to the KPP as the new owner.
The settlement agreement provides, amongst other things, for the spin-off and transfer of Kodak’s Personalised Imaging and Document Imaging businesses to the KPP in exchange for cash and assets valued at US$650 million. A portion of the proceeds from this transaction will be used by Kodak to conclude the Chapter 11 proceedings and to support the Commercial Imaging business unit. Upon completion of the agreement, KPP will waive claims against Kodak and certain subsidiaries of the company amounting to US$2.8 billion.
“In a comprehensive transaction, Kodak will put into practice its long-announced intention to divest its Personalised Imaging and Document Imaging businesses and be released from its largest legacy liability,” said Antonio M. Perez, Chairman and Chief Executive Officer of Kodak. “The KPP transaction will overcome several obstacles in our reorganisation, resolve all potential claims worldwide, ensure the continuation of business operations outside the US, and transfer our Personalised Imaging and Document Imaging businesses to a new owner who recognises their value and is committed to their growth and success. Furthermore, we retain sufficient liquidity to emerge successfully from Chapter 11 proceedings. We are very satisfied with the transaction, the value it creates for the various stakeholders, and the
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commitment and creativity of the KPP, which have made it possible to achieve this exceptional result.”
Steven Ross, Chairman of the KPP, said: “The KPP and Kodak have worked together since the start of the Chapter 11 situation, and this acquisition provides security for KPP members and offers them the greatest value. Overall, the agreement now reached offers KPP members significantly improved prospects for the future and is also good for employees, creditors and Kodak’s business operations in the UK. The business units we are acquiring will generate the cash flows needed to support the pension fund’s obligations in the long term. The KPP’s financial stability will benefit the employees, customers and partners of the Personalised Imaging and Document Imaging business units.”
The agreement will be implemented as part of Kodak’s Chapter 11 plan in the US. Upon completion of the spin-off of both business units, Kodak and its global subsidiaries will be released from their obligations to the KPP. The relevant UK regulatory authority (UK Pensions Regulator) has been fully informed of this process and has given its approval for the acquisition. The regulator has decided that it will approve the release of Kodak Limited, the KPP’s sponsoring company, from its obligations to the KPP, and the UK Pension Protection Fund has confirmed that it has no objections. The completion of the transaction is still subject to approval by the US Bankruptcy Court, approval by the regulator and the fulfilment or waiver of other conditions.
Kodak intends to file a draft Chapter 11 plan with the bankruptcy court on 30 April and, immediately thereafter, to seek approval of the agreement with the KPP and the related transactions. This also means that the previously filed application for the separate sale of the Document Imaging business unit will be withdrawn.
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