Eastman Kodak Co. (EKDKQ) said it reached a deal, subject to
court approval, that would allow it to repay its second-lien
creditors in cash instead of equity in the company.
Kodak, which is working its way through bankruptcy court, had
previously planned to exit Chapter 11 protection under the control
of second-lien bondholders, whom it would ask to forgive the $375
million they are owed in exchange for an 85% stake in the
restructured Kodak.
Now, Kodak said key creditors agreed to back stop a $406 million
rights offering for common stock in the company upon emergence from
Chapter 11, with Kodak expecting to use the proceeds to repay the
second-lien creditors, who will no longer receive equity in the
reorganization plan.
The proposal would permit Kodak to offer its creditors up to 34
million shares of stock for the purchase price of $11.94 a share,
equivalent to about 85% of Kodak upon emergence.
"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," said Kodak Chief Executive Antonio M.
Perez.
Kodak has filed a motion to approve the backstop commitment with
the U.S. Bankruptcy Court for the Southern District of New York,
which is scheduled to be heard on June 25. Kodak also filed on
Tuesday an amended plan of reorganization.
Write to Ben Fox Rubin at ben.rubin@dowjones.com
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