Struggling photography pioneer Eastman Kodak Co on Monday said it has reached an agreement to borrow US$793 million, taking an important step toward letting the company leave bankruptcy protection in the first half of next year.
The deal is contingent on Kodak being able to sell its patent portfolio for at least US$500 million. The company has been trying to sell that asset for more than a year.
In a statement, Kodak said it is “confident it will achieve” that requirement.
Chief executive officer Antonio Perez has announced almost 4,000 job cuts this year and has been selling businesses to help fund a turnaround after seeking Chapter 11 protection in January.
The company, which on Monday reiterated plans to exit bankruptcy in the first half of next year, is selling its consumer film, photo kiosk and commercial scanner businesses; continuing an extended effort to auction its digital imaging patents; and shuttering its consumer inkjet printer sales.
“The additional liquidity from this financing will enable Kodak to accelerate its momentum as we continue to successfully execute on our reorganization objectives and emerge in the first half of 2013,” Perez said in a statement.
Under the deal, Kodak would borrow the money from a private investment firm, Centerbridge Partners, GSO Capital Partners — which is a subsidiary of The Blackstone Group — and banks JPMorgan Chase & Co and UBS AG.
The loan would consist of US$476 million in new loans and US$317 million in rollovers of old debt. There is a provision to convert US$567 million into “exit financing,” a prerequisite for emerging from Chapter 11 protection.