New York, Jan. 19 (Reuters): Eastman Kodak Co, which invented the hand-held camera and helped bring the world the first pictures from the moon, has filed for bankruptcy protection, capping a prolonged plunge for one of America's best-known companies.
The more than 130-year-old photographic film pioneer, which had tried to restructure to become a seller of consumer products such as cameras, said it had also obtained a $950-million, 18-month credit facility from Citigroup to keep it going.
The loan and bankruptcy protection from the US trade creditors may give Kodak the time it needs to find buyers for some of its 1,100 digital patents and to reshape its business while continuing to pay its 17,000 workers.
"The board of directors and the senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," chairman and CEO Antonio Perez said. "Now we must complete the transformation by addressing our cost structure and effectively monetising non-core intellectual property assets. We look forward to working with our stakeholders to emerge a lean, world-class, digital imaging and materials science company," he added.
Meanwhile, Kodak India today said the bankruptcy filing by its parent in the US would not impact operations here and it would continue to do normal business.
"We do not expect the business in India to be impacted in any significant way during this process," Kodak India vice-president, marketing (consumer digital imaging group and graphic communication group), P.N. Raghuvir told PTI.
At the end of September, the group had total assets of $5.1 billion and liabilities of $6.75 billion.
Kodak said it and its US subsidiaries had filed for Chapter 11 business reorganisation in the US Bankruptcy Court for the Southern District of New York. Non-US subsidiaries were not covered by the filing and would continue to honour all obligations to their suppliers.
From highs to lows
Kodak once dominated its industry and its film was the subject of a popular Paul Simon song, but it failed to embrace more modern technologies quickly enough, such as the digital camera ' ironically, a product it even invented.
Its downfall hit its Rust Belt hometown of Rochester, New York, with employment there falling to about 7,000 from more than 60,000 in Kodak's heyday. Its market value has sunk to below $150 million from $31 billion 15 years ago.
In recent years, CEO Perez has steered Kodak's focus more towards consumer and commercial printers.
But that failed to restore annual profitability, something Kodak has not seen since 2007, or arrest a cash drain that has made it difficult for Kodak to meet its substantial pension and other benefit obligations to its workers and retirees.
Perez said bankruptcy protection would enable Kodak to continue to work to maximise the value of its technology assets, such as digital-imaging patents it says are used in virtually every modern digital camera, smartphone and tablet. The company has also built patented printing technology.
Kodak said it was being advised by investment bank Lazard Ltd, which has been helping Kodak look for a buyer for its digital patents.
Other advisers included business-turnaround specialist FTI Consulting, whose vice-chairman, Dominic DiNapoli, would serve as chief restructuring officer for Kodak, supporting existing management.
In the last few years, Kodak has used extensive litigation with rivals such as Apple, BlackBerry maker Research in Motion and Taiwan's HTC Corp over those patents as a means to try to generate revenue. Those patents may now be sold through the bankruptcy process.
George Eastman, a high school dropout from upstate New York, founded Kodak in 1880, and began to make photographic plates. To get his business going, he splurged on a second-hand engine for $125.
Within eight years, the Kodak name had been trademarked, and the firm had introduced the hand-held camera as well as roll-up film, where it became the dominant producer.
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