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Kodak secures interim approval to use $650 million of DIP financing
By Caroline Salls
Pittsburgh, Jan. 20 - Eastman Kodak Co. received interim access to $650 million of its proposed $950 million of debtor-in-possession financing from Citigroup as part of the approval of its first-day bankruptcy motions, according to a company news release.
Kodak said it will use these funds, among other things, to pay vendors and other suppliers for all post-bankruptcy goods and services and to operate its day-to-day business activities.
The DIP facility will consist of a $250 million ABL facility and an up to $700 million term loan facility.
The DIP financing is scheduled to mature in 18 months.
Interest on revolving loans will be either Base rate plus 225 basis points or Libor plus 325 bps, and interest on term loans will be either Base rate plus 750 bps or Libor plus 850 bps, with a 1.5% Libor floor.
The final hearing is scheduled for Feb. 15.
In addition to the interim DIP financing, the company received court approval to pay employees in the usual manner and continue their health care and other benefits programs, pay pre-bankruptcy wages and reimbursable U.S. employee expenses, maintain and administer customer programs and honor pre-bankruptcy obligations to customers and continue to use existing cash management systems and maintain existing bank accounts.
"The court's immediate approval of these critical first-day motions is an important first step, enabling us to continue to operate our U.S. business in ordinary course and putting us on the right path to a successful reorganization," Kodak chairman and chief executive officer Antonio M. Perez said in the release.
Kodak, a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets, filed for bankruptcy on Jan. 19 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 12-10202.
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