Kodak to cut term debt via sale of flexographic packaging division

By Susanna Moon

Chicago, Nov. 12 – Eastman Kodak Co. plans to reduce its outstanding term debt using proceeds of an asset sale.

The company has entered into a definitive agreement to sell its flexographic packaging division to Montagu Private Equity LLP for up to $390 million, according to an announcement.

The total value of the deal consists of the base purchase price of $340 million, potential earn-out payments of up to $35 million over the period through 2020 based on achievement by the business of agreed-upon performance metrics and $15 million payable by Montagu to Kodak at closing as a prepayment for various services and products to be provided by Kodak to the business post-closing pursuant to commercial agreements, subject to completion of pledge and collateral arrangements.

The company said it expects the remaining outstanding term debt to be refinanced or repaid using cash proceeds from additional asset monetizations.

“This transaction is an important turning point in our transformation and is a significant, positive development for Kodak,” Jeff Clarke, chief executive officer of Kodak, said in the press release.

“The sale of the flexographic packaging division unlocks value for shareholders and strengthens our financial position by providing a meaningful infusion of cash which allows us to reduce debt, improving the capital structure of the company and enabling greater flexibility to invest in our growth engines.”

Kodak is a Rochester, N.Y.-based imaging technology products and services provider to the photographic and graphic communications markets.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.