Eastman Kodak emerges from bankruptcy

Eastman Kodak Co, the iconic photographic film pioneer which invented the roll film way back in 1885, yesterday emerged from bankruptcy protection and now aims to focus on its digital imaging business.

''We have emerged as a technology company serving imaging for business markets – including packaging, functional printing, graphic communications and professional services,'' said Antonio Perez, Kodak chairman and CEO, ''We have been revitalized by our transformation and restructured to become a formidable competitor – leaner, with a strong capital structure, a healthy balance sheet, and the industry's best technology.''

The Rochester, New York-based company will focus on commercial products such as high-speed digital printing technology and printing on flexible packaging for consumer goods.

Kodak, founded by George Eastman in 1880, filed for bankruptcy protection under Chapter 11 in January 2012 with assets worth $5.1 billion and debt of $6.75 billion.

The company, which introduced its $1 Brownie box type Camera more than a century ago, had lost more than 95 per cent of its stock value since1999 as it was not able to cope with Japanese competition due to the onset of the digital revolution and was late to launch its mass-market line of digital cameras.

It is ironic that the company had to lose out to competition for digital cameras since it invented the first digital camera in 1975, but took the drastic step of shelving this innovation because it threatened its lucrative film business.

That costly blunder was more painful for the company since 75 per cent of its revenues are generated from digital business.

During its 20-month Chapter 11 reorganisation, Kodak focused on commercial markets and removed large legacy costs, streamlined a complex infrastructure, and exited or spun-off businesses, including its remaining consumer imaging and document imaging businesses that were no longer core to its future.

It also sold its patent portfolio, but netted only $525 million instead of the nearly $2 billion it was seeking.

Kodak said that it completed the final steps in its Chapter 11 restructuring, including the spin-off of its Personalized Imaging and Document Imaging businesses to Kodak Pension Plan, a longstanding pension plan of Kodak's UK subsidiary.

The company also closed on its agreement for $695 million in term exit financing, paid off its DIP lenders and second lien noteholders in full and completed its rights offerings, receiving approximately $406 million of new equity investments from participating unsecured creditors.

Perez expects the new company to have revenues of $2.5 billion this year.

''We are setting a trajectory for profitable growth,'' Perez said. ''We have the right technology at the right time as printing markets increasingly transition to digital. Our broad portfolio of offset, hybrid and digital solutions enables customers to make the transition at their chosen pace using our breakthrough technology solutions.

Kodak, once ranked among America's corporate titans, has a long history of digital innovation. In 1975, it invented the digital camera, and in 1976, Kodak invented the Bayer colour filter array, which allows digital cameras to capture images in colour.