Kodak Spins Off Personalized Imaging and Document Imaging Units to UK Pension...

Kodak Spins Off Personalized Imaging and Document Imaging Units to UK Pension Plan


Rochester, NY—Kodak reached a settlement agreement with the UK Kodak Pension Plan (KPP), its largest creditor, with respect to its Chapter 11 reorganization plan. Under the agreement, Kodak’s Personalized Imaging and Document Imaging businesses will be spun off under new ownership to KPP for cash and non-cash consideration of $650 million.

Certain proceeds will be used to support the emergence of Kodak from Chapter 11 and the growth of its Commercial Imaging business. The agreement also settles approximately $2.8 billion of claims by KPP against Kodak and certain of its affiliates.

Kodak's Personalized Imaging unit consists of Retail Systems Solutions, a leader in retail photo kiosks and dry lab systems for the photo services market; Paper & Output Systems, offering photo specialty retailers, professional and wholesale labs, and photographers traditional photographic paper and workflow solutions; Film Capture, offering consumers and pros still-camera film products; and Event Imaging Solutions, offering theme parks and other venues a total solution in souvenir photo operations.

Kodak's Document Imaging business enables customers to capture and manage  information from electronic and paper documents. Solutions include scanners and capture software, information workflow software, professional services, and  service and support.

“In one comprehensive transaction, Kodak will realize its previously announced intention to divest its Personalized Imaging and Document Imaging businesses and settle its largest legacy liability,” said Antonio M. Perez, Kodak’s chairman and chief executive officer. “The KPP transaction moves us past several key hurdles in our reorganization, resolving all potential claims worldwide, assuring continued operations outside of the United States, placing our Personalized Imaging and Document Imaging businesses with a new owner that recognizes their value and is focused on their growth and success, and providing the remaining liquidity we require to emerge from Chapter 11.”  

The agreement will be implemented as part of Kodak’s Chapter 11 plan in the United States. At consummation of the spin-off, Kodak and its worldwide affiliates will be released from their obligations to KPP. The UK Pensions Regulator decided it will approve the release of Kodak Limited, the KPP’s sponsoring employer, from its liabilities to the KPP. Additionally, the UK Pension Protection Fund confirmed it has no objection. Closing of the transaction is subject to the approval of the U.S. Bankruptcy Court and the Regulator and the satisfaction or waiver of other conditions precedent.

Kodak filed a draft Chapter 11 plan with the Bankruptcy Court on April 30, to seek approval of the KPP settlement and related transactions promptly thereafter, withdrawing the previously filed motion for the stand-alone sale of the Document Imaging business.

In related news, Kodak reported $283 million in consolidated net earnings in the first quarter of 2013, compared to a $366 million loss in the prior-year quarter. The profitable quarter reflects improved results of the Commercial Imaging segments and includes a $535 million gain recorded on the sale of Kodak’s digital imaging patent portfolio, partially offset by a $77 million non-cash goodwill impairment charge related to the patent sale. kodak.com