Eastman Kodak Company hopes to raise upwards of US$700 million in funds, including an estimated US$400-million commitment from Kohlberg Kravis Roberts & Co. L.P. (KKR) based on the planned purchase of Senior Secured Notes that are to fall due in 2017. If the transaction is completed, scheduled for around September 30, Kodak’s board of directors will appoint two individuals designated by KKR to the board.
In addition, Kodak agreed to issue to KKR warrants to purchase up to 53-million shares of Kodak common stock, which means Kodak could ultimately vary the amount of Senior Secured Notes purchased by KRR. Under the terms of the agreement, KKR is required to hold the warrants and shares for a minimum of two years.
“KKR has a long, successful record of working with, and investing in, companies with significant value-creation potential,” stated Antonio Perez, Kodak’s Chairman and Chief Executive Officer, in a press release about the arrangement. “We look forward to working with the KKR team to accelerate the growth of our portfolio of high-margin annuity businesses.”
Kodak also announced it will readjust the release of its upcoming third-quarter results, as it “estimates total segment losses from continuing operations before interest expense, other income (charges), net, and income taxes will be between US$50 million to US$60 million.”