Kodak has emerged from bankruptcy as a leaner, more focused company after selling many of the businesses that made it famous.
After filing for Chapter 11 bankruptcy in January 2012, Kodak has finally emerged from it and seems ready to take up the mantle as one of the technology giants. Founded in 1892, Kodak made photography available to the masses, but seemed unable to adapt its business model to suit the growing digital era that was dawning. This was the cause for the company’s financial trouble as it found itself with $6.75bn worth of liabilities and assets of $5.1bn. Kodak also blamed high pension costs as a contributing factor.
However, after selling off approximately 1,100 imaging patents for $527m to a group of technology companies (that included Facebook, Blackberry, Microsoft, Amazon, Google, Samsung Electronics and Apple), it received a loan from Citigroup of $950m to give the company a chance to rise from the ashes.
As part of the restructure, Kodak also had to sell off its Personalised Imaging and Document Imaging businesses to a Kodak Pension Plan, securing $695m in financing and a further $406m in capital.
Antonio Perez, Chief Executive of Kodak, claimed that the company had “Emerged as a technology company serving imaging for business markets – including packaging, functional printing, graphic communications and professional services.” He went on to state that Kodak has “been revitalised 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 real question then is whether Kodak is a phoenix rising from the ashes, or is it just the residue that remains after a product is burnt? Only time will tell.