Eastman Kodak Company (EKDKQ) announced that, subject to Court approval, key creditors have agreed to backstop $406 million rights offering upon its emergence from Chapter 11.
Kodak expects to use rights offering proceeds to fund distributions under revised Plan of Reorganization, including the repayment of its second lien creditors, who will no longer receive equity in the Plan.
Kodak said it will offer its creditors, GSO Capital Partners, BlueMountain Capital, George Karfunkel, United Equities Group and Contrarian Capital, up to 34 million shares for $11.94 per share, equivalent to about 85% of the equity of Kodak upon emergence.
"This agreement, which serves as a critical component of the capital structure for the emerging Kodak, positions us to comprehensively settle our obligations with our various key creditor constituencies" , said Antonio M. Perez, Kodak's Chairman and Chief Executive Officer.
"Attracting this additional funding is a strong vote of confidence in both Kodak's Plan of Reorganization and in the actions we have taken during our restructuring to create a solid future for our company," Antonio Perez added.
Kodak's Official Committee of Unsecured Creditors fully supports the backstop commitment and related rights offering.
Kodak has filed a motion to approve the backstop commitment with the U.S. Bankruptcy Court for the Southern District of New York, which is scheduled to be heard on June 25, 2013, at the same hearing as Kodak's motion to approve its Amended Disclosure Statement.
Kodak also filed today an Amended Plan of Reorganization. In the coming days, Kodak intends to file a proposed Order regarding the Rights Offering Procedures and an Amended Disclosure Statement describing its Amended Plan.
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