Eastman Kodak has filed for bankruptcy protection in the US, and secured nearly $1bn to maintain operations during the proceedings. [Updated]
"The board of directors and the entire senior management team unanimously believe that this is a necessary step and the right thing to do for the future of Kodak," said Chairman and Chief Executive Antonio M. Perez.
Earlier this month we reported that, according to the Wall Street Journal, the photography firm, which offers digital cameras and printers as well as photographic film, was making "last-ditch efforts" to sell off some of its patents in a bid to avoid having to prepare a Chapter 11 bankruptcy protection filing. Some 1,100 patents could be sold in the move, which equates to around 10 percent of its total patent library. See also: Kodak says Samsung Galaxy Tab infringes patents.
However, it appears the efforts failed and the 131-year-old company has now filed for Chapter 11. Kodak has obtained a $950m, 18-month credit facility from Citigroup to to ensure it remains afloat during bankruptcy proceedings. Kodak said the credit facility, which is subject to court approval, would "enable the company to focus on its most valuable business lines". However, there are concerns regarding what will happen to the firm's 19,000 members of staff now the Chapter 11 filing has gone ahead.
“Kodak is taking a significant step toward enabling our enterprise to complete its transformation," said Perez.
"The Board of Directors, the senior management team and I would like to underscore our appreciation for the hard work and loyalty of our employees. Kodak exemplifies a culture of collaboration and innovation. Our employees embody that culture and are essential to our future success.”
The photography firm believes the Chapter 11 filling will ensure it can maximise the value of two specific area of its portfolio, digital capture patents that are used in mobile devices and other consumer electronics that capture digital images along with "breakthrough" printing and deposition technologies. Kodak expects the reorganisation of the company to be completed by 2013.
In Q3, Kodak reported it had made a quarterly loss of $222m and marked the ninth consecutive quarter the firm has made a loss. The Wall Street Journal's predictions saw Kodak's shares take a hit, falling 28 percent.
However, the firm says sales of printers and consumables in Q3 were 44 percent up on the same time last year. Despite this, IDC says Kodak has only a 2.6 percent share of the printer market and ranks fifth in the world behind the likes of HP. Since 2003, Kodak has closed 13 manufacturing plants and 130 processing labs, and reducing its workforce by 47,000.