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Kodak will use the proceeds of the sale to repay a senior debt of $ 395 million. Kodak exhibition at the CES show in Las Vegas in January
Photo:
david mcnew / Agence France-Presse / Getty Images
Eastman Kodak
Co.
KODK 5.18%
said the sale of its flexographic packaging division to a private investor would receive up to $ 390 million, which could help the company repay a loan maturing next year.
The company confirmed Monday that Montagu Private Equity LLP was the division's buyer, which produces technology used to print images on consumer product packaging.
Last week, CEO Jeff Clarke told investors that Kodak had signed a binding deal for the sale of the unit, but he did not quote the price or the buyer.
Montagu will purchase the unit at a base price of $ 340 million, subject to adjustments, and may eventually pay Kodak price supplements of up to $ 35 million based on the division's performance. Kodak announced in a statement released Monday. At closing, the investor will also pay Kodak $ 15 million for certain services and products that Kodak will provide related to the unit.
Kodak shares have jumped 10% in recent trading; stocks jumped 21% in pre-market trading on news. The stock ended last week at $ 3.09 per share.
Kodak will use the proceeds of the sale to repay a senior debt of $ 395 million. The company announced on Monday that it expected to refinance the remaining debt after payments or repay it with the help of cash from additional "asset monetization".
The transaction for the flexographic packaging division is expected to be finalized in the first half of next year.
Kodak's cash flow, based in Rochester, northern New Zealand, declined to $ 238 million at the end of the third quarter, from $ 344 million at the end of last year. The company has stated in a securities deposit that it faces uncertainties about the payment of debts as they fall due.
In August, the company issued a business continuity warning stating that its ability to deal with the payment of debt and continue operations was in doubt.
Write to Micah Maidenberg at [email protected]
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