Report: Kodak set for bankruptcy

SHARES in photography company Kodak tumbled to an all-time low following a report that the ailing company is getting ready to seek bankruptcy court protection.

The Wall Street Journal said Kodak is preparing for a bankruptcy 11 filing “in the coming weeks” if efforts to sell a trove of digital-imaging patents fall through.

In July, Kodak began trying to sell around 1,100 digital-imaging patents that financial analysts think might fetch $2 billion to $3bn (€1.5 to €2.3bn).

Kodak’s stock dropped 17 cents, or 26.3%, to 48 cents. It hit its previous trading low of 54 cents on September 30 when word leaked that it had hired a law firm that advises companies on bankruptcy and restructuring options.

The New York Stock Exchange warned Kodak this week that its shares will be delisted if they stay below $1 for six more months.

The Journal said Kodak is in discussions with potential lenders for around $1bn in loans called “debtor-in possession financing” that would keep it afloat during a bankruptcy process. A bankruptcy filing could occur this month or early in February, it added.

A Kodak spokesman said the company does not comment on rumour or speculation.

Kodak warned in a filing in November that it could run out of cash within a year unless it can sell its digital-imaging patents or raise money selling debt.

The cautionary statement came as Kodak reported a third-quarter loss of $222 million and said its cash reserves fell almost 10% over the year.

Three members of Kodak’s board of directors have resigned in the last two weeks, the latest of whom was economist Laura Tyson, a member of the Clinton administration.