Kodak Seeks Court Approval for $406 Million Rights Offer

Eastman Kodak Co. said creditors agreed to invest as much as $406 million through a rights offering, which will be used to fund distributions under a revised Chapter 11 reorganization plan.

“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,” Kodak Chairman and Chief Executive Officer Antonio Perez said yesterday in a statement.

The creditors, GSO Capital Partners, BlueMountain Capital, George Karfunkel, United Equities Group and Contrarian Capital, have agreed to backstop the rights offering of 34 million shares of common stock for $11.94 a share, according to the statement. The backstop commitment needs to be approved by the U.S. bankruptcy judge in Manhattan, Kodak said.

Proceeds of the offering will be used to pay Kodak’s second-lien creditors, who won’t receive equity under the revised reorganization plan, the company said. Kodak’s committee of unsecured creditors is supporting the backstop commitment and rights offering, according to the statement.

The case is In re Eastman Kodak Co., 12-10202, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

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