Bloomberg News

Kodak Liquidation Would Provide Biggest Return, Fitch Says

September 28, 2011

Sept. 28 (Bloomberg) -- Eastman Kodak Co., the 131-year-old camera maker that tapped a credit line last week, is likely to default on its debt and liquidating the company may produce the biggest return to investors, Fitch Ratings said.

Kodak was downgraded to CC, the eighth level below investment grade, signifying that “default of some kind appears probable,” New York-based Fitch said today in a statement. The company, which has a market value of $417 million, may have an adjusted reorganization value of about $1.4 billion, Fitch said.

Chief Executive Officer Antonio Perez is trying to turn Kodak around by selling patents to continue funding its consumer and commercial inkjet printing units and has projected the businesses may generate an operating profit by 2013. The company is headed for its sixth loss in the past seven years.

Drawing $160 million from a credit facility “likely signifies weaker-than-expected cash flow in the second half of 2011,” Brian Taylor, a Fitch analyst in New York, wrote today in a note to clients. Proceeds from selling patents won’t materially improve the company’s credit profile without an improvement in free cash flow, he said.

“We are committed to meeting all our obligations,” Gerard Meuchner, a spokesman, said in today an e-mail.

Kodak tumbled 27 cents, or 15 percent, to $1.55 at 4:15 p.m. in New York Stock Exchange composite trading. The price was the lowest since at least January 1974, according to Bloomberg data.

--Editors: Kevin Orland, Robin Ajello

To contact the reporter on this story: Chris Burritt in Greensboro at

To contact the editor responsible for this story: Robin Ajello at

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