Kodak files for Chapter 11 in US bankruptcy court
Film and camera company Eastman Kodak has filed for chapter 11 business reorganisation in the US Bankruptcy Court after failing to back innovative technologies and battling new market entrants.
The company, which has been in business for more than a century, will now undergo a restructure after securing a $US950 million debtor-in-possession credit facility from Citigroup to enhance liquidity and working capital.
Non-US subsidiaries, such as the Australian arm, are not affected. Kodak Australasia's general manager, entertainment imaging and professional services (Australia and New Zealand), Darren Swenson, was unavailable for comment.
Motion picture film remains a popular choice for high-end local feature films although ongoing advances in digital capture technology, such as the ARRI ALEXA, are continuing to win over cinematographers. Film has suffered a sharper decline in the local TV commercial market over the past year.
Kodak retrenched three Australian staff last year amid a downturn in local production. Nonetheless, US executives recently said the US film division remains profitable and the company also said it remains committed to the market.
Kodak chairman and chief executive Antonio M. Perez said the company planned to emerge a lean, world-class, digital imaging and materials science company.
“Chapter 11 gives us the best opportunities to maximize the value in two critical parts of our technology portfolio: our digital capture patents, which are essential for a wide range of mobile and other consumer electronic devices that capture digital images and have generated over $US3 billion of licensing revenues since 2003; and our breakthrough printing and deposition technologies, which give Kodak a competitive advantage in our growing digital businesses.”
Kodak had closed 13 manufacturing plants and 130 processing labs, and reduced its workforce by 47,000, since 2003. It said digital and materials deposition technologies now generate approximately 75 per cent of its revenue.
Last year, Perez said Kodak was five years too late to accelerate its shift to the digital age.
The company developed the first digital camera in 1975 but, fearing for its traditional film business, shelved it. It eventually entered that market and, while its digital cameras were popular for a time, in recent years sales plummeted as customers turned to in-built cameras in their smart phones.
Meanwhile, Kodak hasn’t sold enough low-cost printers in recent years to create sufficient demand for ink and other supplies which would end losses in that division.