Struggling photo pioneer Eastman Kodak Co. said Monday that it has reached an agreement to borrow $793 million, an important step in letting it leave bankruptcy protection in the first half of next year.
The deal is contingent on Kodak being able to sell its patent portfolio for at least $500 million. The company has been trying to sell that asset for more than a year. In a statement, Kodak says it is "confident it will achieve" that requirement.
"The additional liquidity from this financing will enable Kodak to accelerate its momentum as we continue to successfully execute on our reorganization objectives and emerge in the first half of 2013," CEO Antonio M. Perez said in a statement.
Under the deal, Kodak would borrow the money from a private investment firm, Centerbridge Partners; GSO Capital Partners, which is a subsidiary of The Blackstone Group; and banks JPMorgan Chase & Co. and UBS AG. The loan would consist of $476 million in new loans and $317 million in roll-overs of old debt. There's a provision to convert $567 million into "exit financing," a prerequisite for emerging from Chapter 11 protection.
Kodak filed for bankruptcy protection in January after struggling to adapt to the world of digital photography.