Kodak Clears Up Bankruptcy Fears, Plans to Pay Off Debt and Achieve Net-Debt Freedom

Kodak, a century-and-a-half old photography technology company, seeks to reassure its customers that its longstanding presence in the market is not under imminent threat.

Recent speculations about the company’s financial stability have been met with clarification from Kodak itself. On Wednesday, the company disputed media reports suggesting it may be on the brink of collapse, attributing the uncertainty to a misinterpretation of terminology used in its latest financial reports.

In its Q3 financial report, released Monday, Kodak informed investors that it would need to fulfill $500 million of its debt obligations to maintain its trading activities. The report cited “substantial doubt about the Company’s ability to continue as a going concern,” which some news outlets interpreted as a warning signal for potential bankruptcy.

Kodak, however, clarified that the term “going concern” was used to highlight the company’s focus on debt repayment rather than indicating financial instability. Denisse Goldbarg, Kodak’s Chief Marketing Officer and Head of EAMER Sales, explained this to The Verge and ABC News, stating, “Kodak is confident it will be able to pay off a significant portion of its term loan well before it becomes due, and amend, extend or refinance our remaining debt and/or preferred stock obligations.”

To fund the repayment, Kodak plans to draw on the approximately $300 million in cash expected from the reversion and settlement of its U.S. pension fund (the Kodak Retirement Income Plan, or “KRIP”) in December. Goldbarg added, “However, the KRIP reversion is not solely within Kodak’s control and therefore is not deemed ‘probable’ under U.S. GAAP accounting rules, which is what triggered the ‘going concern.’ Once the KRIP reversion is completed, Kodak will be virtually net debt free and will have a stronger balance sheet than it has had in years.”

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