Kodak raised concerns about its future on Monday, warning investors in an earnings report that it may not be able to continue operations. The 133-year old company, which filed for Chapter 11 bankruptcy in 2012, revealed that it does not have “committed financing or available liquidity” to pay its roughly $500 million in upcoming debt obligations.
“These conditions raise substantial doubt about the company’s ability to continue as a going concern,” the company said in Monday’s regulatory filing.
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This understandably raised the alarm on the company’s ability to continue to function, but Kodak has since released statements to the press downplaying the situation.
“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,” says Denisse Goldbarg, Kodak’s CMO and Head of EAMER Sales. “To fund the repayment, we plan to draw on the approximately $300 million in cash we expect to receive from the reversion and settlement of our U.S. pension fund (the Kodak Retirement Income Plan, or “KRIP”) in December. 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 we have had in years.” added Goldbarg.
