Kodak (EK) May Be in Talks with Citi (C) for Financing
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It's no secret Eastman Kodak (NYSE: EK) is facing money issues. Heck, the company even said so itself just a few months ago.
Reports Friday suggest Kodak may be in talks with Citigroup (NYSE: C) over a potential financing deal.
Because cash is so low, Kodak is rumored to be gathering paperwork needed for a bankruptcy filing. Getting protection under Chapter 11 of the U.S. Bankruptcy Code will allow Kodak to avoid creditors while focusing on the sale of its patents.
Kodak might be looking for $1 billion of debtor-in-possession financing, in which the company would be able to retain assets in which a creditor has a lien.
Kodak has been hit with the consumer shift from traditional cameras to devices that run solely on digital formats. Though there is still a market of traditionalists, many consumers now rely on their mobile device or a cheaper, easier to use digital camera for photo needs. Much of the reason has to do with the ability to immediately upload and share photos from events, instead of having to wait several days for film to be processed, and then scanned into a computer, for similar capability.
Why Kodak didn't see this coming and adapt is anyone's guess.
Last quarter, Kodak ended with about $862 million of cash and equivalents, compared to $1.4 billion for the same period last year.
Shares are down 22.6 percent early Friday.
Reports Friday suggest Kodak may be in talks with Citigroup (NYSE: C) over a potential financing deal.
Because cash is so low, Kodak is rumored to be gathering paperwork needed for a bankruptcy filing. Getting protection under Chapter 11 of the U.S. Bankruptcy Code will allow Kodak to avoid creditors while focusing on the sale of its patents.
Kodak might be looking for $1 billion of debtor-in-possession financing, in which the company would be able to retain assets in which a creditor has a lien.
Kodak has been hit with the consumer shift from traditional cameras to devices that run solely on digital formats. Though there is still a market of traditionalists, many consumers now rely on their mobile device or a cheaper, easier to use digital camera for photo needs. Much of the reason has to do with the ability to immediately upload and share photos from events, instead of having to wait several days for film to be processed, and then scanned into a computer, for similar capability.
Why Kodak didn't see this coming and adapt is anyone's guess.
Last quarter, Kodak ended with about $862 million of cash and equivalents, compared to $1.4 billion for the same period last year.
Shares are down 22.6 percent early Friday.
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