Eastman Kodak Co., the photography giant with a history spanning over 130 years, has issued a stark warning regarding its future, stating there is “substantial doubt” about its ability to remain operational.
The company indicated it may struggle to meet impending debt obligations, a revelation that saw its shares plummet by more than 13 per cent in early trading on Tuesday.
In a regulatory filing, Kodak explicitly stated: “Kodak has debt coming due within 12 months and does not have committed financing or available liquidity to meet such debt obligations if they were to become due in accordance with their current terms.”
It added, “These conditions raise substantial doubt about Kodak’s ability to continue as a going concern.”
Based in Rochester, New York, the firm reported cash and cash equivalents of $155 million of cash and cash equivalents as of June 30, with $70 million of that held within the US.
This follows a move last year, reported by The Wall Street Journal, where Kodak ended its retirement income plan in an effort to reduce its debt burden.
Kodak Chief Financial Officer David Bullwinkle said in a statement on Monday that the company expects to know by Friday how it will satisfy its obligations to pay all pension plan participants and foresees completing the reversion by December.
Founded by George Eastman in 1880, Eastman Kodak Co. is credited with popularizing photography at the start of the 20th century and was known all over the world for its Brownie and Instamatic cameras and its yellow-and-red film boxes.
It was first brought down by Japanese competition and then an inability to keep pace with the shift from film to digital technology.
Kodak filed for bankruptcy protection in 2012 after struggling with increasing competition, continuing growth in digital photography and growing debt.
The company wound up selling off many of its businesses and patents, while shutting down the camera manufacturing unit that first made it famous.
It received approval for its plan to emerge from court oversight a year later. At the time, Kodak was looking to recreate itself as a new, much smaller company focused on commercial and packaging printing.
Kodak is now nearing completion of a manufacturing plant to create regulated pharmaceutical products.
The company already makes unregulated key starting materials for pharmaceuticals. Production at the retrofitted facility is expected to start later this year.
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