Kodak warns it may shut down after 133 years, faces $500 million debt and uncertain future

India Today

4 days ago

Eastman Kodak, the photography pioneer with more than a century of history, has warned it could be forced to close if it cannot find a way to pay off around $500 million in looming debt. In an earnings report released on Monday, the 133-year-old company told investors it lacks 'committed financing or available liquidity' to meet these obligations. In its filing, Kodak said these circumstances 'raise substantial doubt about the company's ability to continue as a going concern.' Shares in Kodak fell by more than 25 per cent during midday trading on Tuesday following the announcement.advertisementTo raise cash, the company plans to stop making payments to its retirement pension plan, according to a report by CNN. It also said it does not expect tariffs to have a significant impact, as many of its products, including cameras, inks, and film, are made in the United States.Kodak reportedly told CNN that they are 'confident' about paying off a significant part of the term loan before it is due. They added that the company would seek to amend, extend, or refinance the rest of its debt and preferred stock obligations. According to the spokesperson, the 'going concern' language in the filing was a required disclosure.
Chief executive Jim Continenza said the business was still making progress on its long-term strategy despite 'the challenges of an uncertain business environment.'Founded in 1892 and tracing its roots back to 1879, Kodak revolutionised photography when George Eastman sold the first Kodak camera in 1888 for $25. The camera made photography accessible to the public, leading to the famous slogan: 'You push the button, we do the rest.'By the 1970s, Kodak was a dominant force, responsible for 90 per cent of film and 85 per cent of camera sales in the United States, according to The Economist. Musician Paul Simon's 1973 hit 'Kodachrome' paid tribute to its iconic film.In a twist of fate, the same company that introduced the first digital camera in 1975 struggled to adapt to the digital revolution. By 2012, Kodak had filed for bankruptcy, with debts of $6.75 billion and more than 100,000 creditors.Since then, Kodak has shifted towards industrial printing and brand licensing. It has also ventured into consumer gadgets, such as themed mini photo printers. In 2020, it briefly enjoyed a surge in share price after being awarded, and later facing scrutiny over, a $765 million US government loan to produce pharmaceutical ingredients.The company continues to make films and chemicals for commercial use, including the movie industry, and still licenses its brand. But with the debt clock ticking, its future is clouded by uncertainty. - EndsMust Watch