Print set to save Kodak

Eastman Kodak may be preparing to file for bankruptcy, with plans to exit its photography business in favour of a digital printing future.

According to the Wall Street Journal, the once-iconic photographic film pioneer's cash reserves are dwindling and it is trying to raise cash by selling off its digital imaging patents.

Unless the company can sell off its IP, it may need to file for Chapter 11 bankruptcy protection. It will only sell off 10% of its total patent portfolio, which is estimated to be worth up to $3 billion. Kodak is also looking for a $1 billion settlement in its lawsuit against Apple for patent infringement. A mixed decision last year failed to resolve the court case.

Antonio Perez (pictured), Kodak CEO is banking the company’s future on its inkjet print division. Kodak is in discussions with banks to secure financing to keep it in operation during any bankruptcy proceedings. If the company survives it is likely to completely exit the consumer photography business, since digital technology and smartphones continue to gain greater market share.

The exodus from film and cameras reflects the brand’s move from a consumer business to a B2B printing business. Kodak will not disappear; if anything it will become a more vigorous and important player in the printing industry. It would emerge as a much smaller, but more profitable company.

The fact that three Kodak directors have resigned in the past two weeks, has only added fuel to speculation that bankruptcy is looming.

On January 3rd, Kodak announced that it had received a listing notice from the New York Stock Exchange because the average price of the stock was less than one dollar for 30 consecutive trading days. Following the Journal’s online report, company shares fell 28 percent.

During its 131-year old history the company’s Kodak moment spanned most of the 20th century, where it held a dominant position in the film market. The company's value has slumped 98% from a market value of $30 billion in the 1990s, when sales of photographic film started to fall and digital technology began its rise to prominence. Kodak is saddled with substantial debt burdens, especially millions of dollars owed in pensions and retirement health plans.

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Eastman Kodak has announced the creation of a new business structure that will see its operations reduced to just two business segments from its existing three segments.

The newly created Commercial Segment and Consumer Segment have replaced the company’s Graphic Communications Group (GCG), the Consumer Digital Imaging Group (CDG) and the Film, Photofinishing and Entertainment Group (FPEG).

Both the new divisions report to a freshly created Chief Operating Office headed up by existing COO, Philip Faraci, who will be tasked with overseeing the Commercial Segment, while recently named joint COO, Laura Quatela will oversee the Consumer Segment.

The Commercial Segment includes all of the GCG products plus an additional two product lines that were in the FPEG business, including Prepress, Entertainment Imaging, Commercial Film and Global Consumables Manufacturing.

The Consumer Segment incorporates all of the company’s CDG products, plus three FPEG lines, including Paper & Output Systems, Event Imaging Solutions, the Consumer Film and the Intellectual Property business.

The structural changes were effective from 1 January 2012.