Kodak Faces Survival Crisis Amid $500M Debt and Liquidity Crunch
Photo pioneer and legend Eastman Kodak warns that one has “considerable doubts” about his legal capacity. The 133-year-old photography giant struggles with $ 500 million debts and liquidity problems. The stock crashed by over 25 percent.
Kodak in existential financial crisis
The over 130 -year -old company Eastman Kodak Co. warns of “considerable doubts” of his legal capacity and puts the hiring of the company in the room. The company, which is usually only called Kodak, announced in a regulatory message that within the next twelve months of debt of around $ 500 million, for which there is no reliable financing or sufficient liquidity. The company’s shares broke up by more than 25 percent on Tuesday after the warning became known. How Cnn reports, a Kodak spokesman is confident that it is confident that it can pay a significant part of the loan before due date and to be able to refinance the remaining obligations.
Kodak waved a profit of $ 25 million in a net loss of $ 26 million in the recent quarter in the previous year and burned $ 46 million in cash. The company currently has $ 155 million of cash and cash equivalents, including $ 70 million in the United States.
Pharma as hope
Kodak had already announced last year to end his pension plan to reduce debts. CFO David Bullwinkle said that the company expects clarity to be clarified by Friday about how the obligations towards all plan members can be fulfilled. The company is about to complete a production system for regulated pharmaceuticals and already produces unregulated raw materials for the pharmaceutical industry. Production in the converted system is scheduled to begin this year. This diversification in the pharmaceutical sector could be decisive for the survival of the company.
From the photography icon to the struggle for survival
Kodak was founded in 1880 by George Eastman in Rochester, New York and made photography accessible to the broad mass at the beginning of the 20th century. Eastman revolutionized the industry with its vision of making photography as easy as writing with a pencil. His famous slogan “You Push the Button, We Do The Rest” (“You press the button, we do the rest”) became a synonym for user -friendly technology. The brownie cameras, which were sold for just one dollar from 1900, as well as the later Instamatic cameras and the characteristic yellow-red film packs were world famous. In the 1970s, Kodak dominated the American market with 90 percent of the film and 85 percent of camera sales.
Missed opportunities for digitization
Paradoxically, Kodak invented the first digital camera in 1975 – developed by engineer Steven Sasson. The device weighed 3.6 kilograms and needed 23 seconds for a black and white photo with 0.01 megapixels. But management feared that the new technology could be cannibalizing the lucrative film business and did not adequately invest in further development. This strategic wrong decision, combined with the emerging Japanese competition between companies such as Canon and Nikon, brought down the former giant.
In 2012 Kodak finally registered bankruptcy and fought with increasing competition, the growth of digital photography and increasing debts. The company sold many business areas and patents, closed the famous camera production and was created in 2013 as a significantly smaller company with a focus on commercial and packaging printing. Today Kodak only employs around 4,500 people – a fraction of the once over 145,000 employees who were climaxed.
