Kodak Alaris - sold

Don_ih said:

buy an existing film (or paper, for that matter) coating operation

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MattKing said:

You aren't getting what I'm saying Alan.

First, the Eastman Kodak division that operates building 38 (plus a few other related buildings) doesn't just use them for products related to photographic film. They also make a bunch of things that have nothing to do with photography, as well as products that have both photographic uses and non-photographic uses - Kodak Alaris would have to expand is marketing and distribution considerably if they were to take on those businesses.
Second, Kodak Alaris has never had any responsibility for the obligations of the historical Kodak Limited pension fund. Kodak Alaris is merely an investment intended to provide a financial return to its shareholders. And those shareholders have changed - but nothing else has changed for Kodak Alaris (so far). I

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MattKing said:

You aren't getting what I'm saying Alan.

First, the Eastman Kodak division that operates building 38 (plus a few other related buildings) doesn't just use them for products related to photographic film. They also make a bunch of things that have nothing to do with photography, as well as products that have both photographic uses and non-photographic uses - Kodak Alaris would have to expand is marketing and distribution considerably if they were to take on those businesses.
Second, Kodak Alaris has never had any responsibility for the obligations of the historical Kodak Limited pension fund. Kodak Alaris is merely an investment intended to provide a financial return to its shareholders. And those shareholders have changed - but nothing else has changed for Kodak Alaris (so far). I

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BrianShaw said:

Is there even a part of EK that is known as the “film division”? Looking at the org chart and a recent annual report, the division that makes the film doesn’t even seem to acknowledge photographic film yet described the breadth of other “film” product lines. To spin off photographic film may require a restructuring. It might not even be possible if such an action would impact the other product lines. Plus, although probably not in the decision loop but quite possibly influential, could be the other film users, like motion picture industry and government customers. So it seems interesting speculation and/or wishful dreaming but extremely highly unlikely.

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koraks said:

No, that reflects what @MattKing has been saying.



A very thorough restructuring. It would mean either of two things:
1: Eastman Kodak would sell off its actual coating operations to Alaris. All of its coating operations (not related to photographic film, but the myriad other products they coat there) would then have to be outsourced to a 3rd party, which could be Alaris (i.e. they keep using the same physical line, but no longer own it). The situation that now exists for photographic film would continue to exist, but now for the other products Eastman Kodak manufactures.
2: Eastman Kodak would not sell off its actual coating line. Alaris would now own the film coating business, but would have to look for physical infrastructure to actually do the operations. They would either have to build a plant for that, somewhere, incurring an investment of several hundred million $$$ at least. Eastman Kodak would lose the economies of scope accruing from manufacturing a range of products that rely on the same technology base.

Both of these scenarios have severe practical and strategic drawbacks for both Eastman Kodak and Alaris. Hence, it would be a corporate restructuring that's neither practically feasible, nor desirable for anyone involved.

If Alaris would want to actually start making film, a more likely scenario would be that they somehow manage to contractual agreements with Eastman Kodak so they're not bound to Kodak film. They could at the same time enter an alliance with one or more companies that have film coating capabilities, or are willing and capable to build this competence and physical infrastructure in a reasonable timescale. The latter seems unlikely, so they're more likely stuck with a small selection of companies worldwide they'd have to do business with. Since in this scenario they'd be exiting their alliance with Eastman Kodak, it would make sense that they'd look for other parties. So they're going to be stuck with either a few companies whose color film manufacturing is nascent and immature, or they'll have to somehow convince Fuji to boot some of their Instax business out of their own production line to make room for the new Alaris film that has to be coated.

No matter which way you turn this, it doesn't add up. Which is probably why we've seen this "weird" arrangement between Eastman Kodak and Alaris exist for so long. Despite its oddities, these companies have very little choice but to do it this way, and they're perfectly aware of it, too.

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Alan Edward Klein said:

Eastman does have a contract with certain Hollywood film makers to supply movie film to them and Hollywood is obligated to buy a certain amount each year. However, companies that have contracts with buyers to supply products are sold regularly. The contract has to be honored by the new owners. So, it's possible that Kingswood could buy both the still film and movie film production lines. Or just the still film line to go with its Alaris distribution purchase.

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BrianShaw said:

I've heard about the Hollywood contracts too but never saw details so don't have any real information to offer, or even repond to. Are you sure that those Hollywood, or the legacy government contracts, were transferred to Alaris or could they still be direct with Eastman Kodak?

What gives you confidence that the movie and still film elements of AM&C Division are separable from that division's other - more numerous and more profitable - productlines?

Wishfull thinking and repeated repeating of the same rhetoric may not be sufficient to maintain a meaningful discussion. The available data is a bit hard to decypher but it appears that photographic film is only about 1/2 - 1/3 of that division's sales, and a product line that has been acknowledge to have significant production deficiencies due to aged equipment and infrastructure. Speculation is find as that's all we have at the moment but look a the history and goals of Kingwood; their stated target companies do not seem to include manufacturing, unless I compelety overlooked it. Please correct any knowledge deficiencies I have herewithin displayed.

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BrianShaw said:

I've heard about the Hollywood contracts too but never saw details so don't have any real information to offer, or even repond to. Are you sure that those Hollywood, or the legacy government contracts, were transferred to Alaris or could they still be direct with Eastman Kodak?

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Alan Edward Klein said:

I'd love to see one recent advertisement for film.

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Angarian said:

The complete movie film business has always been run by Eastman Kodak. Kodak Alaris was never ever involved in it (no participitation, no shares, no marketing, nothing at all).
Also the Hollywood contracts were contracts between Eastman Kodak and several Hollywood film studios.

Also because of this I think it is very unlikely that Kingswood has any chance (or intention) to go for the film production of Eastman Kodak.
Another very important point: So far there has not been any information that Eastman Kodak wants to sell its film production.
What is known is that when the UK Pension Plan wanted to sell Kodak Alaris at first there was an offer to Eastman Kodak to buy it. But it was too expensive for Eastman.

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mshchem said:

What if Kingwood buys Cinestill ?

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Alan Edward Klein said:

I'm confused as to the arrangement. How do the retirees get their pension money? Does Kingswood have any responsibility now that they own the KA shares?

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BrianShaw said:

When was that... Kodak Alaris offering to sell back to Eastman Kodak?

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Angarian said:

During the pandemic. Got the info by one of my film distributors, who have excellent connections to Kodak Alaris (from which they got the info).

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MattKing said:

Kodak Limited Pension fund...

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MattKing said:

As I understood it, the Pension Protection Board thought that the indications were that the effects of the pandemic meant that the sort of expressions of interest that they were seeing and offers that could be expected were artificially too low, so they put the sale efforts on hold, until things improved.
One of the up sides of being owned by a pension investor is that there might be a longer term perspective on these things. One can hope that Kingswood is capable of both long term and short term approaches.

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koraks said:

They're not exactly things you buy in a local supermarket. There's only a handful of these lines worldwide, and realistically speaking, only two or three are fit to coat color negative film that's on par with the C41 film we are familiar with from the 1990s-2000s.

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MattKing said:

With respect to the employees who participated in the Kodak Limited Pension fund before 2005, they get their pension entitlement from the very substantial amount that still remains from the substantial pre-2005 contributions made by Kodak Limited and Eastman Kodak into the Kodak Limited pension fund, augmented by the statutorily created UK Pension Protection administration, who have the statutory duty to make good (according to a formula on any shortfall that may, in the future, arise.
The Kodak Limited Pension Fund hasn't run out of money yet, but a shortfall is projected, so under the terms of the legislation, in return for the government guarantee of the shortfall, the Pension Protection Fund administrators have taken over administration of the fund from the independent trustees.
But Kodak Alaris has nothing to do with that. Kodak Alaris is just a relatively new corporate asset that was paying profits to its shareholders - the pension fund - and now has been sold to new investors - Kingswood - with the sale price going into the coffers of what remains of the Kodak Limited pension fund.
The 2005 bankruptcy settlement ended Kodak Limited and Eastman Kodak's responsibility for the Kodak Limited Pension fund - they were released from liability, and no new entity acquired that liability. The relatively huge Kodak Limited Pension fund was left with sole liability for all the pension entitlements of the Kodak Limited employees who had previously acquired pension entitlements from Kodak Limited, which ceased business as of the bankruptcy.
In order to buy that release from liability, Eastman Kodak transferred some hugely valuable assets to the Kodak Limited pension fund - land, buildings, valuable leases on land and buildings plus the exclusive rights to market a whole bunch of Kodak branded stuff.
Many, many former employees of Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries lost their jobs in 2005 (and earlier) due to the bankruptcy and the financial issues that led up to it. In or after 2005 Kodak Alaris did hire many of those now jobless workers as new hires. At the time of that new hiring, on new terms, Kodak Alaris probably made provisions for new retirement benefits for those new employees, relating just to their post-2005 employment. But Kodak Alaris has nothing to do with the old Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries former employees' pre-2005 pension entitlements.

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MattKing said:

As I understood it, the Pension Protection Board thought that the indications were that the effects of the pandemic meant that the sort of expressions of interest that they were seeing and offers that could be expected were artificially too low, so they put the sale efforts on hold, until things improved.
One of the up sides of being owned by a pension investor is that there might be a longer term perspective on these things. One can hope that Kingswood is capable of both long term and short term approaches.

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