Kodak Pension Fund to seek bailout

Discussion in 'Industry News' started by Neil Kelly, Sep 19, 2018.

  1. Neil Kelly

    Neil Kelly Member

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    https://www.ft.com/content/9033effe-bb25-11e8-94b2-17176fbf93f5

    Kodak Pension Fund 2 (which contains Kodak's pension liabilities for UK employees) stated yesterday that they are likely to seek rescue from the UK Pension Protection Fund, which is effectively an industry funded, government backed bailout scheme. This is due to the £1.5 billion deficit which the scheme currently has and which is unlikely to be made up by other means. There will be cuts to the benefits paid out, but I wonder what will happen to Kodak Alaris and still film? The business (among others) was supposed to help fill the pension gap and is apparently profitable, but the PPF is unlikely to wish to retain the assets - they run funds not companies.

    Would Eastman Kodak stand any chance of buying the assets back, or who would be likely to buy it?

    Interested to hear any thoughts :smile:
     
  2. faberryman

    faberryman Subscriber

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    I do not think Kodak has the cash for a buyback. They have to buy back something like 450M in preferred stock next year and do not have the cash for that either.
     
  3. Alan Johnson

    Alan Johnson Subscriber

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    "The PPF [ UK Govt lifeboat the Pension Protection Fund ]is now facing its biggest single claim to date" says veteran member of Parliament Frank Field in a letter to the UK Pensions Regulator.
    ( City AM London)
     
    Last edited: Sep 20, 2018
  4. TonyB65

    TonyB65 Member
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    Most companies have big holes in their pension funds, we've just had our pensions restructured for the second time, it never gets better, and I work for a FTSE 100 company which is relatively healthy. This is just the tip of the iceberg for many private sector employees. It's about time the public sector pensions were tackled, which the rest of us have to pay for.
     
  5. cmacd123

    cmacd123 Member
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    or better, that the private sector be held accountable to fully fund their promises to their staff. often public pensions are designed as a model to be held up as best practice to the private sector.
     
  6. Wallendo

    Wallendo Subscriber
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    Obviously EK doesn't have the money. I wonder what the market capitalization of Kodak Alaris would be if it were taken public. The ideal situation would be for EK's film divisions and KA's film distribution division to be bought out by a white knight and reunited. Maybe we can convince Elon Musk that he needs to take Kodak film on his flight around the moon.
     
  7. mshchem

    mshchem Subscriber
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    The same thing will happen to Social Security, government pension funds. We live on non-stop emission of trillions in debt. Kodak would be a good project for Bezos and Spielberg. Bailout the whole mess for less than a weeks earnings.
     
  8. TonyB65

    TonyB65 Member
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    On the first point I agree, on the second point, it's easy to be held up as "best practice" when someone else is paying for it.
     
  9. AgX

    AgX Member

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    The Kodak Pension Fund cannot have a 1.5 billion deficit.
     
  10. pentaxuser

    pentaxuser Subscriber

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    I think it may be helpful if you can explain your statement for the sake of keeping this thread from rapidly being relegated to the Soapbox.

    What this thread has raised in my mind was how much was the film sales transfer to KA valued at, in terms of Kodak being able to meet its pension obligations and by whom.

    pentaxuser
     
  11. AgX

    AgX Member

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    Well, when the Kodak UK pension fund was contemplating to take over parts of Kodak's businesses (what later evolved into Kopdak Alaris) the fund got assets (thus positives) of 900millionPounds.
    The same time they had claims against Kodak of 3billion$.

    They paid Kodak 325milion$, got those businesses and cancelled any claims against Kodak. Expecting profits of 110million$/year.

    Though even if Kodak Alaris made no profit at all, they woukd not be in that stated deficit. So there must be losses for the fund elsewhere.

    Could someone get the figures right??
     
  12. pentaxuser

    pentaxuser Subscriber

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    Thanks for the informative reply,AgX. So could anyone get the figures right as you have asked? We certainly need to stay grounded on what may be a complicated issue

    pentaxuser
     
  13. MattKing

    MattKing Subscriber
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    I believe that the sum paid by the pension trustees to the Eastman Kodak bankruptcy trustees was $600 million US, not $325 million US.
    And I believed that they borrowed all or part of that sum.
    The "film" sale transfer was probably valued at a fairly low value. The colour paper transfer, and the land and buildings at Harrow (since sold) as well as the other realty (most likely leasehold) interests were most likely valued at a much higher amount.
    So we have a situation where the pension shortfall (not deficit) was 3 billion pounds at the time of the bankruptcy (using AgX's numbers) and has been reduced to 1.5 billion pounds since, but the projected profits from Kodak Alaris are not sufficiently high to continue with the current process.
     
  14. Alan Johnson

    Alan Johnson Subscriber

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    Anyhow, at present it appears that Kodak Alaris is likely to keep going.
    Of rather more doubt is the future of the production facility Building 38 which is I believe operated by US Kodak but that has been discussed in other threads.
     
  15. AgX

    AgX Member

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    What I wanted to say was, that one likely may think that the pension fund bought/traded-in a lemon and thus is in big trouble.
    But the situation seems more complicated. We do not know the financial situation of that fund before Kodak's insolvency or its onset and we neither do know what that rather big claim the fund had against Kodak at that moment was based on.

    On a sale of Kodak Alaris one only can speculate. In any case their halide business would only be an add-on, it not even shows up in their self description
     
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