Kodak is reportedly on the verge of bankruptcy, with its shares tumbling as low as $0.54 in the stock market last week. Sources close to the company said Kodak has hired Jones Day, a top law firm known for dealing with bankruptcy and restructuring of assets.
?It is not unusual for a company in transformation to explore all options ? including financial and legal advisers. Jones Day is one of a number of advisers that Kodak is working with in that regard,” a Kodak official told agencies. However,?Kodak released a statement denying the rumors and saying the company ?has no intention of filing for bankruptcy.
Google is reported to be in line to bid for the company, as it looks to capitalise on the branding of Kodak?s name. Google have already signed a confidentially agreement to look through Kodak?s assets and according to MDB Capital Group, Kodak would go up for sale for up to US$3 billion.
“We certainly reiterate that we have no plans to file for bankruptcy and are committed to meeting our obligations. In fact, as you know, we made a coupon payment today on the debt. We can’t comment on what others choose to do,” Kodak spokesman Chris Veronda said in an e-mail statement on Monday.
There has been a 67% decrease in the Kodak stock, which resumed at $1.34 on Monday morning in the New York Stock Exchange since 23 September.
Kodak had a large workforce of about 145,300 workers when the company was at its peak?in 1988. Failure to catch up with new digital technologies and tough economic conditions have forced the company’s staff to just 18,800 across the globe.
Kodak, a leader in photography industry for over a century since its in birth in 1899, has not been able to claw its way into the digital cameras and video recorders market. Companies like Nikon, Canon, Sony and Panasonic lead today’s digital photography market.
But Tiwana, who specialises in company distress research, said that bankruptcy would not be coming any time soon for Kodak. “The management is unlikely to file for bankruptcy until they run out of cash.?
As early as last week, Kodak withdrew $160 million from a revolving credit line, which sent the shareholders in a bit of a frenzy, but analysts suggest Kodak still holds $957 million on hand.