KKR to invest $300m in Eastman Kodak debt

The firm counts George Fisher, former chairman and CEO of the struggling photographic materials company, as one of its senior advisors.

Kohlberg Kravis Roberts will buy up to $300 million of senior secured notes in Eastman Kodak as the iconic company looks to strengthen its financial footing.

Kodak will use the proceeds in part to repurchase some previously issued convertible notes.

“Kodak is renowned for its global brand and its leadership as an imaging innovator,” KKR’s co-founders, Henry Kravis and George Roberts, said in a statement. “This investment reflects our belief in Kodak’s strategy and our confidence in the Kodak management team to deliver on that strategy.”

KKR has a particular edge in evaluating the company, having in 2003 hired its former chairman and chief executive, George Fisher, as a senior advisor.

Kodak: KKR debt play

Like most camera and photo materials companies, Kodak has suffered from changing consumer trends toward digital photography. It is projecting a total revenue decline of 12 percent to 18 percent this year, estimating its losses will total $200 million to $400 million.

Earlier this year Polariod’s assets became a private equity target after the company fell into bankruptcy in December 2008.

Due in 2017, the Kodak notes KKR will purchase are convertible any time prior to the business day preceding maturity, Kodak said in a statement. It also said it plans to issue KKR up to an additional $45 million in warrants, exercisable on or prior to 22 September, to cover over-allotments.

The notes may be converted to cash or stock, dependent on Kodak’s determination, and the company has the right to redeem the notes in part or in whole between October 2014 and October 2016.