Kodak Sells Patent to get Financing

Kodak is half way out of bankruptcy status by selling its patents to Intellectual Ventures for US$525 million. The sale enables Kodak to repay substantial amount of loan and secure new financing of US$793 million obtainable from Centerbridge Partners, L.P., GSO Capital Partners LP, UBS and JPMorgan Chase & Co, if Kodak can sell their patents for more than US$500 million. The US$525 milestone satisfies the preset financing terms. Initially, banks tried to auction the 1,100 patents. However, initial bids received were between US$150 to US$250 million, which were much below valuation of US$2.6 billion. The low bid forced Kodak to suspend the auction of the patent portfolio. By taking time to look for suitable buyers, Kodak manage to secure a better deal.