Kodak opened the day up more than 13 percent on the stock market after announcing the sale of a division, a move that could eliminate much of the company’s outstanding debt.
Montagu Private Equity will buy Kodak’s Flexographic Packaging Division; Kodak expects to get up to $390 million fromm the deal.
In August, Kodak announced it was putting the division up for sale, so it could raise funds to payoff $400 million in debt.
In a statement Monday, CEO Jeff Clarke says, “This transaction is an important turning point in our transformation and is a significant, positive development for Kodak. The sale of the Flexographic Packaging Division unlocks value for shareholders and strengthens our financial position by providing a meaningful infusion of cash which allows us to reduce debt, improving the capital structure of the Company and enabling greater flexibility to invest in our growth engines.”
The division will now operate as its own standalone company headed by current division president Chris Payne who will act as CEO of the new company.
The deal is expected to close during the first half of 2019 pending regulatory approvals and other conditions.