Kodak Evaluates U.S. Pension Plan, Stock Prices Surge

In a recent report, Eastman Kodak Co. announced plans to evaluate its U.S. pension plan, including a potential termination that could unlock significant funds. This decision has already led to a notable increase in stock price, signaling investor optimism.

Date: 26-11-2024

AI Rating: 7

Eastman Kodak Co. is currently evaluating options for its U.S. pension plan, including the potential termination, which could release substantial funds. The company indicated that terminating the plan might generate proceeds between $530 million and $585 million.

Following this announcement, Kodak's stock price experienced a notable increase, closing at $6.25, reflecting an 18.60% gain on the regular trading day. In after-hours trading, the stock enjoyed an additional increase of 3.04%.

Moreover, Kodak plans to sell certain private equity ownership interests and illiquid assets held by the Kodak Retirement Income Plan Trust (KRIP). The estimated net asset value of these assets as of March 31, 2024, is $764.4 million, with a planned purchase price of $550.6 million payable in cash at closing. Additional agreements with other investors to sell KRIP illiquid assets valued at $87.3 million for $61.7 million is also in motion.

Based on current assumptions, Kodak estimates that KRIP would have surplus assets ranging between $885 million and $975 million after settling its liabilities. The substantial surplus could provide significant benefits to current employees through qualified replacement plans, projected to have assets of $220 million to $245 million.

Importantly, the termination of KRIP will not affect the accrued benefits of any participants, which adds a layer of security for employees.

Stocks: KODK