Kodak pharma deal put on hold
Monday, August 10, 2020
Kodak’s pharma deal with the US government has been put on hold pending an investigation into events around the multi-million dollar loan.
Last week it emerged that the Rochester-headquartered group was facing a House of Representatives probe into the background to the $765m (£590m) loan deal, including executive share purchases made just prior to the announcement.
The news that Kodak would revamp existing facilities in Rochester in order to move into pharmaceutical manufacturing resulted in a huge increase in Kodak’s share price.
Late on Friday, the US International Development Finance Corp (DFC) tweeted that it would not proceed with the loan until the allegations, which had raised “serious concerns”, were cleared.
On July 28, we signed a Letter of Interest with Eastman Kodak. Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.— DFCgov (@DFCgov) August 7, 2020
Kodak has also launched its own investigation. The manufacturer has appointed a special committee of independent directors to look into the matter.
In a statement, Kodak said: “The committee, comprised of directors Jason New and William G. Parrett, will oversee an internal review of recent activity by the company and related parties in connection with the announcement of a potential loan by the US International Development Finance Corporation to support the launch of Kodak Pharmaceuticals.”
Kodak has engaged law firm Akin Gump Strauss Hauer & Feld to oversee the internal review.
The business said it would not make any further comment while the review was ongoing.
The DFC’s Letter of Intent was signed on the direction of President Donald Trump. At a press conference last week, Trump said that the matter would be looked into, and any issues would become apparent “very quickly”.
Separately, US senator Elizabeth Warren has written to the Securities & Exchange Commission (SEC) asking it to investigate the matter, as well.
The SEC has not made any public comment as yet.
Kodak has also moved to assert the ongoing importance of its print business and printing industry customers amid the pharma furore.