Kodak Alaris - sold

[Don_ih]

It would not be outside the realm of possibility that the new owner of K-A could buy an existing film (or paper, for that matter) coating operation and then that would produce product for K-A to market. The current agreement between K-A and E-K may not allow K-A to brand non-Eastman film as "Kodak", though (who knows?).

Anyway, the possibility of more-risky ventures exists with new ownership. No one expects any daring moves from a pension fund management team. Up to this point, K-A has been successful selling film without doing much in the way of promotion. The new ownership may be interested in actually trying to push the product lines.

Or they may be interested in something else.

 

[BrianShaw]

Or both. Who knows? Time will tell. Nobody will know for sure until time tells.

 

[koraks]

buy an existing film (or paper, for that matter) coating operation

They're not exactly things you buy in a local supermarket. There's only a handful of these lines worldwide, and realistically speaking, only two or three are fit to coat color negative film that's on par with the C41 film we are familiar with from the 1990s-2000s.

 

[Alan Edward Klein]

You aren't getting what I'm saying Alan.

First, the Eastman Kodak division that operates building 38 (plus a few other related buildings) doesn't just use them for products related to photographic film. They also make a bunch of things that have nothing to do with photography, as well as products that have both photographic uses and non-photographic uses - Kodak Alaris would have to expand is marketing and distribution considerably if they were to take on those businesses.
Second, Kodak Alaris has never had any responsibility for the obligations of the historical Kodak Limited pension fund. Kodak Alaris is merely an investment intended to provide a financial return to its shareholders. And those shareholders have changed - but nothing else has changed for Kodak Alaris (so far). I

Divisions can be subdivided and sold. I don't know if it's practical to move the film manufacturing portion. Maybe Kodak leaves that and moves the other Kodak products. Maybe they sell off the ownership and leave everything where it is and just continues production in all the same buildings with the different product lines of now two companies. Later, the VC can build another building to expand the film product line. I think you're underestimating the new owners. They don't appear to be a company that's going to sit round waiting to see what happens. In any case, it is an interesting speculation especially since distribution is now owned by an American company. If I were them, I'd want to own the prroduction as well especially when it;s within walking distance of the American distribution building.

 

[Alan Edward Klein]

You aren't getting what I'm saying Alan.

First, the Eastman Kodak division that operates building 38 (plus a few other related buildings) doesn't just use them for products related to photographic film. They also make a bunch of things that have nothing to do with photography, as well as products that have both photographic uses and non-photographic uses - Kodak Alaris would have to expand is marketing and distribution considerably if they were to take on those businesses.
Second, Kodak Alaris has never had any responsibility for the obligations of the historical Kodak Limited pension fund. Kodak Alaris is merely an investment intended to provide a financial return to its shareholders. And those shareholders have changed - but nothing else has changed for Kodak Alaris (so far). I

I'm confused as to the arrangement. How do the retirees get their pension money? Does Kingswood have any responsibility now that they own the KA shares?

 

[Alan Edward Klein]

Is there even a part of EK that is known as the “film division”? Looking at the org chart and a recent annual report, the division that makes the film doesn’t even seem to acknowledge photographic film yet described the breadth of other “film” product lines. To spin off photographic film may require a restructuring. It might not even be possible if such an action would impact the other product lines. Plus, although probably not in the decision loop but quite possibly influential, could be the other film users, like motion picture industry and government customers. So it seems interesting speculation and/or wishful dreaming but extremely highly unlikely.

Eastman does have a contract with certain Hollywood film makers to supply movie film to them and Hollywood is obligated to buy a certain amount each year. However, companies that have contracts with buyers to supply products are sold regularly. The contract has to be honored by the new owners. So, it's possible that Kingswood could buy both the still film and movie film production lines. Or just the still film line to go with its Alaris distribution purchase.

 

[Alan Edward Klein]

No, that reflects what @MattKing has been saying.



A very thorough restructuring. It would mean either of two things:
1: Eastman Kodak would sell off its actual coating operations to Alaris. All of its coating operations (not related to photographic film, but the myriad other products they coat there) would then have to be outsourced to a 3rd party, which could be Alaris (i.e. they keep using the same physical line, but no longer own it). The situation that now exists for photographic film would continue to exist, but now for the other products Eastman Kodak manufactures.
2: Eastman Kodak would not sell off its actual coating line. Alaris would now own the film coating business, but would have to look for physical infrastructure to actually do the operations. They would either have to build a plant for that, somewhere, incurring an investment of several hundred million $$$ at least. Eastman Kodak would lose the economies of scope accruing from manufacturing a range of products that rely on the same technology base.

Both of these scenarios have severe practical and strategic drawbacks for both Eastman Kodak and Alaris. Hence, it would be a corporate restructuring that's neither practically feasible, nor desirable for anyone involved.

If Alaris would want to actually start making film, a more likely scenario would be that they somehow manage to contractual agreements with Eastman Kodak so they're not bound to Kodak film. They could at the same time enter an alliance with one or more companies that have film coating capabilities, or are willing and capable to build this competence and physical infrastructure in a reasonable timescale. The latter seems unlikely, so they're more likely stuck with a small selection of companies worldwide they'd have to do business with. Since in this scenario they'd be exiting their alliance with Eastman Kodak, it would make sense that they'd look for other parties. So they're going to be stuck with either a few companies whose color film manufacturing is nascent and immature, or they'll have to somehow convince Fuji to boot some of their Instax business out of their own production line to make room for the new Alaris film that has to be coated.

No matter which way you turn this, it doesn't add up. Which is probably why we've seen this "weird" arrangement between Eastman Kodak and Alaris exist for so long. Despite its oddities, these companies have very little choice but to do it this way, and they're perfectly aware of it, too.

Dynamic Kingswood is not a sleepy-headed Kodak Alaris. Why would Kingswood, an American firm, just purchase film distribution rights of an obscure little British firm if they can get complete ownership of an American icon, the Kodak film manufacturing company including its patents etc.? Owning Kodak film would be a feather in Kingswood's cap and make it a real presence in private equity. Everyone's heard of Kodak. Considering the small amount of film sales Eastman is getting now, they might already be in discussions, or initialed one already, with Kingswood to sell off their film manufacturing.

For us, this could be exciting times as film might be rediscovered by the public. New and cheaper films could be made available. I'd love to see one recent advertisement for film.

 

[BrianShaw]

Eastman does have a contract with certain Hollywood film makers to supply movie film to them and Hollywood is obligated to buy a certain amount each year. However, companies that have contracts with buyers to supply products are sold regularly. The contract has to be honored by the new owners. So, it's possible that Kingswood could buy both the still film and movie film production lines. Or just the still film line to go with its Alaris distribution purchase.

I've heard about the Hollywood contracts too but never saw details so don't have any real information to offer, or even repond to. Are you sure that those Hollywood, or the legacy government contracts, were transferred to Alaris or could they still be direct with Eastman Kodak?

What gives you confidence that the movie and still film elements of AM&C Division are separable from that division's other - more numerous and more profitable - productlines?

Wishfull thinking and repeated repeating of the same rhetoric may not be sufficient to maintain a meaningful discussion. The available data is a bit hard to decypher but it appears that photographic film is only about 1/2 - 1/3 of that division's sales, and a product line that has been acknowledge to have significant production deficiencies due to aged equipment and infrastructure. Speculation is find as that's all we have at the moment but look a the history and goals of Kingwood; their stated target companies do not seem to include manufacturing, unless I compelety overlooked it. Please correct any knowledge deficiencies I have herewithin displayed.

 

[BrianShaw]

Personally speaking... I like Kodak color products and would miss them if htey disappeared. I'm hoping that Kingswood keeps Alaris going as they currently are. I wasnot really aware of Kinbgswood until yesterday so know only what is inther website, and that is marketing stuff with no real details. I am aware of one compnay they bought and save, but keeping it mostly as it was and rescuing them from being raped, pillaged, and plundererd by their former owner. For me, that is good enough.

 

[Alan Edward Klein]

I've heard about the Hollywood contracts too but never saw details so don't have any real information to offer, or even repond to. Are you sure that those Hollywood, or the legacy government contracts, were transferred to Alaris or could they still be direct with Eastman Kodak?

What gives you confidence that the movie and still film elements of AM&C Division are separable from that division's other - more numerous and more profitable - productlines?

Wishfull thinking and repeated repeating of the same rhetoric may not be sufficient to maintain a meaningful discussion. The available data is a bit hard to decypher but it appears that photographic film is only about 1/2 - 1/3 of that division's sales, and a product line that has been acknowledge to have significant production deficiencies due to aged equipment and infrastructure. Speculation is find as that's all we have at the moment but look a the history and goals of Kingwood; their stated target companies do not seem to include manufacturing, unless I compelety overlooked it. Please correct any knowledge deficiencies I have herewithin displayed.

The more I think about it, the more it makes sense that Kingswood would not have bought Alaris unless they already initialed a deal to buy Eastman's film manufacturing rights and possibly all of Kodak's patents. Buying Alaris first and hoping to make a deal with Eastman later is too risky and would be more expensive as Eastman would ask for much higher sales price. So the deal is already set for Kingswood to buy Kodak film. That's my prediction anyway.

 

[Angarian]

I've heard about the Hollywood contracts too but never saw details so don't have any real information to offer, or even repond to. Are you sure that those Hollywood, or the legacy government contracts, were transferred to Alaris or could they still be direct with Eastman Kodak?

The complete movie film business has always been run by Eastman Kodak. Kodak Alaris was never ever involved in it (no participitation, no shares, no marketing, nothing at all).
Also the Hollywood contracts were contracts between Eastman Kodak and several Hollywood film studios.

Also because of this I think it is very unlikely that Kingswood has any chance (or intention) to go for the film production of Eastman Kodak.
Another very important point: So far there has not been any information that Eastman Kodak wants to sell its film production.
What is known is that when the UK Pension Plan wanted to sell Kodak Alaris at first there was an offer to Eastman Kodak to buy it. But it was too expensive for Eastman.

 

[Angarian]

I'd love to see one recent advertisement for film.

In the last years there have been hundreds of advertisements for film by Kodak Alaris (and Polaroid, Harman / Ilford Photo, Fujifilm, Adox, CineStill etc.) online on all relevant social media channels (instagram, facebook, youtube, twitter), and also in printed photography magazines. In case of Fujifilm even in TV.

 

[mshchem]

What if Kingwood buys Cinestill ?

 

[BrianShaw]

The complete movie film business has always been run by Eastman Kodak. Kodak Alaris was never ever involved in it (no participitation, no shares, no marketing, nothing at all).
Also the Hollywood contracts were contracts between Eastman Kodak and several Hollywood film studios.

Also because of this I think it is very unlikely that Kingswood has any chance (or intention) to go for the film production of Eastman Kodak.
Another very important point: So far there has not been any information that Eastman Kodak wants to sell its film production.
What is known is that when the UK Pension Plan wanted to sell Kodak Alaris at first there was an offer to Eastman Kodak to buy it. But it was too expensive for Eastman.

Thanks for the clarification on the movie studio deals.

When was that... Kodak Alaris offering to sell back to Eastman Kodak? The Kodak Alaris Holdingings LTD Board has been working on selling Kodak Alaris/Moments since 2018 but effort that was shut down about 2020-2021, and apparently revitalized sometime between then and now. The 2021 Strategic Report, however, doesn't go into much detail. It seems reasonable to assume/imply that Kodak Alaris may have been contractually obligated to give Eastman Kodak first right of refusal.

 

[Angarian]

What if Kingwood buys Cinestill ?

Why should the founders and owners - the Wright brothers - sell it?

I had an interesting talk with them on one photo event in Berlin (analogueNow). CineStill is a pure distribution company without own production facility. And they are very small, about ten employees in the team.
I guess many here are much overestimating the size of their business.

 

[MattKing]

I'm confused as to the arrangement. How do the retirees get their pension money? Does Kingswood have any responsibility now that they own the KA shares?

With respect to the employees who participated in the Kodak Limited Pension fund before 201305, they get their pension entitlement from the very substantial amount that still remains from the substantial pre-201305 contributions made by Kodak Limited and Eastman Kodak into the Kodak Limited pension fund, augmented by the statutorily created UK Pension Protection administration, who have the statutory duty to make good (according to a formula on any shortfall that may, in the future, arise.
The Kodak Limited Pension Fund hasn't run out of money yet, but a shortfall is projected, so under the terms of the legislation, in return for the government guarantee of the shortfall, the Pension Protection Fund administrators have taken over administration of the fund from the independent trustees.
But Kodak Alaris has nothing to do with that. Kodak Alaris is just a relatively new corporate asset that was paying profits to its shareholders - the pension fund - and now has been sold to new investors - Kingswood - with the sale price going into the coffers of what remains of the Kodak Limited pension fund.
The 201305 bankruptcy settlement ended Kodak Limited and Eastman Kodak's responsibility for the Kodak Limited Pension fund - they were released from liability, and no new entity acquired that liability. The relatively huge Kodak Limited Pension fund was left with sole liability for all the pension entitlements of the Kodak Limited employees who had previously acquired pension entitlements from Kodak Limited, which ceased business as of the bankruptcy.
In order to buy that release from liability, Eastman Kodak transferred some hugely valuable assets to the Kodak Limited pension fund - land, buildings, valuable leases on land and buildings plus the exclusive rights to market a whole bunch of Kodak branded stuff.
Many, many former employees of Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries lost their jobs in 201305 (and earlier) due to the bankruptcy and the financial issues that led up to it. In or after 201305 Kodak Alaris did hire many of those now jobless workers as new hires. At the time of that new hiring, on new terms, Kodak Alaris probably made provisions for new retirement benefits for those new employees, relating just to their post-201305 employment. But Kodak Alaris has nothing to do with the old Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries former employees' pre-201305 pension entitlements.

 

[Angarian]

When was that... Kodak Alaris offering to sell back to Eastman Kodak?

During the pandemic. Got the info by one of my film distributors, who have excellent connections to Kodak Alaris (from which they got the info).

 

[BrianShaw]

During the pandemic. Got the info by one of my film distributors, who have excellent connections to Kodak Alaris (from which they got the info).

That makes sense. The pandemic era was when the Board squelched the initial sale plans largely, it seems, that they were showing profit based (and this is their words) on continuing demand for film and the selective increase in prices. Kodak Alaris Holdings did not hide htis information and published it openly.

 

[MattKing]

As I understood it, the Pension Protection Board thought that the indications were that the effects of the pandemic meant that the sort of expressions of interest that they were seeing and offers that could be expected were artificially too low, so they put the sale efforts on hold, until things improved.
One of the up sides of being owned by a pension investor is that there might be a longer term perspective on these things. One can hope that Kingswood is capable of both long term and short term approaches.

 

[BrianShaw]

Kodak Limited Pension fund...

In the US, at least, defined-benefit pension plans, whether fully funded or not, are largely protected/insured by the government, especially regarding company bankruptcies. I would assume that the older pension plans are defined-benefit type. Newer plans, which often are defined-contribution pension plans, are not similarly insured/protected. I have no idea if there are similar protetions in Canada or UK or anywhere else. Also, it's not totally uncommon for defined-benefit pension funds to operate in a mode where they are not fully funded. It makes some people uncomfortable, though. At some point that underfunding has to be reconciled or they risk running out of money.

 

[BrianShaw]

As I understood it, the Pension Protection Board thought that the indications were that the effects of the pandemic meant that the sort of expressions of interest that they were seeing and offers that could be expected were artificially too low, so they put the sale efforts on hold, until things improved.
One of the up sides of being owned by a pension investor is that there might be a longer term perspective on these things. One can hope that Kingswood is capable of both long term and short term approaches.

I don't doubt that one bit!

 

[Don_ih]

They're not exactly things you buy in a local supermarket. There's only a handful of these lines worldwide, and realistically speaking, only two or three are fit to coat color negative film that's on par with the C41 film we are familiar with from the 1990s-2000s.

Obviously. But the possibility still remains. There may be more of these lines than you know of, also.

 

[mshchem]

Home Page | Pension Benefit Guaranty Corporation

www.pbgc.gov

USA agency that deals with bankrupt companies defaulting on traditional pensions.

Usually there's a "bail-in" where the higher salaried folks get a lower percentage of what was promised. The senior pilots and managers at Delta airlines got a severe "haircut" when Delta declared bankruptcy and the PBGC assumed the Delta pensions.

I suspect that the same is true for EKCo employees here in the USA and the folks in the UK. In the end the taxpayers end up paying a reduced benefit.

Most of the US companies use 401k scheme in the US, thus everyone has money in stocks. What could go wrong?

 

[Alan Edward Klein]

With respect to the employees who participated in the Kodak Limited Pension fund before 2005, they get their pension entitlement from the very substantial amount that still remains from the substantial pre-2005 contributions made by Kodak Limited and Eastman Kodak into the Kodak Limited pension fund, augmented by the statutorily created UK Pension Protection administration, who have the statutory duty to make good (according to a formula on any shortfall that may, in the future, arise.
The Kodak Limited Pension Fund hasn't run out of money yet, but a shortfall is projected, so under the terms of the legislation, in return for the government guarantee of the shortfall, the Pension Protection Fund administrators have taken over administration of the fund from the independent trustees.
But Kodak Alaris has nothing to do with that. Kodak Alaris is just a relatively new corporate asset that was paying profits to its shareholders - the pension fund - and now has been sold to new investors - Kingswood - with the sale price going into the coffers of what remains of the Kodak Limited pension fund.
The 2005 bankruptcy settlement ended Kodak Limited and Eastman Kodak's responsibility for the Kodak Limited Pension fund - they were released from liability, and no new entity acquired that liability. The relatively huge Kodak Limited Pension fund was left with sole liability for all the pension entitlements of the Kodak Limited employees who had previously acquired pension entitlements from Kodak Limited, which ceased business as of the bankruptcy.
In order to buy that release from liability, Eastman Kodak transferred some hugely valuable assets to the Kodak Limited pension fund - land, buildings, valuable leases on land and buildings plus the exclusive rights to market a whole bunch of Kodak branded stuff.
Many, many former employees of Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries lost their jobs in 2005 (and earlier) due to the bankruptcy and the financial issues that led up to it. In or after 2005 Kodak Alaris did hire many of those now jobless workers as new hires. At the time of that new hiring, on new terms, Kodak Alaris probably made provisions for new retirement benefits for those new employees, relating just to their post-2005 employment. But Kodak Alaris has nothing to do with the old Kodak Limited/Eastman Kodak/other Eastman Kodak subsidiaries former employees' pre-2005 pension entitlements.

As I understood it, the Pension Protection Board thought that the indications were that the effects of the pandemic meant that the sort of expressions of interest that they were seeing and offers that could be expected were artificially too low, so they put the sale efforts on hold, until things improved.
One of the up sides of being owned by a pension investor is that there might be a longer term perspective on these things. One can hope that Kingswood is capable of both long term and short term approaches.

I assume the pension requirements currently refers to current employees of Alaris, not the original retirees before the bankruptcy which are covered by Eastman Kodak funding as assigned by the bankruptcy court? What protection do BRitish employees have regarding promises for their retiree pensions? I assume these are being given to current Alaris employees.

 

[lightray]

Kodak is way overpriced in EU, you see sellers advertising over dated Kodak films, even then they are more expensive than say Ilford, no one wants to be a thief of their own wallet, Kodak or who ever is behind it better wise up, Kodak deserves better.