According to sources close to the situation, Eastman Kodak Co (KODK.N), opens new tab is considering a strategy to cash in on its overfunded pension scheme, as reported by Bloomberg News on Thursday.
In the aftermath of the report, the company's stock ended the day roughly 52.6% higher.
The advent of digital photography and filmmaking put an end to Kodak's dominance in the industry. Its current emphasis is on producing high-tech chemicals and materials.
Rather than leaving extra cash to present and future retirees, Kodak is considering a so-called pension reversion, according to the sources. This would allow the company to regain control of the surplus.
According to the article, this strategy would entail selling off its holdings in illiquid investments and liquidating other assets.
By the end of 2022, the overfunded situation had reached an astounding $1.2 billion.
Which is equivalent to more than four times the market capitalization of Kodak. This information was revealed by Bloomberg.
As stated by the people, two potential applications of the proceeds are the reduction of debt and the investment in initiatives that will lead to growth.
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