Kodak Secures A Preliminary Agreement For A $765-Million Loan With The US Government

President Donald Trump announced on Tuesday its initiative to provide a $765-Million loan for camera firm Eastman Kodak Co.

According to a report, Adam Boehler who is the Chief Executive Officer of the U.S. International Development Finance Corporation (DFC) signed a preliminary agreement with Kodak Executive Chairman Jim Continenza to provide the loan. Though it is still subject to DFC's final due diligence, the said deal will not only enable the camera firm to start manufacturing ingredients for generic drugs that would help fight the current coronavirus pandemic but will also reduce the country's reliance on China.

The said loan will also have been the first of its kind to be done under the Defense Production Act which the President had recently passed. The act will ensure that government contracts and orders are prioritized as a necessity for national defense.

Reportedly, Trump said in a press conference that the act will ensure that Kodak is able to "make generic, active pharmaceutical ingredients." He added that the planned investment will create at least 350 jobs for those who have lost their livelihood due to the economic crisis brought by the pandemic. He said in his speech that he is looking to make America the world's leading medical manufacturer and supplier.

In Tuesday's extended trading, the said announcement has led to a 60% surge in Kodak shares while in regular trading, the stocks grew three times as much. The increase in its stock price has, in turn, resulted in an increase in its market value from $115 million to $347 million after Tuesday's trading session ended.

Continenza said that the company is honored to play a key role in the manufacturing of key pharmaceutical ingredients that would possibly help save the country from the pandemic. The company will focus on manufacturing pharmaceutical components that are essential but have been chronically scarce throughout the U.S.

It joined the U.S. International Development Finance Corporation, or DFC, in confirming that it has plans to augment its current facilities located in Rochester, New York and St. Paul, Minnesota by establishing a new division: Kodak Pharmaceuticals.

The planned investment will be Kodak's newest fighting chance to compete with other industry players after it faced bankruptcy in 2012 as consumers shifted to digital cameras.