Allegations Put Kodak Pharmaceuticals Loan on Hold

Citing undisclosed allegations against Kodak, the DFC placed a hold on a potential $765 million loan to launch US-based API manufacturing.

Less than two weeks after the US International Development Finance Corporation (DFC) announced a letter of interest to provide a $765 million loan to Eastman Kodak to fund the launch of Kodak Pharmaceuticals to produce pharmaceutical components, the agency placed the loan on hold.

On Aug. 7, 2020, the DFC issued a statement via its Twitter feed that “Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.”

On the same day, Eastman Kodak announced via a press statement that a committee of independent directors of the Board would “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." The announcement said the company would not make further public comment during the review.

DFC did not provide details about the allegations. In announcing the letter of intent on July 28, 2020, DFC noted that the letter signing “indicates Kodak’s successful completion of DFC’s initial screening and will be followed by standard due diligence conducted by the agency before financing is formally committed.”

In the July 28 press release, DFC said the loan would be used for startup costs related to expanding and repurposing Kodak’s existing facilities in Rochester, NY and St. Paul, MN. The facilities, which would produce “critical pharmaceutical components”, would use continuous manufacturing and advanced technology capabilities, the announcement noted.

Sources: Eastman Kodak and US International Development Finance Corporation