Eastman Kodak, in a Nov. 25 filing, said the company is proceeding to liquidate the three quarters of its $3.5 billion U.S. defined benefit plan invested in private equity and hedge fund assets, leaving Kodak in position to terminate the plan and lock in proceeds of up to $585 million on its surplus.
Kodak said the board has not yet made a formal determination to terminate the plan, and Kodak's filing noted that a termination of Kodak Retirement Income Plan would not impair the accrued benefits of any participant, current or former, under KRIP.
According to the filing, Mastercard Foundation has entered into a sales and purchase agreement with KRIP to buy certain private equity ownership interests and other illiquid assets valued at $764.4 million as of March 31, for $550.6 million, or a 28% discount.
A Mastercard Foundation spokeswoman couldn’t immediately be reached for comment.
Four other unidentified investors agreed to buy $87.3 million in illiquid assets for a purchase price of $61.7 million.
The transactions will leave the Kodak Retirement Income Plan with $161.3 million in illiquid assets as of Sept. 30.
The filing said as previously reported, KRIP has likewise moved to redeem a substantial majority of the $917.2 million in hedge fund assets the defined benefit plan held as of Sept. 30.
The filing said Eastman Kodak’s board of directors is “reviewing options with respect to KRIP, including the possible termination” of the plan,” and has instructed the plan’s investment committee to position the plan for a potential termination.
At the close of 2023, the plan had more than $3.5 billion in assets, a surplus of more than $1 billion over its liabilities.
In the event of a termination, Kodak projects that after the capitalization of a replacement plan, with assets likely valued at between $220 million and $245 million, the company would receive proceeds having a value of between $530 million and $585 million.
