A $765 million loan agreement between Eastman Kodak and the government to supply pharmaceutical ingredients continues to be placed on hold due to questions about Kodak's recent securities transactions.
Reuters reported that the transactions had sparked questions of the serious nature from senior Democratic leaders, and the U.S. International Development Finance Corp. (DFC) said hello \”will not proceed any more unless these allegations are cleared.\” And President Trump said the government would be considering the circumstances of the loan.
The photographic equipment maker reached a deal July 28 with the DFC to help make pharmaceuticals at its U.S. factories, and was to be the recipient of a $765 million loan in order to begin that project.
Shares from the company soared 1000 percent upon this news of the deal a week ago, Reuters wrote. The boost was a big one for executives, a number of whom had received options just the previous day.
The transactions, lawmakers said, appeared to be suspicious and can constitute insider trading.
Kodak has set up its own independent committee of directors from its board, Akin Gump Strauss Hauer & Feld LLP, to check out the problem, the organization said inside a statement.
It's not the first time Kodak has been active in the medical industry – the company owned pharmaceutical firm Sterling Winthrop from 1988 to 1994, PYMNTS reported. Now, the company is slated to create some ingredients in hydroxychloroquine, which has been said by a few to operate like a strategy to the coronavirus, along with other drugs.
The $765 million loan will be repaid on the 25-year span. It was the very first loan provided by the DCF, and originated from Trump's order earlier in the year to spur more American manufacture of items to fight the pandemic. Kodak CEO Jim Continenza said as much as 40 percent of the company's sales could originate from pharma.
However, PYMNTS ponders when the new momentum behind the company can last, or if it is simply a fluke.
