UPDATE 3-Kodak to raise $700 million; KKR to invest

* Kodak says to raise up to $700 mln

* Includes $400 mln from KKR

* KKR could end up with 13-17 pct stake - source

* 2009 GAAP loss at lower end of previous forecast range

* Shares slip nearly 3 percent (Adds details of board, more background about company)

LOS ANGELES/NEW YORK, Sept 16 (Reuters) - Photography company Eastman Kodak Co (EK.N) plans to raise up to $700 million, including a commitment from private equity firm Kohlberg Kravis Roberts & Co [KKR.UL], to bolster its balance sheet and free up capital for investments, the company said on Wednesday.

Kodak, which makes cameras, picture frames and consumer printers, about a year ago completed an expensive four-year restructuring that transformed it into a maker of digital photography products and printers. During that restructuring, Kodak halved its workforce.

The company has since been hit by the global recession, which has limited consumer spending on travel -- an activity that spurs the use of cameras. It posted disappointing second-quarter results in July as weak demand hurt its film and digital photography businesses.

Kodak said on Wednesday its 2009 GAAP loss would fall toward the lower end of a previously forecast range of $200 million to $400 million, reflecting its latest assessments of restructuring charges, interest expense, and interest income.

Shares of Kodak slipped 2.7 percent after-hours to $6.50 from a regular-session close of $6.68. The stock had risen 4.5 percent during regular trading.

KKR, which is to buy up to $400 million of Kodak's senior secured notes due 2017, said that its investment reflected its belief in Kodak's strategy. Kodak also said it is to issue to KKR warrants to purchase up to 53 million shares of Kodak common stock.

The private equity giant is also designating two individuals to be appointed to Kodak's board, which will be announced upon the deal's close at the end of September.

Separately, Kodak is launching a private placement of $300 million of convertible senior notes, due 2017.

Depending on the amount of capital raised and the number of warrants that convert, KKR could end up owning somewhere between 13 percent and 17 percent of the company, a source close to the deal said. (Reporting by Laura Isensee in Los Angeles and Megan Davies in New York; Editing Bernard Orr)