November 8, 2011 / 12:21 AM / 6 years ago

UPDATE 2-Kodak sells image sensor unit to Platinum Equity

* Kodak sells unit for undisclosed sum

* Shares rise 6 pct in after-hours trading

By Liana B. Baker

NEW YORK, Nov 7 (Reuters) - Eastman Kodak said it sold its Image Sensor Solutions business to Platinum Equity for an undisclosed sum in a move that will provide it with much needed capital as it grapples with dwindling cash reserves.

The deal comes a week after Kodak said it was exploring raising $500 million in additional financing. It warned last Thursday it may need to raise new debt or complete a multibillion-dollar patent sale to survive the next 12 months.

Kodak has said it planned to generate $200 million from nonstrategic asset sales this year.

Kodak’s shares rose 6 percent in after-hours trading on Monday.

A spokesman for Platinum Equity, a firm that specializes in buying distressed assets, declined to comment on the sale.

Kodak’s Image Sensor Solutions division helped develop the first digital camera prototype and operates across a broad range of industrial and media industries.

Rafferty Capital Markets analyst Mark Kaufman said the unit was profitable to Kodak.

As part of the deal, the company is selling a 263,000 square foot facility in Rochester, New York, that houses the division’s manufacturing and research facilities. A Kodak spokesman said some 200 full-time employees and some contractors were being offered jobs with Platinum.

Kodak said that, as of Sept. 30, the company held $862 million in cash, about 10 percent less than it had on June 30. It expects to have $1.3 billion to $1.4 billion in cash at the end of the year.

An analyst from the credit agency Moody’s published a note on Monday saying Kodak would run out of cash in the United States by 2012 unless it receives a major infusion from a multibillion patent sale or new financing.

The company has said it has no intention of filing for bankruptcy.

Kodak’s image sensor business had industrial, medical, photography and security applications, according to the unit’s website. That division helped Kodak developed the first prototype of the digital camera, as well as the image sensor used in the Space Shuttle program, it said.

Kodak shares rose 6 percent in after hours trading after closing at $1.19 on the New York Stock Exchange.

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