Kodak has commenced the sale process of its flexographic packaging division (FPD) to shift focus to its commercial printing, film, and advanced materials services business.

In relation to the proposed divestment, the company has appointed UBS Investment Bank as its financial adviser.

With a workforce of 300 staff, FPD is engaged in the production of the FLEXCEL NX system of flexographic imaging equipment, printing plates, consumables and related services.

The division’s revenues and operational earnings before interest, taxes, depreciation, and amortisation (EBITDA) stand at $150m and $33m, respectively.

Over the past one year, FPD reported a 9% increase in revenue and 18% rise in operational EBITDA.

“Kodak has been evaluating monetisation opportunities for the last several years in order to deleverage the company and we believe this is right time to monetise this valuable asset.”

Kodak CEO Jeff Clarke said: “This is a great opportunity to unlock value for shareholders given the strong interest we have received in the Flexographic Packaging Division.

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“Kodak has been evaluating monetisation opportunities for the last several years in order to deleverage the company and we believe this is the right time to monetise this valuable asset.

“Following this transaction, Kodak’s improved capital structure will allow us to increase our focus on demonstrated growth engines, while continuing to invest in and provide solutions across the commercial printing, film, and advanced materials industries.”

During the sale process, the company will invest in FPD by expanding manufacturing capacity.

FPD will also see a development of advanced technologies and recruitment of additional staff to meet customer needs.

Flexography involves using flexible plates to print on a range of packaging substrates, including plastic, metallic films, cellophane, and paper.

In a separate move, Kodak signed a letter of intent to secure a $400m loan in order to refinance its existing term debt.

The company believes that this will allow it to pursue the sale process of FPD ‘in a thoughtful manner in order to achieve maximum value for shareholders’.

Kodak will use the net proceeds from the divestiture to repay the loan.