Kodak could run out of US cash in '12, without help - Moody's

A Kodak 5500 color all-in-one printer is shown in Encinitas, California November 3, 2011.

REUTERS - Without an infusion of cash from a sale of patents or some hundreds of millions of dollars in additional financing, Eastman Kodak Co would run out of cash in the U.S. in 2012, according to a research note published on Monday by the credit agency Moody's.

Photography icon Kodak warned investors last Thursday that it might need to raise new debt or complete a multibillion-dollar patent sale to survive the next 12 months, which sank shares 12 percent.

The company also said last Thursday it was exploring raising $500 million in first-lien financing, which means its lenders would be among the first in line to get repaid.

Moody's analyst Rick Lane said on Monday this additional $500 million would tap out the rest of the company's financing options.

"The financing, if it materializes, would also likely consume the few remaining forms of alternate financing available to Kodak, somewhat akin to putting the last logs on the fire," he said in the note.

He added that the additional financing "is negative for existing creditors as it piles on more senior debt obligations while Kodak's picture becomes still murkier."

He said that without extra cash from a patent sale, new financing or a settlement in the legal battle against Apple Inc and Research in Motion Ltd, Kodak would run out of domestic liquidity between the second and third quarters of 2012. Moody's expects Kodak to end the year with $1.3 billion in cash, and $600 million of that cash held in the U.S.

As of Sept. 30, Kodak had $862 million in cash globally, according to a regulatory filing.

A Kodak spokesman did not respond for comment on Monday. Kodak shares were trading 0.9 percent lower at $1.15 per share.

(Reporting by Liana B. Baker, editing by Gerald E. McCormick)