UK – The UK regulator has said it is prepared to be “creative” to ensure pension funds find viable alternatives to entering the Pension Protection Fund (PPF) after the sale of several of Eastman Kodak’s businesses to its UK pension scheme were completed.
Stephen Soper, interim chief executive of the Pensions Regulator (TPR), said the $650m (€497m) settlement that saw the UK Kodak Pension Plan (KPP) acquire its parent company’s Personalised Imaging and Document Imaging businesses was an “important step” towards an outcome that balanced the needs of the PPF, Eastman Kodak and scheme members.
“This solution avoids the Kodak group’s insolvency, and pension scheme members will benefit from the cash flows and growth potential of the two businesses,” he said after the scheme’s trustee announced that both businesses would in future trade under the Kodak Alaris brand.
KPP’s independent trustee chairman Steven Ross said he welcomed the potential for “highly successful growth opportunities” stemming from both businesses.
Of the rebranding, he said: “Today starts the new chapter of a storied brand, and we’re thrilled with the potential the new company holds for our plan members, our customers and our employees.”
KPP acquired both businesses from Eastman Kodak after the firm filed for Chapter 11 bankruptcy, triggering a $2.8bn lawsuit by the UK pension scheme to see its deficit funded.
Andrew Bradshaw, one of KPP’s trustees, previously told IPE the fund would not see more than £210m (€249m) in scheme assets used to acquire the companies.
However, Soper warned that, despite the sale finalising, a number of matters between KPP’s trustees and the PPF were still unresolved, “including monitoring and governance arrangements to provide appropriate safeguards going forwards”.
Soper, who was appointed as interim chief executive following the departure of Bill Galvin, added that TPR would publish a report on its approach “once the remaining milestones have been completed”.
He added: “Where businesses are in a distressed state, we’re prepared to be creative and work collaboratively with pension trustees and employers to explore the options to find viable outcomes.
“These situations are often complex, and we encourage trustees and employers to approach us at an early stage if they are experiencing financial difficulties that threaten ongoing support to the scheme.”
The regulator was previously party to discussions that saw UK Coal restructure its business, spinning off a separate real estate division in which its pension schemes acquired a controlling stake rather than allowing the funds to be transferred to the PPF.
However, the UK lifeboat fund was forced to accept both of UK Coal’s legacy schemes only a few months later, after a fire in one of the firm’s few remaining mines raised doubts over its future.