Kodak sells online business to Shutterfly

New York Eastman Kodak Co has agreed to sell its online photo services business to Shutterfly Inc for $23.8 million (Dh87.4 million), kicking off the bankrupt photography pioneer's relaunch as a much slimmer company — although a patent sale seen crucial to its turnaround may still be months away. The once-iconic company that invented the hand-held camera has said it will quit the camera business and is expected to fetch $1 billion to $2 billion from the sale of about 1,100 digital patents, which is due to get under way by June 30. A source familiar with the patent sale said the process was moving forward, but added that completion was not expected anytime soon. Complicating the prospects is a dispute with computer giant Apple Inc over one of the patents. Article continues below At a hearing on March 8, a bankruptcy judge will hear Apple's motion to move forward with its patent-infringement suit. Apple has asked the court to lift the automatic stay applied to pending litigation against Kodak when the company filed for bankruptcy on January 19. Kodak said the deal with Shutterfly followed a "stalking horse" bid — a starting bid or minimally accepted offer that other bidders must surpass in a court-supervised auction — from the web-based personal publishing service. Shutterfly shares rose 18 per cent to $31.70 in extended trade on Thursday, following the news. The stock had closed at $26.91 on the Nasdaq. Shutterfly said it will transfer Kodak Gallery customer accounts and images in the United States and Canada to Shutterfly, and will allow customers to opt out of the transition if they do not want their photos to be transferred. Kodak Gallery — which enables users to store and share their own images and create custom printed albums — has more than 75 million users. Kodak is focusing its consumer business on retail and destination photo solutions as well as home printing products, Pradeep Jotwani, president, consumer businesses and chief marketing officer of Kodak, said in a statement. The key focus for those watching Kodak's recovery effort, however, is progress in the patent sale. "Kodak, the debtor, is under pressure from various creditors and constituents to liquidate its non-essential assets sooner rather than later," said bankruptcy lawyer Edward Neiger. The patents that Kodak must sell include one for which Apple said it is the rightful owner. From gulfnews