Eastman Kodak’s unlikely deal with the federal government to dive into drug manufacturing has raised eyebrows—not only for the size of the loan itself but Kodak’s lack of experience. Now, with investigations mounting, the U.S. is pumping the brakes.
The government put the $765 million loan on hold after “allegations of wrongdoing” on the company’s part jeopardized its federally funded move into pharmaceuticals, the U.S. International Development Finance Corporation (DFC) said in a terse tweet Friday.
Kodak and the DFC signed an interest letter in late July for a loan that would have jumpstarted Kodak’s move into manufacturing active pharmaceutical ingredients (API) for a range of generic drugs.
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The government’s interest in Kodak—a photography company that declared bankruptcy in 2012 and has no experience in drugmaking—as well as insider trading allegations spurred a growing number of investigations in recent days.
On July 28, we signed a Letter of Interest with Eastman Kodak. Recent allegations of wrongdoing raise serious concerns. We will not proceed any further unless these allegations are cleared.
Late last week, a group of influential House Democrats sought documents on the DFC loan, arguing that Kodak didn’t appear to have the needed experience to qualify for the massive funding deal.
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