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Kodak's Second Life on the NYSE Begins (Update 1)

Updated from 10:28 a.m. ET with comments from CEO Antonio Perez in an internal memo sent to employees

NEW YORK (TheStreet) -- Eastman Kodak (KODK) on Friday began trading on the New York Stock Exchange for the first time since emerging from an over 18-month bankruptcy process in September that re-positioned the company away from consumer products.

Kodak's shares gained 1% to close at $26.25, valuing the Rochester, N.Y.-based commercial printing company at a market capitalization of nearly $1 billion.

"This is a notable achievement," Kodak CEO Antonio Perez wrote in a memo sent to employees, obtained by TheStreet. "This re-listing validates we are moving forward as a technology company and that the NYSE believes we have the financial stability and market interest to rejoin other leading technology companies represented there."

Perez said that the company intends to ring the opening bell of the NYSE in the near future.

"As always, thank you for your efforts in helping Kodak reach this point," Perez said in the memo. "Now let's push for a strong close to 2013, and show the outside world the renewed energy and confidence we have as a new Kodak."

The company's shares last traded on the NYSE on Jan. 19, 2012, the day the over 100-year old film and camera pioneer fell into Chapter 11 bankruptcy. Since then, Kodak has dramatically altered its business model, divesting most of its film, imaging and digital operations, and re-doubling its focus on commercial printing.

Kodak said in September it is on track to earn $167 million in 2013 earnings before interest, taxes, depreciation and amortization (EBITDA), an improvement of more than $300 million from last year. The company will also have a balance sheet with worldwide cash that exceeds debt by roughly $800 million.

The company believes that after decades of declines to its once-dominant film business, it now is in a position to grow. Kodak forecast in September that it may earn nearly $500 million in EBITDA by 2017.

The Transformation

Kodak's return to the NYSE, the exchange where it traded for many decades and was once considered a blue-chip technological pioneer alongside the likes of IBM (IBM) and Hewlett-Packard (HPQ), is a turnaround story.

In its heyday, Kodak's film business was also among the world's most recognizable brands, such as Coca-Cola (KO) soda. The company, however, has divested most of its best-known consumer products such as photographic film and digital cameras, and it is now a specialized player in high-tech manufacturing businesses that include commercial and functional printing.

The bankruptcy process allowed Kodak spin off its non-core film and document imaging assets to its U.K. pension fund, in a crucial move that resolved liabilities with its largest unsecured creditor and presaged the firm's post-Labor Day bankruptcy exit. Kodak also sold Kodak Gallery to Shutterfly (SFLY) and a portfolio of digital imaging patents to a consortium of technology industry giants such Apple and Google.

"It will be enormously valuable for the Company to get out of Chapter 11, and begin to regain its position in the pantheon of American business," U.S. Bankruptcy Court Judge Allan Gropper said when approving Kodak's plan to emerge from bankruptcy on Aug. 20.

The new Kodak is expected to be attached to markets as high-end as the manufacturing of touch screens, semiconductors, battery technologies, holographic images and circuitry.

"The new Kodak is a global technology company offering breakthrough solutions and professional services in the packaging, graphic communications and functional printing markets," Kodak said in a statement, pointing to its presses and imprinting systems, its packaging solutions, and process free plates.

In mid-October, Standard & Poor's gave Kodak a sub-investment grade rating on its first-lien debt and highlighted that while the company has undergone a major transition it will be difficult to build sustainable earnings in a highly competitive commercial printing market. S&P's "B-" first-lien debt rating also cited Kodak's high leverage relative to its earnings as a risk.

Kodak's new equity holders include private-equity giant Blackstone Group (BX), through its GSO Capital Partners credit investing arm and hedge fund BlueMountain Capital Management. Both investors hold in excess of 20% of Kodak's outstanding shares, according to recent filings with the Securities and Exchange Commission. Moses Marx of United Equities, Contrarian Capital and George Karfunkel are also among Kodak's new shareholders.

Most of Kodak's shareholders are secured creditors who backstopped a $406 million rights offering in June that converted secured and unsecured creditor claims into new equity, an important piece of the company's bankruptcy emergence.

While Kodak's January 2012 bankruptcy filing was a national news event and even stood out to some as an example of America's declining manufacturing industry, its reemergence may be indicative of the specialized U.S. businesses now at the confluence of manufacturing and technology.

The company's turnaround will now be in full view for the investing public, after its NYSE re-listing on Friday.

Check out TheStreet's series about Kodak's fall, its bankruptcy and Rochester, N.Y.'s ability to avoid Detroit's fate

-- Written by Antoine Gara and Joe Deaux in New York

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