Eastman Kodak shares tumbled on Monday, after a federal agency said last Friday that it would hold off on moving ahead with a $765 million loan to the company to help it make ingredients used in generic drugs. The stock fell nearly 28%, to $10.73 a share on Monday.
Last Friday, The U.S. International Development Finance Corporation said that it would not proceed with the loan unless the company is cleared of allegations of wrongdoing. Questions were raised about the way the announcement of the government loan had been handled as well as stock options granted to some Kodak executives.
During a White House briefing on Monday, Press Secretary Kayleigh McEnany was asked about the possibility that funds distributed through the Defense Protection Act might be misused. In response to a reporter’s question, McEnany said that, “This president has used the DPA effectively but we’re certainly aware of the Kodak allegations and take them seriously.”
When the reporter followed up on whether the president would pull the plug on the deal, McEnany replied, "I’ll leave that to the president, but he takes these very seriously, we won’t speculate as to what that investigation finds"
A spokesperson for Kodak said on Monday that, “the company appreciates and supports the DFC’s decision to await clarification before moving forward with the process.”
Last week Kodak said that a special committee of independent members of its board of directors will look into recent activity surrounding the federal loan.