Kodak shares plunge after $765m government loan hits a hurdle

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Shares in Eastman Kodak opened 40 per cent lower on Monday after the federal government said it would not move forward with a heavily scrutinised $765m loan until allegations of potential wrongdoing were cleared.

Shares in the company slipped to $8.90, down 85 per cent from a peak it reached last month after the company said it was near a deal with the government to manufacture generic drug ingredients.

The US International Development Finance Corporation said on Friday that “recent allegations of wrongdoing raise serious concerns”, without specifying any allegations.

“We will not proceed any further unless these allegations are cleared,” the agency said. It added that it would continue working with other government agencies “to address critical shortfalls in America’s pharmaceutical supply chain”.

Kodak said it “appreciates and supports the DFC’s decision to await clarification before moving forward with the process”.

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