Shares of Eastman Kodak (NYSE: KODK) were down more than 30% near the close of trading today after a tweet from the U.S. International Development Finance Corp. said a $765 million loan for domestic pharmaceutical manufacturing is on hold.
The Aug. 7 tweet said: “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.”
The agency added: “We remain committed to working together with other government agencies to address critical shortfalls in America’s pharmaceutical supply chain.”
The loan is supposed to support the retooling of Kodak’s existing facilities in Rochester, N.Y., and St. Paul, Minn., incorporating continuous manufacturing and advanced technology so that a new Kodak Pharmaceuticals can produce critical pharma ingredients inside the U.S. — a major Trump administration goal.
Kodak has faced scrutiny over how its executives handled stock transactions around the announcement. House Democrats are launching an investigation — asking not only about the transactions but also how a company focused on photography was able to win Trump administration support to manufacture drugs.
Kodak has created a special committee of independent directors that is retaining Akin Gump Strauss Hauer & Feld to conduct an internal review.