Kodak Reported in Talks with Citigroup for Bankruptcy Cash

(Reuters) -- Eastman Kodak Co is in advanced talks with Citigroup Inc to obtain financing that would be used if the money-losing photography company files for bankruptcy protection, Bloomberg News said on Thursday, citing three people familiar with the matter.

Advisers to Kodak are also lining up a "stalking horse" that would become the lead bidder for a patent portfolio should it be auctioned via the Chapter 11 process, the newswire said, citing one of the people.

Neither Kodak nor Citigroup immediately responded to requests for comment.

Shares of Kodak fell 7.2 cents to 60 cents in after-hours trading following the report. They had closed regular trading down 14.3 cents, or 17.5 percent, at 67.2 cents.

Kodak has been left behind by rivals that embraced digital camera technology faster.

The Rochester, N.Y.-based company is trying to raise cash by selling a large patent portfolio, a sale that could enable it to avoid bankruptcy.

It also has patent litigation against such companies as Apple Inc , Taiwan's HTC Corp <2498.TW> and BlackBerry maker Research in Motion Ltd , which if successful could boost the value of its patents.

On Tuesday, Kodak restructured its business operations, but it was unclear whether this would be enough to restore the company's health sufficiently fast.

According to published reports, Kodak may file for Chapter 11 protection by early February, and seek about $1 billion of debtor-in-possession financing to keep it operating while in bankruptcy.

The company is scheduled to report fourth-quarter results on Jan. 26.

(Reporting by Jonathan Stempel in New York; Editing by Richard Chang)