BlackBerry abandons sale plans

Dylan Bushell-Embling
05 Nov 2013

BlackBerry has abandoned plans to sell off the company, and has announced the departure of CEO Thorsten Heins.

Neither Fairfax Financial or any of the other interested bidders will buy BlackBerry, although Fairfax and a group of other investors will tip an extra $1 billion into the company.

BlackBerry announced it will place convertible debentures worth $1 billion to the investors, including $250 million to Fairfax alone.

If all debentures are converted, the placement would represent 16% of the company's total common shares.

A consortium led by Fairfax in September made a preliminary $4.7 billion offer to buy out BlackBerry and take the company private.

But Fairfax as well as BlackBerry co-founder Mike Lazaridis and Cerberus Capital Management had reportedly faced difficulties lining up funding for their respective planned buyout offers ahead of yesterday's deadline to table a bid.

Fairfax head Prem Watsa also toldAP the company had been advised against a leveraged buyout on the grounds that loading BlackBerry with too much debt would not be appropriate.

BlackBerry also revealed that CEO Thorsten Heins will step down from the post and from the board upon the closing of the placement.

Former Sybase CEO John Chen will step in as executive chairman from that time, and will also serve as interim CEO until a replacement is found.

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