BlackBerry ditches CEO and accepts $1B loan from Fairfax, others

BlackBerry will take a loan from its principal shareholder and name John S. Chen chairman and interim CEO

BlackBerry will change its CEO and accept a US$1 billion loan from a consortium involving shareholder Fairfax Financial Holdings as it struggles with inventory and strategy problems. The company has abandoned plans to sell itself.

CEO Thorsten Heins will resign when the deal is complete, with former Sybase CEO John S. Chen joining the company as chairman and interim CEO, BlackBerry announced Monday.

The $1 billion loan takes the form of convertible debentures, exchangeable for shares at a price of $10, a 28.7 percent premium over Friday's closing price, the company said. Fairfax has agreed to acquire $250 million of the debentures, with other institutional investors agreeing to take the rest. If all the debentures were converted, they would amount to around 16 percent of outstanding shares, BlackBerry said. In addition, the investors could purchase another $250 million of debentures, potentially raising their combined stake to 19.2 percent.

In September, Fairfax made a conditional offer of around $9 per share, valuing BlackBerry at around $4.7 billion, although it had not obtained financing for the deal at that time. The new arrangement puts a higher value on the company, but means Fairfax has to find less money to finance the deal.

BlackBerry thanked Heins for establishing a more efficient cost structure and overseeing delivery and adoption of the BlackBerry 10 platform and BlackBerry Enterprise Server (BES) 10.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags smartphonesMergers and acquisitionsBlackberrybusiness issuesinvestmentsconsumer electronicsThorsten HeinsFairfax Financial HoldingsJohn S. chen

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Peter Sayer

Peter Sayer

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Cate Bacon

Aruba Instant On AP11D

The strength of the Aruba Instant On AP11D is that the design and feature set support the modern, flexible, and mobile way of working.

Dr Prabigya Shiwakoti

Aruba Instant On AP11D

Aruba backs the AP11D up with a two-year warranty and 24/7 phone support.

Tom Pope

Dynabook Portégé X30L-G

Ultimately this laptop has achieved everything I would hope for in a laptop for work, while fitting that into a form factor and weight that is remarkable.

Tom Sellers

MSI P65

This smart laptop was enjoyable to use and great to work on – creating content was super simple.

Lolita Wang

MSI GT76

It really doesn’t get more “gaming laptop” than this.

Featured Content

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?