Canadian Investors Provide Lions’ Share Of BlackBerry Financing

Canadian investors are providing 80 percent of the $1 billion being raised by BlackBerry in private financing, evidence that there is still hope for the beleaguered smartphone manufacturer in its homeland.

It was revealed earlier this week that Fairfax Holdings, BlackBerry’s largest shareholder, was abandoning its $4.7n billion takeover bid for the company and that the firm would instead raise fresh finance with a number of private institutions.

The list of investors was revealed in a government filing. It shows that the largest single investor is Canso Investment Council, which is stumping up $300 million, with Fairfax the second largest with $250 million.

BlackBerry investors

Other investors include Power’s Mackenzie Financial division, Markel Corp, Qatar Holding and Brookfield, all of whom are pledging between $200 million and $50 million. BlackBerry said it no longer plans to sell the company, but if it is taken over within 30 days of the deal closing, investors will be paid a combined $135 million.

Prem Watsa, CEO of Fairfax Holdings, attributed much of the optimism to the appointment of John Chen, who will serve as the executive chair and interim chief executive of BlackBerry in the wake of the departure of Thorsten Heins.

Chen previously took over Sybase, an enterprise and services company that was sold in 2010 for six times of what it was worth when he first assumed the role, and it is hoped he can work similar magic at BlackBerry. Chen will receive a pay package that includes restricted shares worth $85 million, but he must stay for five years in order to receive all of it in an effort to make him think like a long-term shareholder.

Fairfax takeover

According to Canadian newspaper The Globe and Mail, Watsa said Fairfax pulled out of a takeover because its advisors said a leveraged buyout would add too much debt to the firm.

Concerns about Fairfax’s ability to raise the funds necessary to complete the transaction had persisted throughout the takeover process and it was widely reported that BlackBerry was seeking other buyers.

Lenovo was understood to be very interested in making a bid, but the Canadian government nipped that possibility in the bud due to security fears.

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