Fairfax Purchases $250m More Of BlackBerry’s Debt

BlackBerry’s largest shareholder Fairfax Financial Holdings has purchased more of the company, buying $250 million of debt that can be converted into BlackBerry shares. This gives BlackBerry more cash to engineer a recovery., and means Fairfax could own around 18 percent of the company if it converts all its debt to shares.

Fairfax’s new purchase follows an earlier investment of $250 million in November as part of a $1 billion debt financing deal by BlackBerry, the majority of which was provided by Canadian investors.

BlackBerry financing deal

BlackBerry had put itself up for sale and had accepted a $4.7 billion bid from Fairfax, but the process was abandoned after the hedge fund’s advisors said a leveraged buyout would add too much debt to the firm, while others suggested it could not afford the acquisition.

John Chen has since been appointed as BlackBerry CEO and recently announced he plans to return the company to profitability by March 2016 thanks to a recovery plan focussed on high-end smartphones for businesses, BlackBerry Enterprise Service (BES) 10, BlackBerry Messenger (BBM) and QNX embedded software and connected cars.

The firm recently posted huge quarterly losses of £2.7 billion after an asset write down, but shareholders have responded positively to the fact that BlackBerry finally appears to have a coherent recovery plan.

Chen has already made a number of changes to his senior management team, with high profile casualties including global creative director Alicia Keys. He has also announced a joint-manufacturing deal with Foxconn to produce handsets targeted at developing markets where BlackBerry devices are still seen as a status symbol.

Will things improve for BlackBerry in 2014 Try our 2013 BlackBerry quiz!

Steve McCaskill

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

Recent Posts

Apple, Google Mobile Ecosystems Should Be Investigated, CMA Told

CMA receives 'provisional recommendation' from independent inquiry that Apple,Google mobile ecosystem needs investigation

5 hours ago

Australia Rejects Elon Musk Claim About Social Media Ban For Under-16s

Government minister flatly rejects Elon Musk's “unsurprising” allegation that Australian government seeks control of Internet…

8 hours ago

Northvolt Files For Bankruptcy Protection In US

Northvolt files for Chapter 11 bankruptcy protection in the United States, and CEO and co-founder…

9 hours ago

UK’s CMA Readies Cloud Sector “Behavioural” Remedies – Report

Targetting AWS, Microsoft? British competition regulator soon to announce “behavioural” remedies for cloud sector

1 day ago

Former Policy Boss At X, Nick Pickles, Joins Sam Altman Venture

Move to Elon Musk rival. Former senior executive at X joins Sam Altman's venture formerly…

1 day ago

Bitcoin Rises Above $96,000 Amid Trump Optimism

Bitcoin price rises towards $100,000, amid investor optimism of friendlier US regulatory landscape under Donald…

1 day ago