DHAKA: BlackBerry has abandoned its sale process and announced it will replace its chief executive.
Fairfax Financial Holdings Ltd., BlackBerry’s largest shareholder with a 10 percent stake, said it won’t buy the struggling smartphone company and take it private but said it and other investors will inject $US1 billion as part of a revised investment proposal.
BlackBerry said CEO Thorsten Heins is stepping down, reports The Sydney Morning Herald.
Heins took over in early 2012 after the company lost billions in market value.
John Chen has been appointed as chair of BlackBerry`s board of directors and will serve as interim CEO.
Fairfax head Prem Watsa will be appointed to the board.
BlackBerry announced in September that Fairfax Financial Holdings signed a letter of intent that contemplated buying BlackBerry for $US9 a share, or $US4.7 billion, and taking it private.
Fairfax said then it wouldn`t increase its 10 percent stake and the company went about trying to attract other investors.
Watsa said they did due diligence and worked with a consulting company that recommended that taking it private with borrowed money was not the way to go.
‘To load this company with too much debt was not appropriate,’ Watsa said.
‘We didn’t want it leveraged. We didn’t even bother to go there. Once we decided that a leveraged buy-out with high debt was not appropriate we didn`t push it any further. We backed off completely.’
Watsa said BlackBerry needs financial flexibility.
BDST: 2001 HRS, NOV 05, 2013