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BlackBerry Scraps Sale Plans & Raises $1Bn; John Chen Is New Interim CEO

After concluding a review of all strategic alternatives to its $4.7 billion buyout offer, beleaguered Canadian handset maker BlackBerry has scrapped its plans to sell the company and raised $1 billion investment from Fairfax Financial Holdings Limited and other institutional investors in convertible debentures, with Fairfax itself purchasing $250 million of the debentures. The transaction is expected to be completed over the next two weeks. As per the agreement, the investor consortium will subscribe to 6% unsecured subordinated convertible debentures worth $1 billion, convertible into common shares of BlackBerry at $10 per share, which is 28.7% premium to the closing price of BlackBerry shares on November 1, 2013. These debentures have a seven-year term and if all of them are converted, the issued common shares will represent 16% of all common shares in BlackBerry, based on the number of current outstanding common shares. This investment is expected to provide an immediate cash infusion to BlackBerry to substantially improve its cash position. It's also worth noting that Investors have an option to purchase additional debentures worth $250 million within 30 days of closing the transaction, thereby increasing its stake to 19.2%. John S Chen Is New BlackBerry CEO Following this investment, BlackBerry CEO Thorsten Heins will be stepping down after a six year stint and will be replaced by former Sybase CEO John S. Chen who has been appointed as the Interim CEO, until the board completes the search for a new CEO. Heins had been appointed as the president and CEO of BlackBerry (then Research In Motion) in January 2012,…

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