Struggling Canadian smartphone maker Blackberry Ltd. said Monday it was scrapping a plan to sell itself, would replace its CEO and was receiving a cash infusion of $1 billion from its largest shareholder, Fairfax Financial.
Fairfax Financial Holdings, which has a 10 percent stake in the tech company, and other investors will inject capital into the company and CEO Thorsten Heins will resign, BlackBerry said.
BlackBerry’s shares fell as much as 19 percent in pre-market trading on Monday after the $4.7 billion deal to sell itself collapsed.
“Upon the closing of the transaction, John S. Chen will be appointed Executive Chair of BlackBerry’s Board of Directors and, in that role, will be responsible for the strategic direction, strategic relationships and organizational goals of BlackBerry,” the company said in a statement.
“I am pleased to join a company with as much potential as BlackBerry,” Chen said. “BlackBerry is an iconic brand with enormous potential - but it’s going to take time, discipline and tough decisions to reclaim our success.”
Fairfax chairman and CEO Prem Watsa will be named lead director and chairman of the compensation, nomination and governance committee once the capital infusion is completed, Blackberry said.
“Fairfax is a long-time supporter, investor and partner to BlackBerry and, with this investment, reinforces its deep commitment to the future success of this company,” Watsa said.
Fairfax Financial Holdings Limited will provide $250 million of the $1 billion in funding, Blackberry said.
The transaction, which is expected to be completed this month, was hammered out after Fairfax spent six weeks trying to line up financing for its deal to buy BlackBerry and take it private.
Toronto-based Fairfax had until Monday afternoon to present a firm offer for BlackBerry, which put itself up for sale in August.