Canadian device maker BlackBerry has taken itself off the market and will instead receive a $1 billion capital injection from a small group of investors, including former prospective buyer Fairfax Capital.
In concert with the investment, which the company says could increase to a maximum of $1.25 billion, CEO Thorsten Heins will resign both his seat on the board of directors and his executive post. The change of plans was first reported by The Globe and Mail and later confirmed by BlackBerry.
John S. Chen will step in as executive chairman of the moribund brand and temporarily replace Heins as interim CEO. Chen is a longtime veteran of the technology industry, having led Silicon Valley data management company Sybase from 1998 until its acquisition by German software behemoth SAP in 2010.
The investment will be made in the form of convertible notes, essentially long-term IOUs that can be redeemed for shares of the company after a set period of time --Â in this case seven years, with a strike price of $10 per share. BlackBerry notes the funding, if it reaches its full $1.25 billion potential, would represent nearly 20 percent of the company as it exists today.
BlackBerry has been seeking a way to right the ship for more than a year, as the increasing popularity of Apple's iPhone and devices running Google's Android have taken significant chunks out of BlackBerry's formerly dominant position in the enterprise. Heins, who was brought on in 2012 to lead the company's turnaround, presided over the disastrous rollout of the 10-series smartphones and the belated release of BlackBerry Messenger for iOS and Android.
The deal comes on the last day of the period that Fairfax, which agreed to acquire BlackBerry for $4.7 billion last month, was given to examine the company's books. Rumors that the buyout was on thin ice have been circulating seemingly since it was announced, with recent reports tipping groups including BlackBerry founder Mike Lazaridis and former Apple CEO John Sculley as potential alternative bidders.