BlackBerry replaces CEO, Board of Directors following $1 billion investment

BlackBerry 10After rumored negotiations with several firms over the past couple of weeks, BlackBerry has agreed to a $1 billion investment deal with Fairfax Holdings Limited and several other investors (called collectively “Purchasers”). As part of the deal, CEO Thosten Heins will be stepping down, as well several members of the Board of Directors.

This move is not a surprising one, as Heins time at the head of the company has been wrought with complications since taking the reigns in 2012. Desperation was rife within the company as they struggled to find a buyer or create a viable plan to counter major losses over the last few years.

While a buy out was originally believed to be on the horizon, all deals fell through. BlackBerry was unable to broker a deal that worked for both the person/company who would handle the acquisition, and those who held stakes in the company already.

Once word came of a possible investment deal, it wasn’t clear if it would work out. Fairfax had trouble raising the required funds, and it became necessary to find other Purchasers to take some of the financial burden and slip in the deal.

But in the end the deal was settled. The $1 billion will be delivered in convertible debentures, and a $250 million principal amount will be acquired by Fairfax.

In addition to this part of the deal, it has been agreed that Heins will step down. In the near future, the CEO and Chairman of the Board positions will go to John S. Chen, previously of Sybase. That transfer of power should occur within two weeks, at which time BlackBerry will begin looking for a permanent CEO to replace him.

“The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders,” Barbara Stymiest, Chair of BlackBerry’s Board said in a statement released this morning.

“This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.”

This isn’t nearly as surprising a move as might be expected, given how difficult it was for BlackBerry to find interested buyers. While several sources showed some willingness to acquire it, such as Intel, there were no solid leads on who had made offers. Certainly, they were not going to get what they wanted for it, with the future of the company’s product line being so unclear.

Finding investors was a good move, and changing out CEO’s was an even better once. Now all they need is to start bringing in fresh blood for their development teams and begin a move innovative strategy for products. BlackBerry has been suffering under the same stagnation of Microsoft, though more so thanks to their lack of direction and focus.

Source: Market Wired

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