BlackBerry has scrapped its attempts to find a new owner, with the manufacturer aiming to raise $1bn and replacing its CEO Thorsten Heins.
Investment firm Fairfax Capital, which holds the largest stake in BlackBerry, had until the end of today (4 November) to find the cash to take control of the stricken Canadian phone maker. No rivals suitors stepped forward with a formal bid, despite reported interest from the likes of Samsung, Facebook and BlackBerry founders Jim Balsillie and Doug Fregin.
Fairfax Capital will now invest $1bn into the company by raising money through institutional investors, with the fundraising completed in two weeks time. At that point the CEO of software vendor Sybase, John S Chen, will become executive chair of BlackBerry's board of directors. He will be in charge of the 'strategic direction, strategic relationships and organisational goals' of the manufacturer.
BlackBerry's CEO Thorsten Heins is leaving the company as part of today's changes, bringing his time in charge of the company to an end less than two years after he was appointed. Chen will take on the interim CEO role until a new head of the company is appointed.
Barbara Stymiest, chair of BlackBerry's board, described today's move as a 'significant vote in confidence' in BlackBerry's future. She said: '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. This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position. Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs.'
Chen said: 'I am pleased to join a company with as much potential as BlackBerry. BlackBerry is an iconic brand with enormous potential - but it's going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.'
Today's move is the latest attempt to turn the business around after enterprise and consumers were left largely nonplussed by its new BB10 operating system. When it was unveiled earlier this year, the new OS was seen as its redesign for the modern smartphone era. However, UK retailers and operators were critical of BB10, saying that BlackBerry had priced the devices too expensively and had not built a large enough catalogue of apps to compete with rivals Apple and Google.
It said in August that it was effectively putting itself up for sale as it tried to secure its long-term future but the challenges facing BlackBerry were starkly illustrated when it said in September it was writing off almost $1bn because of unsold stock of its BlackBerry Z10 smartphone, the first device in the BB10 era.
Author: Graeme Neill