The deadline for troubled smartphone and mobile platform maker BlackBerry to find a suitor has come and gone with no deal, and company will now soldier on by raising $1bn in new funding on its own, according to company officials.
In a prepared statement, the company added that that CEO Thorsten Heins -- who hasn't been there long -- is leaving BlackBerry and that a shakeup on the executive board is afoot. Heins' position will be filled on an interim basis by John Chen, who will also serve as board chairman.
The news caps nearly three months of drama during which BlackBerry had been seeking a buyer and had received a letter of intent from Fairfax Financial Holdings to purchase the company for nearly $5bn. Other rumoured suitors included the private-equity firm Cerberus Capital Management and Qualcomm Inc.
Under the new deal struck this morning US time, Fairfax will help BlackBerry raise $1bn in private funding and assume $250 million in debt. The transaction is expected to be completed within the next two weeks.
"I am pleased to join a company with as much potential as BlackBerry," said Chen said in a statement. "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.2
Once a darling of the smartphone market, BlackBerry has seen its share of the mobile OS market fall to just 2.7 per cent, recent IDC figures released earlier this month show. Although the figure was up one point from last year, the company's share still remains far behind Android and iOS, which own 75.3 per cent and 16.9 per cent market share, respectively.
In September Jabil Circuit, a manufacturer of BlackBerry's devices, said it wanted out of its contract to produce the units after sales stagnated. In recent months, the Canadian vendor formerly known as Research In Motion has announced deep losses, job cuts, a takeover bid and a new distribution deal that finds the company turning its back on the consumer and devices space and pinning its hopes on what may be the last remaining jewel in its crown: its mobile management server platform.
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