John S. Chen to be Appointed Executive Chair of BlackBerry’s Board of Directors and Interim CEO; Prem Watsa to be Appointed Lead Director.
In what have been rather busy last few hours for the Canadian smartphone manufacturer, BlackBerry has announced that Chief executive officer Thorsten Heins will step down and former Sybase chief executive officer John Chen will be appointed interim chief executive, pending completion of a search for a new Chief Executive Officer. Parallel to this development, the interim CEO, John S. Chen announced that the complete takeover bid from FairFax Financial will not be happening. Instead, Fairfax Financial Holdings Limited and other institutional investors (collectively, the “Purchasers”) will invest in BlackBerry through a U.S. $1 billion private placement of convertible debentures. Fairfax has agreed to acquire U.S.$250 million principal amount of the Debentures. The transaction is expected to be completed within the next two weeks.
The announcement of the abandoned plan to sell to FairFax Financial led to BlackBerry stocks falling by as much as 16%. It was just last month that the struggling smartphone manufacturer had reported a second-quarter net loss of $965m.
“I am pleased to join a company with as much potential as BlackBerry,” said Mr. Chen. “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.”
“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,” said Prem Watsa, Chairman and CEO of Fairfax. “I look forward to rejoining the BlackBerry Board and to working with the other directors and management team, under John Chen’s leadership, to shape the next stage of BlackBerry’s strategy and growth.”
Thorsten Heins had taken over as CEO last year, to oversee the launch of the BB10 platform, but smartphone sales have certainly not been as good as the company hoped they would be. We will have to wait and watch how this development has any impact, if at all, on Lenovo’s rumored interest in rescuing the company.
Read: BlackBerry statement