BlackBerry ditches Fairfax sale plan and seeks a $1bn lifeline

BlackBerry, the troubled Canadian mobile phone maker, has abandoned plans to sell itself to its largest shareholder and announced the departure of its chief executive as it adopts a new strategy to revive its business.

It plans to raise $1bn (£628m) from institutions and is bringing in a new broom as executive chairman to find a way out of its problems. The news triggered a sell-off in BlackBerry’s shares yesterday as investors digested details of the new plan.

The company had earlier signed a tentative pact to sell itself to a consortium of investors led by its largest shareholder, Fairfax Financial, as it failed to attract consumers with its latest smartphones. It has been struggling for years to win back the initiative from rivals such as Apple and Samsung.

But the Fairfax deal depended on the consortium securing the requisite funding, something that yesterday was reported to have proved a struggle. As a result, BlackBerry took itself off the market with the new deal, which will see Fairfax and other investors plough $1bn into the company via a private placing of convertible debt as it tries to mount another turnaround effort.

BlackBerry said its chief executive, Thorsten Heins, will step down once the rescue deal is complete. A new executive chairman, John Chen, will act as chief executive until a replacement is found. Mr Chen is the former boss of Sybase, a database company he is credited with reinvigorating. In his new role, he will be responsible for “strategic direction, strategic relationships and organisational goals”.

“BlackBerry is an iconic brand but it’s going to take time, discipline and tough decisions to reclaim our success,” he said.