BlackBerry abandons plan to sell itself to Fairfax Financial Holdings

BlackBerry has decided to abandon a plan to sell itself to its biggest shareholder, Fairfax Financial Holdings.

Instead, BlackBerry intends to raise $1 billion in fresh financing.

Chief executive Thorsten Heins will step down and former Sybase chief executive John Chen will serve as interim chief executive.

Last month, BlackBerry reported a second-quarter net loss of $965 million.

Those losses were blamed on poor sales of its new smartphone, the Z10.

Fairfax was planning to lead a consortium of firms in a takeover of BlackBerry worth $4.7 billion.

But that plan, announced last month, has fallen through.

Last week, Reuters reported that Fairfax was struggling to raise the financing needed for the deal.

Instead, Fairfax, which owns a 10% stake in BlackBerry, is contributing $250 million to the new fund-raising.

“This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position,” said Barbara Stymiest, chair of BlackBerry’s board of directors.

In September, BlackBerry announced a plan to cut 4,500 jobs, or 40% of its workforce, to reverse giant losses.

The interim chief executive, John Chen, acknowledged the challenge ahead: “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success.”