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.
BlackBerry has decided to abandon a plan to sell itself to its biggest shareholder, Fairfax Financial Holdings
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.”
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Blackberry is exploring options for its business, which could see the company sold off.
Timothy Dattels, a Blackberry board member, will head a new committee that will consider different business models, including partnerships.
The smartphone maker wants to increase sales of its Blackberry 10 model, seen as crucial to the future of the company.
“We believe that now is the right time to explore strategic alternatives,” said Timothy Dattels.
“During the past year, management and the board have been focused on launching the Blackberry 10 platform and BES 10, establishing a strong financial position and evaluating the best approach to delivering long-term value for customers and shareholders.”
Blackberry is exploring options for its business, which could see the company sold off
Prem Watsa, chairman of Blackberry’s largest shareholder, Fairfax Financial, resigned from the board as the formation of the committee was announced. Prem Watsa said he wanted to avoid any potential conflict of interest.
“I continue to be a strong supporter of the company, the board and management as they move forward through this process, and Fairfax Financial has no current intention of selling its shares,” he said.
Blackberry has struggled in recent years to regain market share lost to Apple and users of Google’s Android operating system.
“It’s quite surprising to see a statement like this made publically,” said Francisco Jeronimo from the technology research firm IDC.
“Everyone knows that they’ve been struggling and looking at their options. It’s clear that they haven’t been able to find anyone who wants to buy or form a partnership.
“Blackberry has very strong assets and is one of the most recognized portfolios in the industry.
“The question now is how much they’re asking and what’s on offer.”
Shares in the company rose by more than 5% as the news of the committee formation emerged.
The company dropped its Research in Motion name in January 2013 and rebranded as Blackberry, to coincide with the launch of the Blackberry 10 model.
In its most recent quarter, Blackberry lost $84 million and expects to lose more money in the three months to the end of August.