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BlackBerry abandons $4.7 billion sell off as CEO Heins is ousted

Plans to raise money with fresh financing
BlackBerry abandons $4.7 billion sell off as CEO Heins is ousted
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Less than two months after it was first announced, BlackBerry has announced it has abandoned plans to sell the business to lead shareholder Fairfax Holdings.

The $4.7 billion deal would have seen Fairfax expand its existing 10 percent share in order to shore up BlackBerry's business in preparation for a more longterm sell-off to one of the company's rivals.

However, the company will now look to save the business by raising funds of $1 billion in convertible debt, with former suitor Fairfax stumping up £250 million.

Share slump

Part of the revised strategy will also see current CEO Thorsten Heins who only took up the position in January 2012 step down, replaced by former Sybase chief executive John Chen in an interim capacity as the company searches for a more permanent successor.

Shares in BlackBerry have been halted in the aftermath, having fallen by almost 19 percent in pre-market trading, while Business Insider reports Heins may have activated a $56 million strong 'golden parachute' written into his contract following his removal.

BlackBerry Z10

BlackBerry, however, is keen to put a positive spin on the news, with board chair Barbara Stymiest claiming the switch in strategy "represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors."

"The BlackBerry board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders," added Stymiest.

"This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position.

"Some of the most important customers in the world rely on BlackBerry and we are implementing the changes necessary to strengthen the company and ensure we remain a strong and innovative partner for their needs."

The firm's flagship, the BlackBerry 10-powered Z10, slumped at retail, with the company having recently been forced into a write down of nearly $1 billion in unsold inventory.

[source: BlackBerry]