BackBlackBerry completes $1 billion investment through debentures
Investors also have an option to purchase additional $250 million worth of debentures in 30 days
Premium(Mark Blinch/Reuters )
New York: Smartphone maker BlackBerry Ltd said it has concluded the private placement of debentures worth $1 billion with Prem Watsa-led Fairfax Financial Holdings Ltd and other institutional investors.
The investors also have an option to purchase additional $250 million worth of debentures in 30 days.
The struggling Canadian handset maker had earlier this month scrapped a sale plan and said it would instead raise as much as $1.25 billion through convertible debentures, which it intends to use for general corporate purposes.
In a regulatory filing to the US Securities and Exchange Commission (SEC), BlackBerry said: “It has completed the previously-announced $1 billion private placement of convertible debentures to Fairfax Financial Holdings and other institutional investors."
BMO Capital Markets acted as the sole book-runner and sole placement agent for the private placement of the debentures, the filing, which was filed on Wednesday, it added.
“As previously announced, the investors have an option to purchase up to an additional $250 million principal amount of additional debentures within 30 days," the firm said.
In a previous SEC filing this month, BlackBerry said that Fairfax, which signed a tentative agreement in September to acquire it for $4.7 billion, will invest $250 million in convertible debentures. Fairfax holds 10% in the firm.
Besides, Mackenzie Financial Corp. will purchase debentures worth $200 million, Canso Investment Counsel ($300 million), Markel Corp. ($70 million), Brookfield Asset Management ($10 million), Qatar Holding ($100 million).
Fairfax, Mackenzie, Canso, Markel, Brookfield and Qatar Holding are termed as the “original purchasers"—the firms with which BlackBerry entered into a Subscription Agreement on 4 November, the filing had said.
Once a dominant player in the handset market, BlackBerry has been losing its market share to rivals, mainly Apple (iPhone), Google’s Android-powered devices and Nokia’s Windows Phone. BlackBerry’s net loss widened to $965 million in the second quarter ended 31 August, from $235 million a year earlier, hit hard by inventory charges related to its latest offering Z10.
According to research firm IDC’s latest July-September data, BlackBerry recorded the largest year-over-year decline among the leading operating systems.
In Q3, 2013, BlackBerry operating system shipments fell by 41.6% to 4.5 million units from 7.7 million units in the year-ago period, it added.
“Underpinning its results was softer demand for its new BB10 operating system and continued demand for its older BB7 within emerging markets," IDC said.
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