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Fairfax bails out BlackBerry with another $250m

Jennifer Scott

Fairfax Financial Holdings today announced it was buying up more of BlackBerry’s debts to the tune of $250m.

The Canadian firm is the largest shareholder of BlackBerry stock and made a bid in September to buy out the company in its entirety for $4.7bn.

BlackBerry.jpg

However, the deal fell through and instead in November Fairfax led a group of investors to buy $1bn of BlackBerry’s debentures – a debt not secured by collateral but backed only by reputation.

Today it confirmed it would buy a further $250m, giving BlackBerry a much needed cash injection as it tries to change direction and return to profitability.

BlackBerry’s most recent results showed the company was continuing to struggle, with operating losses of $4.4bn and revenues down by 56% year on year.

However, CEO John Chen – appointed the day the Fairfax debenture buyout was made public – continued to tout the company’s comeback capabilities. He is in the process of making numerous changes to the management team and has promised a return to focusing on enterprise rather than chasing the consumer market.

“With the operational and organisational changes we have announced, BlackBerry has established a clear roadmap that will allow it to target a return to improved financial performance in the coming year,” Chen said during BlackBerry’s earnings call.

“We have accomplished a lot… but still have significant work ahead of us as we target improved financial performance next year.”

This latest debenture transaction is expected to close before 16 January 2014.


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