Struggling smartphone maker BlackBerry has abandoned plans to sell the business and ditched chief executive Thorsten Heins after nearly two years at the helm.
Shares plunged as the company announced that instead of finding new buyers, largest shareholder Fairfax and other investors would inject a billion US dollars into the firm.
John Chen, former boss of technology firm Sybase, was named interim chief executive to replace Mr Heins and immediately admitted that the once pioneering business faced tough challenges.
He said: “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success.”
The firm has struggled in the face of competition from Apple’s iPhone and other devices. New phones launched earlier this year running a revamped operating system called BlackBerry 10, have not sold well.
It recently revealed second quarter losses of $965m.
In September, plans for Fairfax to take BlackBerry private for $4.7bn were announced but it later said it would not increase its 10% stake and began trying to recruit other investors.
That attempt has been dropped in favour of the new investment plan which includes a $250m contribution from Fairfax.
BlackBerry’s handset revolutionised phone technology and was swiftly taken up by business people after it was introduced in 1999 but was badly hit by the arrival of Apple’s iPhone in 2007.
The Canada-based firm has also lost out to Android phones as well as Microsoft’s Windows devices.
Its latest announcement concludes a strategic review of its future.
Barbara Stymiest, chairwoman of the board, said: “This financing provides an immediate cash injection on terms favourable 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.”
She thanked Mr Heins for his “significant accomplishments” at the company, which he joined in 2007.