BlackBerry to raise $1bn in bonds and seek new chief

BlackBerry Ltd, coping with the collapse of a $4.7bn buyout by Fairfax Financial Holdings, will raise $1bn in convertible bonds and seek a new chief executive officer for the struggling company.

BlackBerry shares fell as much as 18% after Fairfax abandoned the takeover plan, opting instead for a bond deal and management shakeup. Fairfax, BlackBerry’s largest investor, will invest $250m in the convertible debentures, according to a statement. CEO Thorsten Heins will step down, while former Sybase chief John Chen becomes executive chairman.

The transaction, slated to be completed later this month, follows a six-week attempt by Fairfax to attract financing for its buyout bid, which would have taken the smartphone maker private. The $1bn infusion will help stabilise the unprofitable company as it burns cash, though BlackBerry will still pursue other deals and is now more open to the idea of a breakup, people familiar with the matter said.