Blackberry recently announced a 40% cut in its
workforce
Shares in struggling smartphone maker Blackberry
have fallen 13% after it announced it had
abandoned a plan to sell itself to its biggest
shareholder, Fairfax Financial Holdings.
Instead, it intends to raise $1bn (£627m) in fresh
financing.
Chief executive Thorsten Heins will step down and
former Sybase chief executive John Chen will serve as
interim chief executive.
Last month, Blackberry reported a second-quarter net
loss of $965m.
Those losses were blamed on poor sales of its new
smartphone, the Z10.
'Substantial cash'
Fairfax was planning to lead a consortium of firms in a
takeover of Blackberry worth $4.7bn.
But that plan, announced last month, has fallen
through.
Last week, Reuters reported that Fairfax was struggling
to raise the financing needed for the deal.
Instead, Fairfax, which owns a 10% stake in Blackberry,
is contributing $250m to the new fund-raising.
"This financing provides an immediate cash injection on
terms favourable to Blackberry, enhancing our
substantial cash position," said Barbara Stymiest, chair
of Blackberry's board of directors.
In September, the company announced a plan to cut
4,500 jobs, or 40% of its workforce, to reverse giant
losses.
The interim chief executive, John Chen, acknowledged
the challenge ahead: "Blackberry is an iconic brand
with enormous potential - but it's going to take time,
discipline and tough decisions to reclaim our success."
Some analysts remain sceptical about the firm's
prospects.
"Now we're back to the downward spiral," said BGC
Partners analyst Colin Gillis.
"They've got $1bn more cash that buys them time. The
drumbeat of negativity is likely to continue."
Comments
Post a Comment