Ailing handset maker BlackBerry has pushed back a deadline which was set to expire today to give a consortium of investors more time to purchase a further US$250m of convertible debentures.
The consortium, led by major shareholder Fairfax Financial…
Ailing handset maker BlackBerry has pushed back a deadline which was set to expire today to give a consortium of investors more time to purchase a further US$250m of convertible debentures.
The consortium, led by major shareholder Fairfax Financial Holdings, acquired US$1bn of the notes on 13 November and had 30 days to buy a further US$250m should it wish to.
BlackBerry has pushed the deadline back to 13 January. It said the decision was taken to allow prospective investors to get an update on the company’s financials – it is set to release its Q3 results on 20 December.
The seven-year, 6% unsecured subordinated debentures will be converted into Blackberry shares at US$10 per common share. If all are converted, they will equate to 16% of the company’s total stock, or 19.2% if the extra US$250m of debentures are also bought and converted.
BMO Capital Markets acted as the sole bookrunner and placement agent on the initial transaction. Should the investors take up the option, the purchase will be completed before 16 January 2014.
The transaction forms part of a financing package agreed with Fairfax and other institutional investors in the wake of Fairfax’s unsuccessful US$4.7bn takeover bid for BlackBerry.
That deal fell apart after Fairfax failed to persuade other investors to join a lending syndicate. Fairfax and co-investors subsequently sought to inject US$1bn of capital into the company in the form of the convertible debentures. BlackBerry decided to end the strategic review it launched in August after agreeing the convertible deal.
