BlackBerry CEO Thorsten Heins has been axed as the Canadian smartphone manufacturer announces it is no longer looking for a buyer.
With the BlackBerry Z10 and BlackBerry Q10 maker having recently declared it was looking to instigate a buyout following years of declining sales and a depleted market share, the company has now stated it will instead look to raise $1 billion from institutional investors, including its leading shareholder Fairfax Financial Holdings.
As well as announcing its new financial intentions, BlackBerry, formally known as RIM, has confirmed that CEO Thorsten Heins is to be given the boot. The German head, who took BlackBerry through the launch of the BlackBerry 10 operating system and subsequent handsets, will be replaced in the short term by John S Chen. The interim CEO will also stand as the Executive Chair of the BlackBerry Board.
"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of pre-eminent, long-term investors," Barbara Stymiest, chair of BlackBerry's board said.
She added: "The BlackBerry Board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders.
“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."
The company added: “Today’s announcement marks the conclusion of the review of strategic alternatives previously announced on August 12, 2013.”
Although the reasoning for Heins’ ousting has yet to be confirmed, BlackBerry has revealed his departure will take place with immediate effect.
“On behalf of the Board, I would also like to thank Thorsten for his service to BlackBerry over the past six years,” Stymiest stated. “Under his leadership, BlackBerry established a more efficient cost structure, developed new products, saw the adoption of BES 10 and delivered the BlackBerry 10 platform. These are all significant accomplishments. We are grateful for his contributions and wish him well in his future endeavours.”
With the company stating that “the transaction is expected to be completed within the next two weeks,” it has revealed that $250 million of the $1 billion investment will be supplied by Fairfax. Following the announcement, BlackBerry’s shares dropped 19 per cent.
Speaking on his appointment, inbound CEO John Chen stated: “I am pleased to join a company with as much potential as BlackBerry.”
He added: “BlackBerry is an iconic brand with enormous potential – but it’s going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees.”
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