Canadian Manufacturing

BlackBerry restructures debt, signs deal with Fairfax

The deal with Fairfax Financial Holdings Ltd. and other institutional investors will raise US$605 million in new 3.75-per-cent unsecured convertible debentures



WATERLOO, Ont.—BlackBerry Ltd. announced a plan to restructure its debt and cut its interest costs.

Trading in BlackBerry shares had been halted pending the announcement.

Under the plan, the company will redeem about US$1.245 billion in six-per-cent unsecured convertible debentures which can be converted into BlackBerry shares at a price of US$10 per share.

BlackBerry also said it has signed a deal with Fairfax Financial Holdings Ltd. and other institutional investors to raise US$605 million in new 3.75-per-cent unsecured convertible debentures.

The new debentures will be convertible into BlackBerry shares at a price of US$10 per share and will be due on Nov. 13, 2020.

Based on the number of shares outstanding, if all of the new 3.75-per-cent debentures were to be converted, the shares issued would represent about 11.57 per cent of its shares outstanding.

“The restructuring of our convertible debt will enable us to significantly reduce our interest expense and potential future dilution for our shareholders,” John Chen, BlackBerry’s executive chairman and chief executive, said in a statement.

“I am pleased that Fairfax will continue as BlackBerry’s leading lender, reinforcing its ongoing commitment to the company as we continue to execute on our strategy of pursuing growth and sustainable profitability.”

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