BlackBerry Abandons Sales Process, CEO Thorsten Heins Out

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Thorsten Heins

The embattled smartphone maker is raising $1 billion in new operating funds.

TORONTO -- Embattled BlackBerry has called off its sales process and announced that CEO Thorsten Heins and some board members are leaving.

The retreat, to include the Canadian-based smartphone maker raising around $1 billion in new operating funds, follows Fairfax Financial Holdings abandoning a planned $4.7 billion buyout of BlackBerry after doing its due diligence.

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John S. Chen has been named executive chair of BlackBerry's board of directors and interim CEO.

While not buying out BlackBerry, Fairfax Financial and other institutional investors are to invest $1 billion in the smartphone maker via a private placement of convertible debentures.

Prem Watsa, chairman and CEO of Fairfax, has been named a lead director, while Heins and David Kerr are to exit the boardroom.

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"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said Barbara Stymiest, chair of BlackBerry's board, in a statement Monday.

Despite that optimism, BlackBerry is expected to continue downsizing as it looks to survive increased competition in the global smartphone market from Apple, Samsung and other rivals.