BlackBerry to raise $605 mn through convertible debentures

Troubled smartphone maker BlackBerry said it planned to raise $605 million (roughly Rs 4,062 crores) through the sale of convertible debentures to shareholder Fairfax Financial Holdings and other investors.

The Canadian company said it will also redeem roughly $1.25 billion (around Rs. 8,393 crore) worth of outstanding debentures carrying a coupon of 6 per cent on 2 September.

The new debt, that BlackBerry planned to issue would have a coupon of 3.75 per cent and would be due in November 2020.

The company added, if all the new debt was converted into stock, it would represent about 11.57 per cent of BlackBerry's outstanding shares.

Well known contrarian investor Prem Watsa's FairFax is BlackBerry's second-largest shareholder with 8.9-per cent stake, according to Reuters data.

BlackBerry, which, at one time, was a dominant player in smartphones, now holds a meagre share of the global market for the devices.

BlackBerry last month said, it would stop making its Classic model, adding to doubts about the money-losing handset maker as it shifted focus to software.

The company, in July, had launched a second Android-based handset, which combined Alphabet's popular software and broad app catalogue with its security and productivity features at a lower price.

''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.