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Fairfax to purchase additional convertible debentures of BlackBerry

By Bla1ze on 8 Jan 2014 01:51 pm EST

Back in December BlackBerry announced they would be extending the purchase option deadline for additional convertible debentures. Today, the company has announced that Fairfax Financial Holdings Limited has agreed to purchase an additional $250,000,000 principal amount of 6% unsecured subordinated convertible debenture through its subsidiaries. The transaction will be completed on or before January 16, 2014.

Press Release

Fairfax to Purchase Additional Convertible Debentures​

WATERLOO, ONTARIO--(Marketwired - Jan. 8, 2014) - BlackBerry(R) Limited (NASDAQ:BBRY)(TSX:BB), a world leader in mobile communications, announced today that Fairfax Financial Holdings Limited has agreed to purchase, through its subsidiaries, an additional $250,000,000 principal amount of 6% unsecured subordinated convertible debentures of BlackBerry (the "Debentures"). The additional Debentures will be purchased pursuant to the exercise of a previously-announced option that was granted in connection with BlackBerry's private placement of $1 billion principal amount of Debentures on November 13, 2013, and the transaction will be completed on or before January 16, 2014.


Reader comments

Fairfax to purchase additional convertible debentures of BlackBerry

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Watsa sure has confidence in BlackBerry man, the dude has balls. I'm praying he knows something we don't.

Posted via CB10

And this insider knowledge will come back to haunt BlackBerry. Prem is like the schoolyard bully; tossing around his muscle against the smaller children. He is positioning himself to be the largest creditor to ensure a big payday when BlackBerry declares bankruptcy or when BlackBerry starts bringing in huge profits.

Posted via CB10

Tick the boxes:

Cash ready
OS ready (almost there...)
Great team ready
New devices?

10 9 8 7 .... Go the Berries!

My name is Prem, I'm using BBM ... from my QuZe10 ...whatarhyme...

I don't really care what Prem knows of if he is investing wisely or not as long as he keeps pumping money in to BlackBerry!

Posted via CB10 on Z30 STA100-2 on O2 UK - Activated on BES10.2

Seeing that his wealth has grew significantly even through the recession. I would lean on the "he knows something" side of things.

Does anyone know why a company with $3B in cash needs to pay interest on an additional $0.25B???

Something I can't piece together. Seems like Watsa and pension funds doing themselves a favor and board is allowing them to do it.

Are they about to make an acquisition?

Posted via CB10

Well they drove the price of the stock at rock bottom and basically bought the company for 1 billion, adding 250mil serve the only purpose of making lots $$$.

They don't have a choice to issue those debts. Back in November, they offered an option to do so... So Blackberry has the obligation to offer the debts. And of course they will buy them now, the stock is around 9$, the debentures are convertible at 10$.

Posted via the Android CrackBerry App!

I'm not certain exactly what that means but it's sounds like a huge investment! It's getting HOT up in the BlackBerry world!

All systems are a go!

Keep The Faith  BlackBerry Q10 

I don't know ... he's buying debt (with an interest rate) not stock. They have to pay him back $250 million + interest, vs. him taking a chance and buying $250 million worth of stock that might go up for down. Risky if BlackBerry goes under or defaults but less risky than a fluctuating stock.

6%... and if they default they break the company up and sell the pieces and you get paid before anyone else... i would like a piece of that too.

Posted via CB10

True. It's win win I guess. Mitigates any potential loss in his stocks as he's going to get the 6% succeed or fail

Posted via CB10

That's what GM bondholders (like some in my family) thought before Barack Odummy came along and abrogated, ignored and then defiled the USA bankruptcy laws that clearly say what you pointed out.

Didn't happen. Bondholders got screwed by the US government because of Obama. Yes, I'm aware this is Canada, and you're not stuck with an arrogant tyrant like Obama, but it's an example of unbridled hubris and can happen anywhere.

This is why I like him, he has balls of iron and sees something extremely positive about BlackBerry.

Prem has already made a cool few million from the share purchase only a couple of weeks ago !! Not through fairfax but some other private company. Rich get richer and I keep wishing I had pocket change like them lol

Well, Fairfax seems to be in it for the long haul. Not likely going to be able to flip that investment in the next year anyway. Hope the long term goal isn't to make the company profitable again only to put it back up for sale when it has a higher perceived value

If you look at Fairfax history, they have not done that in the past decades (sell when profitable).
I'm not in Prem's mind but I don't think his main motivation was money when he created the fund. And I believe it still is not today.

Remember that Fairfax stands for "fair financial acquisition".

Besides Fairfax is not the owner of BlackBerry. They have a weight in decision making but no ownership from a legal point of view, so selling is not done like that.

Posted via CB10

BlackBerry is now starting to stir the pot.

I really hope this is all leading to major success. I love the brand.

BlackBerry Q10 and Z30 current

Posted via CB10

If the stock goes past $10 a share he can convert and then would have instant profits beyond the 6%. I think this is a hugh step of confidence that he believes the stock will rise so that he can then convert at the $10 per share price. I think he believes the stock will go up by a large amount and this locks in his ability to convert and make more. If the stock doesn't go up by a large amount he still has the 6% to fall back on plus his original investment. It is like going to Vegas and watching the high rollers place their bets and you duplicate their action. May be time to buy more stock

Good man. Don't let waste money on more shoes and face creams and magazines. BlackBerry stock is better.

Posted via CB10

With each passing day the storm clouds keep breaking up.

This community and those who believe in BlackBerry have finally had enough of the lynch mob mentality and are starting to fight back hard.

Sent from my BlackBerry Z30

I now have my z30 and z10 z30 is amazing glad I got it And the best of BlackBerry

Posted via CB10