An anonymous director reports
BLACKBERRY ANNOUNCES PARTIAL EXTENSION OF CONVERTIBLE DEBENTURES
BlackBerry Ltd. has entered into an agreement with certain controlled affiliates of Fairfax Financial Holdings Ltd., pursuant to which Fairfax will subscribe for $150-million (U.S.) aggregate principal amount of 1.75 per cent extendable convertible unsecured debentures of BlackBerry on a private placement basis. The transaction is expected to be completed on or before Nov. 17, 2023.
BlackBerry also announced that it has paid all amounts due upon the maturity of its outstanding 1.75 per cent unsecured convertible debentures issued Sept. 1, 2020 (Toronto Stock Exchange: BB.DB.U). The outstanding principal amount of the 2020 debentures was $365-million (U.S.), and none of the 2020 debentures had been converted into common shares of BlackBerry prior to repayment.
The extension debentures will be convertible into common shares at a price of $6 (U.S.) per common share, and will be due on or about Feb. 14, 2024, with an option for the parties to extend the maturity date to on or about May 14, 2024, by mutual agreement. The conversion price represents a premium of approximately 64.8 per cent to the closing price of the common shares on the New York Stock Exchange on Nov. 10, 2023, and the common shares issuable upon conversion of all of the extension debentures would represent approximately 4.3 per cent of the current issued and outstanding common shares. Aside from the maturity date, the terms of the extension debentures will be substantially identical to those of the 2020 debentures, except that the extension debentures will not be listed on any stock exchange and will not involve an indenture trustee. The extension debentures will be guaranteed on a senior unsecured basis by BlackBerry and BlackBerry U.K. Ltd.
In light of Fairfax's interest in the proposed subscription for the extension debentures, the transaction is a related-party transaction, but will be exempt from the minority approval and valuation requirements of Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions) of the Canadian Securities Administrators. The transaction will also be exempt from shareholder approval requirements under the rules of the Toronto Stock Exchange and the New York Stock Exchange. Fairfax beneficially owns, or exercises control or direction over, 46,724,700 common shares, representing approximately 8.0 per cent of the currently issued and outstanding common shares on a non-diluted basis. Fairfax would own, control or direct 71,724,700 common shares, representing approximately 11.8 per cent of the issued and outstanding common shares, assuming full conversion of the extension debentures. Prem Watsa recused himself from BlackBerry board of directors discussions relating to the transaction and did not vote on its approval.
The closing of the transaction is subject to customary conditions, including approval from the Toronto Stock Exchange and the New York Stock Exchange.
An early warning report will be filed by Fairfax in accordance with applicable securities laws and will be available under BlackBerry's profile on SEDAR+
or directly from Fairfax by contacting John Varnell, vice-president, corporate development, at 416-367-4941. Fairfax will acquire the extension debentures for investment purposes, and in the future, it may discuss with management and/or the board of directors of BlackBerry any of the transactions listed in clauses (a) to (k) of item 5 of Form F1 of National Instrument 62-103 (the Early Warning System and Related Take-over Bid and Insider Reporting Issues), and it may further purchase, hold, vote, trade, dispose of or otherwise deal in the securities of BlackBerry, in such manner as it deems advisable to benefit from changes in market prices of BlackBerry securities, publicly disclosed changes in the operations of BlackBerry, its business strategy or prospects, or from a material transaction of BlackBerry.
About BlackBerry Ltd.
BlackBerry (New York Stock Exchange: BB and Toronto Stock Exchange: BB) provides intelligent security software and services to enterprises and governments around the world. The company secures more than 500 million end points, including over 235 million vehicles. Based in Waterloo, Ont., the company leverages artificial intelligence and machine learning to deliver innovative solutions in the areas of cybersecurity, safety and data privacy solutions, and is a leader in the areas of end point management, end point security, encryption and embedded systems. BlackBerry's vision is clear -- to secure a connected future you can trust.
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