Proactive Investors - Double digits were wiped from BlackBerry’s share price in Wednesday’s pre-market session after the mobile phone-cum-software company announced a $160 million private debt offering.
BlackBerry (TSX:BB) is hoping to raise the cash to cover the repurchase of $150 million worth of outstanding debt maturing next month, with the remainder, if any, earmarked for “general corporate purposes”.
The group initially entered into the $150 million debt financing agreement with Fairfax Financial Holdings (TSX:TSX:FFH) in November 2023 after fully repaying $365 million worth of debentures issued in 2020.
The new notes will mature on February 15, 2029, unless earlier converted, redeemed or repurchased.
BlackBerry is in the midst of an upheaval following the appointment of industry veteran John Giamatteo last month.
Under Giamatteo, the group intends to fully separate its Internet-of-Things (IoT) and cybersecurity businesses, a plan which chairman Dick Lynch hopes can “unlock shareholder value”.
BlackBerry initially planned to IPO its IoT wing, but those plans have since been scrapped.
Shares are expected to open for a trading price of $3.22 when US markets open on Wednesday.