LONDON, UK / ACCESSWIRE / August 29, 2016 / Active Wall St. blog coverage looks at the headline from BlackBerry Ltd. (NASDAQ: BBRY) as the company announced on August 26, 2016, that it will redeem its 6% unsecured Convertible Debentures worth about $1.25 billion and also raise funds via issue of fresh unsecured Convertible Debentures via a private placement worth $605 million. Register with us now for your free membership and blog access at: http://www.activewallst.com/register/.

Today, AWS is promoting its blog coverage on BBRY. Get all of our free blog coverage and more by clicking on the link below: http://www.activewallst.com/registration-3/?symbol=BBRY.

BlackBerry is a telecommunications company engaged in the sale of smartphones and enterprise software and services. The company was founded in 1984 and is headquartered in Waterloo, Ontario, Canada, with offices across North America, Europe, Middle East, and Africa, Asia Pacific and Latin America.

Paying off Old Debts

The Convertible Debentures will be redeemable on September 2, 2016 at a price of $106.7213 which includes the principal and interest quotient. The holders of the 6% Convertible Debentures also have the option of converting them into common shares of BlackBerry. These common shares will be available at a price of $10.00 on and before September 1, 2016 at per the terms of the Convertible Debentures. BlackBerry, however, expects zero conversion of the 6% Convertible Debentures into shares, given the conversion price.

The Fresh Liability

BlackBerry also plans to raise $605 million through private placement the sale of unsecured Convertible Debentures with a 3.75% coupon to Fairfax Financial Holdings and other institutional investors. Fairfax Financial Holdings is majority shareholder of BlackBerry with 8.9% stock of the company. These will be convertible into BlackBerry common shares at $10 per share and will be due in November 13, 2020. The entire 3.75% Convertible Debentures if converted into shares represent nearly 11.57% of BlackBerry's outstanding stock. Terms and conditions of these Convertible Debentures are similar to the 6% ones except that the new convertible debentures can only be redeemed after maturity and not before. The above transactions are subject to necessary approvals from the Toronto Stock Exchange.

Commenting on the transactions, John Chen, Executive Chairman and CEO of BlackBerry said:

"The restructuring of our convertible debt will enable us to significantly reduce our interest expense and potential future dilution for our shareholders. I am pleased that Fairfax will continue as BlackBerry's leading lender, reinforcing its ongoing commitment to the company as we continue to execute on our strategy of pursuing growth and sustainable profitability."

Future Outlook

BlackBerry has been facing severe challenges in the rapidly evolving smartphone sector. It has been steadily losing its market share to other handset manufacturers. In July 2016, it had launched a competitively priced Android based handset DTEK50 with advanced safety and productivity features. John Chen was confident that BlackBerry's handset business would turn profitable by September 2016. However, market pundits and analysts do not agree with his enthusiasm especially after the company announced that it would discontinue production of its Classic model.

BlackBerry has strategically shifted its focus towards the software and enterprise solutions end of the business, where it has met with a great deal of success. Given its financial woes, the decision to get rid of expensive debt in favour of cheaper option will help the company in the long run.

Stock Performance

On August 24, 2016, BlackBerry's shares closed at $7.97, down 0.13%, with a volume of 2.43 million shares traded. The company's stock price has gained 4.59% in the past one month and 1024% in the last three months.

Active Wall Street:

Active Wall Street (AWS) produces regular sponsored and non-sponsored reports, articles, stock market blogs, and popular investment newsletters covering equities listed on NYSE and NASDAQ and micro-cap stocks. AWS has two distinct and independent departments. One department produces non-sponsored analyst certified content generally in the form of press releases, articles and reports covering equities listed on NYSE and NASDAQ and the other produces sponsored content (in most cases not reviewed by a registered analyst), which typically consists of compensated investment newsletters, articles and reports covering listed stocks and micro-caps. Such sponsored content is outside the scope of procedures detailed below.
AWS has not been compensated; directly or indirectly; for producing or publishing this document.

PRESS RELEASE PROCEDURES:

The non-sponsored content contained herein has been prepared by a writer (the "Author") and is fact checked and reviewed by a third party research service company (the "Reviewer") represented by a credentialed financial analyst, for further information on analyst credentials, please email info@activewallst.com. Rohit Tuli, a CFA® charterholder (the "Sponsor"), provides necessary guidance in preparing the document templates. The Reviewer has reviewed and revised the content, as necessary, based on publicly available information which is believed to be reliable. Content is researched, written and reviewed on a reasonable-effort basis. The Reviewer has not performed any independent investigations or forensic audits to validate the information herein. The Reviewer has only independently reviewed the information provided by the Author according to the procedures outlined by AWS. AWS is not entitled to veto or interfere in the application of such procedures by the third-party research service company to the articles, documents or reports, as the case may be. Unless otherwise noted, any content outside of this document has no association with the Author or the Reviewer in any way.

NO WARRANTY

AWS, the Author, and the Reviewer are not responsible for any error which may be occasioned at the time of printing of this document or any error, mistake or shortcoming. No liability is accepted whatsoever for any direct, indirect or consequential loss arising from the use of this document. AWS, the Author, and the Reviewer expressly disclaim any fiduciary responsibility or liability for any consequences, financial or otherwise arising from any reliance placed on the information in this document. Additionally, AWS, the Author, and the Reviewer do not (1) guarantee the accuracy, timeliness, completeness or correct sequencing of the information, or (2) warrant any results from use of the information. The included information is subject to change without notice.

NOT AN OFFERING

This document is not intended as an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Please read all associated disclosures and disclaimers in full before investing. Neither AWS nor any party affiliated with us is a registered investment adviser or broker-dealer with any agency or in any jurisdiction whatsoever. To download our report(s), read our disclosures, or for more information, visit http://www.activewallst.com/disclaimer/.

CONTACT

For any questions, inquiries, or comments reach out to us directly. If you're a company we are covering and wish to no longer feature on our coverage list contact us via email and/or phone between 09:30 EDT to 16:00 EDT from Monday to Friday at:

Email: info@activewallst.com
Phone number: 1-858-257-3144

Office Address: 3rd floor, 207 Regent Street, London, W1B 3HH, United Kingdom

CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.

SOURCE: Active Wall Street