365 million US dollars 2020 Debentures fully repaid; 150 million US dollars Agreed extension debentures under substantially identical conditions until February 2024
WATERLOO, ONTARIO, November 13, 2023 /PRNewswire/ — BlackBerry Limited (NYSE: BB; TSX: BB) announced today that it has entered into an agreement with certain controlled affiliates of Fairfax Financial Holdings Limited (together, “Fairfax“), under which Fairfax will subscribe for 150 million US dollars aggregate principal amount of BlackBerry’s 1.75% extendable unsecured convertible debentures (the “Extension debentures“) on the basis of a private placement (the “Transaction“). The Transaction is expected to be finalized no later than November 172023.
BlackBerry also announced that it has paid all amounts due upon maturity of its issued 1.75% unsecured convertible debentures. September 1, 2020 (TSX: BB.DB.U) (the “2020 Debentures“). The outstanding principal amount of the 2020 debentures was 365 million US dollars and none of the 2020 Debentures had been converted into shares of BlackBerry common stock (“Ordinary actions“) before reimbursement.
The extension debentures will be convertible into common shares at a price of US$6.00 per ordinary share and will be due on or about February 14, 2024with the option for the parties to extend the due date to or around that date. May 14, 2024, by mutual agreement. The conversion price represents a premium of approximately 64.8% to the closing price of the common stock on the New York Stock Exchange on November 10, 2023, and the Common Shares issuable upon conversion of all of the Continuation Debentures would represent approximately 4.3% of the Common Shares currently issued and outstanding. Other than the maturity date, the terms of the Continuation Debentures will be substantially the same as the 2020 Debentures, except that the Continuation Debentures will not be listed on any stock exchange and will not involve a trustee designated by the indenture. trust. The Extension Debentures will be guaranteed on a senior unsecured basis by BlackBerry Corporation and BlackBerry UK Limited (the “Subsidiary guarantees“).
Given 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 during 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% of the common shares currently issued and outstanding on an undiluted basis. Fairfax would own, control or direct 71,724,700 common shares representing approximately 11.8% of the issued and outstanding common shares assuming full conversion of the Continuation Debentures. Mr. Prem Watsa recused himself from BlackBerry board discussions relating to the transaction and did not vote on its approval.
Closing of the transaction is subject to customary conditions, including approval of the Toronto Stock Exchange and the New York Stock Exchange.
The offer and sale of the Continuation Debentures, subsidiary guarantees and common shares issuable upon conversion of the Continuation Debentures, if any, will be made to qualified investors pursuant to the exemption from registration provided for in Section 4(a)(2) of the US Securities Act of 1933, as amended (the “Securities Act“), and will not be registered under the Securities Act or any state securities laws. Unless a subsequent sale is registered under the Securities Act, the Continuation Debentures, Warranties subsidiaries and ordinary shares issuable upon conversion of the extension debentures, if any, may be offered or sold in United States in a transaction that is exempt from or in a transaction not subject to the registration requirements of the Securities Act and other applicable securities laws.
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+ at www.sedarplus.ca or directly from Fairfax by contacting John Varnel, Vice President, Corporate Development, at (416) 367-4941. The BlackBerry headquarters and headquarters address is 2200 University Avenue. Waterloo East, Ontario N2K0A7. The Fairfax head office and head office address is located at 95 Wellington Street West, Suite 800, Toronto, Ontario M5J2N7. Fairfax will acquire the Continuation Debentures for investment purposes and, in the future, may discuss with management and/or the board of directors of BlackBerry any transaction listed in clauses (a) through (k) of the Article 5 of form F1 of National Regulation 62-103 – The Early Warning System and Issues Related to Takeover Bids and Insider Reporting and it may further purchase, hold, vote, exchange, assign or otherwise deal in the securities of BlackBerry, in any manner it deems appropriate to benefit from changes in the market prices of the securities of BlackBerry, changes publicly disclosed in the BlackBerry’s operations, business strategy or prospects or a significant BlackBerry transaction.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any of these securities nor shall there be any sale of these securities in any state or jurisdiction in which such offer , solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
BlackBerry (NYSE: BB; TSX:BB) provides intelligent security software and services to businesses and governments around the world. The company obtains more 500M end points, including more 235M Vehicles. Situated at Waterloo, Ontario, the company leverages AI and machine learning to deliver innovative solutions in the areas of cybersecurity, security and data privacy, and is a leader in the areas of endpoint management, security of endpoints, encryption and embedded systems. BlackBerry’s vision is clear: ensuring a connected future you can trust.
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SOURCE BlackBerry Limited