Fairfax Announces Acquisition of 1.75% Convertible Debentures of BlackBerry Limited After Redemption of Existing Convertible ...
September 02 2020 - 7:58AM
Fairfax Financial Holdings Limited (“Fairfax”) (TSX:FFH and FFH.U)
announces that it has acquired, through its subsidiaries, ownership
and control of $330,000,000 aggregate principal amount of 1.75%
unsecured subordinated convertible debentures maturing on
November 13, 2023 (the “Debentures”) of BlackBerry
Limited (“BlackBerry”) representing approximately
90% of BlackBerry’s private placement (the
“Private Placement”) of an aggregate principal amount of
$365,000,000 of Debentures that closed today. The Debentures
are convertible at the option of the holder into common shares of
BlackBerry (“Common Shares”) at a price of $6.00 per Common Share
and, therefore, the Debentures purchased by Fairfax’s subsidiaries
(the “Purchased Debentures”) are convertible into 55,000,000 Common
Shares.
Prior to the redemption thereof by BlackBerry
(the “Redemption”), which redemption was completed prior to the
Private Placement, Fairfax held, through its subsidiaries,
ownership of $500,000,000 aggregate principal amount of 3.75%
unsecured subordinated convertible debentures (the “Redeemed
Debentures”) of BlackBerry maturing November 13, 2020. The
Redeemed Debentures were convertible at the option of the holder
into Common Shares at a price of $10.00 per Common Share and,
therefore, the Redeemed Debentures held by Fairfax’s subsidiaries
(the “Fairfax Redeemed Debentures”) were convertible into
50,000,000 Common Shares. Together with Common Shares already
owned by Fairfax and its subsidiaries and assuming full conversion
of the Fairfax Redeemed Debentures, Fairfax would have beneficially
owned 96,724,700 Common Shares representing, assuming all other
Redeemed Debentures were converted, approximately 15.7% of the
total Common Shares outstanding or, if no other Redeemed Debentures
were converted, approximately 16.0% of the total Common Shares
outstanding, each as of August 28, 2020. Had Fairfax not
participated in the Private Placement, Fairfax would have
beneficially owned, and exercised control or direction over
46,724,700 Common Shares, representing approximately 8.4% of the
Common Shares outstanding as of August 28, 2020, and no other
securities of BlackBerry.
After the Redemption and Private Placement,
Fairfax no longer beneficially owns or has control or direction
over the Redeemed Debentures. Fairfax now beneficially owns, and
exercises control or direction over, the Purchased Debentures,
representing 55,000,000 Common Shares assuming full conversion.
Together with Common Shares already owned by Fairfax and its
subsidiaries and assuming full conversion of the Purchased
Debentures, Fairfax would beneficially own 101,724,700 Common
Shares representing, assuming all other Debentures are converted,
approximately 16.5% of the total Common Shares outstanding or, if
no other Debentures are converted, approximately 16.6% of the total
Common Shares outstanding, each as of August 28, 2020.
In connection with the acquisition of the
Purchased Debentures, Fairfax agreed to a “standstill” provision
(the “Standstill”) as more particularly described in the early
warning report to be filed by Fairfax. Fairfax has acquired
the Purchased 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, subject to the Standstill, it may further
purchase, hold, vote, trade, dispose 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.
An early warning report will be filed by Fairfax
in accordance with applicable securities laws and will be available
on SEDAR at www.sedar.com or directly from Fairfax upon request at
the telephone number below.
BlackBerry’s head and registered office address
is 2200 University Avenue East Waterloo, Ontario N2K 0A7.
Fairfax is a holding company which, through its
subsidiaries, is engaged in property and casualty insurance and
reinsurance and the associated investment management.
For further information contact: |
|
John Varnell, Vice President, Corporate Development, at (416)
367-4941 |
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