Fairfax Financial Holdings and other institutional investors will plough cash into BlackBerry through a US$1 billion private placement of convertible debentures, the company announced overnight.
Canadian insurance giant, Fairfax, had originally proposed to purchase the company outright
in a $4.7bn deal, but BlackBerry execs had also held meetings with tech majors including Lenovo, Facebook and Samsung who had expressed interest in the struggling mobile giant.
Fairfax has now agreed to acquire U.S$250 million principal amount of the debentures, in a transaction due completed within the next two weeks.
"Today's announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors," said Barbara Stymiest, Chair of BlackBerry's Board.
"This financing provides an immediate cash injection on terms favorable to BlackBerry, enhancing our substantial cash position."
Thorstein Heins will step down as BlackBerry CEO, and replaced by John Chen, ex-CEO of Sybase acquired by SAP AG in 2010, who will serve as Interim CEO until a new boss is found.
"I am pleased to join a company with as much potential as BlackBerry," said Chen.
"BlackBerry is an iconic brand with enormous potential - but it's going to take time, discipline and tough decisions to reclaim our success. I look forward to leading BlackBerry in its turnaround and business model transformation for the benefit of all of its constituencies, including its customers, shareholders and employees."
The Canadian-based company says yesterday's announcement concludes the review of Strategic Alternatives, announced earlier this year, and pursued the course of action that is in the best interests of BlackBerry and its shareholders.
But analysts aren't happy with the mess Blackberry has created, backtracking on plans, and shares tumbled overnight.
"Now we're back to the downward spiral," said BGC Partners analyst Colin Gillis, reports Reuters.