BlackBerry reaches deal to sell majority of its Canadian real estate
22 March 2014
BlackBerry Ltd yesterday said that it has reached an agreement to sell a majority of its real estate holdings in Canada, as part of its plan to raise money to shore up its balance sheet.
Under the terms of the agreement, which is expected to close in the first quarter of fiscal 2015, BlackBerry will sell more than 3 million square feet of space as well as vacant lands and lease back a portion of the space.
The Ontario-based company did not name the buyers, but said that the terms of the transaction would only be announced after the principal conditions were satisfied, or waived by the parties
''The successful sale of property in Canada will help us move toward our goal of continued operational efficiency,'' said BlackBerry CEO and executive chairman, John Chen. ''As previously stated, BlackBerry remains committed to having a strong presence in Canada and we continue to consider Waterloo home to our global headquarters.''
Early this year, BlackBerry, which recently changed its name from Research In Motion, had late last year agreed to sell five buildings, along with some land, to the University of Waterloo, for about C$41 million.
A month later it announced that it would team up with commercial real estate services company CBRE, to divest majority of its real estate assets in Canada through a combination of sale-leaseback and vacant asset sales. (See: BlackBerry to divest majority of its Canadian real estate assets)
Much of the real estate being sold is in Waterloo, Ontario, including the home of its head office operations - totaling over three million square feet of space across 19 buildings and some vacant land.
Blackberry, the once smartphone giant who pioneered the concept of on-the-go email, and though its pagers and phones had gained immense traction with political and business leaders in recent years, had lost its once-dominant market share to Apple Inc's iPhone and smartphones powered by Google Inc's Android operating system.
Chen, who has been recently hired to turn the company around, is credited with turning around Sybase, a database and mobile software company, before it was sold to German software company SAP AG in 2010.
The most immediate challenge for Chen is to come with a solid plan to transition the devices operations to a more profitable business model.