BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) unveiled Monday its plans to sell majority of its real estate holdings in Canada to San Francisco-based real estate investment firm Spear Street Capital LLC for $278 million.
However, the smartphone maker earlier indicated that it will consider Waterloo home to its global headquarters.
BlackBerry: Sale as indicated earlier
In March, BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) announced a big change. As part of its effort to trim costs and keep competitive, the beleaguered smartphone maker said it would divest itself of the bulk of its Canadian real estate. In its press release, BlackBerry Ltd disclosed that it would sell over 3 million square feet of space as well as vacant lands. The company will also lease back a portion of the space. The smartphone maker anticipated closing to occur in the first quarter of fiscal 2015.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) also indicated earlier that additional terms of the transaction will be announced once the principal conditions are satisfied or waived by the parties.
80% sale later this month
The smartphone maker said Monday that Spear Street Capital has waived a due diligence condition in its deal to buy the majority of the smartphone company’s real estate holdings in Canada.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) said it anticipates to sell properties valued at 80% of the deal later this month and the rest by the third calendar quarter of this year.
The Waterloo, Ontario, smartphone maker’s real-estate sale is part of Chief Executive John Chen’s wide-ranging overhaul of the company. He reached an outsourcing deal with Taiwan’s Foxconn Technology Co Ltd (TPE:2354) (OTCMKTS:FXCOF) and invested in niche markets like health care.
In his interview with Goldman Sachs analyst last month, John Chen reiterated that he aims to make the company profitable by FY 2016, which ends February 2016. He said the company would reach cash flow break-even by the end of the current fiscal year. The company is likely to benefit from the real estate and tax tailwinds in the current quarter. It anticipates tax refunds of about $400 million in the current quarter.