» Business » BlackBerry to sell majority of its real estate in Canada

BlackBerry to sell majority of its real estate in Canada

Source: PTI
March 22, 2014 11:34 IST
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Smartphone maker BlackBerry will sell most of its real estate holding in Canada in a bid to improve operational efficiencies as the firm is facing mounting losses and unsold handset inventory.

Last week, the Waterloo (Canada)-headquartered firm had sold its US office in Texas to Brookfield Property Group in a bid to rationalise costs.

The move is being seen as a part of the Canadian handset maker's broader efforts to conserve cash and fund turnaround efforts amid intense competition from Apple's iOS and Google's Android operating system-based smartphones.

BlackBerry in a statement today said: "It has entered into an agreement pursuant to which it will sell majority of its real estate holdings in Canada.

The announced transaction is part of BlackBerry's ongoing programme to improve operational efficiencies, optimize resource usage and shift resources to support operations as the business continues to evolve."

"The successful sale of property in Canada will help us move toward our goal of continued operational efficiency," BlackBerry CEO and Executive Chair John Chen said.

The firm remains committed to having a strong presence in Canada and will continue to consider Waterloo home to its global headquarters, he added.

"Under the terms of the agreement, BlackBerry will sell more than 3 million square feet of space as well as vacant lands. It will also lease back a portion of the space. CBRE Limited served as an advisor to BlackBerry for this transaction," the company said.

BlackBerry expects closing to occur in the first quarter of fiscal 2015. The transaction is subject to certain conditions and the transaction may not be completed on the negotiated terms or at all, it added.

On February 14, BlackBerry said the Brookfield Property Group purchased its Irving, Texas campus property and the firm will continue to be a tenant on the campus.

Once a leader in the global smartphone market, BlackBerry has lagged behind competitors Samsung and Apple and lost market share steadily.

For the quarter ended November 30, it posted a net loss of $4.4 billion compared with a loss of $965 million in the year-ago period. The loss includes a non-cash, pre-tax charge against inventory and supply commitments of approximately $1.6 billion during the reported quarter.

The pile up was mainly on account of unsold BlackBerry 10 devices, launched last year with much fanfare. BlackBerry started a programme in 2012 to streamline operations and increase efficiency. Among other things, the company sought to optimise its manufacturing footprint and outsource global repair services and reduce its workforce.

BlackBerry said it would cut 4,500 positions to bring the total workforce to approximately 7,000 full-time global employees. 

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