 "BlackBerry restructuring charge estimates up to $400 million, may consider real estate sales")
BlackBerry Ltd expects to take $400 million in pre-tax charges related to cost-cutting, quadruple its estimate of $100 million earlier this year, the smartphone maker said in a regulatory filing late on Tuesday.
The company expects to spend $400 million in severance, “network simplification costs” and other expenses in this fiscal year and the first quarter of next year combined. In the first quarter it said it would take charges of $100 million for the current fiscal year, ending March 1, 2014.
The struggling Canadian smartphone maker may also sell some of its real estate to raise money, the Globe and Mail newspaper said on Wednesday. Citing sources it did not identify, the Globe said BlackBerry had asked real estate companies to “outline ideas to generate the largest possible return in as little time as possible.”
Major changes on the way (Image credit: Reuters)
The company is considering selling some properties and leasing back space, as well as other options, the Globe said. A statement from BlackBerry quoted in the article said the company was cutting costs and that efforts included “optimizing” space.
BlackBerry, which has lost market share to Apple Inc’s iPhone and phones that run Google Inc’s Android operating system, said last month it planned to shed 4,500 jobs, more than one-third of its workforce. The company has signed a tentative $9-a-share agreement to be acquired and taken private by a consortium led by Fairfax Financial Holdings Ltd . But its stock has languished well below the offer price, a sign investors are skeptical the deal will succeed.
The proceeds of any real estate sale may make BlackBerry a more attractive target for potential acquirers. But any such buyers, including Fairfax, may simply be looking for detailed estimates of the value of the assets. The company could not immediately be reached for comment early on Wednesday.
Reuters