BlackBerry to divest majority of its Canadian real estate

TORONTO Wed Jan 22, 2014 5:25am IST

A Blackberry logo is seen through a cracked box in this photo illustration taken in the central Bosnian town of Zenica, September 24, 2013. REUTERS/Dado Ruvic

A Blackberry logo is seen through a cracked box in this photo illustration taken in the central Bosnian town of Zenica, September 24, 2013.

Credit: Reuters/Dado Ruvic

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TORONTO (Reuters) - BlackBerry Ltd (BBRY.O) (BB.TO) said on Tuesday it intends to divest the majority of its real estate holdings in Canada, as it seeks to bolster its balance sheet and turn around its fortunes.

In partnership with commercial real estate services company CBRE, BlackBerry said it intends to strategically divest the majority of its real estate assets via a combination of sale-leaseback and vacant asset sales.

The company did not disclose how much it expects to raise from the process. The properties being put on sale comprise over 3 million square feet of office space, the company said.

The announcement comes barely a month after the technology company agreed to sell five buildings, along with some land, to the University of Waterloo for about C$41 million.

That deal is expected to close next month. The university said the five buildings would add some 300,000 square feet of space to its campus footprint and over 1,000 parking spaces.

The moves to monetize the real estate assets comes after a series of major layoffs by BlackBerry, which is attempting to reinvent itself and turn around its faded fortunes.

The company did not provide details on the location of the real estate assets, but much of BlackBerry's real estate asset base is centered around its headquarters in Waterloo, Ontario.

John Chen, BlackBerry's new chief executive, in a statement said the company remains committed to being headquartered in Waterloo and having a strong presence in Canada following the planned real estate asset sales.

"This initiative will further enhance BlackBerry's financial flexibility and will provide additional resources to support our operations as our business continues to evolve," he said.

Chen has been working quickly to implement a whole series of changes in the company, as it seeks to reinvent itself and focus less on its devices segment, and more on its services business.

The company's stock, which fell to a 10-year low on the Toronto Stock Exchange last month, has since been on a tear and surged 30 percent this year. Much of the new optimism springs from the company finalizing a handset production deal with FIH Mobile (2038.HK) in December. The deal lowers the risk of the company having to book huge writedowns on unsold phones.

(Reporting by Euan Rocha; Editing by Nick Zieminski and Chris Reese)

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