Prem Watsa sat down with The Globe and Mail yesterday to share some details on the deal they signed with BlackBerry. He stated that he accomplished the goals he set out for now once they found that a “high debt situation was not appropriate for BlackBerry.” He confirmed that they could have bought out the company but adding to the debt load for the company without adding a cash infusion would not have helped. What the company needed instead was convertible debt to give John Chen some runway to build back the company.
Watsa confirmed that he wants to build the company back instead of splitting it up. Here are some of his key quotes:
“We looked at it and said, ‘Hey, a high-debt situation was not appropriate,’”
“We wanted to take the ‘For Sale’ sign down, get John Chen as executive chairman as soon as we could and finance it for the long-term,” Mr. Watsa said. “That’s effectively what we’ve done.”
“Why would you buy a BlackBerry system or a BlackBerry phone if you think the company is not going to survive? Well, that’s out. BlackBerry is here to stay,” he said, adding “There’s no question” the very public strategic review and uncertainty around it hurt the company’s business prospects.
“Convertible debt at 6 per cent is just the appropriate financing,” Mr. Watsa said. “This financing will help us go through that [cash burn period] and for John to have the financial soundness to build this company over time.”
On Monday, he insisted that cobbling together financing for the proposed $4.7-billion takeover “was not a problem,” although sources familiar with the situation have told the Globe and Mail that securing financial backing was a struggle. “We’ve, over 28 years, whenever we thought something was a good idea, been able to raise the money,” Mr. Watsa said.
Mr. Watsa dismissed the market’s hostile reaction to the deal’s collapse, saying “I’ve been in the market 40 years. If you decide to make a judgment on what the market thinks for every half an hour, that would be very inappropriate.”