Page 48 of 159 – SEC Filing
Neither the filing of this Schedule 13D nor the information contained herein shall be deemed to constitute an affirmation by V. Prem Watsa, 1109519, Sixty Two, 810679, Fairfax, FFHL, Advent, Advent No. 3, CRC, Fairfax US, Clearwater, ZNIC, Zenith, TIGH, TIG, Odyssey, Odyssey Re, Odyssey Reinsurance, Hudson, Newline UK, Newline Insurance, Newline, Clearwater Select, Crum & Forster, US Fire, North River, RiverStone Holdings, RiverStone, NFC, Federated, NCIC, NGIC, NPIC, Zenith Canada, Brit, Brit Holdings, Brit UW, Brit Gibraltar or Brit Syndicates that it is the beneficial owner of the Shares referred to herein for purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act), or for any other purpose, and such beneficial ownership is expressly disclaimed.
The name, present principal occupation or employment and name, principal business and address of any corporation or other organization in which such employment is conducted and the citizenship of each director and executive officer of each of the Reporting Persons is set forth in Annex A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, AA, BB, CC, DD, EE, FF, GG, HH, II, JJ, KK or LL, as the case may be, and such Annexes are incorporated herein by reference.
Pursuant to Rule 13d-1(k) under the Exchange Act, the Reporting Persons have agreed to file jointly one statement with respect to their ownership of the Shares.
During the last five years, none of the Reporting Persons, and, to the best of each such Reporting Persons knowledge, none of the executive officers or directors of such Reporting Person have been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended and restated in its entirety to read as follows:
The source of funds for the purchase of the Shares beneficially owned by the Reporting Persons (assuming conversion of the 3.75% Debentures in accordance with their terms) was cash on hand from existing investment portfolios, including the proceeds from the redemption of the 6% Debentures described in Item 4 below.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following text immediately prior to the last paragraph of Item 4 and by deleting in its entirety such last paragraph of Item 4:
On August 26, 2016, BlackBerry entered into an agreement (the Subscription Agreement) pursuant to which (a) Fairfax and other institutional investors (collectively, the Purchasers) will invest in BlackBerry through a U.S.$605,000,000 private placement of 3.75% unsecured convertible debentures (the 3.75% Debentures) convertible into Shares of BlackBerry at a price of U.S.$10.00 per Share and (b) the outstanding 6.00% unsecured subordinated convertible debentures of BlackBerry issued on November 13, 2013 and January 16, 2014 on a private placement basis for an aggregate subscription price of U.S.$1,000,000,000 and U.S.$250,000,000, respectively (collectively, the 6% Debentures) were redeemed (collectively, the Transaction). The 3.75% Debentures will be due on November 13, 2020. The other terms of the 3.75% Debentures are substantially identical to those of the 6% Debentures, except that the 3.75% Debentures will not be redeemable prior to maturity.
Pursuant to the Subscription Agreement, Fairfax agreed to acquire U.S.$500 million principal amount of the 3.75% Debentures and completed such acquisition on September 7, 2016. The 6% Debentures were amended by BlackBerry to permit optional redemption prior to November 13, 2016 and were redeemed on September 2, 2016, at a redemption price of 106.7213% of the outstanding principal amount of the 6% Debentures. The purpose of the Transaction is to significantly reduce BlackBerrys interest expense and potential future dilution of its shareholders.
The closing of the Transaction was subject to customary conditions, including redemption of all of the 6% Debentures concurrently with the issuance and purchase of the 3.75% Debentures and termination of the indenture in respect thereof, approval of the issuance of the 3.75% Debentures and the listing of the underlying Shares by the Toronto Stock Exchange and approval of the listing of the underlying Shares by the NASDAQ Global Select Market, in each case without the requirement to seek the approval of BlackBerrys shareholders.
The forgoing description of the Subscription Agreement does not comport to be complete and is qualified in its entirety by the full text of the Subscription Agreement, which is filed herewith as Exhibit 9 and incorporated herein by reference.
Subject to the contractual limitations described in this Item 4 above, one or more entities within the Fairfax Group of Companies, including one or more of the Reporting Persons, may, depending upon price, market conditions, availability of funds, evaluation of alternative investments, the financial exposure of the Fairfax Group of Companies to BlackBerry and other factors, determine to purchase additional Shares, debentures or other securities of BlackBerry, or sell Shares, debentures or other securities of BlackBerry, in the open market or otherwise.
Item 5. Interest in the Securities of the Issuer.
Item 5 of the Schedule 13D is hereby amended and restated in its entirety to read as follows:
(a) Based on the most recent information available, the aggregate number and percentage of the Shares (the securities identified by Item 1 of this Schedule 13D) that are beneficially owned by each of the Reporting Persons is set forth in boxes 11 and 13 of the second part of the cover page to this Schedule 13D for each of the Reporting Persons, and such information is incorporated herein by reference.
The percentage of Shares beneficially owned by each of the Reporting Persons was calculated based on 572,819,126 Shares issued and outstanding as of August 31, 2016 (assuming conversion of all of the 3.75% Debentures into Shares).
48
Neither the filing of this Schedule 13D nor the information contained herein shall be deemed to constitute an affirmation by V. Prem Watsa, 1109519, Sixty Two, 810679, Fairfax, FFHL, Advent, Advent No. 3, CRC, Fairfax US, Clearwater, ZNIC, Zenith, TIGH, TIG, Odyssey, Odyssey Re, Odyssey Reinsurance, Hudson, Newline UK, Newline Insurance, Newline, Clearwater Select, Crum & Forster, US Fire, North River, RiverStone Holdings, RiverStone, NFC, Federated, NCIC, NGIC, NPIC, Zenith Canada, Brit, Brit Holdings, Brit UW, Brit Gibraltar or Brit Syndicates that it is the beneficial owner of the Shares referred to herein for purposes of Section 13(d) or 13(g) of the Securities Exchange Act of 1934, as amended (the Exchange Act), or for any other purpose, and such beneficial ownership is expressly disclaimed.
The name, present principal occupation or employment and name, principal business and address of any corporation or other organization in which such employment is conducted and the citizenship of each director and executive officer of each of the Reporting Persons is set forth in Annex A, B, C, D, E, F, G, H, I, J, K, L, M, N, O, P, Q, R, S, T, U, V, W, X, Y, Z, AA, BB, CC, DD, EE, FF, GG, HH, II, JJ, KK or LL, as the case may be, and such Annexes are incorporated herein by reference.
Pursuant to Rule 13d-1(k) under the Exchange Act, the Reporting Persons have agreed to file jointly one statement with respect to their ownership of the Shares.
During the last five years, none of the Reporting Persons, and, to the best of each such Reporting Persons knowledge, none of the executive officers or directors of such Reporting Person have been (a) convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or (b) a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration.
Item 3 of the Schedule 13D is hereby amended and restated in its entirety to read as follows:
The source of funds for the purchase of the Shares beneficially owned by the Reporting Persons (assuming conversion of the 3.75% Debentures in accordance with their terms) was cash on hand from existing investment portfolios, including the proceeds from the redemption of the 6% Debentures described in Item 4 below.
Item 4. Purpose of Transaction.
Item 4 of the Schedule 13D is hereby amended and supplemented by adding the following text immediately prior to the last paragraph of Item 4 and by deleting in its entirety such last paragraph of Item 4:
On August 26, 2016, BlackBerry entered into an agreement (the Subscription Agreement) pursuant to which (a) Fairfax and other institutional investors (collectively, the Purchasers) will invest in BlackBerry through a U.S.$605,000,000 private placement of 3.75% unsecured convertible debentures (the 3.75% Debentures) convertible into Shares of BlackBerry at a price of U.S.$10.00 per Share and (b) the outstanding 6.00% unsecured subordinated convertible debentures of BlackBerry issued on November 13, 2013 and January 16, 2014 on a private placement basis for an aggregate subscription price of U.S.$1,000,000,000 and U.S.$250,000,000, respectively (collectively, the 6% Debentures) were redeemed (collectively, the Transaction). The 3.75% Debentures will be due on November 13, 2020. The other terms of the 3.75% Debentures are substantially identical to those of the 6% Debentures, except that the 3.75% Debentures will not be redeemable prior to maturity.
Pursuant to the Subscription Agreement, Fairfax agreed to acquire U.S.$500 million principal amount of the 3.75% Debentures and completed such acquisition on September 7, 2016. The 6% Debentures were amended by BlackBerry to permit optional redemption prior to November 13, 2016 and were redeemed on September 2, 2016, at a redemption price of 106.7213% of the outstanding principal amount of the 6% Debentures. The purpose of the Transaction is to significantly reduce BlackBerrys interest expense and potential future dilution of its shareholders.
The closing of the Transaction was subject to customary conditions, including redemption of all of the 6% Debentures concurrently with the issuance and purchase of the 3.75% Debentures and termination of the indenture in respect thereof, approval of the issuance of the 3.75% Debentures and the listing of the underlying Shares by the Toronto Stock Exchange and approval of the listing of the underlying Shares by the NASDAQ Global Select Market, in each case without the requirement to seek the approval of BlackBerrys shareholders.
The forgoing description of the Subscription Agreement does not comport to be complete and is qualified in its entirety by the full text of the Subscription Agreement, which is filed herewith as Exhibit 9 and incorporated herein by reference.
Subject to the contractual limitations described in this Item 4 above, one or more entities within the Fairfax Group of Companies, including one or more of the Reporting Persons, may, depending upon price, market conditions, availability of funds, evaluation of alternative investments, the financial exposure of the Fairfax Group of Companies to BlackBerry and other factors, determine to purchase additional Shares, debentures or other securities of BlackBerry, or sell Shares, debentures or other securities of BlackBerry, in the open market or otherwise.
Item 5. Interest in the Securities of the Issuer.
Item 5 of the Schedule 13D is hereby amended and restated in its entirety to read as follows:
(a) Based on the most recent information available, the aggregate number and percentage of the Shares (the securities identified by Item 1 of this Schedule 13D) that are beneficially owned by each of the Reporting Persons is set forth in boxes 11 and 13 of the second part of the cover page to this Schedule 13D for each of the Reporting Persons, and such information is incorporated herein by reference.
The percentage of Shares beneficially owned by each of the Reporting Persons was calculated based on 572,819,126 Shares issued and outstanding as of August 31, 2016 (assuming conversion of all of the 3.75% Debentures into Shares).
48
