BlackBerry now seeks lenders not buyers … and new CEO

Foundering BlackBerry has given up for now on finding a buyer. Instead the smartphone company is seeking an infusion of cash from some investors, and shaking up its board and executive leadership.

The company will also be getting a new CEO.

In a statement issued this morning, the company said it will raise about $1 billion by selling convertible notes. Fairfax Financial Holdings Ltd, which had proposed buying BlackBerry for $4.7 billion and had until today to complete a close examination of BlackBerry’s finances, will buy a chunk of the notes, paying about $250 million for them. Other unnamed “international investors” will pick up the rest.

CEO Thorstein Heins, who has run BlackBerry for less than two years, will resign once the transaction is done. He was named CEO in early 2012, taking over for founders Michael Lazaridis and Jim Balsillie.

As part of the leadership shakeup, John Chen, formerly chairman and CEO of Sybase from 1998 until it was acquired by SAP in 2010, will become Executive Chair of BlackBerry’s Board of Directors. He will also act as interim CEO during a search for a new chief. Fairfax Chairman and CEO Prem Watsa becomes lead director and chair of the compensation, nomination and governance Committee.

Heins and board member David Kerr will resign from the board once the deal closes.

A convertible debenture is a type of unsecured loan that can be converted into stock by its holder. Because of the conversion, BlackBerry pays a lower interest rate on the loan. But it’s unclear what the extra billion dollars in capital will do for the smartphone maker, since it’s primary strategic goal, set before Heins took over, was to bet on the new BlackBerry 10 operating system and a new portfolio of smartphones running it to turn around the company’s fortunes.