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BlackBerry to Complete Sale of Canadian Real Estate by August

BlackBerry to Complete Sale of Canadian Real Estate by August

By Press Trust of India | Updated: 23 June 2014 09:40 IST

Embattled smartphone maker BlackBerry, which has sold 80 percent of its real estate in its home country, expects to complete the sale of the remaining properties in Canada by August-end, as it tries to improve operations and increase efficiency.

The Waterloo (Ontario)-headquartered firm is targeting break-even cash flow results by the end of fiscal 2015 (February-March).

In May, the firm said it would sell a majority of its Canadian real estate holdings to real estate investment firm Spear Street for about $278 million, whereas in March, it sold its US office in Texas to Brookfield Property Group.

This is part of BlackBerry's Cost Optimisation and Resource Efficiency (CORE) Programme, which includes cutting its headcount by about 4,500 to bring the total global workforce to 7,000 people.

The move is being seen as a part of the Canadian handset maker's broader efforts to conserve cash and fund turnaround efforts amid intense competition from Apple's iOS and Google's Android operating system-based smartphones.

The company has completed various sales of real estate assets in the first quarter of fiscal 2015 as part of the CORE programme, it said in a regulatory filing with the US SEC last week.

BlackBerry added in 2014 fiscal it announced plans to "strategically divest" the majority of its Canadian commercial real estate portfolio, offering properties comprising over 3 million square feet of space through a combination of sale, leaseback and vacant asset sales.

"Subsequently, the company announced that it had reached an agreement with Spear Street Capital to sell the properties for approximately $278 million and lease back a portion of the space for the company's operations.

In the first quarter of fiscal 2015, the company completed the sale of properties valued at approximately 80 percent of the total real estate sale and expects to complete the remaining 20 percent of the sale in the second quarter of fiscal 2015, it said in the filing.

Last week, it had reported a higher-than-expected net profit of $23 million in the quarter ended May 31, helped by growing smartphone sales and higher adoption of enterprise services.

BlackBerry sold 1.6 million smartphones in the March-May quarter and issued 1.2 million BlackBerry Enterprise Service 10 licences, in a sign of recovery with the embattled company finally coming out of the red.

The Waterloo (Ontario)-headquartered firm had posted a net loss of $84 million is the year-ago period.

Revenue for the first quarter of its fiscal 2015 stood at $966 million, down 1 percent from $976 million in the same quarter of previous fiscal.

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