The next chapter in BlackBerry’s troubled history has been written. Thorsten Heins has been ousted as the struggling smartphone manufacturer’s CEO after plans to sell the company to its biggest shareholders, Fairfax Financial Holdings, fell through.

Instead, Fairfax and other institutional shareholders will pump US$1bn into BlackBerry, with a private placement of convertible debentures. The deal is expected to go through within the next two weeks.

The move sent BlackBerry’s share plummeting by as much 21% in early trading in New York.

Former Sybase CEO John Chen will step in as interim CEO while BlackBerry’s board searches for a permanent replacement.

“Today’s announcement represents a significant vote of confidence in BlackBerry and its future by this group of preeminent, long-term investors,” says BlackBerry chair Barbara Stymiest in a statement.

“The BlackBerry board conducted a thorough review of strategic alternatives and pursued the course of action that it concluded is in the best interests of BlackBerry and its constituents, including its shareholders.”

This financing provides an immediate cash injection on terms favourable to BlackBerry, enhancing its “substantial cash position”, Stymiest says.

German-born Heins has been with BlackBerry since 2007, starting off as senior vice-president of the handheld business unit, before moving on to become chief operating officer of product engineering and subsequently of product and sales. He was appointed as CEO in January 2012, succeeding BlackBerry co-founders Jim Balsillie and Mike Lazaridis. — (c) 2013 NewsCentral Media