Export Development Canada helps BlackBerry Ltd (BBRY) ink Vodafone Deal
Export Development Canada just gave BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) a big boost thanks to the US$850 million in financial assistance that they are now giving to Vodafone Group Plc (ADR) (NASDAQ:VOD), one of the largest telecommunications companies on the European continent.
Recent industry reports show that the EDC has signed a five-year loan agreement with Vodafone. As part of this agreement, the telecom company will commit to purchasing $750 million worth of BlackBerry mobile devices, support services and software.
This new announcement is welcome news for BlackBerry, as the company is getting ready to launch a new handset called the Classic, which is a newer version of its older-style smartphones with a keyboard, on December 17th. The Canadian company is also getting ready to publish its financial results for the third quarter on December 19th.
The EDC aims to promote Canadian goods and services on the worldwide market by providing financing to international companies. The loan issued to Vodafone also includes $100 million that will help the telecom provider make the necessary connections with Canadian suppliers so that it can grow its business.
This isn’t the first time that Vodafone has received a loan from EDC. Back in 2012, the telecom provider has received a $750 million loan that it recently paid back. Other companies have also taken advantage of EDC financing to purchase BlackBerry devices and services. The Spanish company Telefonica took out a loan of $265 million last year.
Vodafone has been one of BlackBerry’s most valuable partners. Since the company became popular in the early 2000’s, it has carried numerous BlackBerry branded handsets. Vodafone is present in numerous markets around the globe, operating in 26 countries and having 438 million subscribers to its mobile communications services.
The EDC loan given to Vodafone is certainly welcome by BlackBerry as the company attempts to reverse a decline in Service Fees and meet CEO John Chen’s goal of making BlackBerry cash flow break even by the end of its current fiscal year 2015. The company also hopes to return to non-GAAP profitability and double software revenues to $500 million by its next Fiscal Year 2016.
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