After months of deliberation, BlackBerry has not been sold to its largest shareholder Fairfax and has instead opted to take a $1bn (£626m) low-interest loan from investors. As part of the deal, CEO Thorstein Heins has handed in his resignation and the company now says this marks the conclusion of its review of strategic alternatives.

Fairfax has been offered $250m in convertible debentures, representing a low-interest, unsecured loan to Blackberry which can be turned into stock. Earnings-per-share, already low and falling, will now be even lower as shares are diluted to account for the potential for these investors to convert. The debenture is based on EPS of $10, a 28.7 per cent premium on BlackBerrys closing price on Friday.

On conversion, the $1bn worth of debentures would represent around 16 per cent of BlackBerrys outstanding common shares. Should BlackBerry go bust, the loan will only be paid back after other fixed income holders are reimbursed.

CEO Thorstein Heins – who has been named in a separate lawsuit for misleading investors – will step down and along with David Kerr will resign from BlackBerrys board. John S. Chen, formely chairman and CEO of SAP’s Sybase, will be appointed executive chair of BlackBerrys board and act as CEO until a replacement is found.

Fairfax chairman and CEO Prem Watsa will appointed lead director and chair of the compensation, nomination and governance committee.