BlackBerry released a statement this morning announcing a plan led by Fairfax Financial Holdings to raise US$1 billion from a group of institutional investors, abandoning efforts to take itself private. As part of the deal, CEO Thorsten Heins will step down, to be replaced by former Sybase chief executive John S. Chen, who will serve as executive chairman of the board and interim CEO until BlackBerry completes a search for Heins’ permanent successor.

This news comes three days after Reuters reported that Fairfax was struggling to fund its initial $4.7 billion bid before today’s deadline of its examination of BlackBerry’s finances. Fairfax will invest $250 million of the $1 billion acquisition, which will be converted into $10 BlackBerry shares.

(BlackBerry’s failed plan to go private)

As part of the investment, Fairfax CEO Prem Watsa will also join BlackBerry’s board of directors. The transaction is expected to be completed within the next two weeks. Since the announcement this morning, BlackBerry shares have plunged 18% in pre-market trading.