Blackberry has never needed the cash horde from Fairfax, but it has been a way for large shareholder Prem Watsa to exert control as potentially the largest shareholder if he converts the debt to shares. That allowed him to pick his friend Sandeep Chennakeshu, as well as John Chen and others loyal to him. Watsa's shares would have to be sold at $17.50 for him to break even, so he wants control and inside knowledge.
Spending the bounty on acquisitions is an option but inorganic growth often does not work as planned.

Dilution due to convertible debt conversion shares is a non issue though since the increase in shares is balanced by an identical increase in a company's cash reserves.