Brazilian tycoon Eike Batista’s debt-laden oil company, currently under bankruptcy protection, has agreed with foreign creditors to renegotiate $US5.8 billion in debt into a 90 per cent stake in the firm.
Oleo e Gas Participacoes (OGP), formerly known as OGX, informed Brazil’s Securities and Exchange Commission of the accord, the G1 news website reported Wednesday.
Under the deal reached Tuesday, holders of $US3.8 billion in bonds issued by OGP’s OGX Austria subsidiary are also to invest between $US200 million to $US215 million to cover the company’s operation costs and cash flow needs, it said.
Implementation of the accord, which must be approved by all creditors and by the Rio bankruptcy court, would enable the company “to weather its current financial crisis, continue its activities and fully meet its objectives,” Rio-based OGP said.
The company’s chief executive Paulo Narcelio Simoes Amaral was quoted as saying the agreement was “an important vote of confidence in our future and the company now has solid foundations to take part in promising prospects of the Brazilian oil sector.”
OGX filed for bankruptcy protection in late October after debt-restructuring talks with its creditors failed.
Last month, a Rio state judge granted bankruptcy protection to OGX but not to its foreign subsidiaries based in The Netherlands and Austria.
A Rio court also extended bankruptcy protection to Batista’s debt-laden shipbuilding company OSX.
OSX and OGX are part of Batista’s crumbling EBX empire of energy, mining and logistics companies.
The decline of EBX began in mid-2012, when OGX announced that its oil output would be a quarter of what it had promised.
In three years, EBX has seen its value plummet from $US43.5 billion to less than $US3 billion.
Copyright (2013) AFP. All rights reserved.
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