Former billionaire tycoon Eike Batista could soon face off against repo men,
according to Bloomberg.
Over the last year and change, Batista has lost 99% of his fortune, as his commodities and logistics empire has crumbled under the weight of unmet expectations.
OGX, Batista’s oil and gas company, has been the worst performer of all his 6 companies.
In fact, last week, Batista did not pay interest on the company’s bonds due October 1st (OGX will officially be in default on the 30th), making creditors like PIMCO, the biggest bond firm in the world, very nervous.
So it’s no surprise that more of the company’s creditors are considering taking possession of two of the OGX’s oil barges as collateral for the money Batista owes them.
Banks are talking to advisers and OSX officials to evaluate whether they should seize the platforms if oil-producing sister company goes into default, which would trigger cross-default clauses on OSX debt, said the people, asking not to be named as discussions are private. OSX borrowed $US1.27 billion from 12 banks including Banco Santander SA and DVB Group Merchant Bank (Asia) Ltd. and is still negotiating to avoid filing for bankruptcy protection, one of the people said.
Another reason why creditors may want to pick up a boat or two — or refinance despite the fact that Batista’s prospects look super bleak — is that Brazil ranks 143rd out of 185 economies when it comes to working out insolvencies in Court according to the World Bank.
That means if Batista does go bust, it could be a while (years on years) before any creditors see any cash.