Brazilian tycoon Eike Batista no longer belongs to the world’s billionaire’s club, Bloomberg reports. At this time last year he was the world’s 8th richest man.
Most of Batista’s problems can be traced to his oil and gas company, OGX. In the last year the stock has fallen 86%, investors have filed an injunction to prevent Batista from selling any company assets, and his larger holding company, EBX, has been forced to refinance a loan from Mubadala Investment Corporation, Abu Dhabi’s sovereign wealth fund.
At his richest last March, Batista was worth $34.5 billion, according to Bloomberg’s Billionaires Index. Now, with $1.5 billion due to Mubadala and about $2 billion worth of personal liabilities, Bloomberg estimates that he’s worth $200 million.
Earlier this month, in an open letter to Brazilians in the journal, Valor International, he wondered what went wrong:
More than anyone, I wonder where I went wrong. What should I have done differently? A first question might be linked to the funding model I chose for the companies. Today, if I could go back in time, I would not have resorted to the stock market. I would have a structured private-equity firm that would allow me to create from scratch and develop over at least 10 years each company. And they would all remain private until I was sure that it was time to go public. In the projects that I conceived, time proved a vital stress factor for the reversal of expectations on companies bearing broadly satisfactory results and valuable assets.
Indeed ultimately, Batistas companies did not live up to his promises. At the end of his letter, he assured readers that he was still “buzzing with new ideas that spring from nothing and slowly take shape. I feed myself from this ability to dream and achieve. Undertaking is in my blood, in my DNA. It is my inexhaustible source of energy and life.”
For his sake, he better be right about that one.
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