OGX, the sickest of all former Brazilian billionaire Eike Batista’s six ailing companies, will file for bankruptcy in the next few days,
according to the WSJ.
It was lower-than-expected outputs from the oil and gas company that began the end of Batista in the first place. That was back in 2012. Now things have deteriorated to the point that, earlier this month, OGX started defaulting on a $US45 million interest payment to bondholders (it will officially be in default on October 3oth). The company’s stock is down 90% this year.
Batista’s empire, all held under the his holding company EBX, is very interconnected. So this could be the beginning of something very ugly (as if things weren’t ugly enough).
OGX is preparing a so-called judicial recovery plan for reorganization, similar in part to a streamlined U.S. bankruptcy filing, the people said. This approach differs from the traditional Brazilian bankruptcy process that tends to end in liquidation, some of these people said…
The cash-strapped company, operating with about $US3.6 billion of debt, has tried but so far has yet to reach a restructuring deal with creditors, many of whom traveled to Brazil to meet with advisers and management this week, the people familiar with the matter said. The company asked creditors for a $US75 million capital injection but didn’t get an immediate answer from creditors, who are concerned they won’t recover the money, the people said.
Batista, once the 7th richest man in the world with a fortune of $US34 billion, is now down to $US200 million