The Fabulous Life Of Eike Batista—The Brazilian Who Is Risking It All To Become Richest Man In The World

Eike BatistaEike Batista

Photo: AP

Flamboyant Brazilian billionaire Eike Batista made his first million from gold trading before he was 24 years old.And from there it was a life worthy of the silver screen — he married a Playboy model, entered speedboat contests, and made it to the top 20 of the world billionaires list.

By 2012, he was worth $30 million and he was the 10th richest person in the world, gunning hungrily for the top spot.

But by the end of the year, half of his wealth disappeared. According to Bloomberg’s billionaires list he now ranks #89 on the list of the world’s wealthiest. He could have to hand over more of his wealth

Batista was born in Brazil in 1956 and moved to Germany when he was a teen.

On of seven children, Eike was born in 1956 in Governador Valadares, Minas Gerais, Brazil, to a Brazilian father and German mother, he spent his childhood in the country of his birth, but moved to Germany when he was a teenager.

In 1974, he began to study metallurgical engineering at the University of Aachen in Germany.

He used to sell insurance door-to-door when he was in college

His family returned to Brazil when he was 18, and he started selling insurance to make ends meet. All his friends, on the other hand, were rich.

From the Australian Financial Review:

'So I got highly motivated to make some extra money and I sold insurance policies from door to door. It's a great learning experience because some doors open and some don't. I had a lot of teas with old ladies.'

But by 1979, he'd dropped out of college before he could finish his degree in metallurgical engineering and returned to Brazil.

Source: Robert the matador joins Eike the bull, Australian Financial Review, October 30, 1999 Saturday, Late Edition

After school, he tried to export granite, marble and diamonds.

He told the Australian Financial Review:

'I discovered it was controlled by the Italian Mafia, so I quit that and began organising pick and shovel miners to produce diamonds.'

The garimpeiros (shovel miners) would come to his Rio office with diamonds in little bags. Batista introduced them to Jewish dealers from Portugal and Antwerp and collected commissions on each sale.

Source: Robert the matador joins Eike the bull, Australian Financial Review, October 30, 1999 Saturday, Late Edition

But eventually moved on to trading gold, where he made his first millions.

He eventually founded TVX Gold, a gold mining company.

Since the whole gold trading things was working out so well, Batista decided to found his own gold mining company--TVX Gold, in 1980.

The 'X' in the name is supposed to signify 'multiplication,' as in multiplication of wealth.

It was rough going. Once, his bodyguard killed and buried a man in the Amazon

And some say Batista wasn't always on the straight and narrow in his dealings.

From the Age:

'Eike would go into the jungle and show these village chiefs a 10-day-old newspaper and say, 'Look, here's the price of gold,'' McLucas, told The Age.

'Meanwhile, the price had gone up, and would go up even more by the time he got back to Rio. He'd pay the chiefs in local currency, which was dropping, and sell the gold in hard currency. You couldn't lose.'

Source: The boy from Oz goes to Rio for the force, The Age (Melbourne, Australia), June 15, 1999 Tuesday, Late Edition

In 1983 founded EBX, the umbrella under which he would found all his other companies.

Between 2004 and 2012 he would add six public companies under the EBX umbrella:

  • OGX (oil), MPX (energy),
  • LLX (logistics),
  • MMX (mining),
  • OSX (offshore industry),
  • and CCX (coal mining).

He became a superstar in 1991 when he eloped with model, actress and carnival dancer Luma de Oliveira IN 1991.

The couple met in 1990 and at the height of their romance, they were the darlings of gossip rags and the mainstream media.

The thing was, Batista was seeing a Brazilian socialite at the time they were married (because Oliveira was pregnant) unbeknownst to Oliveira.

From People:

'I just knew he had a girlfriend, but not...who it was.'

In the four years before they got divorced, they had two children--Thor and Olin.

Meanwhile, Batista started really living like a billionaire — he won several power boating championship titles.

In the 1990's Batista was the Brazilian, U.S. and world champion in the Super Offshore Powerboat class.

In 2006, he covered the 220 nautical miles between Santos and Rio de Janeiro in just a sliver over three hours and beat the record for the course in his boat, the Spirit of Brazil, according to a Dow Jones profile of the CEO.

Source: Dow Jones

He bought lots of really expensive things.

Things like this yacht.

Source: Bloomberg, EBX

Really, just a whole bunch of expensive stuff.

Like this other yacht.

Source: Bloomberg, EBX

...and this private jet...

Source: Bloomberg, EBX

...also, this private jet...

Source: Bloomberg, EBX

...and this one.

So far the tally is: two yachts and one private jet.

Source: Bloomberg, EBX

And this really expensive car.

He bought a $1.2 million Mercedes-Benz SLR McLaren. Then he used it to decorate the lounge of the Jardim Botanico mansion in Rio.

And he sure could afford it. At the start of 2012, he was worth more than $30 billion.

Source: BornRich.com

In 2001, he had to resign from TVX, his gold mining company

After plans for a gold mine in Greece went bust because of political opposition, once high-flier TVX took a decided turn for the worse. And then the price of gold started to fall, reaching a paltry $300 an ounce.

Batista resigned in 2001, after the cash-strapped producer was forced to put itself up for sale.

Source: The Globe and Mail

Environmental groups started agitating about what his businesses were doing to the environment.

You don't want to mess with Greenpeace or anyone else who is concerned with the health of Amazon River dolphins near Batista's mining operations.

But 10 years later, Batista bought back into the gold business.

In 2011, Batista bought out Ventana Gold Corp., a company he's had his eye on for a while by then. He first snapped up a 9.5% stake in Ventana in July 2009 through EBX, and by 2010, he controlled 20% of the company's stock.

They finally came to a full sale agreement in 2011, when Batista sweetened the deal, which valued Ventana at a little more than C$1.5 million.

Source: Bloomberg

And one of his companies bought the rights to the Ultimate Fighting Championship in Brazil.

IMX, Batista's sports and entertainment company, bought the rights to the Ultimate Fighting Championship (UFC) in Brazil in late 2011. UFC Brazil is a mixed-martial arts fighting competition hosted in Sao Paulo that's aired on pay-per-view television.

Source: Fighters Only Magazine

In the spring of 2012 he was the 10th richest man in the world.

By the end of 2012, however, he lost two-thirds of his fortune and needed cash.

His oil and mining companies started hemorrhaging money in 2012. OGX, the oil company, had lost 40% of it's value halfway through 2012, as it had to cut production targets at it's first two oil wells by as much as 75%.

And the mining company, MMX, got slapped with a $1.8 billion way-past-due tax bill.

He started off 2012 with more than $30 billion. By the end of the year, his net worth was down to about $12.4 billion.

Source:The Economist

Batista struck a deal with a sovereign fund in Abu Dhabi to get his hands on some extra cash.

In 2012, he got Abu Dhabi's Mubadala Development Company, a government owned fund, to invest $2 billion in EBX Group Co., which gave the fund a 5.63% economic stake in the company.

He was raising money to develop his oil and mining businesses.

Source: Bloomberg

But if he doesn't deliver a 5% annual return on Abu Dhabi's investment, he has to turn over more of the company by 2019.

The amount that Batista would have to turn over is unknown, what is known is that he's taking on more risk.

But he's probably OK with that.

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