- POSTED: 09 Feb 2014 05:07
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Brazilian tycoon Eike Batista will turn over the bulk of his debt-ridden OGX oil company to creditors in a US$215 million deal that aims to ensure the firm continues to operate.
RIO DE JANEIRO: Brazilian tycoon Eike Batista will turn over the bulk of his debt-ridden OGX oil company to creditors in a US$215 million deal that aims to ensure the firm continues to operate.
Under a deal announced Saturday the newly-renamed Oleo y Gas Participaciones (OGP) will create US$215 million worth of shares, in two stages, pending regulatory approval, said a statement from the company.
The creditors agreed to acquire the shares - which will result in their owning 65 per cent of the company - a spokesman told AFP.
Existing shareholders will be left with just 10 per cent, while company founder Batista's stake will be reduced to five per cent, thereby losing control, the spokesman added.
The oil firm emphasised this type of financing constitutes "a key element in the restructuring of the company," according to the statement. The restructuring plan is expected to be presented in the coming weeks.
OGX was placed under bankruptcy protection in October 2013, because of billions of dollars of debt.
The company, along with shipbuilding outfit OSX, is part of Batista's collapsing EBX empire of energy, mining and logistics interests.
Batista was formerly Brazil's richest man, but the decline of EBX began in mid-2012 when OGX announced that its oil output would be a quarter of what had earlier been promised.
In three years, EBX has seen its value plummet from US$43.5 billion to less than US$3 billion today.