OGX Readies Bankruptcy Filing, to Exclude Gas Unit -Sources
RIO DE JANEIRO/SAO PAULO, Oct 28 (Reuters) - OGX Petróleo e Gas Participações SA, the Brazilian oil company controlled by former billionaire Eike Batista, will file for bankruptcy protection as early as Tuesday, three sources with direct knowledge of the situation told Reuters on Monday.
Officials at the Rio de Janeiro-based company are currently preparing paperwork for the filing, said one of the sources, who declined to be identified because the decision is private. The same source said that OGX plans to exclude its OGX Maranhão gas unit, which is currently in talks to sell a stake to Eneva SA , from the bankruptcy protection filing.
OGX, which is saddled with over $5 billion in debt, declined to comment.
If confirmed, it would be the largest-ever corporate bankruptcy filing in Latin America, according to Thomson Reuters data. The decision comes as a 30-day grace period OGX had to pay $44.5 million in interest to investors was about to expire.
Not only would a filing be a sign of how far Batista's star has fallen, but it would also provide a stiff test of whether Brazil's eight-year-old bankruptcy law provides adequate protection to creditors. Batista, 56, less than 18 months ago owned the world's seventh-largest fortune.
Batista's dramatic decline has become a symbol of Brazil's own economic woes after the end of a decade-long boom that made it one of the world's hottest emerging economies. If foreign investors do not feel they have been treated fairly in the restructuring process, they may be less willing to invest in other Brazilian companies.
Shares of OGX were flat on Monday at 0.29 reais, reversing early losses of about 30 percent earlier in the day.
View Full Article
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.