Batista creditors strike gasfield deal
Eike Batista’s creditors and one of his main business partners, Germany’s Eon, have struck a deal to prepare for the potential bankruptcy of his oil company OGX in what is set to be Latin America’s largest ever corporate default. Eneva, known as MPX before the Brazilian tycoon ceded control of the energy company to Eon this year, agreed on an option to buy out OGX’s natural gas business should the company file for bankruptcy protection. OGX, once the flagship of Mr Batista’s oil and mining empire, has until Thursday to secure a debt restructuring after missing a payment on its $3.6bn in bonds at the beginning of this month. But with no deal in sight, the company is preparing to file for bankruptcy protection over the next few days, people close to the situation said. Eneva said on Monday that it had signed an option with the creditor banks of Mr Batista’s natural gas company OGX Maranhão to buy 66.7 per cent of the shares it does not already own in the venture for R$200m ($91.5m) in the event of bankruptcy. However, the put option can be exercised only after February 19 next year and was still subject to regulatory approval, Eneva said in a statement. Eon first acquired a stake in MPX in April last year, becoming the largest shareholder in the company this year with a stake of about 38 per cent. The deal comes as OGX’s restructuring process has been increasingly hampered by infighting, prompting creditors and partners to scramble for assets as they prepare for the worst. There is also speculation that OSX, Mr Batista’s oil services company, would file for bankruptcy at the same time as OGX. But the company, which owes $500m to bondholders, is said to be in better shape than OGX. It owns an $800m floating oil platform, a state of the art vessel that OGX has contracted to operate at its Tubarão Martelo oilfield. Scheduled to begin production next month, the field is the company’s last hope of generating substantial revenue in the short term. If OGX can secure a restructuring with creditors, Malaysia’s Petronas could enter as a partner in Tubarão Martelo under an earlier $850m deal. OGX’s natural gas Maranhão venture has eight blocks in Brazil’s Parnaiba basin, and although small, the operation is considered one of the tycoon’s better companies. OGX said on its website that OGX Maranhão was producing 4m cubic metres of gas a day, or about 26,000 barrels of oil equivalent. That is more than the output of Mr Batista’s oilfields that are already in production in Brazil’s Campos Basin near Rio. Those are expected to cease production next year due to technical problems.