Batista seeks Mubadala refinancing after Óleo success, sources say
The successful restructuring of bankrupt oil producer Óleo e Gás Participações SA will allow Brazilian tycoon Eike Batista to move forward with plans to cut his own debt, three sources with direct knowledge of the situation said.
Batista and his EBX holding company have been in talks to renegotiate about $2 billion owed to Abu Dhabi sovereign wealth fund Mubadala Development Co PJSC, the sources said. Batista may offer assets, including stakes in firms he either controls or has a stake in, to speed up the process, they said.
“Our discussions are continuing,” Brian Lott, a spokesman for Mubadala, told Reuters without elaborating. “We continue to review assets and opportunities that complement our existing portfolio.”
If the loan is refinanced, it will be the second time both parties agreed to change the terms of the loan. Soon after Mubadala bought a 5.6 percent stake in EBX in March 2012, it converted that equity into debt. EBX was forced to renegotiate the debt last July as Batista’s energy, mining and logistics empire collapsed.
Spokespeople and lawyers for Batista and EBX declined to comment.
Now that a judge has approved Óleo e Gás’ restructuring and most other EBX companies have been sold, Batista wants better terms on the Mubadala deal, a first source said. Óleo e Gás used to be known as OGX Petróleo e Gás Participações SA, which filed Latin America’s largest-ever bankruptcy petition last year.
The Óleo resolution “is a starting point from which he can improve his own finances and those of his business,” said the source, who is not authorized to discuss the matter publicly.
A renegotiation could involve Mubadala getting new stock in or extending loans to EBX companies, a second source said. Without new investment some of those companies may not be able to generate revenue needed to repay their debt.
Batista’s problems stem from a Óleo e Gás’ 2012 revelation that it could not produce as much oil as promised. Oleo e Gas’ share price sank by more than 90 percent, and other EBX companies followed, wiping out most of their market value along with Batista’s $30 billion fortune.
The three sources noted that Batista and Mubadala have been in talks for some time about options. The most likely area for Mubadala to provide capital is in port operator Prumo Logística SA and shipbuilding company OSX Brasil SA.
Batista was left with about 20 percent of Prumo after the August takeover of the company by EIG Global Energy Partners LLC. Batista and EBX own 50.2 percent of OSX, which filed for protection from creditors in November.
Because OSX’s debts alone could “sink” EBX, a deal with Mubadala would probably require some effort to keep OSX working or unravel it in an orderly fashion, said the third source, adding that Mubadala could also be interested in Batista’s stake in electricity utility Eneva SA.
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