Sunday, October 6, 2013
OGX Said to Weigh Bankruptcy Protection Filing in a Month
Mon., October 7, 2013
OGX Petroleo & Gas Participacoes SA, the oil company controlled by former billionaire Eike Batista, is considering filing for bankruptcy protection in about a month, said two people with direct knowledge of the matter, Bloomberg reported. The filing would be done in Rio de Janeiro, said the people, asking not to be identified as discussions are private. While Batista is negotiating with creditors to avoid the same process for shipbuilder OSX Brasil SA, the most likely outcome is that both companies will seek legal protection, they said. The proceedings would put $3.6 billion of OGX dollar bonds into default in Latin America’s largest corporate debt debacle. For Batista, it would culminate an 18-month decline that wiped out more than $30 billion of his fortune after offshore deposits he had valued at $1 trillion turned out to be duds. Once a judge accepts a filing, the company would have 60 days to present a restructuring plan. The judicial process gives new investors top priority for payments, said Leonardo Morato, chairman of the local affiliate of the Turnaround Management Association of professionals involved with corporate recovery. He declined to comment on OGX’s case specifically.