OGX has filed for bankruptcy protection in a Rio de Janeiro court. OGX is a Brazilian oil and gas company controlled by the billionaire Eike Batista. The filing came as OGX admitted that long-running talks with creditors to restructure some of its $5.1 billion debt broke down earlier this week.
According to BBC News, OGX has struggled with large debt and a crisis in investor confidence. OGX has had big problems with a fall in output from its oil fields in Brazil
It is thought to be Brazil’s biggest corporate bankruptcy. BBC News also provided this analysis:
The failure of OGX is seen as a significant chapter in the demise of the vast business empire controlled by Mr Batista, a colourful and well-known business figure in Brazil who once boasted of ambitions to become the world’s richest man.
Estimates by Forbes put Batista’s fortune at $30 billion in 2012, but analyst suggest that troubles at OGX have wiped out his wealth.
There were signs that problems were on the horizon earlier this month when OGX missed a $44.5 million interest payment owed to bondholders. Analysts say the business model was based on securing loans to be paid back with oil that had not yet been produced.
- Batista oil firm in bankruptcy (bbc.co.uk)
- Brazil’s OGX Seeking Bankruptcy Protection (nytimes.com)
- Brazilian oil tycoon nears bankruptcy (theguardian.com)