Brazil´s Eike Batista Pushes for More Asset Sales to Raise Fresh Cash
By Luciana Magalhaes and Emily Glazer
SAO PAULO--Troubled Brazilian businessman Eike Batista is again pushing to sell a stake in the only viable exploration
field controlled by his flagship oil firm, OGX Petroleo e Gas SA (OGXP3.BR), as he moves to raise additional cash to try
to save his indebted empire, according to a person familiar with the effort.
Mr. Batista aims to close the sale within 60 days, the person said.
The businessman has been scrambling for cash in recent months in an often frantic effort to save his crumbling empire,
a clutch of start-up companies ranging from mining and energy to entertainment. The companies are subsumed under the
umbrella of his EBX holding operation. The main problem has been poor operational performance and disappointing
revenues, especially in the case of OGX.
Meanwhile Mr. Batista has decided to postpone the sale of his remaining stake in electric power utility Eneva SA, the
former MPX Energia SA (MPXE3.BR), according to the same person.
Mr. Batista has resumed talks with Malaysia's government-run oil company Petroliam Nasional, or Petronas, over the
sale of a 40% stake in OGX-controlled oil exploration site Tubarao Martelo in Brazil, one of the two people said.
"Petronas is the natural candidate." The person also said OGX also had feelers out to other potential candidates for a
stake in Tubarao Martelo but declined to name them.
Petronas did not reply to a message seeking comment. Spokesmen for Mr. Batista and for OGX were not immediately
available for comments.
OGX originally struck the $850 million deal with Petronas in May but, in August, Petronas Chief Executive Shamsul
Azhar Abbas said the deal was no longer certain. "The deal is still pending full clarity with regard to the
restructuring exercise," he said on August 26. "The debt restructuring has to happen first."
OGX is currently in talks with creditors over the restructuring of its debt. Financial market analysts have said OGX,
the flagship of Mr. Batista's EBX group, may soon run out of cash.
The firm has slashed back on all other investments in order to concentrate on Tubarao Martelo, which is due to come on
stream by mid-year 2014.
As for the OGX debt renegotiation, creditors have already signed non-disclosure agreements, allowing them to review
non-public company information and take steps toward a restructuring deal, according to a person familiar with the
Earlier Tuesday, independent financial advisory firm Lazard Ltd. (LAZ) confirmed that it has been hired by OGX. Lazard
will work together with bankers at U.S.-based Blackstone Group LP (BX), which was previously hired to provide financial
advice, according to people familiar with the agreements.
Mr. Batista has also decided to postpone, but not abandon, the sale of his shares in Eneva, a company which he jointly
controls with German partner E.ON Se (EONGY), two people have said.
Earlier this month, Eneva confirmed in a statement it had received information that Mr. Batista was in preliminary
talks to sell shares in the company. A few days later, Eneva said in another statement that sales talks had not
One of the people close to the negotiations said it was not a good time for Mr. Batista to sell Eneva shares, which
have been given as collateral for bank loans taken by Mr. Batista. Shares of Eneva are down 46% in the last twelve
The person, however, said financial advisers plan to resume sales talks once they see an opportunity to reach a more
According to Eneva´s website, Mr. Batista currently owns 23.9% of the company´s shares, while E.ON has 37.9%
. The two groups, however, have an agreement to share control of the company.
On a smaller scale, Mr. Batista is also expected to exit the technology venture in which he has a partnership with
International Business Machines (IBM). Brazil´s government-run development bank BNDES has confirmed that, together
with other partners, it has been seeking for investors to take over Mr. Batista´s investment in semiconductor
company SIX Semicondutores.
The potential new investors are expected to contribute 10% of the $560 million project, equivalent to the portion Mr.
Batista hasn´t yet invested in SIX, the BNDES said.
SIX Semicondutores is building a plant in the state of Minas Gerais to develop chips that will be used by the
industrial and medical segments.
Mr. Batista owns privately held technology firm SIX Solucoes Inteligentes, a partner in SIX Semicondutores, together
with the BNDES and IBM, among others.
IBM declined to comment for this story.
Write to Luciana Magalhaes at email@example.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
Copyright (c) 2013 Dow Jones & Company, Inc.