Firm of Brazil's former richest man Eike Batista files for bankruptcy

PUBLISHED : Friday, 01 November, 2013, 4:27am
UPDATED : Friday, 01 November, 2013, 4:27am


Once Brazil's richest man, Eike Batista's dream of becoming the wealthiest person on the planet has gone up in smoke with the collapse of his flagship oil company OGX.

On Wednesday, OGX filed for bankruptcy protection in Rio to avert default after debt-restructuring talks with creditors failed. Credit rating agency Moody's said with OGX's debts of up to US$5.4 billion, it would be the biggest bankruptcy protection in Latin America since 1990.

Known for his passion for speedboats, Batista, who turns 57 on Sunday, symbolised the world's infatuation with emerging giant Brazil, luring foreign investors to his grand oil projects.

The Brazilian tycoon's EBX conglomerate of commodities and energy businesses include OGX, MPX (energy), LLX (logistics), MMX (mining), OSX (offshore oil and gas services) and other firms.

His companies quickly grew on financial markets thanks to oil production promises that never materialised.

"OGX sold very well without having a single barrel of oil," said analyst Marcelo Pereira, of the Sao Paulo-based Tag Investimentos consulting firm.

Batista said he had been misled by some of his executives.

"I fell for it. When you live in a country where huge oil reserves are discovered why could I not have been blessed with one of them?" Batista asked recently.

A little over a year ago, he ranked as Brazil's richest man and seventh among the world's billionaires.

His net worth was then estimated at US$30 billion, but today his wealth has shrunk to US$900 million, according to Forbes.

With most of his assets made up of company shares, his fortune could shrink even further, added the magazine, to which Batista confided a few years ago that he wanted to become "the wealthiest person on the planet".

In early October, Batista's dreams turned into a nightmare when OGX announced it would forgo a US$44.5 million interest payment to its international creditors.

Eccentric and superstitious, this son of a former mines and energy minister and a German mother, once launched a book with 10 recipes to become a millionaire.