sources say
Wed Jun 18, 2014
* Batista makes push after Óleo e Gás restructured
* Mubadala may buy stakes in EBX companies, sources say
* OSX rises; shares of Eneva make first gain in 10 days (Adds share performance in paragraph 10; Batista and EBX declining comment)
By Guillermo Parra-Bernal and Jeb Blount
SAO PAULO/RIO DE JANEIRO, June 18 (Reuters) - 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 refinance 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." Batista and EBX declined to comment.
If the loan is refinanced, it will be the second time the parties agreed to change the terms. 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.
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 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 most likely area for Mubadala to provide capital is in port operator Prumo Logística SA, shipbuilding company OSX Brasil SA and electricity utility Eneva SA, the three sources said.
Eneva shares rose as much as 4.1 percent in Wednesday trading in Sao Paulo, on track for their first gain in 10 days. OSX was up 3.7 percent. Shares of Prumo remained unchanged.
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 result in efforts to keep OSX working or unravel it in an orderly fashion, the third source added. (Reporting by Guillermo Parra-Bernal and Jeb Blount; Additional reporting by Stanley Carvalho in Abu Dhabi; Editing by Meredith Mazzilli)
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Abu Dhabi's Mubadala In Talks To Cut Debt Owed by Eike Batista
Structure of a Possible Deal Hasn't Been Reached.
2014.6.16
Wall Street journal
By Luciana Magalhaes
Abu Dhabi's Mubadala In Talks To Cut Debt Owed by Eike Batista
The biggest investor in Brazilian Eike Batista's holding company is still struggling to reduce its exposure to the troubled industrial group.