According to a report from the Wall Street Journal,"OSX Brasil SA the ship building company of troubled tycoon Eike Batista, filed for bankruptcy protection, the second such filing for a commodities empire that crumbled this year as losses piled up and investor confidence plummeted''.
"The move Monday at a Rio de Janeiro court follows a default and bankruptcy filing last month for Mr. Batista's flagship oil firm OGX Petroleo e Gas Participacoes SA.The firm went public in 2008 for $4.1 billion but failed to produce nearly any of the up to 10.8 billion barrels it claimed to have. Recently, OGX declared several of its once promising fields were actually duds".
"The move Monday at a Rio de Janeiro court follows a default and bankruptcy filing last month for Mr. Batista's flagship oil firm OGX Petroleo e Gas Participacoes SA.The firm went public in 2008 for $4.1 billion but failed to produce nearly any of the up to 10.8 billion barrels it claimed to have. Recently, OGX declared several of its once promising fields were actually duds".
"OSX had outstanding debts of around $2.2 billion as of June 30, including dollar- and local- currency denominated loans and bonds held by a mix of banks investors and government institutions, such as Brazil's National Bank for Economic and Social Development, or BNDES, and the Merchant Marine Fund.
But the bankruptcy only covers a portion of the debt, as some major assets were excluded from the filing, according to a company spokeswoman.
Three OSX oil platforms set up as separate corporate entities in the Netherlands aren't part of the process, the spokeswoman confirmed. The platforms act as collateral for some $1.4 billion in dollar denominated loans and bonds.
Eduardo Munhoz, a lawyer who is handling OGX and OSX dealings on Mr. Batista's behalf, said OSX has also provided an additional 2.2 billion reais in guarantees for two of the oil platforms.
Company subsidiaries are often excluded from bankruptcy if they are able to pay their debts, said Richard Levin, chair of the restructuring practice at Cravath, Swaine & Moore LLP. When subsidiaries are based in other countries, they also may not file for bankruptcy to protect them from potential actions by foreign regulators and suppliers", he added.
