Thu 31 Oct 2013
THE RICHEST MAN IN THE WORLD OF MINING FILES FOR BANKRUPTCY
Once the richest person in the world of mining Brazilian tycoon Eike Batista’s flagship company has filed for bankruptcy protection.
Reuters reports Batista’s oil and gas explorer OGX applied for “judicial recovery” as the process is known in Brazil after debt restructuring talks with holders of $3.6 billion in bonds ended with no agreement.
The bonds are part of $5.1 billion distressed debts at the company and OGX’s demise is Latin America’s largest corporate default in history.
The rise of his empire built on the commodities boom was nothing if not spectacular.
He started out with small-scale gold mining in the Amazon before graduating to the big leagues with gold, iron ore, oil & gas, shipping, energy, construction and sports promotion companies.
OGX was set to give credence to Batista’s publicly stated goal of becoming the richest person in the world.
Batista founded OGX, one of five public companies controlled by the flamboyant Brazilian, only in 2007 with $1.3 billion raised from private investors.
His fortune topped out at an eye-watering $32.8bn in April last year after OGX struck oil off the Brazilian coast and investors piled into the company which boasted oil reserves valued at $1 trillion by the man himself.
Batista was born into mining as son of a CEO of iron giant Vale and the young Eike led the playboy lifestyle, dropping out of engineering school, marrying a nude model and becoming a speedboat world champion.
Ever the consummate salesman, Batista famously sold Minas Rio to Anglo-American in 2008, pocketing $5.5 billion and getting rid of what has become Anglo’s biggest asset write-off on record.
Batista’s divestiture strategy to shore up the vast debts he had built up had more than a whiff of a fire sale this year as his firms began to run out of capex funds and creditors started making collateral calls.