South America

OSX Brasil SA , the Brazilian shipbuilder controlled by former billionaire Eike Batista, is considering seeking court protection from creditors as early as Wednesday, three sources with direct knowledge of the plans told Reuters. OSX will likely petition the same Rio de Janeiro court where Batista's oil producer OGX Petróleo e Gas Participações SA sought protection on Oct. 30, said one of the sources, who declined to be identified by name because the plans are private. With the move, OSX will put 5.3 billion reais ($2.3 billion) of debt under court protection.

Lupatech SA, a Brazilian offshore oil industry products and services provider, in a securities filing Tuesday said its board has approved a debt-for-equity swap designed to help it push past a series of missed payments to creditors, Reuters reported. Lupatech said it would renegotiate some of its debt with lenders and that holders of perpetual bonds and debentures would be offered an option of swapping 85 percent of their debt for new equity.

Bondholders, followed by oilfield-service companies, are the biggest creditors of Brazilian tycoon Eike Batista's oil company OGX, which made Latin America's biggest-ever bankruptcy filing last week, according to a list obtained by Reuters. The No. 2 creditor after bondholders is OSX Brasil SA, the Batista-controlled shipyard and ship-leasing company that built three offshore oil production platforms for OGX. OSX is owed at least 2.45 billion reais ($1.1 billion) or about 21 percent of the oil company's obligations.

Brazil plans to reduce lending by its development bank by about 20 percent next year to shore up finances after a wider-than-expected September deficit fueled speculation the nation’s credit rating may be cut, Bloomberg reported. Finance Minister Guido Mantega said in an interview yesterday that state lender BNDES will provide about 150 billion reais ($66.6 billion) of loans in 2014, compared with an estimated 190 billion reais this year.

The loan exposure of Brazil's two largest private-sector banks to former billionaire Eike Batista's debt-laden Grupo EBX is falling, UBS Securities said in a report, signaling that the risk of additional bad loan provisions or significant writedowns is declining, Reuters reported. Collateral put forth by Batista and EBX, a mining, energy and logistics conglomerate, is proving enough to reduce the probability of losses at Itaú Unibanco Holding SA and Banco Bradesco SA, London-based strategist Philip Finch said in a client note.

OGX Petróleo e Gas Participações SA, the beleaguered Brazilian oil company controlled by former billionaire Eike Batista, said on Thursday it expects to end up in arbitration over a deal struck with Malaysian state oil company Petronas, Reuters reported. The day after filing for bankruptcy, OGX said in a securities filing that it had struck a deal with Petronas in the middle of this year for which it should have received about 1.9 billion reais ($869 million).

OGX Petróleo e Gas Participações SA, the Brazilian oil company controlled by former billionaire Eike Batista, sought court protection from creditors on Wednesday in Latin America's largest-ever corporate bankruptcy filing, Reuters reported. The bankruptcy protection request, filed in a Rio de Janeiro court, came after OGX failed to reach an agreement with creditors to renegotiate part of its $5.1 billion debt load.

Brazilian entrepreneur Eike Batista’s financial collapse is being reflected on the balance sheets of global suppliers to his oil company, Bloomberg reported. OGX Petroleo & Gas Participacoes SA, controlled by the former billionaire, said in a statement today that it has cut payments to all but “critical” suppliers to its most promising field. Diamond Offshore Drilling Inc., Ensco Plc and Schlumberger Ltd. are among those paying the price.

Attempts to save Eike Batista's flagship oil company, the business most responsible for the meltdown of his once high-flying industrial empire, have been hampered by internal conflict and unpredictable decisions by the Brazilian tycoon, sources with direct knowledge of the situation told Reuters. The difficulty of reading Batista, who less than 18 months ago owned the world's seventh-largest fortune, and mixed signals from advisers and managers to his companies have disrupted attempts to renegotiate about $5 billion of bond and bank debts at OGX Petróleo e Gás Participações SA.

Investors who bet on Eike Batista have lost billions over the past year as the Brazilian's ephemeral business empire imploded. But they haven't been the only losers - the onetime Amazon gold trader and former speedboat racer's hometown of Rio de Janeiro has also been shaken by his rapid decline, Reuters reported in an insight. Beginning in 2006, Batista floated a series of mining, energy and shipping companies through share offers that by 2012 made him the world's seventh richest man, valued by Forbes magazine at $30 billion.