Brazil's OSX bondholders sign accord to protect rights -report
RIO DE JANEIRO, Sept 12
RIO DE JANEIRO, Sept 12 (Reuters) - Investors holding about $300 million of shipbuilder OSX Brasil SA's debt signed an agreement to protect their rights in case the company controlled by Brazilian tycoon Eike Batista is unable make bond payments, the Estado de S. Paulo newspaper reported on Thursday.
The accord was signed by seven large investment funds with about $200 million in OSX bonds and other investors holding about $100 million, Estado said, without naming a source. OSX has $500 million in international bonds outstanding, the paper said. OSX declined to comment.
Under the agreement, the signatories have agreed not to sell their holdings, the paper reported. OSX is building a shipyard north of Rio de Janeiro and owns three offshore oil production ships known as FPSOs, all designed for lease to Batista's OGX Petróleo e Gás Participações SA, an oil company.
OSX debt is trading at about 80 percent of face value, the newspaper said. That compares with less than 20 percent for oil company OGX's bonds. Despite being dependent on OGX for its revenue, OSX debt is outperforming OGX debt because OSX pledged the OGX-3 FPSO as collateral against non-payment, the paper said.
Lower than expected output at OGX's offshore fields led to a meltdown in the value of OGX, OSX and other companies in Batista's EBX energy, port, shipbuilding and mining group. A more than 90 percent drop in the value of most of the six EBX Group companies in the last year has also reduced Batista's ability to keep investing in EBX companies, most of which are start-ups with little or no revenue.
This had led to concern that some EBX Group companies will be unable to pay debt. On Monday, Fitch cut its rating on OGX debt to "C", or at risk of imminent default, from "CCC".
The OGX-3 oil production ship recently arrived in Rio de Janeiro from Singapore to work in OGX's Tubarão Martelo offshore oil field. OSX bondholders are looking at how to seize ownership of the ship if needed, Estado said.
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