Brazil's OGX ready to file for bankruptcy protection - sources

RIO DE JANEIRO/SAO PAULO Mon Oct 28, 2013 3:55pm EDT

RIO DE JANEIRO/SAO PAULO Oct 28 (Reuters) - OGX Petróleo e Gas Participações SA, the Brazilian oil company controlled by former billionaire Eike Batista, will file for bankruptcy protection as early as Tuesday, three sources with direct knowledge of the situation told Reuters on Monday.

OGX declined to comment.

Officials at the Rio de Janeiro-based company are currently preparing paperwork for the filing, said one of the sources, who declined to be identified because the decision is private. The same source said that OGX plans to exclude its OGX Maranhão gas unit, which is currently in talks to sell a stake to Eneva SA , from the bankruptcy protection filing.

OGX is saddled with over $5 billion in debt.

If confirmed, it would be the largest-ever corporate bankruptcy filing in Latin America, according to Thomson Reuters data. The decision comes as a 30-day grace period that OGX had to pay $44.5 million in bond interest payments to investors was about to expire.