UPDATE 1-Batista's oil company signs $50 million bridge loan

Tue Jan 14, 2014 7:49pm EST

BRASILIA Jan 14 (Reuters) - Bankrupt oil company Oleo e Gas Participações S.A., controlled by Brazilian businessman Eike Batista, said on Tuesday it signed a deal for a bridge loan of up to $50 million to finance operations as it works with creditors to restructure its debts.

Obtaining the loans was one of the requirement in an agreement the company reached with bond holders on Dec. 24 to convert Oleo e Gas debt into stock. Oleo e Gas was formerly known as OGX Petróleo e Gas Participações SA.

The bridge loan will be repaid once creditors provide a new facility under a debtor in possession finance agreement. Under the accord with bondholders, existing creditors will provide between $200 million and $215 million of new financing to allow the restructuring to go forward, Oleo e Gas said in a statement.

The discount, or interest, rate on the bridge loan is 20 percent, Oleo e Gas said.

The company's 11.2 billion real ($4.75 billion) bankruptcy filling on Oct. 30 was the largest ever in Latin America, and the biggest emerging-market bond default in 2013. A deal with holders of $3.8 billion of bonds is considered essential to gain the approval of a Rio de Janeiro judge for a reorganization.

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