* Batista may dispose of another 5 pct stake in OGX
* Batista to stay as OGX majority shareholder
* Report of EBX-BTG breakup further pressures shares
* OGX to stay in Bovespa index in debt restructuring
By Jeb Blount
RIO DE JANEIRO, Aug 29 Brazilian tycoon Eike
Batista, the controlling shareholder of OGX Petróleo e Gas
Participações SA, sold 1.54 percent of the oil
company's stock to pay debts of his Grupo EBX, according to a
securities filing on Thursday.
Batista made the sale on Wednesday, bringing his total sale
of stock in OGX to 5.67 percent since March, the filing added.
He plans to sell at least another 5 percent of his OGX stake,
but plans to keep at least 50.01 percent of the company's
capital, the filing said.
OGX, whose shares fell as much as 21 percent on Thursday,
has led a year-long meltdown of Batista's Grupo EBX which
includes energy, shipbuilding, mining and port operations. The
group, once worth more than $60 billion, has seen its value
nearly evaporate in the last year and a half.
The stock fell 12.3 percent on Thursday to finish at 0.49
reais, its lowest close in six weeks.
Batista's or EBX's problems are unlikely to tarnish the
image of Brazil's stock market - the largest in Latin America
and the most liquid among emerging markets, said Edemir Pinto,
chief executive of Brazil's sole financial exchange BM&FBovespa
The problems facing the conglomerate, which also comprises a
entertainment company, interests in tourism and even a renowned
restaurant in the city of Rio de Janeiro, "were not expected by
anyone, not even by Eike Batista himself," Pinto said. "All the
money he raised in the market he poured into his group, he
didn't grab even a cent for himself."
SHARES AND THE INDEX
Pinto, speaking at a BM&FBovespa event in the Brazilian city
of Campos do Jordão, added that it is unlikely that, under
current bourse rules, shares of OGX are excluded from the
benchmark Bovespa index. The tumble in OGX, which has
the fourth-largest weighting in the Bovespa, has been a key
driver in the index's 18 percent decline this year.
OGX stock could only be excluded from the Bovespa in the
case where the struggling oil producer files a request for
bankruptcy protection or goes out of business. Asked whether an
eventual debt restructuring at OGX could trigger the stock's
expulsion from the Bovespa index, Pinto said "not at all."
Lower than expected oil output at OGX raised concerns about
the group's abilities to generate cash flow to fund expansion
and pay debt, creating a crisis of confidence in other EBX
companies, many of which depended on each other for
The OGX slide has led to a wider reorganization of EBX, with
Batista agreeing to give up control of port operator LLX
Logística SA and electricity generator MPX Energia SA
to foreign companies in exchange for new investment.
While he has maintained most of his holdings, Batista has
made small sales in recent months to pay debts.
Batista has been using Brazilian investment bank Grupo BTG
Pactual SA to help him reorganize his companies and
finances. The accord, signed in March, has provided Batista and
EBX with access to loans, advice and other services.
Shares of OGX and other EBX companies came under additional
pressure on Thursday after the Veja weekly news magazine said
BTG Pactual and Batista will end their relationship. Veja did
not name any source in its report.
BTG Pactual's returns on the partnership depend on the
performance of EBX Group stock. EBX Group stock has fallen
sharply since the accord was made in March. BTG Pactual and the
EBX Group declined to comment on the news report.
The sale of OGX stock is the second asset sale announced by
Batista's EBX this week. On Tuesday, OSX Brasil SA,
EBX's shipbuilding unit, said Batista would sell $50 million of
stock in the shipyard to help pay for a promised capital
injection into the company.
Batista's Centennial Asset Mining Fund LLC and Centennial
Asset Brazilian Equity Fund LLX, companies that form the basis
of the EBX Group's holdings, held 58.92 percent of OGX as of
July 10, according to Thomson Reuters data.