Americas News
OGX in Latin America's Largest-Ever Bankruptcy Filing
Brazilian oil company OGX Petróleo e Gas Participações SA (OGX) has filed for bankruptcy protection Wednesday after failing to reach an agreement with creditors over its $5.1 billion debt, Reuters reports.
The news come as little surprise to those following OGX's developments. The firm missed a $44.5 million interest payment owed to bondholders on October 1, and had a 30-day grace period before being declared in default on $3.6 billion in bonds.
"We knew it was coming. Even the shoeshine boy told us about this," said Dan Fuss, vice chairman and senior portfolio manager at Loomis Sayles.
If the court approves the request, which is Latin America's largest-ever bankruptcy filing, OGX will develop a restructuring plan, which creditors will be able to agree to or reject.
Among the creditors are U.S. based bond fund Pacific Investment Management Co. (PIMCO) and investment fund BlackRock Inc., also based in the U.S..
OGX is controlled by Brazilian businessman Eike Batista, who has lost $30 billion - the vast majority of his personal fortune - in the past 18 months and has been breaking up his Grupo EBX conglomerate.
World Fuel Services (WFS) recently filed suit against another EBX company, OSX Brasil SA (OSX), saying it had missed bunker payments of about $8.4 million.
Reuters reports that the fate of OSX, which builds oil production and service vessels for OGX, "depends almost entirely" on the oil company.
OSX had been working to build the largest shipyard in the Southern Hemisphere, but has had to scale back its plans.
