Sources knowledgeable regarding the news states that Eike Batista who is the billionaire of Brazil and owes the shares of Oil Company is planning to sell off a stake after it recorded the lowest rate in the last week. It is stated that he may sell stocks to MPX Energia SA as Batista is faced with demands from his creditors to enhance the security issue.
Itau Unibanco Holding SA, which is based out at Sao-Paulo, is the biggest creditor of Batista, having about 5.5 billion outstanding loans, as stated by the sources who denied to be identified as the issue is still private and not revealed officially. They also reveal that Batista had borrowed average 4.8 billion reais from the Banco Bradesco whereas he also hired 1.6 billion reais from the BTG Pactual Grupo, thus not maintaining any line of credit. it is also stated that Batista had borrowed around $1 billion from the BTG in the previous month.
It is believed that Batista, who is 56 years of age, has used the shares of his EBX Group Co. in order to avail loans and build his business empire of various commodities and energy. in the last year, the shares of Batista’s energy company, OGX Petroleo e Gas Participacoes SA, got a drop of around 85 percent, thus making the owner sell off his assets to pay the debts and lower the security demands.
According to the words of Leonardo Brito, the analyst of hedge fund and equity at Teorica Investmentos, “Investors are demanding for more security as they are feeling insecure about the fact that Batista may have to call for the margins in order to settle his debts. Hence their doubts and mistrust continues.”
As per the data and information gathered by Bloomberg, it is stated that last year the average debt value of the six trade units of Batista got tripled to around 15.8 billion reais. The organization had declared a net loss value of $1.68 billion within the time span of nine months, thus missing the chance of achieving targets and gains.
In an email that was forwarded yesterday, the EBX Group states that the infrastructure of the undertaken projects need long term financial help intensely. The EBX Group does have the needful capital to establish and enhance its profile in the future years.
In the month of June, the oil production company of Batista witnessed cut in target, after the decline in fuel sharing price in his public business organizations. As an effect of the price fall, there is rise in demand for security to stay in risk tolerance structure. As per information revealed by sources, the personal wealth value of Batista dropped by $25 billion within the last one year. Hence at present, for trade purpose he can use short term liquidity that is received from the BTG in order to pay off debts and reduction in security value.