Insight: As Brazil's Batista falters, Rio dream does too

Sun Oct 20, 2013 7:37pm EDT
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By Paulo Prada

RIO DE JANEIRO (Reuters) - Investors who bet on Eike Batista have lost billions over the past year as the Brazilian's ephemeral business empire imploded.

But they haven't been the only losers - the onetime Amazon gold trader and former speedboat racer's hometown of Rio de Janeiro has also been shaken by his rapid decline.

Beginning in 2006, Batista floated a series of mining, energy and shipping companies through share offers that by 2012 made him the world's seventh richest man, valued by Forbes magazine at $30 billion. All the companies' names, including that of his EBX conglomerate, ended in X, a letter he said symbolized the multiplication of wealth.

With the same verve he used to woo investors, Batista also became the biggest booster of a hoped-for revival in Rio, the verdant, seaside metropolis whose glorious past as Brazil's capital and cultural center had in recent decades given way to crime, violence and the unfettered sprawl of slums.

At his peak, Eike, as the 56-year-old is known locally, bankrolled the campaign that lured the 2016 Olympics to Rio. He paid for police vehicles in poor neighborhoods and partially decontaminated a popular local lagoon.

He bought a landmark waterfront hotel and nearby marina and vowed to make natives of rival São Paulo, the country's business capital, "die with envy." Along with some progress by local officials against crime, litter and other urban blight, Batista's efforts helped fuel a sense that a rebound was indeed underway, at least in wealthier parts of town.

"I don't know where we would be without him," says Rosa Celia Barbosa, a Rio cardiologist who received a 30 million real ($13.9 million) donation from Batista in 2011 for a charity hospital for children. After struggling for more than a decade with funding, she finally had enough to pay for final construction and equipment costs.

But now, as creditors pick over what's left of Batista's holdings, his dream for Rio is all but bankrupt.   Continued...

Eike Batista, Chairman and CEO of EBX Group speaks at a dinner panel discussion at the Milken Institute Global Conference in Beverly Hills, California April 30, 2012. REUTERS/Mario Anzuoni