OSX becomes second Batista company to file for bankruptcy

Mon Nov 11, 2013 5:26pm EST
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By Sabrina Lorenzi

RIO DE JANEIRO (Reuters) - Brazilian shipbuilder OSX Brasil SA filed for bankruptcy protection on Monday, becoming the second company controlled by former billionaire Eike Batista to seek court protection from creditors in just over a week.

The move, confirmed by the company shortly after a source told Reuters the filing was underway, follows a decision by the OSX board on Friday to pursue bankruptcy proceedings.

The petition was made to the same court in Rio de Janeiro where Batista's oil company OGX Petróleo e Gas Participações SA sought protection from creditors on October 30. That case, citing 11.2 billion reais in debt ($4.8 billion), was Latin America's largest bankruptcy filing.

OGX is the shipbuilder's only big customer and filing the OSX petition at the same court in effect asks the judge to consider the two cases together.

It remains unclear how much of OSX's 5.34 billion reais ($2.29 billion) debt the company wants to restructure.

In a securities filing on Monday, parent company OSX said it filed for protection along with two of its subsidiaries: OSX Construção Naval S.A. and OSX Serviços Operacionais Ltda.

The filing left a third unit out of the petition: OSX Leasing, which owns three platforms that are leased for oil exploration purposes. In the filing, OSX said it had rescinded contracts it had with OGX for two of the platforms.

Last week, OSX's $500 million in secured dollar-denominated bonds rallied on speculation that keeping the leasing unit out of bankruptcy proceedings would give OSX more flexibility with the unit's assets. OSX could, for instance, sell the platforms to generate revenues that could then be used in the restructuring.   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