Brazil's OSX sees bondholders accepting delayed interest payment

Wed Dec 18, 2013 10:55am EST
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By Jeb Blount

RIO DE JANEIRO (Reuters) - OSX Brasil SA expects a deal in the coming days to delay an interest payment on bonds sold to finance an oil production ship, a move that will help the ailing Brazilian shipbuilder move ahead with a restructuring plan, a senior executive said on Wednesday.

A deal will allow OSX, controlled by tycoon Eike Batista, to put off a December 20 interest payment on $500 million of 9.25 percent bonds due in 2015, Chief Financial Officer Claudio Antonio da Silva Zucker said at the sidelines of an event in Rio de Janeiro.

Reuters reported on December 5 that 95 percent of the holders of the securities had agreed to delay the December 20 payment, worth about $11.6 million. One of the conditions is that OSX give up control, but not ownership, of the OSX-3 ship that secured the bonds to a captain and crew under the control of creditors, sources said at the time.

OSX (OSXB3.SA: Quote), which operates a shipyard north of Rio de Janeiro, last month filed for protection from creditors on liabilities of 5.34 billion reais ($2.30 billion). OSX, part of Batista's troubled Grupo EBX, filed for bankruptcy after Oleo e Gas Participações SA (OGXP3.SA: Quote), formerly known as OGX Petroleo e Gas Participações, filed for bankruptcy October 30.

Oleo e Gas' failure to produce as much oil as expected at its first offshore oilfield, Tubarão Azul, led to the meltdown of EBX and nearly wiped out Batista's fortune, once worth about $30 billion. That undermined his ability to finance other companies in his group with capital needs as they tried to transform from start-ups to revenue producing concerns.

OSX gets all its revenue from leasing oil production ships to Oleo e Gas Participações.

OSX shares fell 4.8 percent on Wednesday to 0.20 real, while the price on the OSX bonds fell half a cent to 86 cents on the dollar.

The bankruptcy petition left OSX's ship-leasing unit, which owns three floating, production, storage and offloading (FPSO) ships, out of the petition as it seeks buyers for the ships and deals with bondholders and banks that financed them.   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