Brazil's Eike Batista faces collapse after repayment default

RIO DE JANEIRO, Oct. 3 (UPI) -- Brazilian entrepreneur Eike Batista faces a further blow to his fortunes following default on a multimillion-dollar interest payment on a $3.6 billion loan, a setback set to drag other Brazilian and international investors into the debacle, analysts said.

Most exposed are the Newport Beach, Calif., bond firm, Pacific Investment Management Co. LLC and, indirectly, sovereign fund interests in Abu Dhabi, United Arab Emirates.

Reverberations from the former billionaire's collapse would likely reach all international markets, analysts said. Batista lost his Forbes billionaire status in September and is about to lose his oil company too, the magazine said on its website.

Batista, 56, was an all-time favorite until last year, the darling boy of Brazil's government as well as corporate entities in the Latin American country and elsewhere. Then he started losing heavily on his OGX oil company and was no longer a billionaire.

As chairman of Brazilian conglomerate EBX Batista was worth $30 billion until July last year. Now he's rated to be worth less than $200 million.

Batista Tuesday failed to make a $45 million interest payment due on OGX bonds for a $3.6 billion loan for the oil company. OGX was launched amid much fanfare in 2008 but failed to make a profit.

"OGX Petroleo is sinking like a platform torpedoed on all four legs," Fortune said. "The stock is now a shadow of itself and [Batista] owes the loss of his super-1-percenter status to that one firm."

"Batista's oil baby isn't worth a dime" after a dramatic share fall, Fortune said.

Last-ditch attempts by the entrepreneur to find a rescuer met with scant success after reported approaches to Brazilian state-run Petrobras energy giant and other potential funders as far away as the Middle East and Malaysia.

"Batista has become the most picked on super rich man for the past several months," Fortune said. "Shareholders are nagging him. He was dumped from Forbes' billionaire ranks on Sept. 2. And now, there is no rest for the wicked."

Brazilian media said more trouble is ahead and Batista's collapse could affect investors far and wide. Batista will file for bankruptcy protection within two weeks, Veja news magazine said.

Batista's shipping company, OSX, is next to fall, Veja said.

The default is the biggest in Brazilian corporate history and in South America's recent history second only to Argentina's Bank of Galicia and Buenos Aires, which failed to pay a $1.9 billion debt in 2012. Argentina is still struggling to recover from its 2002 sovereign default.

Analysts said Batista might still be trying to restructure what remains of his business and try to reverse his fall through negotiations with investors, aiming to persuade potential funders of future prospects for his energy assets. Success is far from assured, analysts said.