Batista’s Companies Rebound on Europe, OGX CEO: Rio Mover
Eike Batista, the Brazilian billionaire who took six companies public since 2006, is recovering part of his wealth after easing concerns about European banks helped stocks to rebound.
Batista lost $3.8 billion of his net worth over two days as the value of his six companies plunged after his oil producer OGX Petroleo e Participacoes SA slashed output targets by as much as 75 percent at its first two wells, the company said June 26. OGX dropped 40 percent over the two-day period before rebounding today. The stock rose 8.9 percent to 5.50 reais in Sao Paulo.
“Investors sold Eike amid concerns all his companies may cut production targets or projects,” Nataniel Cezimbra, an equity analyst with Banco do Brasil SA, said in a telephone interview from Sao Paulo. “The main driver for the gains today is the relief that came from Europe, combined with the management changes at OGX.”
OGX said yesterday that Luiz Carneiro would replace Paulo Mendonca as chief executive officer. European leaders dropped requirements that taxpayers get preferred creditor status on aid to Spain’s banks and opened the way to recapitalize lenders directly, alleviating concerns banks will fail.
The OGX management change tells investors that communication with investors should improve, Cezimbra said.
Batista’s other companies also rebounded. Mining company MMX Mineracao e Metalicos SA soared 17 percent and led gains of Brazil’s benchmark Bovespa stock index. Earlier the stock rose the most since April 2, 2009.
Logistics company LLX Logistica SA (LLXL3) jumped 7.8 percent and utility MPX Energia SA (MPXE3) rose 2.6 percent. Shipbuilder OSX Brasil SA (OSXB3), whose main client is OGX, slid 3.6 percent. Coal unit CCX Carvao da Colombia SA gained 5.9 percent.
The losses in the past two days pushed Batista, who has said he wants to overtake Carlos Slim as the world’s wealthiest person, to the 27th spot among the richest people on the planet yesterday down from the eighth spot he had June 26, according to the Bloomberg Billionaires Index.
To contact the editor responsible for this story: James Attwood at email@example.com