OGX Petroleo & Gas Participacoes SA (OGXP3), the oil company controlled by billionaire Eike Batista, dropped the most on Brazil’s benchmark Bovespa index as Banco Espirito Santo de Investimento SA cut its rating on the stock.
Shares tumbled 4 percent to 3.14 reais at 2:32 p.m. in Sao Paulo trading, the steepest decline on the Bovespa index, which fell 0.7 percent.
Espirito Santo cut its rating on the stock to neutral from buy, citing a delay connecting the company’s fourth Campos Basin well. Rio de Janeiro-based OGX postponed the connection of the well due to be completed this quarter until the second half of the year, Espirito Santo analysts said in a report published today.
“We now expect further deterioration in the company’s financial condition due to the delayed production startup,” Oswaldo Alcantara Telles Filho and Filipe Rosa, analysts at Espirito Santo, wrote in the report.
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