LLX Drops Most Since 2011 and Leads Batista Decliners

LLX Logistica SA (LLXL3), billionaire Eike Batista’s port startup, fell the most since 2011 as investors abandon his group of natural resources and logistics companies after his oil unit failed to deliver on production goals.

LLX, based in Rio de Janeiro, dropped 13 percent to 1.78 reais at 1:27 p.m. in Sao Paulo after tumbling as much as 15 percent, the most since Aug. 8, 2011. OGX Petroleo e Gas Participacoes SA, Batista’s oil producer, fell 11 percent to 1.53 reais in the fifth day of losses. His oil services and shipbuilding company OSX Brasil SA (OSXB3) fell 11 percent.

“Some investors are throwing in the towel,” Eric Conrads, who oversees about $750 million in Latin American stocks at ING Investment Management, said by phone from New York. “It’s all these companies, they’re all going in the same direction.”

LLX’s Acu project in Rio de Janeiro was originally showcased as an industrial complex that would become the world’s third-largest port, catering to clients from iron-ore miners to carmakers. Prospective deals with Nissan Motor (7201) Co., steelmaker Ternium SA (TX) and oil service provider Subsea 7 SA to set up plants in the hub failed to materialize over the past 18 months.

OGX is down 65 percent this year after production at its first offshroe oil project came in at a fraction of original estimates, casting doubts on the quality of the Rio-based explorer’s discoveries in the Campos Basin. OGX said March 26 it would reduce the estimated volumes at its Tubarao Azul field from the original 110 million barrels. Oil and gas researcher Wood Mackenzie calculated the field’s recoverable reserves at 51 million barrels in an April research report.

“You can’t change the geology, there’s no magic for that,” Conrads said.

Batista planned to have OGX bolster profits at other companies in his group. The explorer has ordered production vessels from OSX and plans to store and export crude from LLX’s port.

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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