MPX Energia SA (MPXE3) rose the most in five years after Germany’s EON SE (EOAN) strengthened its control over the Brazilian thermal-power utility and founder Eike Batista quit as chairman as the collapse of his business empire accelerates.
Batista, once Brazil’s richest man, left the board of the utility he started in 2001 after a 33 percent stock plunge forced the Rio de Janeiro-based company to cut the size of a share sale. EON will increase its sway over the company, agreeing to invest 400 million reais ($176 million) in an offering and appointing an interim chairman.
“It’s a very good deal for EON and other investors,” Rodolfo Amstalden, an analyst at equity research firm Empiricus Research, said in a phone interview from Sao Paulo. “The company has good gas fields and integrated thermo plants to produce energy in a structure that maximizes margins.”
Shares of Batista’s other resources and logistics companies also rebounded from a record selloff as the unraveling of his empire creates possible asset purchase opportunities, Amstalden said. Crude producer OGX Petroleo & Gas Participacoes SA (OGXP3) soared as much as 26 percent after announcing increased output at its sole producing field. MPX rose 10 percent to 7.10 reais at 5:10 p.m. and earlier advanced 13 percent, the steepest intraday gain since November 2008.
His departure from MPX is the latest reversal for Batista, whose net worth has dropped more than $30 billion in the past year after his natural resources and logistics startups failed to meet targets. The self-made businessman has put his Embraer SA (EMBR3) jet up for sale and is selling assets or stakes in his mining and energy companies as he tries to stem the rout.
“EON appreciates Eike’s great contribution to developing MPX to be one of the leading energy companies in Brazil since he founded it in 2001,” MPX’s new chairman Jorgen Kildahl said in a statement. “EON now is supporting the further development of MPX, a fundamentally solid company.”
MPX will sell 800 million reais of shares at 6.45 reais each in a private capital increase, according to a statement today. That replaced a plan to raise 1.2 billion reais at 10 reais apiece in a public offering.
EON owns 36 percent of MPX and has a joint venture with the power producer. Brazilian bank Grupo BTG Pactual (BBTG11) committed to cover the remainder, EON said. The company will be renamed and operations will be moved to the headquarters of the MPX-EON venture, EON said.
The woes of Batista’s companies have quickened this week. Shares in OGX, his oil producer, plunged 50 percent in Sao Paulo during the week after the company said it may have to shut its only producing field.
Batista is being asked by advisers to consider shutting down the shipbuilding business of oil-services company OSX Brasil SA (OSXB3), a person with direct knowledge of the proposal said.
The entrepreneur plans to sell the Sudeste port belonging to iron-ore producer MMX Mineracao & Metalicos SA, pay part of its debt and extend payments of other obligations, the person said, asking not to be named as the negotiation is private. Remaining capital will be injected into OGX, said the person.
BTG, which is advising Batista, is seeking to bring in partners for OGX’s oil fields, according to the person. The producer may exercise a $1 billion put option granted by Batista once he raises enough money from asset sales, the person said.
The press department of Batista’s holding company, EBX Group Co., referred all questions to OGX and MMX in an e-mailed response to questions. OGX’s press office declined to comment on a possible cash injection from Batista in an e-mailed response to questions. MMX doesn’t comment on the use of funds by the shareholder, its press office said by e-mail.
The MPX share sale will be completed within the next 40 days. The company’s share price has fallen about 33 percent since the public offer, at which time EON promised to pay 10 reais apiece, was announced May 31.
Brazil’s development bank BNDES is considering participating in the capital increase, according to EON’S statement. A decision will be made at the opportune time, according to the bank’s press office.
EON rose 1.2 percent to 12.25 euros in Frankfurt.
“This capitalization will bring a lot of value to shareholders in terms of allowing financial gain, growth opportunities, improving our balance sheet,” MPX Chief Executive Officer Eduardo Karrer said in a conference call today. “We’re going to see a wide range of benefits.”
Brazil’s securities regulator CVM is investigating facts related to Batista’s companies, it said yesterday in an e-mailed statement without elaborating.
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