Creditors of Eike Batista’s shipbuilder OSX Brasil SA (OSXB3) hired law firm Bingham McCutchen LLP in preparation for the possible restructuring of $500 million in bonds, said two people briefed on the arrangements.
Bingham, based in Boston, is approaching prospective financial advisers on behalf of a creditor group representing holders of OSX’s dollar-denominated notes due 2015, said the people, who asked not to be identified because talks are private. The group represents about 60 percent of OSX bondholders, according to one of the people.
Investors are turning away from Batista’s commodities startups after a series of missed operational and financial targets. The entrepreneur created OSX to supply vessels to sister company OGX Petroleo & Gas Participacoes SA (OGXP3), which last month hired Rothschild to advise on a possible restructuring after canceling projects and warning its only producing oilfield may stop next year.
OSX’s bonds, which are backed by a contract to lease an oil platform to OGX, fell to a record low 83 cents on the dollar today, pushing up the yield to 24.8 percent, from 103.53 cents at the end of last year. In March, the company shelved plans to sell debt. OGX’s dollar bonds due 2018 trade at 18.85 cents on the dollar, down from 90 cents at the end of 2012.
Timothy DeSieno, a partner at Bingham, declined to comment in an e-mailed response to questions. An OSX press officer, who isn’t an authorized spokesperson, didn’t respond to an e-mail and a phone call seeking comment.
OSX has two other oil platforms. One, called the OSX-1 is being used by OGX at the Tubarao Azul oilfield. The OSX-2 platform was delivered to OSX last week in Singapore by SBM Offshore NV (SBMO) and will remain in Asia until a decision is made on its future, OSX said today in an e-mailed statement.
OSX-3 will be deployed at the Tubarao Martelo field operated by OGX. Petroliam Nasional Bhd., or Petronas, acquired a 40 percent stake in the field earlier this year for $850 million. Petronas said last month that the deal hinges on OGX’s debt restructuring, while OGX said Malaysia’s state oil producer isn’t entitled to set that condition.
To contact the editor responsible for this story: James Attwood at firstname.lastname@example.org