Brazilian billionaire Eike Batista is no longer one of the world’s 100 richest people.
Batista, 56, lost $300 million today after shares of his shipbuilder, OSX Brasil SA, fell 11.6 percent to 7.00 reais in Sao Paulo trading. He now commands a fortune of $10.7 billion, according to the Bloomberg Billionaires Index.
The billionaire’s fall from the ranking comes as OGX Petroleo & Gas Participacoes SA, the centerpiece of Batista’s empire of interlinking commodity startups, has lost more than three quarters of its market value in the past 12 months after delivering a series of production disappointments. So far this year, the company has disclosed a drop in output at its main field and reported a dry hole at one of its wells.
“There is a bit of a marriage between over-hype from his side and unquestioning beliefs from the investors’ side,” said Ian McCall, who manages $107 million in emerging-market assets at Quesnell Capital and holds OGX bonds at his First Geneva Global High Yield Fund, in a telephone interview. “He has not executed but, to my mind, that’s because he had too much on his plate.”
Batista was Brazil’s wealthiest individual when his wealth peaked at $34.5 billion in March last year. In an interview with Bloomberg News that month, he called himself the exemplar of a new “Brazilian dream” of entrepreneurial success, and said he would overtake Carlos Slim as the world’s No. 1 by 2015. After he repeatedly failed to meet goals and timetables for his six publicly traded companies, a sell-off erupted in June when OGX reported lower-than-expected production.
LLX Logistica SA, Batista’s port-development unit, and shipbuilder OSX Brasil SA slumped further last month after a Brazilian prosecutor sued to suspend the works of LLX’s Acu project in Rio de Janeiro state, citing environmental damage. Both companies refute the allegations.
The declines haven’t deterred Batista from adding to his bets on the companies. After injecting about $250 million into OSX last year, he plans to invest a similar amount in the coming months. He’s also pouring as much as 1.4 billion reais ($705 million) into iron-ore miner MMX Mineracao & Metalicos SA, and may inject $1 billion into OGX.
An e-mail to the EBX press office wasn’t immediately returned.