Eike Batista’s OSX-3 offshore oil-processing vessel, collateral for bonds from the billionaire’s shipping company, departed Singapore for Rio de Janeiro as investors track the asset amid the unraveling of his businesses.
The ship, anchored in the Singapore Strait until yesterday, is now west of the Asian nation where it was built, according to ship-tracking data compiled by Bloomberg from IHS Fairplay, a Redhill, England-based maritime research company.
The vessel built by Tokyo-based Modec Inc. is helping OSX Brasil SA’s $500 million of 2015 notes weather a selloff of debt and shares from Batista’s crumbling resources empire as it guarantees creditors’ payback. The ship will be less valuable for bondholders once it arrives in Brazil because it will be treated according to the country’s rules in the event of a debt restructuring, said JGP Credito’s Rafael Fritsch.
“Once the ship is in Brazil, it will be subject to Brazilian law,” Fritsch, who helps manage 6 billion reais ($2.6 billion) as chief investment officer at JGP Credito in Rio, said by e-mail today. “It may be considered an essential good and make a foreclosure more difficult to execute.”
The bonds backed by the ship are down 19.5 cents this year to 84.02 cents on the dollar and have lost investors about 2 percent, including reinvested interest, since their March 2012 issuance. That compares with a loss of more than 70 cents for distressed notes from Batista’s OGX Petroleo & Gas Participacoes SA in the same span, data compiled by Bloomberg show.
“It’s good news that the vessel is 100 percent ready, but that was already priced in the bond,” Fritsch said.
The ship will reach Brazil in about 50 days and will start generating revenue for OSX as soon as it is installed at the oil field, the company said in an e-mailed reply to questions today.
OSX-3 remains one of Batista’s most valuable assets after failure to deliver on output targets and projects sparked a rout of his energy, materials and cargo companies that wiped out $30 billion of his wealth.
The floating production, storage and offloading platform, or FPSO, built by Modec was valued at $800 million, according to a March 2012 prospectus for the bonds that offer the ship as collateral.
Oil explorer OGX ordered the platform for its Tubarao Martelo field, where Malaysia’s Petroliam Nasional Bhd agreed to buy a 40 percent stake in May for $850 million.
Modec said last month that the vessel would leave Singapore “around the end of June” to arrive in Rio by year-end.
OSX’s first FPSO took about six weeks to get to Rio from Singapore in 2011 and another four months to arrive on site and start producing oil at OGX’s Tubarao Azul field.