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Eneva Seeks to Shelter Gas Venture as OGX Bankruptcy Looms

Oct. 28 (Bloomberg) -- Eneva SA, the Brazilian utility controlled by Germany’s EON SE and Eike Batista, offered to buy out a natural gas company shared with OGX Petroleo e Gas Participacoes SA if the venture defaults.

Eneva signed an option with OGX Maranhao Petroleo & Gas SA’s three bank creditors to buy the 66.7 percent of the shares it doesn’t own in the venture for 200 million reais ($91.5 million), the Rio de Janeiro-based company said in a statement today. Banco Itau BBA SA, Banco Santander SA and Morgan Stanley have the right, starting on Feb. 19, to sell their shares to Eneva if they execute guarantees on OGX Maranhao, it said.

Eneva is attempting to disentangle itself from the collapse of OGX, Batista’s oil producing company. Dusseldorf-based EON starting buying shares from the former billionaire in January 2012 to gain a foothold in Brazil as domestic profit declined. Eneva is in talks with banks and partners to avoid redemption of the debt owed by OGX Maranhao, three people with knowledge of the talks told Bloomberg News earlier this month.

“It seems Eneva is attempting to protect themselves and secure the asset in case something happens to OGX but am not sure they will reach that goal,” Leonardo Brito, an analyst at hedge fund Teorica Investimentos, said by telephone from Rio today. “If OGX asks for bankruptcy protection, all the creditors will make claims at the same time.”

The venture is important for Eneva because it supplies natural gas for the operations of some of its plants, he said.

Missed Payment

OGX, the centerpiece of Batista’s commodities empire, missed an Oct. 1 interest payment on $1.1 billion of bonds, triggering a 30-day grace period. The company is considering filing for bankruptcy protection later this month or early next, two people briefed on the plans said Oct. 4. Either act could trigger cross-default clauses in the debt of affiliated companies such as the Eneva gas venture, the people said.

OGX’s press office in Rio declined to comment on bankruptcy protection speculation.

EON became Eneva’s largest holder on May 29 and increased its stake in a private placement on July 4, three days after OGX said it would probably have to shut its only producing oil field, and Batista was replaced as Eneva chairman. OGX Maranhao, where Eneva has a 33.3 percent stake, operates eight blocks in Brazil’s Parnaiba basin, producing natural gas for the utility’s thermoelectrical plants in the region.

Eneva gained 3.7 percent to 4.50 reais in Sao Paulo today, the biggest closing increase since Oct. 11. The stock lost 59 percent this year, underperforming the 12 percent loss of Brazil’s Ibovespa Small Caps index.

To contact the reporter on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

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

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