OGX Rebounds After Five-Day Rout as Reserves Seen Solid
OGX Petroleo & Gas Participacoes SA rebounded after a five-day slide on speculation the Brazilian oil producer’s crude reserves will insulate it from eroding confidence in controlling shareholder Eike Batista.
The shares jumped 2.2 percent to 3.22 reais at the close of trading in Sao Paulo. It was the best performer on the benchmark Bovespa index, which declined 2 percent. The Rio de Janeiro- based company’s stock had tumbled 18 percent in the previous five sessions.
Many investors have lost confidence in Batista’s capacity to provide financing to his companies if needed, said Rodolfo Amstalden, an analyst at Sao Paulo-based consulting firm Empiricus Research. OGX tumbled 68 percent last year, the worst performance on the Bovespa.
“OGX’s oil reserves are substantially more solid than Eike Batista’s” finances, Amstalden, who recommends clients buy the stock, said in an e-mailed note yesterday.
Batista, 56, has seen his net worth plunge more than 70 percent since March, dropping him from among the world’s 100 richest people, according to data compiled by Bloomberg, as shares of its startup commodities companies tumbled. He’s currently worth about $10.1 billion, according to the Bloomberg Billionaires index.
Last year, Batista granted OGX a put option that could require him to buy as much as $1 billion in new stock. As part of the accord, OGX will have the right to exercise the put option anytime through April 2014 should it need additional capital.
The press office at Batista’s holding company, EBX Group Co., didn’t respond to an e-mail seeking comment.
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