Billionaire Batista’s OGX Soars 16% After BTG Accord: Rio MoverJuan Pablo Spinetto and Peter Millard
OGX Petroleo & Gas Participacoes SA, Eike Batista’s mining and oil companies, rose the most in more than four years and contributed most to the advance in Brazil’s benchmark index after the billionaire’s holding EBX Group Co. signed a financing agreement with Grupo BTG Pactual.
OGX, as the Rio de Janeiro-based explorer is known, surged 16 percent to 3.40 reais at the close of trading in Sao Paulo, the biggest increase since September 2008. MMX Mineracao e Metalicos SA, Batista’s mining company, jumped 17 percent to 3.64 reais. The stocks were the two best performers on Brazil’s Bovespa index, which advanced 1.6 percent. LLX Logistica SA, Batista’s port developer unit, was the index’s third-biggest gainer, rising 10 percent to 2.44 reais.
“Funds have been underweight in Eike’s companies,” Dany Rappaport, who helps manage 250 million reais ($127 million) at Investport in Sao Paulo, said by phone. “There was short covering, it was a reversal” after the BTG announcement.
Batista, 56, signed a so-called strategic cooperation agreement with billionaire Andre Esteves’s BTG for financial advice, lines of credit and future long-term capital investments in projects, EBX said in an e-mailed statement yesterday. BTG provided a $1 billion liquidity line to EBX, a person with direct knowledge of the agreement said, asking not to be identified because details of the agreement haven’t been made public.
The 56-year-old entrepreneur is seeking to raise money, including through the sale of assets, to boost output at existing projects. His oil business cut production targets in June, fueling additional declines at six publicly traded companies he owns.
OGX’s $2.56 billion of bonds due in 2018 rose 4.65 cents to 93.51 cents on the dollar. Yields fell 125 basis points to 10.24 percent, the most since the securities were sold in May 2011.