Batista Warns Short Sellers That Bets Against Him Will BackfireJuan Pablo Spinetto and Alex Cuadros
Brazilian billionaire Eike Batista warned short sellers wagering against his companies that they’ll regret their bets, according to posts on his Twitter account.
Asked by other Twitter users about the companies’ falling stock prices, Batista wrote on March 23 that “rumors and gossip are the tools of short sellers,” who will be “caught with their pants down.” Short sellers borrow shares and sell them in order to profit from buying them later at a lower price.
Batista posted on Twitter a day after his companies came under renewed selling pressure on the Sao Paulo exchange on concerns they’re losing access to the financing needed to carry out investment plans. Shares of OSX Brasil SA, Batista’s shipbuilding and oil services unit, plunged 17 percent to a record-low 4.88 reais at the close of trading. Oil company OGX Petroleo & Gas Participacoes SA fell 9.2 percent. OGX has fallen 48 percent this year, and OSX is down 54 percent.
Batista, whose personal wealth has fallen about $25 billion as the value of his companies declined in the past year, faces demands from creditors to boost collateral, people familiar with the matter said last week. OSX is planning to sell $265 million in secured bonds due in June 2014, a person familiar with the plans said on March 15.
There is no collateral demand from creditors, said a person close to Batista's holding company, EBX Group Co., on March 22.
Batista’s units have the “necessary funding established for the coming years,” EBX Group said in an e-mailed statement on March 19.
In his Twitter posts, Batista referred readers to an interview with Grupo BTG Pactual President Andre Esteves published online March 23 by Estado de S. Paulo. Batista’s companies are in no danger of failing and he remains one of the best-capitalized businessmen in Brazil, Esteves is quoted by the Sao-Paulo based newspaper as saying.
Earlier this month, BTG and Batista entered into a strategic cooperation agreement. BTG has extended Batista credit lines in the range of 1 billion reais ($498 million), Esteves said, according to Estado.
Bloomberg News reported on March 7 that BTG provided a $1 billion credit line to EBX, according to a person with direct knowledge of the agreement.
Asked on Twitter if it’s not time to start talking about what he is doing with his companies, Batista posted, “We’re going to turn on the communications engines.” Pointing out that the port he’s building at Acu in Rio de Janeiro state will help ease logistical logjams, he wrote: “It’s not I who needs help, it’s Brazil.”