Batista’s OSX Surges 48% on Speculation BNDES to Rework Loan

OSX Brasil SA, Eike Batista’s shipbuilding company, surged the most on record on speculation Brazil’s national development bank will extend a 548 million-real ($252 million) debt.

The shares gained 32 percent to 74 centavos at the close of trading in Sao Paulo after earlier rallying as much as 48 percent. It was the best performance among the 73 members of the BM&FBovespa Small Cap index, which rose 0.3 percent.

OSX had a 548 million-real debt with the development bank know as BNDES as of June 2013, which was rolled over and matures Oct. 15, according to regulatory filings. The Rio de Janeiro-based company said in an e-mailed reply to questions today that it’s continuing to negotiate terms of the loan with BNDES.

“The government wants the company to succeed,” Fabiano Santin, a fixed-income analyst at Kondor Invest in Sao Paulo, said by phone. “I don’t think they have a choice but to extend the loan. You would have the additional risk of the company shutting down and laying off people.”

Other OSX lenders are considering seizing two oil production ships used as collateral on loans, according to six people with direct knowledge of the matter who asked not to be named because the discussions are private. OSX hired Credit Suisse Group AG to help sell the vessels, the people said. Creditors would join that process as they seek to avert losses after OGX Petroleo & Gas Participacoes SA missed a $45 million Oct. 1 bond payment that puts Batista on the brink of Latin America’s biggest corporate default.

The BNDES loan has guarantees from Banco Votorantim SA and no vessel as collateral, two people with knowledge of the matter said.

A BNDES press official declined to comment on the loan.

Before it's here, it's on the Bloomberg Terminal.