SAO PAULO: Brazilian tycoon Eike Batista’s troubled oil firm OGX announced yesterday that talks with creditors to restructure its ballooning debt had failed, sending stock prices tumbling.
In a note sent to the market, the company, which skipped a key interest payment early this month, said negotiations with creditors had concluded but “no agreement was reached.”
The announcement came only days before a 30-day deadline was set to expire for OGX to take necessary measures before its reported $3.6bn debt matures.
As a result, OGX shares fell 20.69 percent at the opening bell on the Sao Paulo bourse. Four weeks ago, OGX said it was foregoing a $44.5m interest payment as it scrambled to avoid debt default.
It said investment banks Lazard and Blackstone had been selected to coordinate negotiations with creditors, including those holding notes issued by OGX Austria. In December, the company is also due to pay interest on $110m in notes due in 2018. Market analysts expected OGX to seek bankruptcy protection to avert a debt default, which, according to the Wall Street Journal, would be the biggest in Latin American history.