Batista Quits as MPX Chairman After Share Sale Price Is Cut
Eike Batista, once Brazil’s richest man, quit as chairman of MPX Energia SA (MPXE3) as the collapse of his business empire accelerated.
The billionaire left the board of the utility he founded in 2001 after a 33 percent stock-price plunge forced the Rio de Janeiro-based company to cut the size of a share sale. Germany’s EON SE (EOAN) strengthened its control over the company, agreeing to invest 400 million reais ($176 million) and appointing an interim chairman. MPX shares headed for the biggest gain in almost five years in Sao Paulo.
His departure from MPX is the latest reversal for Batista, whose net worth has dropped more than $30 billion in the past year after his natural resources and logistics startups failed to meet targets. The self-made businessman has put his Embraer SA (EMBR3) jet up for sale and is selling assets or stakes in his mining and energy companies as he tries to stem the rout.
“EON appreciates Eike’s great contribution to developing MPX to be one of the leading energy companies in Brazil since he founded it in 2001,” MPX’s new chairman Jorgen Kildahl said in a statement. “EON now is supporting the further development of MPX, a fundamentally solid company.”
MPX will sell 800 million reais of shares at 6.45 reais each in a private capital increase, according to a statement today. That replaced a plan to raise 1.2 billion reais at 10 reais apiece in a public offering.
EON owns 36 percent of MPX and has a joint venture with the power producer. Brazilian bank Grupo BTG Pactual (BBTG11) committed to cover the remainder, EON said. The company will be renamed and operations will be moved to the headquarters of the MPX-EON venture, EON said.
The woes of Batista’s companies have quickened this week. Shares in OGX Petroleo (OGXP3) & Gas Participoes SA, his oil producer, plunged 50 percent in Sao Paulo during the week after the company said it may have to shut its only producing field.
Batista is being asked by advisers to consider shutting down the shipbuilding business of oil-services company OSX Brasil SA (OSXB3), a person with direct knowledge of the proposal said.
The MPX share sale will be completed within the next 40 days. The company’s share price has fallen about 33 percent since the public offer, at which time EON promised to pay 10 reais apiece, was announced May 31.
EON shares rose 1.1 percent at 12.23 euros as of 3:25 p.m. in Frankfurt. MPX jumped as much as 13 percent to 7.29 reais, the steepest intraday gain since November 2008.
“This capitalization will bring a lot of value to shareholders in terms of allowing financial gain, growth opportunities, improving our balance sheet,” MPX Chief Executive Officer Eduardo Karrer said in a conference call today. “We’re going to see a wide range of benefits.”
MPX operates 1,700 megawatts of power plants and will bring a further 1,100 megawatts online by the end of 2013. In total, the utility plans 10,000 megawatts of conventional power and renewable plants, EON said today. The Brazilian company said it is preparing to bid in auctions for new generating capacity.
“MPX is now in a position to speed up significantly and to focus on the implementation of its ambitious growth plan,” EON Chief Executive Officer Johannes Teyssen said in today’s statement. “The fundamentals underlying these projects remain highly promising.”