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Discussion Starter #21
Brazil, Fortune and Fate Turn on Billionaire

When the Brazilian billionaire Eike Batista appeared on the Charlie Rose show in 2010, he and his country were on a roll.

Brazil’s economy, driven by a worldwide commodity boom, grew a blistering 7.5 percent that year. And Mr. Batista’s prodigious holdings — spanning oil, mining, shipping and real estate — were soaring in value. In the interview, Mr. Batista was asked how rich he would become over the next decade.

“A hundred billion dollars,” he said, an amount that would most likely have made him the wealthiest person in the world.

Today, with the Brazilian stock market and the value of its currency falling as mass demonstrations hobble the country, Mr. Batista’s billions are evaporating. From a peak of $34.5 billion in March 2012, his wealth has dropped to an estimated $4.8 billion, according to the Bloomberg Billionaires Index. His lenders are growing anxious, and there are concerns that he might have to reorganize — and possibly lose control of — his dwindling empire.

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The New York Times
 

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One time I sold some old jewelry to free up some cash, so I know how this guy feels.
 

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Discussion Starter #26
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.”

Share Sale

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.

MPX Soars

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.”
Bloomberg
 

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Discussion Starter #27
Brazil’s Batista Loses Billionaire Status as Debts Mount

Eike Batista, ranked as the world’s eighth-richest person last year, is no longer a billionaire after Mubadala Development Co. opted to convert an investment in his Brazilian companies into debt.

Batista’s EBX Group Co. owes $1.5 billion to Mubadala after the Abu Dhabi sovereign-wealth fund restructured a $2 billion investment, said three people with knowledge of the deal. The fund no longer has equity in EBX, which paid back $500 million after renegotiating earlier this month, said two of the people, asking not to be named because terms are private.

By converting to debt, Mubadala will be shielded from equity losses after Batista’s commodities and logistics startups plunged about 80 percent on average since the deal was announced in March 2012. Batista had already amassed at least $2 billion in personal liabilities, meaning the 56-year-old entrepreneur now has a net worth of about $200 million, according to the Bloomberg Billionaires Index.

After peaking at $34.5 billion in March last year, Batista’s fortune has evaporated after a failure to meet output and reserve targets at his oil company OGX Petroleo e Gas Participacoes SA prompted investors to sell shares and bonds of his group’s traded units. As a creditor, Mubadala will have priority over shareholders in the reshaping of the group as the billionaire seeks to sell assets, trim projects and reduce debt.

EBX, based in Rio de Janeiro, said July 10 that it restructured an agreement with Mubadala after the selloff pushed down the value of Batista’s companies to about half their combined total debt. The parties also agreed to protect the fund’s remaining investment, EBX said, without elaborating.

Batista’s flagship OGX rose 3.7 percent to 56 centavos in Sao Paulo yesterday, reducing a decline this year to 87 percent.
Bloomberg
 

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Discussion Starter #28
Brazil's Eike Batista, Onetime The World's 7th Richest, Is No Longer A Billionaire

Eike Batista, the flamboyant Brazilian entrepreneur whose wealth peaked at $30 billion just 18 months ago on FORBES’ 2012 list of the World’s Billionaires, has officially lost his billionaire status. Batista, who told FORBES in 2010 he would become the world’s richest man, is now worth less than $900 million, according to Forbes’ calculations. That figure accounts for $2.7 billion in loans that Batista reportedly owes to Brazil’s BNDES development bank and to the Mubadala sovereign fund of the UAE.

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Much of Batista’s estimated $900 million remaining fortune lies in shares of his six public traded companies, all of which are still in pre-operational stages and have yet to turn on a profit. That means he could eventually see his net worth drop even more, since he has reportedly pledged his personal wealth to back loans from Brazilian banks.

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Forbes
 
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