From World's 7th Richest Man To Margin Calls In 15 Months

Tyler Durden's picture

My how the 'over-levered and cross-collateralized debt-is-wealth' mighty have fallen. Eike Batista, Brazilian entrepreneur, was the 7th richest man in the world in 2011 but as Forbes recently noted, he is the 'biggest loser' on their list (losing an incredible $2mm per hour), ending 2012 in 100th place after his biggest holding - OGX Petroleo E Gas  - slumped 80% in the last year (and a stunning 43% in 2013 alone) which means his net worth has plunged 20% YTD (according to Bloomberg). While he has the yacht, cars, speedboat, and jets to go with someone who apparently has a net worth of $9.9bn, he now has one more thing to worry about...


As Bloomberg notes, the billionaire faces demands from creditors to boost collateral as his other company MPX Energia saw its stock fall to record lows (as cross-collateralization leads towards a vicious circle). "Doubts about the group continue," one analyst notes as net debt at Batista's six publicly traded units more than tripled last year, "he really has to something to prove he isn't having a cash problem." On the bright side, we are sure his girlfriend will stay with him.

His largest holding OGX...




Via Bloomberg,

Eike Batista, the Brazilian billionaire whose oil-company shares fell to a record low last week, is close to selling a stake in MPX Energia SA (MPXE3) as he faces demands from creditors to boost collateral, people with direct knowledge of the matter said.


Among Batista’s biggest creditors is Sao Paulo-based Itau Unibanco Holding SA, with about 5.5 billion reais ($2.8 billion) in loans outstanding, said two of the people, who asked not to be identified because the matter is private. Batista borrowed about 4.8 billion reais from Banco Bradesco SA and 1.6 billion reais from Grupo BTG Pactual, not counting a credit line of $1 billion BTG provided earlier this month, the people said.


Batista, 56, used shares of his publicly traded companies as collateral for loans that helped build his empire of commodities and energy businesses, held as units of his EBX Group Co., the people said. Shares of his oil and gas company, OGX Petroleo e Gas Participacoes SA (OGXP3), plunged 8 percent in the past year, and Batista is trying to reduce collateral requirements by selling assets to pay debt, the people said.


A big part of investors’ mistrust now comes from the fact that Eike may be forced to cover margin calls on his debts,” Leonardo Brito, an equity analyst at hedge fund Teorica Investimentos, said in a telephone interview from Rio de Janeiro. “Doubts about the group continue.”


Net debt at Batista’s six publicly traded units more than tripled last year to a combined 15.8 billion reais, according to data compiled by Bloomberg based on the latest available figures. The companies posted a combined net loss of 1.68 billion reais in the first nine months of last year amid missed project targets and rising costs.




Batista, whose personal wealth declined about $25 billion in the past year as the share prices tumbled, can use the short- term liquidity line he received from BTG for any of his companies and for any purpose, including paying debt as a way to reduce collateral needs, one of the people said.


Itau, Bradesco and BTG declined to comment on collateral calls, according to bank officials who asked not to be identified in keeping with company policies.




Batista also would sell MPX shares to the public in the divestiture, which may raise more than $2 billion, the person said. An EON official declined to comment on the talks.




Batista sold part of the holding company EBX last year to Abu Dhabi’s Mubadala Development Co. and General Electric Co., slowing an expansion into mining and energy in Brazil, Colombia and Chile to focus on raising cash to boost output at existing projects.


Batista also aimed to sell all of his gold business, AUX, after disclosing plans last year to divest a 49 percent stake, two people familiar with the matter said last month. Vancouver- based Goldcorp Inc., the world’s second-biggest miner of the precious metal by market value, entered the talks for AUX after an agreement to negotiate exclusively with Qatar’s government expired in October, the people said. The pace of negotiations for AUX has slowed and a deal may not happen, one of the people said.


Batista also sought to sell shipbuilder OSX Brasil SA (OSXB3) to Sete Brasil Participacoes SA in exchange for a stake in the oil- rig contractor, according to two people with direct knowledge of the matter. He eventually gave up on the idea, Folha de S. Paulo reported in October, citing an interview with Batista.


OGX share’s price fell 44 percent this year, the second- biggest drop among 125 companies in the FTSE All World Oil & Gas Producers Index (AWOGPU), and investors are betting it will fall more as short-seller positions increase. ...


“He really has to do something to prove he isn’t having any cash problem,” Brito at Teorica said. “Maybe selling an asset, like MPX, or doing a farm-out at OGX; anything that proves that he has assets that he can sell at a good price.”


His Yacht


His Jet


His Speedboat


His Son's Girlfriend


... from another angle...

His Girlfriend


Could be worse we guess...


Two things spirng to mind... funny how leverage works both ways AND the joys of rehypothecation and cross-collateralization in this case are a perfect example of why when and if the world has a greater-than-5-to-10% correction in asset prices, the panic buttons will be hit hard...

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AssFire's picture

I hope he spent it wisely on hookers and fine wine.. instead of just wasting it.

american eyedol's picture

the tide is going out bitchez

nmewn's picture

"On the bright side, we are sure his girlfriend will stay with him."

Its always good to have some solid assets to fall back on ;-)

Joe Davola's picture

Glad to see Ashley Dupre has stabilized her life.

Abraxas's picture

Don't care about the rich dudes or their girlfriends. So, she's got a nice ass. They can go screw themselves. What I do care about is that gold's holding above $1600. Now, that makes me excited.

krispkritter's picture

Man, he took a haircut on that play...Is that the equivalent of a 'stock Brazilian'?

Pure Evil's picture

I guess they're right about the camera adding 10 lbs, but in this case it looks as if it added about 30 lbs.

ACP's picture

Popozuda is the name for Brazilian large-ass.

TerminalDebt's picture

What you owe doesnt matter, as long as the bling gets the ass


And why is every comment about the ass?

Pure Evil's picture

Cause we can't see any nips or the big V-giny.

mjcOH1's picture

"And why is every comment about the ass?"

Because it"s epic. And the rest of the toys are bullshit.

TerminalDebt's picture

actually the rest of the toys are there to get the epic ass

smlbizman's picture

...after many hours of study, and with 55 yrs of experience , i feel qualified to say that this ckick has the finest ass on the planet....the only thing that could make it better, would be having it abusing me.....blows that smokin hot  israeli chick on the beach with the machine gun to shame....

lewy14's picture

That's some serious tail... risk...

Real Estate Geek's picture

No.  Not even close.  THIS is the finest ass on the planet:

You're welcome.

varnelius's picture

OMG, I can hardly look away.  If any piece of ass was calling for a brick, its that one.  (Step 1: use the brick to knock them out.  Step 2: ..., Step 3: profit!)

Momauguin Joe's picture

In the end, they began to cannibalize each other.

Abraxas's picture

You mean they'll eat each other out?

smlbizman's picture

so when did we start just doing photo spreads without articles?

zorba THE GREEK's picture

Look at pictures 2 and 3 of his girlfriend. What happened to her boobs?

kaiserhoff's picture

As Dow liked to say, Better Living Through Chemistry, in this case, silicone.

Mr. Badger's picture

Gonna wax pedantic, "Better Things for Better Living...Through Chemistry." was a DuPont slogan.

stacking12321's picture

for the reading comprehension-impaired:

the first 2 photos are of his son's gf

the 3rd photo is his gf


Matt's picture

RTFA. The first two pics are his son's girlfriend; the last pic is his girlfriend. Why is his son's girlfriend relevant? Because she brings more traffic to the article, that's why.

Buck Johnson's picture

No kidding, I love the girl.

Leto II's picture

How many times can you UP arrow yourself? 20 UP arrows on 58 comments? I call bull shit

Pure Evil's picture

You don't need to post a comment to up or down arrow another comment. There were over 8000 reads so anyone of them could have up arrowed the dude.

wee-weed up's picture

Bazillion Ho's...

pure milk-chocolate orgasms, bitchez!

fudge's picture

Chocolate Fudge :))  like tasty Thai girlies.


conspicio's picture

Flavia Sampaio is a hottie and an attorney. We'll see if 4 years of bliss means she sticks by her margin called man. As for the son, he chose the one that gets naked more often. Google images for Nicole Bahls. Day-um gurl.

ACP's picture

Is she a Kardashian?

ihedgemyhedges's picture

No. The girl in this pic is a virgin I'm sure.....

AssFire's picture

No, just spends like one apparently.

Theta_Burn's picture

LOL nice

Let this be a lesson to all you billionaire out there. spend all your time with your face buried in fine ass whilst jetting to your motorboat, you to will face margin calls.


hapless's picture

spend all your time with your face buried in fine ass whilst jetting to your motorboat, you to will face margin calls.

...and hopefully you'll run out of gas before you run out of ocean.

Hedgetard55's picture

Just one girlfriend? Loser.

Bastiat's picture

He seems to have missed the whole "diversification" concept.

buckethead's picture

With a middle name like Fuhrken, one would think he had better game.

1C3-N1N3's picture

"Game" is indicative of gynocentric preoccupation.

Used to be, before rampant gynocentric thought (in the west at least), man would engage in _healthy_ competition with his fellow man to go build/add to civilization, and he wouldn't have to worry about shit like Game. Bitches gravitate to us because they tend to like civilized life and those who participate in its construction. THEN you fuck them. Net gain to humanity: improvement (or establishment) of civilization.

These days, man engages in _unhealthy_ competition with his fellow man _just_ for a _hint_ of access to females. All the cutthroating and cockblocking and destructive behavior for what -- what's the net gain to humanity here? Your dick gets wet? This is a big factor in western decline that's not discussed, even here.

Spitzer's picture

Im having a better year in Jr Mining stocks and this is the worst ever.


His girlfreind.... Meh Has a French nose. Must be Sarko's daughter. And she doesn't have much for hips.

Ness.'s picture

Is she for sale?  


"How much for the little girl?  the women? How much for the women.. I want to buy your women"

zorba THE GREEK's picture

If he needs to sell 'ass'ets, I would like to put my bid in for his girlfriend. On an hourly basis, that is.