In 2012, he got Abu Dhabi’s Mubadala Development Company, a government owned fund, to invest $2 billion in EBX Group Co., which gave the fund a 5.63% economic stake in the company.
He was raising money to develop his oil and mining businesses.
Source: Bloomberg
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474784/Then-everything-changed-in-the-summer-of-2012-Batista-started-losing-1-6-billion-a-month-2-million-a-day-Now-99-of-his-fortune-is-gone-.jpg", "name": "Then everything changed in the summer of 2012. Batista started losing $1.6 billion a month, $2 million a day. Now 99% of his fortune is gone.", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474784", "caption": "Then everything changed in the summer of 2012. Batista started losing $1.6 billion a month, $2 million a day. Now 99% of his fortune is gone." , "description": "By July of 2013, Batista was no longer a billionaire.
The main contributor Batista's downfall was and is OGX, his oil and gas company. His fields simply did not produce as promised. In January 2012 OGX estimated production of 15,000 barrels of oil a day (not that great), then in May of 2012, one of its fields dropped to 10,000 a day.
Then expectations for some fields fell even farther, to 5,000 barrels a day, in June of 2012.
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474785/And-as-went-Eike-so-went-Brazil-.jpg", "name": "And as went Eike, so went Brazil.", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474785", "caption": "And as went Eike, so went Brazil." , "description": "As of August 1st, the six companies under EBX's umbrella — OGX, MPX, LLX, MMX, OSX and CCX — lost a combined $9.7 billion in 2013. All 300 publicly traded companies in Brazil lost $203 billion in the same period.
More than anyone, I wonder where I went wrong. What should I have done differently? A first question might be linked to the funding model I chose for the companies. Today, if I could go back in time, I would not have resorted to the stock market. I would have a structured private-equity firm that would allow me to create from scratch and develop over at least 10 years each company. And they would all remain private until I was sure that it was time to go public. In the projects that I conceived, time proved a vital stress factor for the reversal of expectations on companies bearing broadly satisfactory results and valuable assets.
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474787/He-tried-to-explain-his-issues-with-OGX-as-well-as-some-in-Brazil-and-beyond-spoke-of-him-as-a-swindler-and-a-fake-business-man-.jpg", "name": "He tried to explain his issues with OGX as well, as some in Brazil and beyond spoke of him as a swindler, and a fake business man.", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474787", "caption": "He tried to explain his issues with OGX as well, as some in Brazil and beyond spoke of him as a swindler, and a fake business man." , "description": "What has happened since it became clear that OGX would not be able to deliver the results that once seemed possible to achieve? Have I suddenly become a reckless adventurer who marshals resources for his own benefit and does not care if I will deliver what I had advertised? Today it is hard to remember, but OGX was built by some of the crowned heads by decades of services to reputed companies. I did not invest in the oil industry without surrounding myself of those I and the market understood to be among the most skilled professionals one could find. When winning the fields it got, expectations around OGX were sky high.
I had offers to sell big stakes or even the control of OGX from a valuation of $30 billion. Two years ago, I put more than $1 billion out of my pocket in the company. I lost and have been losing billions of dollars with OGX. Does someone who wishes to mislead the other do so at a cost of billions of dollars? If I wanted, I could have performed a scheduled sale of $100 million every six months over 5 years. I would have pocketed $5 billion and still remain in control of OGX. But I did not. Who lost the most with the collapse in the value of OGX was one shareholder: Eike Batista. No one has lost as much as I did, and it is fitting that it be so.
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474788/But-empires-are-not-built-on-letters-On-October-1st-Batista-failed-to-pay-a-47-million-interest-payment-on-OGX-bonds-this-week-By-October-30th-hell-be-in-default-.jpg", "name": "But empires are not built on letters. On October 1st, Batista failed to pay a $47 million interest payment on OGX bonds this week. By October 30th, he'll be in default.", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474788", "caption": "But empires are not built on letters. On October 1st, Batista failed to pay a $47 million interest payment on OGX bonds this week. By October 30th, he'll be in default." , "description": "If this happens, OGX will become this biggest corporate default in Latin America, according to the WSJ.
Batista wants bondholders, like PIMCO the largest bond fund in the world, to restructure his debt, and bondholders have retained lawyers and hired Rothschilds to review the deal.
Last month, Batista got Mubadala restructured his debt — why not his bondholders?
According to Bloomberg, he'll also try to negotiate $250 million in cash to continue developing OGX's fields and hold his empire together.
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474789/But-time-is-running-out-Batista-is-now-on-his-5th-restructuring-adviser-and-there-are-rumors-swirling-that-OGX-and-another-company-have-applied-for-bankruptcy-protection-.jpg", "name": "But time is running out. Batista is now on his 5th restructuring adviser, and there are rumors swirling that OGX and another company have applied for bankruptcy protection.", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474789", "caption": "But time is running out. Batista is now on his 5th restructuring adviser, and there are rumors swirling that OGX and another company have applied for bankruptcy protection." , "description": "Batista has denied filing for bankruptcy protection, though it was reported in Sao Paulo newspaper, 'Veja'.
Sources tell Bloomberg that Batista is considering selling the 'The Spirit of Brazil VIII' for scrap.
On the other hand... last month, a bleary eyed Batista told the WSJ that he is still hopeful:
If you look at my astrological map, this period wasn't favorable for me, Mr. Batista said during the interview, pausing and staring into space for a moment. The good period? It has already started, literally this month, he added.
" }, { "@type": "ImageObject", "thumbnailUrl": "https://www.businessinsider.in/photo/23474790/Want-to-learn-about-another-risk-taker.jpg", "name": "Want to learn about another risk taker?", "contentUrl": "https://www.businessinsider.in/the-complete-story-of-how-brazilian-tycoon-eike-batista-lost-99-of-his-34-5-billion-fortune/batista-was-born-in-brazil-in-1956-and-moved-to-germany-when-he-was-a-teen-/slidelist/23474752.cms#slideid=23474790", "caption": "Want to learn about another risk taker?" , "description": "
On of seven children, Eike was born in 1956 in Governador Valadares, Minas Gerais, Brazil, to a Brazilian father and German mother, he spent his childhood in the country of his birth, but moved to Germany when he was a teenager.
In 1974, he began to study metallurgical engineering at the University of Aachen in Germany.
His family returned to Brazil when he was 18, and he started selling insurance to make ends meet. All his friends, on the other hand, were rich.
From the Australian Financial Review:
"So I got highly motivated to make some extra money and I sold insurance policies from door to door. It's a great learning experience because some doors open and some don't. I had a lot of teas with old ladies."
But by 1979, he'd dropped out of college before he could finish his degree in metallurgical engineering and returned to Brazil.
Source: Robert the matador joins Eike the bull, Australian Financial Review, October 30, 1999 Saturday, Late Edition
He told the Australian Financial Review:
"I discovered it was controlled by the Italian Mafia, so I quit that and began organizing pick and shovel miners to produce diamonds."
The garimpeiros (shovel miners) would come to his Rio office with diamonds in little bags. Batista introduced them to Jewish dealers from Portugal and Antwerp and collected commissions on each sale.
Source: Robert the matador joins Eike the bull, Australian Financial Review, October 30, 1999 Saturday, Late Edition
In the early 1980's Batista returned to Brazil and started a gold trading firm Autram Aurem, raising seed money from connections in Rio and quickly establishing a far-flung network of 60 buyers of raw gold in the Amazon.
From The Age:
"The price of gold was shooting up and the cruzeiro [Brazil's currency before the real] was going down," recalls Willie McLucas, a former manager of a European resource fund that invested in TVX in the 1980s.
Source: The boy from Oz goes to Rio for the force, The Age (Melbourne, Australia), June 15, 1999 Tuesday, Late Edition
Since the whole gold trading things was working out so well, Batista decided to found his own gold mining company—TVX Gold, in 1980.
The 'X' in the name is supposed to signify 'multiplication,' as in multiplication of wealth.
From Australian Financial Review:
Batista was a gold trader at the time, traveling around the pick and shovel miners (garimpeiros) in the Amazon jungle to buy their gold. He also financed some of them and one digger had made no attempt to repay him for six months.
"On one of my tours I went to see him and said: 'Where is my money?' He went screaming mad. He was a drunk. I made the mistake of calling him a son of a b--ch (filho da puta). I turned around and walked a few metres away and bang! He shot me in the back."
"He was drunk. I was lying on the floor and the other guys' [his bodyguards] instinctive reaction was to shoot him because they didn't know whether he would shoot them next."
They buried the garimpeiro in an unmarked grave at the end of the airstrip.
Source: Robert the matador joins Eike the bull, Australian Financial Review, October 30, 1999 Saturday, Late Edition
From the Age:
"Eike would go into the jungle and show these village chiefs a 10-day-old newspaper and say, 'Look, here's the price of gold,'" McLucas, told The Age.
"Meanwhile, the price had gone up, and would go up even more by the time he got back to Rio. He'd pay the chiefs in local currency, which was dropping, and sell the gold in hard currency. You couldn't lose."
Source: The boy from Oz goes to Rio for the force, The Age (Melbourne, Australia), June 15, 1999 Tuesday, Late Edition
Between 2004 and 2012 he would add six public companies under the EBX umbrella:
The couple met in 1990 and at the height of their romance, they were the darlings of gossip rags and the mainstream media.
The thing was, Batista was seeing a Brazilian socialite at the time they were married (because Oliveira was pregnant) unbeknownst to Oliveira.
"I just knew he had a girlfriend, but not...who it was."
In the four years before they got divorced, they had two children—Thor and Olin.
In the 1990's Batista was the Brazilian, U.S. and world champion in the Super Offshore Powerboat class.
In 2006, he covered the 220 nautical miles between Santos and Rio de Janeiro in just a sliver over three hours and beat the record for the course in his boat, the Spirit of Brazil, according to a Dow Jones profile of the CEO.
Source: Dow Jones
Things like this yacht.
Source: Bloomberg, EBX
Like this other yacht.
Source: Bloomberg, EBX
Source: Bloomberg, EBX
So far the tally is: two yachts and one private jet.
Source: Bloomberg, EBX
He bought a $1.2 million Mercedes-Benz SLR McLaren. Then he used it to decorate the lounge of the Jardim Botanico mansion in Rio.
And he sure could afford it. At the start of 2012, he was worth more than $30 billion.
Source: BornRich.com
After plans for a gold mine in Greece went bust because of political opposition, once high-flier TVX took a decided turn for the worse. And then the price of gold started to fall, reaching a paltry $300 an ounce.
Batista resigned in 2001, after the cash-strapped producer was forced to put itself up for sale.
Source: The Globe and Mail
You don't want to mess with Greenpeace or anyone else who is concerned with the health of Amazon River dolphins near Batista's mining operations.
In 2011, Batista bought out Ventana Gold Corp., a company he's had his eye on for a while by then. He first snapped up a 9.5% stake in Ventana in July 2009 through EBX, and by 2010, he controlled 20% of the company's stock.
They finally came to a full sale agreement in 2011, when Batista sweetened the deal, which valued Ventana at a little more than C$1.5 million.
Source: Bloomberg
IMX, Batista's sports and entertainment company, bought the rights to the Ultimate Fighting Championship (UFC) in Brazil in late 2011. UFC Brazil is a mixed-martial arts fighting competition hosted in Sao Paulo that's aired on pay-per-view television.
Source: Fighters Only Magazine
And he told Bloomberg he absolutely had to number 1 because of the competitive spirit that he acquired in his childhood:
"I suffered very heavy asthma, so my mother threw me in the cold swimming pool," he said. "So I cured my asthma through discipline, and I saw that you could achieve things by performing, and it's part of my DNA… I'm very competitive."
Batista also said he wanted to repair Brazil's reputation:
"Brazil lost two generation of Brazilians to the crisis between '84 and '97," he said. "Brazil probably paid $150 billion in extra risk spread [during that time]. The ratings agencies put Brazil in the same level as Nigeria, and today it's better than Germany."
In 2012, he got Abu Dhabi’s Mubadala Development Company, a government owned fund, to invest $2 billion in EBX Group Co., which gave the fund a 5.63% economic stake in the company.
He was raising money to develop his oil and mining businesses.
Source: Bloomberg
By July of 2013, Batista was no longer a billionaire.
The main contributor Batista's downfall was and is OGX, his oil and gas company. His fields simply did not produce as promised. In January 2012 OGX estimated production of 15,000 barrels of oil a day (not that great), then in May of 2012, one of its fields dropped to 10,000 a day.
Then expectations for some fields fell even farther, to 5,000 barrels a day, in June of 2012.
As of August 1st, the six companies under EBX's umbrella — OGX, MPX, LLX, MMX, OSX and CCX — lost a combined $9.7 billion in 2013. All 300 publicly traded companies in Brazil lost $203 billion in the same period.
More than anyone, I wonder where I went wrong. What should I have done differently? A first question might be linked to the funding model I chose for the companies. Today, if I could go back in time, I would not have resorted to the stock market. I would have a structured private-equity firm that would allow me to create from scratch and develop over at least 10 years each company. And they would all remain private until I was sure that it was time to go public. In the projects that I conceived, time proved a vital stress factor for the reversal of expectations on companies bearing broadly satisfactory results and valuable assets.
What has happened since it became clear that OGX would not be able to deliver the results that once seemed possible to achieve? Have I suddenly become a reckless adventurer who marshals resources for his own benefit and does not care if I will deliver what I had advertised? Today it is hard to remember, but OGX was built by some of the crowned heads by decades of services to reputed companies. I did not invest in the oil industry without surrounding myself of those I and the market understood to be among the most skilled professionals one could find. When winning the fields it got, expectations around OGX were sky high.
I had offers to sell big stakes or even the control of OGX from a valuation of $30 billion. Two years ago, I put more than $1 billion out of my pocket in the company. I lost and have been losing billions of dollars with OGX. Does someone who wishes to mislead the other do so at a cost of billions of dollars? If I wanted, I could have performed a scheduled sale of $100 million every six months over 5 years. I would have pocketed $5 billion and still remain in control of OGX. But I did not. Who lost the most with the collapse in the value of OGX was one shareholder: Eike Batista. No one has lost as much as I did, and it is fitting that it be so.
If this happens, OGX will become this biggest corporate default in Latin America, according to the WSJ.
Batista wants bondholders, like PIMCO the largest bond fund in the world, to restructure his debt, and bondholders have retained lawyers and hired Rothschilds to review the deal.
Last month, Batista got Mubadala restructured his debt — why not his bondholders?
According to Bloomberg, he'll also try to negotiate $250 million in cash to continue developing OGX's fields and hold his empire together.
Batista has denied filing for bankruptcy protection, though it was reported in Sao Paulo newspaper, 'Veja'.
Sources tell Bloomberg that Batista is considering selling the 'The Spirit of Brazil VIII' for scrap.
On the other hand... last month, a "bleary eyed" Batista told the WSJ that he is still hopeful:
"If you look at my astrological map, this period wasn't favorable for me," Mr. Batista said during the interview, pausing and staring into space for a moment. "The good period? It has already started, literally this month," he added.
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