Batista’s OGX Exercises $1 Billion Put; Shares Surge
OGX Petroleo (OGXP3) & Gas Participacoes SA, the worst performing stock on Brazil’s main index, called on former billionaire Eike Batista to buy $100 million of new shares at more than 10 times their market value to fund the explorer. Shares jumped as much as 49 percent.
Exercising a $1 billion put option, OGX asked for $100 million up front and may request additional disbursals, the Rio de Janeiro-based company said in a filing. Batista will pay 6.3 reais per share compared with yesterday’s 41-centavo close. Shares surged 46 percent to 60 centavos at 10:45 a.m. in Sao Paulo, extending a weekly gain to a record 100 percent and reducing a year-to-date loss to 86 percent.
“Management of the company, in a unanimous decision, exercised the option against the controlling shareholder, Mr Eike Fuhrken Batista,” OGX said in today’s statement. “With immediate disbursal of $100 million and the remaining in tranches depending on the cash needs of the company.”
Batista agreed to the put option on Oct. 24 last year to guarantee the company would have enough cash to expand its exploration properties in Brazil. Since then, OGX’s production collapsed at its first project and Deutsche Bank AG said Aug. 27 it would run out of cash by the end of this quarter if it doesn’t receive a cash injection.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at [email protected]
OGX Petroleo (OGXP3) & Gas Participacoes SA, the worst performing stock on Brazil’s main index, called on former billionaire Eike Batista to buy $100 million of new shares at more than 10 times their market value to fund the explorer. Shares jumped as much as 49 percent.
Exercising a $1 billion put option, OGX asked for $100 million up front and may request additional disbursals, the Rio de Janeiro-based company said in a filing. Batista will pay 6.3 reais per share compared with yesterday’s 41-centavo close. Shares surged 46 percent to 60 centavos at 10:45 a.m. in Sao Paulo, extending a weekly gain to a record 100 percent and reducing a year-to-date loss to 86 percent.
“Management of the company, in a unanimous decision, exercised the option against the controlling shareholder, Mr Eike Fuhrken Batista,” OGX said in today’s statement. “With immediate disbursal of $100 million and the remaining in tranches depending on the cash needs of the company.”
Batista agreed to the put option on Oct. 24 last year to guarantee the company would have enough cash to expand its exploration properties in Brazil. Since then, OGX’s production collapsed at its first project and Deutsche Bank AG said Aug. 27 it would run out of cash by the end of this quarter if it doesn’t receive a cash injection.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at [email protected]
