(Updates with closing share price in third paragraph.)
March 7 (Bloomberg) -- Grupo BTG Pactual provided a $1 billion liquidity line to EBX Group Co., the holding company owned by billionaire Eike Batista, a person with direct knowledge of the agreement said.
Batista, 56, can use the short-term liquidity line for any of his companies and for any purpose, the person said, asking not to be identified because details of the agreement haven’t been made public.
EBX didn’t give specific amounts yesterday when it announced a strategic cooperation agreement with Sao Paulo-based BTG that includes financial advice, lines of credit and long- term capital investments. Shares of OGX Petroleo & Gas Participacoes SA, Batista’s oil company, rose 16 percent to 3.40 reais, the most in more than four years.
Batista, whose estimated net worth plunged more than 70 percent in a year, is trying to raise money, including through asset sales, to boost output at existing projects. His oil business cut production targets in June, fueling additional declines at the six publicly traded companies he owns. Those businesses had a combined total debt of 24.5 billion reais ($12.5 billion) based on the latest available figures for 2012, according to data compiled by Bloomberg.
Batista and BTG’s billionaire chief executive officer, Andre Esteves, 44, will lead a strategic and financial management committee, EBX said. The agreement doesn’t imply BTG will be the only provider of financial services to EBX, it said. Fees will depend on the performance of EBX companies.
Officials for EBX and BTG declined to comment on the liquidity line.
OGX’s cash dropped 23 percent in the six months through September to 5.1 billion reais as sub-par production at its first two oil wells put output goals out of reach. Bonds of OGX, which will run out of cash in less than two years at its current burn rate, have suffered even after Batista said in October that he would pump $1 billion of his own money into the company that he founded in 2007.
Batista lost his place among the world’s 100 richest people last month after Rio de Janeiro-based OGX, the biggest of his commodities businesses that include shipbuilder OSX SA and coal producer CCX Carvao da Colombia SA, lost more than 80 percent of its market value in 12 months as oil production and free cash flow fell short of estimates.
--With assistance from Boris Korby in New York and Rodrigo Orihuela and Juan Pablo Spinetto in Rio de Janeiro. Editors: Steve Dickson, Steven Crabill