(Updates with closing prices in second paragraph.)
Oct. 16 (Bloomberg) -- OGX Petroleo & Gas Participacoes SA, Eike Batista’s oil company, surged a third day amid speculation it will get a capital injection from investors as its negotiates to restructure debt after firing its chief executive officer.
The shares surged as much as 59 percent to 54 centavos, more than doubling in value over the past three days. The stock closed at 47 centavos in Sao Paulo, contributing the most to the Ibovespa’s 1.8 percent advance. Trading volume was 3.9 times the three-month daily average.
The company will get a $200 million capital injection from investors, O Estado de S. Paulo and Valor Economico reported separately today, without naming them or saying how they got the information. OGX said in a statement yesterday that it nominated Paulo Narcelio Simoes Amaral to replace Luiz Carneiro as CEO. Amaral, a former Brasil Telecom SA chief financial officer, was hired as OGX’s chief financial officer last month and will keep the position.
“For the first time, the market is seeing a solution for the company that doesn’t involve judicial reorganization or bankruptcy,” Luana Helsinger, an analyst at GBM Grupo Bursatil Mexicano, said in a phone interview from Rio de Janeiro.
A $200 million capital injection would help OGX develop its oil fields, Helsinger said. The company needs to cover costs until it starts production at its next offshore oil project before the end of the year.
Batista’s flagship oil producer burned through about $7.2 million in cash a day in the 12 months through June 30 and was set to run out of funds last month, according to data compiled by Bloomberg.
OGX declined to comment on the capital-injection reports in an e-mailed response to questions from Bloomberg News.
The oil producer missed a $45 million bond payment Oct. 1. and has been negotiating with debt holders. A default of the $3.6 billion international bonds due in 2018 and 2022 would be the region’s biggest, according to data compiled by Moody’s Investors Service.
OGX is considering filing for bankruptcy protection within a month after missing the bond payment, two people with direct knowledge of the matter said this month. The bankruptcy filing would be done in Rio de Janeiro, said the people, asking not to be identified as discussions are private.
The company said in a statement yesterday that it hired Sao Paulo-based Angra Partners as a “restructuring” consultant. Angra was already an adviser to EBX Group, Batista’s holding company. OGX’s other advisers include Blackstone Group LP and Lazard Ltd.
Batista, who has taken six companies public since 2006, is selling assets ranging from oilfields to ports after his net worth slumped by more than $30 billion since early 2012 in a selloff spurred by missed targets and rising debt.
OSX Brasil SA, Batista’s shipbuilding company, also climbed today as the company was said to be renegotiating loans. The shares advanced 12 percent to 82 centavos, pushing this month’s gain to 39 percent.
--With assistance from Denyse Godoy and Cristiane Lucchesi in Sao Paulo and Peter Millard in Rio de Janeiro. Editors: Richard Richtmyer, Dennis Fitzgerald