Eike Batista may be forced to cover margin calls on his debts, said one analyst. According to a recent Bloomberg article, Eike seems to be facing demands from creditors to boost collateral.
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.
According to the article, Batista 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 plunged in the past year, and Batista is trying to reduce collateral requirements by selling assets to pay debt.
His 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.
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.
“He really has to do something to prove he isn’t having any cash problem,” said an analyst. “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.”