Source: Economia | iG.
There are two basic plots for a business journalism of a certain kind.
Call them Triumph and Tragedy.
These are the stuff of what a friend of mine likes to call “business porn” — personality-centered, celebrity-driven hagiography by proxy, focused on the personal.
Page after page of celebrity treatment given to fresh-faced Dartmouth boys with hedge funds. A cult of personality with Andy Fastow at one extreme and Warren Buffet at the other, within the simplistic PR narrative framework of triumph and tragedy.
Count the number of magazine covers on the theme “Steve Jobs is a genius” over the years, for example. They practically canonized the man.
Today, to take another example, the iG portal turns to the irresistible human interest of the man who lost all of the money in the world.
On October 1, after announcing that he would not repay a debt of US$ 45 million of one of his companies, the oil and gas firm OGX, a joke began to circulate at dinner tables and on the social networks. “If Eike Batista finds it hard to do, imagine someone else.”
Eike has become the topic of the hour, even outside Brazil, as when Bloomberg Businessweek called the ruination of the Batista group one of the worst personal financial collapses in history.
In fact, the lifestyle of the once-mighty Eike has undergone some necessary adjustments. But if in the popular imagination he now represents despair, in his personal life he is trying to recover the confidence of a man who once stated his ambition was to become the richest man in the world.
Eike is adjusting to the times: he has given up his helicopters and his favorite dishes.
As iG has learned from a close family friend of the Batistas says he continues to take all kinds of risks in order to recover his empire. Despite his delicate, to put it mildly, position, the impresario is optimistic. “He is fine, taking part in the lives of Flava, his girlfriend and children and trading stocks with a new board of directors he is assembling, with people from Brazil and outsiders,” he says. In the eyes of this family friend, “at the level where he operates, there is also a risk of this sort of situation, and obviously the gains and losses can be enormous.”
According to the same source, negative political pressure shines a spotlight on the worst aspects of the ex-billionaire and his “new” life. “But that is how it is. I believe he will recover soon and those who turned against him will return as allies.
Many doubt this optimistic view of things. For an oil tycoon, an announcement like that made by OGX last week is only the beginning of a long, hard fall. “Eike is a great salesman. He knows how to talk, how to persuade, how to win. But his ego knows no bounds. And now it is what it is. Either he runs off to a desert island to escape his creditors, or he kills himself. This is just the beginning of his ruin,” the friend opines.
After his failure to repay and threatened with bankruptcy, Eike continues to live in his mansion in Alto Jardim Botânico, in Rio de Janeiro. His girlfriend, Flavia Sampaio, remains very close to Batista and lives at the residence with their youngest child, Balder, three months old — a note of joy amid all the chaos Eike has had to endure.
Flavia, an attorney, has her own home in Leblon, but in her Instagram account she makes a point of using and abusing the terrace of the mansion as a back drop — with an impressive view. Last week, an image announced the family would shortly take a holiday to St. Barths: “#stbarth #vacation #agoraasferiasecomobaby #tripsoon #sozinhanuncamais”, she subtitled, using hash tags.
What has changed at EBX
Someone close to Eike told iG that what had happened to his friend was an “editing” of his daily life in every sense of the term. After putting his Gulfstream G 550 up for sale along with his Agusta Grand helicopter — all that remained of his personal air force … Eike has no choice but to get to work by car. Until last Monday (September 30) he reported for duty at EBX headquarters, where he occupies an office on the 22nd floor.
Inside the business, employees are instructed to maintain the law of silence … after information leaked that EBX might vacate the premises. A functionary revealed to iG that the team does not yet know “anything beyond what the market already knows.” “There are cost cuts going on because of our problem in the market, but it is still a peaceful atmosphere to work in,” she said.
Officially, what was announced by the PR office of MMX — the mining component of the X empire — to iG is that abandoning the Serrador building “is a possibility being considered between now and the end of the year. MMX denied, however, that the change was already underway, and did not inform us of the location of the new offices.
Cost controls reportedly went so far as to affect the snack and soda pop machines. Before, all the products were free to employees. Now, workers have to dig change out of their own pocket if they get hungry.
And speaking of hunger, Eike has stopped frequenting BB Lanches, a traditional juice bar in Leblon. He was once a fixture at that emporium late at night, according to those worked there. What did he like? Juice and a meat pasty.. The tip? A big fat one, and something for everyone, from the kitchen to the front of the house.The gang at BB Lanches misses its customer. .
He has also begun doing less jogging in the Lagoa area. For lack of time or in order not to expose himself publicly, Eike has not appeared anywhere in postcard Rio where he used to roam freely in the company of security guards.
His detail has also been cut in half, to four body guards from the eight that accompanied him during the glory days. “If you post a guard, you make it possible to locate the man. But this is dangerous: He was always heavily protected. He leaves home in a convoy of Toyota HiLuxes,” says a person familiar with Eike’s routine.
And so on.
According to today’s Valor, meanwhile,
Negotiations between OGX and international creditors, to whom the company owes R$ 3.6 billion, has reached a stage in which the direct involvement of controller Eike Batista will be necessary. According to a source with knowledge of the talks, impresario Eike will travel next week for New York where he will engage in talks on the subject.
The negotiations are being conducted by OGX executives advised by Blackstone and Lazard. The director involvement of Eike became essential, for the principal line of negotiations involves, as expected, the dilution of his shareholdings in the company.
This should take place based on the possibility of creditors willing to convert debt into equity shares, and perhaps even enter with new investments, as the company has requested. Eike owns 50,1% of the capital of OGX.
As conversations proceed with the credtors, the OGX executives whose return was planned for early this week will spend additional time in New York.
A source close to OGX says there is no date set for a potential bankruptcy, in case talks with creditors fall through. Various scenarios involving the court-organized restructuring are being formulated by suppliers and partners of OGX. The partners do not speak of this possibility, but the lack of liquidity at OGX comes at a time when Queiroz Galvão Petróleo and Barra Energia are initiating developing production of BS-4, which will increase demand for Eike’s infusion of petroleum OGX also owes suppliers of deepwater probes, such as Diamond Offshore, Pride/Ensco and Schlumberger.
No petroleum producer has ever sought bankruptcy protection in the history of Brazil. The application of legislation specific to areas explored under a concession regulated by the National Petroleum Agency (ANP) is also unprecedented and is causing concern.
Yesterday, Goldman Sachs reduced the target price of OGX shares from R$ 0.70 to R$ 0.20.
Filed under: Brazil