By Peter Mueller, Guest Writer
It seems like just yesterday flamboyant Brazilian billionaire, Eike Batista, was making claims that he would soon be crowned the world’s richest man. Only last year, Batista was declared the seventh wealthiest terrestrial individual with a net worth of $35 billion, Forbes reports.
With the news that Batista’s oil and gas exploration company, OGX, is filing for bankruptcy, the chance of becoming the world’s wealthiest man has now disappeared for the Brazilian.
Born as the son of the mines and energy minister of Brazil, Batista sifted through the amazon to buy up gold in his early twenties. Batista re-sold the gold to major cities across the globe, leading him to his first fortune.
In 1983, Batista founded EBX, an international conglomerate containing 10 major subsidiaries. The flagship subsidiary of EBX was OGX. Batista created OGX to provide the cash flow for all of EBX’s other ventures including MMX (mining), LLX (logistics) and CCX (coal).
After $5 billion of investments, and many years of failed explorations for oil reserves, speculation of OGX’s true profitability came to a creeping halt. Many investors rushed to invest in the company when OGX first reported the discovery of oil reserves that could yield approximately 1 billion barrels.
In 2010, OGX had a market value of $34 billion, but later stood to suffer $3 billion in losses due to dismal oil production numbers, Associated Press reports.
Because of inflated offshore drilling expectations, Batista’s personal net worth was based mainly on speculated information rather than true wealth. Batista put every penny he had into OGX without receiving a fraction of the anticipated petrol.
Due to an inability to pay off rising debts, OGX filed for bankruptcy Oct. 30. The filing looks to be the largest bankruptcy filing in South America, Reuters reports. Many analysts expect other subsidiaries under EBX’s umbrella to crumble in the aftershock of the OGX bankruptcy filing.
Some analysts expect Batista to make a return, Associated Press reports. They argue that he is too motivated, and too well connected in business circles to fail.
Still, the man who was once the symbol of Brazil’s economic potential and growth, now faces accusations of lying to investors and a growing pile of seemingly recalcitrant debt.