Gulf Oil and Gas accountACCOUNT

OSX in Talks with Cerberus, Others over DIP Financing

Source: Reuters 2/17/2014, Location: South America

OSX Brasil SA, the bankrupt shipbuilding company controlled by former billionaire Eike Batista, is in talks with Cerberus Capital Management LP and a number of unnamed investors for a potential debtor-in-possession financing deal.

Currently no agreement has been struck between OSX and potential sources of the loan, commonly known as DIP financing, the Rio de Janeiro-based company said in a securities filing on Monday. OSX's focus at this point is what to do with three floating production storage and offloading vessels it owns, according to the filing.

A source with knowledge of the situation said OSX, which filed for bankruptcy protection late last year, is seeking between $200 million and $215 million in financing to move ahead with a restructuring process. The source noted that talks with Cerberus, a U.S. private equity firm, were at a "more advanced stage" than with other players.

OSX declined to name potential sources of the DIP loan beyond Cerberus. Efforts to reach executives at Cerberus to comment were unsuccessful. U.S. markets were closed on Monday in observance of a national holiday.

The source, who declined to be identified because of the sensitivity of the issue, said OSX wants to clinch a DIP financing deal before presenting creditors and a bankruptcy court a final restructuring plan. Currently the company is carrying out a thorough revision of its business and negotiating with creditors in order to stay afloat.

Batista, who until early last year was Brazil's richest individual with a fortune close to $30 billion according to Forbes magazine, saw his empire of commodities and industrial companies collapse under a mountain of debt after disappointing output at its oil wells sent investors running for the exits. OSX's sister company, Oleo e Gas Participacoes SA, is also in the middle of a bankruptcy protection process and recently obtained $215 million in DIP financing.

Oleo e Gas was formerly named OGX Petroleo e Gas Participacoes SA and was, until early last year, Brazil's No. 2 listed oil producer.

In the case of Oleo e Gas, creditors moved slowly with the loan because they were uneasy about the lack of precedent for such a structure in Brazil, the second source said. In the United States, debtor-in-possession loans are the first debts to be repaid.

As a result, such loans tend to be a regular feature of bankruptcy cases and are credited with saving companies and their employees from fire-sale liquidations.

For more information about related Opportunities and Key Players visit Brazil Oil and Gas Projects

Investment News in Brazil >>

Argentina >>  5/20/2019 - The Argentinian authorities officially awarded the exploration license of offshore block MLO 124 to an Eni-led consortium. The award is the outcome of...

Related Categories: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Industrial Development  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 

Brazil Oil & Gas 1 >>  2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | 13 | 14 | 15 | 16 | 17 | 18 | 19 | 20 | 21 |

More News

Related Links

Gulf Oil and Gas
Copyright © Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.