Brazilian oil company OGX files for bankruptcy protection

Brazilian oil company OGX, part of the conglomerate controlled by magnate Eike Batista, said it filed for bankruptcy protection.

The company made the request Wednesday due to serious financial woes stemming from disappointing output at offshore wells, a move that if approved will enable it to continue operating without financial pressure while it negotiates with creditors, attorney Sergio Bermudes said.

The bankruptcy filing came a day after the breakdown of monthslong talks between OGX and bondholders aimed at restructuring $3.6 billion in debt.

OGX, Batista’s flagship company, was founded in 2007 when the world’s thenseventh wealthiest individual acquired concession rights to 21 exploratory blocks in Brazil.

Germany’s E.On and Brazilian investment firm Cambuhy said Thursday they were making a joint investment of $114 million in OGX.

Cambuhy will contribute $91 million and E.On the remaining $23 million, the companies said in a filing with securities regulators.

The funds will be used to boost the capital levels of OGX Maranhão, an OGX unit involved in natural gas exploration in that likenamed northeastern state.

OGX will sell its stake in OGX Maranhão to Cambuhy, which, once the entire transaction is completed, will be the majority shareholder with a 73 percent stake.

Eneva will have an 18 percent interest in OGX Maranhão and E.On will own the remaining 9 percent, while OGX, though it will not have an ownership stake, will retain “rights as a minority shareholder,” Eneva said in a statement sent to Efe.

The deal is subject to approval by regulators and OGX’s creditors.