Brazilian magnate Eike Batista has stepped down as chairman of energy firm MPX Energia, a move interpreted as the start of an announced restructuring of his conglomerate amid a severe financial crisis.
MPX, whose business includes natural gas exploration and is one of a score of companies controlled by Batista, announced the businessman's resignation as chairman as well as a capital increase of 800 million reais (some $360 million) in a statement Thursday.
The capital increase will be carried out in part by German utility E.ON, which holds a 24.5 percent stake in MPX and will invest an additional 366 million reais (some $166 million) in the Brazilian company.
The remainder of the increase, which will replace a planned IPO, will be contributed by investment bank BTG Pactual.
Jorgen Kildahl, a member of E.ON's board of directors, will take over as MPX Energia's chairman on an interim basis.
The statement said the decision was taken "after market conditions substantially worsened in the last few weeks," a period in which shares in all of Batista's companies have fallen sharply amid severe debt woes.
It said the "capitalization will help strengthen the company's structure" and ensure the continuation of its business plans in the natural gas sector.
Folha de Sao Paulo newspaper reported Sunday that Batista's EBX Group conglomerate, to which MPX belongs, was urgently trying to restructure debt contracted with 11 banks. Loans totaling 7.9 billion reais ($3.6 billion) will come due in March 2014.
Efforts to renegotiate that debt have coincided with the announcement of a major restructuring at EBX and a resulting plunge in the share prices of all of Batista's publicly listed companies.
Financial market spokespersons say that as part of that restructuring Batista, who until 2011 had been listed by Forbes magazine as the world's seventh-wealthiest person, will need to sell off many of his assets.
According to Forbes, Batista's net worth had fallen to $10.6 billion last December from $19.4 billion at the end of the previous year. EFE