Batista's OGX resumes bondholder talks, sees 'rapid progress'

By Guillermo Parra-Bernal

SAO PAULO, Nov 27 (Reuters) - OGX Petr (Other OTC: OGXPY - news) óleo e Gas Participações SA, which filed for bankruptcy protection last month, resumed talks on Wednesday with holders of more than half of the Brazilian oil company's $3.6 billion in bonds to restructure the debt.

OGX, which missed a $45 million bond interest payment in October and faces another $100 million installment early next month, said in a securities filing that it had yet to reach a binding accord with the bondholders but cited "rapid progress" in the discussions.

Negotiations "will continue until a definitive agreement is reached," after which creditors will have the opportunity to approve or reject the accord, the filing added.

The company, which tycoon Eike Batista founded in 2007 and at its peak was valued at around $30 billion, is seeking to obtain debt relief from creditors including banks and suppliers after acknowledging its inability to honor about $5.1 billion in total liabilities.

Another Batista-controlled company, shipbuilder OSX Brasil SA, also sought court protection from creditors in the wake of OGX.

Pacific Investment Management Co, which is the world's largest bond fund and is known as Pimco, and half a dozen money management companies are among bondholders that stand to lose millions if OGX fails to emerge from bankruptcy proceedings. Investors also worry that a lengthy legal battle is on the horizon in Brazil, where recent debt restructuring and bankruptcy proceedings have turned out badly for them.

A committee formed by Pimco and the other investment funds picked investment banking firm Rothschild in August as its adviser on the matter, two sources told Reuters at the time. Law firms Cleary Gottlieb Steen & Hamilton LLP and Pinheiro Neto Advogados were also hired, both sources added.

The selection process followed a decision by OGX in late July to hire Blackstone Group LP and Lazard Ltd to help the company review its capital structure. OGX's main financial advisor is Rio de Janeiro-based Angra Partners.

OGX faces the December coupon payment on about $2.5 billion bonds due in 2018. Prices on the 8.5 percent bond were at about 9 cents on the dollar on Wednesday, according to Thomson Reuters (Frankfurt: TOC.F - news) data.

Shares of OGX, which are down 97 percent over the past year, were up 7 percent at 0.15 reais on Wednesday in São Paulo.