OSX, Bondholders in Talks Over FPSO Lease

By The Maritime Executive 02-11-2014 10:29:00

OSX Brasil SA, the shipbuilding and ship-leasing company controlled by businessman Eike Batista, said in a regulatory filing on Monday that it was in talks with bondholders over the lease terms of an oil production ship.

The ship, OSX-3, is a floating production, storage and offloading vessel that is handling oil and gas output from the Tubarão Martelo offshore oil field east of Rio de Janeiro owned by Batista's Óleo e Gás Participações SA.

Oleo e Gas filed for Latin America's largest-ever bankruptcy protection on Oct. 30. OSX, which depends on OGX for nearly all of its current and future revenue, filed for bankruptcy protection Nov. 11. OSX left its ship-leasing units, including OSX-3 out of the filing in an effort to keep them afloat while looking for a buyer.

A lawyer representing OSX bondholders was not immediately available for comment.

OSX sold $500 million of 9.25 percent debt maturing in March 2015 to finance the construction of the OSX-3. The bonds rose 50 points to 90.50 percent of face value on Monday to yield 18.75 percent, according to Thomson Reuters.

OSX-3 began producing oil in Tubarão Martelo in December. The field represents the last major chance for Oleo e Gas to produce enough revenue to allow the company to be restructured.

Oleo e Gas said late Friday that creditors, led by Pacific Investment Management Co and other bond investors, agreed to provide $215 million of debtor-in-possession financing to keep the company operating. The loans will be made in the form of a two part bond offer.

Under the deal, Batista will lose control of Óleo e Gás.