UPDATE 2-Batista speeds up EBX divestments as cash burn worsens
* Miner MMX says will have new controlling shareholder soon
Investors worry about rapid cash burn at EBX companies
* Former billionaire Batista dismantling empire to pay debt
(Adds MMX CEO and analyst comments, financial details, Batista empire background, updates stock prices)
By Jeb Blount and Guillermo Parra-Bernal
RIO DE JANEIRO/SAO PAULO, Aug 15 (Reuters) - Debt-ridden Brazilian tycoon Eike Batista is accelerating the breakup of his tottering energy, port and mining empire, ceding control to new investors as some of the companies he founded scramble for fresh capital.
With cash holdings plunging and Batista's own fortune largely earmarked to guarantee Grupo EBX's estimated $11 billion in debt, the companies in his group face the choice of trimming capital spending or reducing their size to stay afloat.
On Thursday, the day after Batista agreed to cede control of port operator LLX Logistica SA to Washington-based EIG Global Energy Partners, officials at MMX Mineração e Metálicos SA , the backbone of the EBX conglomerate, said the iron ore producer will soon have a new controlling shareholder.
"We are reviewing all our options and focusing on the port operations so that the new shareholder can make the decisions necessary to ensure the company's growth and expansion," Chief Executive Carlos Gonzalez told investors on a conference call.
In the last quarter, MMX, LLX and oil producer OGX Petróleo e Gas Participações SA reported worse-than-expected losses with a rapid deterioration in their cash position as well as rising capital expenditures and debt levels.
In the case of MMX, cash holdings of about 450 million reais ($192 million) may not be enough to cover 1.2 billion reais of maturing obligations over the next 12 months and capital spending of some 700 million reais.
Estimated investments at LLX for an iron ore transport line jumped to 1.7 billion reais from 1 billion reais, the company said late on Wednesday.
MMX shares plunged nearly 8 percent in early trading on Thursday after a late Wednesday announcement of a 441.5 million real second-quarter loss. Shortly before the close of trading in São Paulo on Thursday, MMX shares were down 3.8 percent at 2.02 reais.
OGX shares tumbled 5.9 percent to 0.64 real after the company's net loss rose 12-fold, cash holdings dropped and debt soared. LLX stock was up 9.3 percent at 1.65 reais, putting it on track for its highest close in 2-1/2 months.
"While the operational results are unlikely to catch investors' attention, we believe that the low cash position, in face of OGX's liabilities and capex requirements, will weigh on the stock's performance," Paula Kovarsky, a senior analyst with Itau BBA in Sao Paulo, said in a client note.
OUT OF THE PUBLIC EYE
A flamboyant former billionaire whose conglomerate of mining, energy and logistics companies once symbolized Brazil's rise to global prominence, Batista is now a reflection of the nation's recent woes.
He had long courted publicity but has stayed out of the public eye amid a drop of more than $25 billion in his fortune that knocked him from the top of Brazil's wealth list this year.
The moves at LLX and MMX are the latest steps in Batista's efforts to shore up EBX, which was once valued at $60 billion but suffered from a series of project delays and dwindling confidence that its largely startup companies could deliver revenue and profit before being overwhelmed by debt.
The value of EBX assets, which had soared on hopes that Brazil's China-driven commodities boom would continue, is now less than $5 billion, according to Thomson Reuters estimates.
When EBX restructuring ends, Batista will be left with between $1 billion and $2 billion in assets and $1.7 billion of long-term debt, sources with direct knowledge of the situation told Reuters. That is a sliver of his former fortune, which last year reached about $35 billion, according to Forbes magazine.
About the only asset that is not on the block is his shipbuilder and ship-leaser OSX Brasil SA. A sale of OSX is not being considered at this time because it could trigger clauses in bond contracts that would force the company to buy back its debt if Batista and his family holding company are replaced as controlling shareholder.
MMX ON THE BLOCK
Talks with potential bidders for MMX, which owns several iron ore projects in Latin America, including the giant Serra Azul project in Brazil's southeastern highland state of Minas Gerais and a nearly complete iron ore port near Rio de Janeiro, are advanced and MMX has put nearly all activity outside of port construction on hold in deference to potential buyers.
The MMX port, west of Rio, is not related to LLX's Port of Açu, north of Rio.
The decision to sell LLX came a month after Batista let German utility E.ON SE take over power producer MPX Energia SA.
Batista will leave the board of LLX, but retain a "relevant" stake and the right to choose a representative on the board. He may also keep a stake in MMX, which already has investment from South Korea's SK Holdings Co and China's Wuhan Iron and Steel Co.
MMX's Gonzalez also said the company has put its Corumbá mine up for sale along with other assets in hopes of finding investors that will shore up its dwindling cash position.
He also said it is unlikely that MMX will sell its port separately as the buyer risks not having enough iron ore to move through the terminal without ore from MMX's Serra Azul project, which is linked to the port by rail.
As part of the sale to a new controlling shareholder, MMX is likely to offer more stock to the general public and existing shareholders to raise additional capital, Gonzalez said. ($1 = 2.34 Brazilian reais)
(Editing by Kieran Murray, Leslie Gevirtz and Matthew Lewis)