UPDATE 1-OSX becomes 2d Batista company to file for bankruptcy-source

Sabrina Lorenzi
Monday, 11 Nov 2013 | 2:19 PM ET

RIO DE JANEIRO, Nov 11 (Reuters) - Brazilian shipbuilder OSX Brasil SA filed for bankruptcy protection on Monday, becoming the second company controlled by former billionaire Eike Batista to seek court protection from creditors in just over a week.

The filing, confirmed to Reuters by a source with knowledge of the bankruptcy petition, follows a decision by the OSX board on Friday to pursue bankruptcy proceedings.

The petition was being made to a court in Rio de Janeiro, the same jurisdiction where Batista's oil company OGX Petróleo e Gas Participações SA <OGXP3.SA sought protection from creditors on Oct. 30. Citing 11.2 billion reais in debt ($4.8 billion), it was the largest bankruptcy filing in Latin America.

The Rio court was not immediately able to confirm the OSX filing. It also remains unclear how much of its 5.34 billion reais ($2.29 billion) in debt OSX wants to restructure.

In a securities filing on Friday, the company said parent company OSX would file for protection along with two subsidiaries: OSX Construção Naval S.A. and OSX Serviços Operacionais Ltda.

The company did not mention a third unit, OSX Leasing, which owns three platforms that are leased for oil exploration purposes.

The OGX petition set in motion a further dismantling of a sprawling energy, minerals and logistics empire that Batista, a Rio-based entrepreneur who was once the seventh richest man in the world, created over the past decade.

Leveraging booming worldwide demand for commodities, and soaring investor interest in Brazil at the time, Batista rapidly built his EBX Group, a conglomerate that over the past year collapsed under a mountain of debt after missing production and profit targets.

If the court approves the company's bankruptcy request, the company will have 60 days to present a restructuring plan. OSX creditors will then have 30 days to endorse or reject the plan, though legal experts warn the proceedings could drag on for much longer than that.

OSX is 10 percent owned by South Korea's Hyundai Heavy Industry.

Stock market regulators on Monday suspended trading in OSX shares until its bankruptcy filing is official.