Petrobras CEO: no order from Brazil to help Batista's EBX Group


Petrobras CEO: no order from Brazil to help Batista's EBX Group

RIO DE JANEIRO -- Energy giant Petrobras, denied on Wednesday that the country's government has ordered the company to help billionaire businessman Eike Batista's troubled EBX Group out of its financial dilemma.

Discussions with Mr. Batista's EBX Group, which include interests in ports, shipbuilding, oil production and mining, to make some of the entrepreneur's projects feasible "do not exist," Petrobras Chief Executive Maria das Gracas Foster told reporters Wednesday in Sao Paulo.

"What we have had since September with [EBX Group] are discussions about utilizing some assets," Ms. Foster said. For example, Petrobras has talked about using a liquefied natural-gas terminal that could potentially be developed at the Acu port currently under construction by Mr. Batista's LLX Logistica, Ms. Foster said.

"We are discussing other services-type opportunities, but everything depends on cost," Ms. Foster added. The executive also noted that Petrobras has a shipbuilding contract with OSX Brasil.

However, a person close to the government said this week that negotiations could lead Petrobras to sign up for a berth at LLX's Acu port. Despite Ms. Foster's comments, LLX shares remained up more than 8% in Wednesday trading after posting a 7% gain the previous session.

Talks of a potential partnership with Petrobras came as investors are questioning the ability of Mr. Batista's companies to meet targets and raise funds to finance capital-intensive infrastructure projects. On Tuesday, Moody's Investor Service downgraded OGX Petroleo e Gas Participacoes, a Batista oil company, because of low production flows and concerns over tightening liquidity. In the last 12 months, OGX's shares have lost 88% of their value.

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