OGX files judicial recovery request, enters subscription agreement

By Caroline Salls

Pittsburgh, Oct. 31 - OGX Petroleo e Gas Participacoes SA filed a judicial recovery request at the Judicial District of Rio de Janeiro State on Wednesday, "given its adverse financial situation and accumulated losses, as well as the recent due and forthcoming interest payments of a great part of its debt," according to a company news release.

The filing also includes subsidiaries OGX Petroleo e Gas SA, OGX International GmbH and OGX Austria GmbH.

OGX said it had been talking with potential investors, but because of challenges derived from its financial situation, it decided that the judicial recovery request is the best measure to take in order to preserve the continuity of its business and to protect the company's and shareholders' best interests.

Subscription, purchase deals

In addition, OGX said it entered into a subscription agreement with Cambuhy Investimentos Ltda., Eneva SA and DD Brazil Holdings Sarl under which Cambuhy and DD Brazil will invest R$250 million in Maranhao Petroleo e Gas SA.

The company said the investment will be carried out through a capital increase at OGX Maranhao, in which Cambuhy will subscribe for newly issued shares equivalent to R$200 million and DD Brazil will subscribe for newly issued shares equivalent to R$50 million.

As part of the agreement, Eneva will transfer its subscription rights in the capital increase to Cambuhy and DD Brazil.

OGX and Cambuhy Investimentos also entered into a share purchase agreement, whereby Cambuhy will purchase its remaining stake in OGX Maranhao for a purchase price of R$200 million, subject to antitrust approval, Agencia Nacional de Petroleo approval and creditors' approval.

The company said the transaction also includes the termination of a shared cost agreement, under which OGX will receive R$144 million, corresponding to the net value of the outstanding debt of OGX Maranhao with the company.

According to the release, R$50 million of the R$144 million will be paid on the date of the capital increase, R$10 million in each of five monthly installments from July 2014 to November 2014 and roughly R$45 million in January 2015.

OGX said MPX Austria will also pay $20 million to Parnaiba BV in connection with the acquisition of equipment currently leased by OGX Maranhao.

New shareholder agreements

Eneva, DD Brazil and Cambuhy also entered into a new shareholders agreement, which will take effect upon the completion of the capital increase.

Also, OGX, Cambuhy, DD Brazil and Eneva entered into a second shareholders' agreement that grants OGX specified minority rights.

The new shareholders' agreements will replace and supersede the current OGX Maranhao shareholders' agreement between OGX and Eneva.

OGX is an oil and natural gas company based in Rio de Janeiro.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.