Former Brazilian tycoon Eike Batista’s mining company declared bankrupt

RIO DE JANEIRO, BRAZIL – A Rio de Janeiro court declared Wednesday the bankruptcy of MMX Mineração e Metálicos, the mining company controlled by former Brazilian tycoon Eike Batista, who was once considered the seventh richest man in the world before his conglomerate collapsed.

The Sixth Civil Chamber of the Court of Justice of Rio de Janeiro rejected a request by the mining company to revoke the decision that had declared unfeasible the recovery process filed by the company after it filed under the Bankruptcy Law.

The court, considering that the company has no way to pay its debts and continue operating, declared both MMX Mineração e Metálicos and its subsidiary MMX Corumbá Mineração to be definitively bankrupt.

The court decision was confirmed using a relevant fact sent to the São Paulo Stock Exchange by MMX itself, a mining company created by Batista in 2005. It had a production capacity of 10.8 million tons of iron per year.

The mining company announced that it would file an appeal against the court decision because the court did not take into account the new information brought by the company to court, including an agreement by which China Development Integration Limited undertook to inject US$50 million in the company to recover it.

MMX also reported that the Chinese company, despite the court decision, maintained its intention to invest in the mining company and expects a higher court to approve a new recovery process.

In 2013, when his companies went into a chain crisis, Batista decided to request the intermediation of Justice to reach agreements with his creditors and save the companies.

The controllers of both MMX and MMX Corumbá availed themselves of the bankruptcy law and filed recovery processes to continue operating while renegotiating their debts.

But the Rio de Janeiro Court rejected the plan, just as the Business Chamber of the Belo Horizonte Court had already rejected on May 5 a similar plan to save MMX Sudeste Mineração, another of the companies controlled by Batista, from bankruptcy.

Batista became the richest man in Brazil (seventh in the world according to Forbes magazine) and accumulated until 2010 a fortune estimated at around US$30 billion through mining, oil, and raw materials businesses that spread across several countries in the region.

But in 2013, his empire collapsed due to mismanagement and the international crude and commodities crisis.

Among the few companies that were saved from bankruptcy, thanks to the fact that their control was transferred, OGX, an oil company founded by Batista and the main company of his conglomerate, stands out.

The Justice approved in 2017 the recovery plan presented by the new controllers of OGX and allowed them to suspend payments while they restructured their operations and negotiated with their creditors the payment of a debt that was estimated at US$4.3 billion.

The recovery process, requested by the oil company in October 2013 and which was considered the largest of its kind in the world for the value of the debt, also included subsidiaries OGX Austria and OGX International.

After the sale of most of his companies, the once richest man in Brazil faced several processes for corruption and money laundering and became imprisoned in both 2017 and 2019.

Justice granted him the benefit of house arrest despite his convictions for both manipulation of the financial system and corruption, in a case in which he was accused of paying bribes to the then governor of Rio de Janeiro, Sergio Cabral.