Eike Batista plans to contest a decision to pump up to $1bn of his own money into OGX, delivering a setback to investors in his cash-starved oil company.
The former billionaire warned that if the dispute were not resolved within 60 days he would take the issue to the arbitration court of Brazil’s stock exchange, according to a regulatory filing by OGX on Monday.
“I stress my rights under the contract and under the law to question the circumstances, the form, the content, the validity and other legal aspects of the desired option exercise,” Mr Batista wrote in a letter published in the filing.
On Friday, shares in OGX rose as much as 49 per cent after the company said it had exercised a put option under which Mr Batista had promised in October to buy up to $1bn worth of the company’s shares by the end of April next year.
Under the move, Mr Batista was expected to immediately transfer $100m to OGX via the purchase of new shares, helping to ease pressure on the company that Deutsche Bank last month said could run out of cash as early as this quarter.
However, shares in OGX, which have slumped more than 90 per cent this year following production disappointments and cash concerns, lost more than 15 per cent on Monday as suspicion grew among investors over the put operation.
“We believe the entire move to exercise the put and then contest it was orchestrated by Eike himself as a way to exonerate the company’s former independent directors of legal responsibility over the put,” said Aurélio Valporto, one of a group of about 60 minority investors who are preparing to sue Mr Batista.
“Ever since Eike knew that OGX had no oil, it seems he decided not to put one more cent into the company,” said Mr Valporto.
OGX did not respond to requests for comment on the group’s accusations.
