Batista oil firm delays restructure plan to secure more funding -sources
By Guillermo Parra-Bernal SAO PAULO, Jan 24 (Reuters) - Bankrupt oil producer Óleo e Gás Participações SA will delay presenting its restructuring plan to creditors, initially scheduled for Friday, by about a week as the company attempts to secure more funding, two sources familiar with the situation told Reuters. Óleo e Gás, formerly known as OGX Petróleo e Gas Participações SA, and creditors are discussing terms of a potential $200 million debtor-in-possession loan, said the sources, who declined to be identified because the talks are private. The delay is unlikely to disrupt operations, and the company has enough funds to stay afloat, both sources added. Management wants to convince the maximum number of creditors to back the recovery plan, which has to be filed with a Brazilian bankruptcy court, the first source said. Óleo e Gás owes about $5.1 billion to investors such as bond fund Pimco, dozens of suppliers including Schlumberger NV, and sister company and shipbuilder OSX Brasil SA. Óleo e Gás and OSX are both controlled by Brazilian tycoon Eike Batista, the former billionaire whose empire of commodities and industrial companies collapsed last year in dramatic fashion under a mountain of debt after disappointing output at the oil company's wells sent investors running for the exits. Calls to Óleo e Gás in Rio de Janeiro were not immediately answered. Lawyers working on behalf of the company and creditors declined to comment. Once Óleo e Gás delivers the restructuring plan to the bankruptcy court, creditors will then have between 30 days and 60 days to endorse or reject the plan. Bankers and creditors have moved slowly with the DIP loan because they are uneasy with the lack of precedent for such a structure in Brazil, the second source said. In the United States, DIP loans are the first debt that gets repaid. As a result, such loans tend to be a regular feature of bankruptcy cases and are credited with saving companies and their employees from fire-sale liquidations. In recent weeks, Óleo e Gás obtained a bridge loan to pay for operations while it seeks the DIP loan. The company, which filed for bankruptcy protection on Oct. 30, stands to lose offshore exploration rights in Brazil's Espírito Santo state should it fail to meet capital spending commitments by the end of this week, a source with direct knowledge of the situation told Reuters on Thursday.
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