RIO DE JANEIRO -- Just a few years ago, flamboyant billionaire Eike Batista was boasting that he would soon be the world’s richest man. For those who visited his home, he loved to show off his prized Mercedes-Benz McLaren, which he parked in the living room of his mansion.
Batista’s fall has been sharp and fast. His OGX oil company filed for bankruptcy protection Wednesday in a stunning reversal of fortune for the champion speedboat racer who came to symbolize the country’s economic boom with Brazilian flair. There are now concerns that Batista’s OSX ship-building company may also quickly fall into bankruptcy; it’s carrying heavy debt and was meant to supply the oil firm with ships and platforms.
Batista was born into privilege. His father was the mines and energy minister and also led what was then the state-run Vale mining company, which has since been privatized. The younger Batista made his first fortune in his 20s, scouring the Amazon to buy up gold, which he resold in Brazil’s big cities and Europe.
Those beginnings led to his current conglomerate of oil, mining, infrastructure, and real-estate companies, all suffering as his once high-flying OBX faces possible liquidation.
Married for more than a decade to Luma de Oliveira, a former model and one of Brazil’s most beloved Carnival queens with whom he has two sons, Batista’s life was as much fodder for celebrity scandal sheets as business pages.
Now 56, Batista’s fortune has reportedly dwindled to less than 1 percent of the $34.5 billion that Forbes magazine estimated he was worth in early 2012. He has ordered that his luxury yacht be cut up and sold for scrap.
His problems have extended into his personal life. In June, his son Thor, 21, was convicted of involuntary manslaughter for running over a cyclist while driving the same model of Mercedes-Benz his father keeps near a family couch.
Critics contend Batista misled investors about the size of the oil fields that OGX had found in recent years and say his troubles are a new sign that Brazil won’t soon see an end to its economic slide. The economy grew 7.5 percent in 2010, but then eked out just a 0.9 percent gain last year amid a downturn in world commodity prices and Brazilian consumer spending.
OGX didn’t respond to requests for a comment.
Batista’s star wasn’t supposed to stop glittering so soon.
Just 18 months ago, President Dilma Rousseff attended a ceremony marking OGX’s first offshore oil production and said resolutely that state-run oil company Petrobras would go into deep partnerships with Batista’s firm.
“Eike is our standard, our expectation and, above all, the pride of Brazil when it comes to a businessman in the private sector,” Rousseff told those in attendance.
Some say Batista’s failure to deliver on producing offshore oil and the resulting inability to obtain more investor credit was a byproduct of a toughening economic environment as well as underlying weaknesses in his company.
“What’s the phrase? When the tide goes out, you can see the man who is not wearing a bathing suit?” said Jefferson Finch, a Latin America analyst with the New York-based consulting firm Eurasia Group. “That’s what’s happened with Eike Batista.”
Finch said that “investor enthusiasm started turning on Brazil around 2011” after five years of high hopes that South America’s biggest nation had finally turned a corner and would make good on its longtime promise to become a perennial power with repeated years of strong growth.