Shell cuts stake in Brazil oil project with $1 billion sale to Qatar

A Shell logo is seen at a petrol station in London January 31, 2013.

(GNN) - Oil firm Royal Dutch Shell (RDSa.L) is selling a stake in a Brazilian oil project to Qatar Petroleum International (QPI) for $1 billion, in line with this year's plan to ramp up disposals.

Shell said on Wednesday it was selling 23 percent of the Parque das Conchas or BC-10 project off the coast of Brazil, leaving it with a 50 percent interest. It will continue to operate the 50,000 barrels of oil per day project.

Earlier in January Shell sold a stake in a gas project in Western Australia for $1.14 billion as part of its drive to improve return on investment, days after it had issued a shock profit warning for the fourth quarter.

Analysts and shareholders said the company's weak results would push the world's number-three investor-controlled energy firm to keep a tighter control on costs after it said 2013 capital expenditure would peak at about $45 billion.

Shell had already said last October that it would significantly step up disposals in 2014 to keep cash flowing in.

Recent media reports have suggested the company's divestments could total $15 billion this year, equivalent to around 6.5 percent of its $228 billion market capitalization.

QPI, the global arm of Qatar Petroleum, which is the world's largest liquefied natural gas exporter, has to date undertaken only limited expansion overseas but the Gulf state's energy minister told Reuters in October that QPI wants to expand its reach.

Shell, which said the Brazilian disposal was subject to regulatory approval by that country's authorities, is due to release its fourth-quarter results on Thursday.

Shares in the company closed at 2,123.5 pence on Tuesday.(GNN)(Reuters)(GNN INT)

(Reporting by Sarah Young; editing by Kate Holton and Paul Sandle)

Tiger Global to invest up to $500 million in Brazil online retailer B2W

Tiger Global Management LLC, the hedge fund managed by industry mogul Charles Coleman, plans to spend up to 1.2 billion reais ($500 million) to buy a stake in Brazilian online retailer B2W Companhia Digital (BTOW3.SA), in a bet that e-commerce will keep booming in Latin America's largest economy.

Brazilian retailer Lojas Americanas SA (LAME4.SA), B2W's largest shareholder with a 62.2 percent stake, and two funds overseen by Tiger Global will jointly inject 2.38 billion reais into B2W, according to a late Friday securities filing. Tiger and Lojas agreed to subscribe to 95.2 million of B2W shares at 25 reais each, 61 percent above the stock's Friday closing price.

Lojas Americanas, Brazil's No. 1 discount retailer, agreed to purchase a minimum 1.021 billion reais of new shares in B2W while Tiger Global will purchase between 459.2 million reais and 1.2 billion reais worth of B2W stock, the filing said. At the end of the transaction, which requires regulatory approval, Lojas Americanas will remain B2W's top shareholder.

In recent years, Tiger Global has taken advantage of rapid growth in online commerce retail operations in Brazil and China, the world's two largest emerging market economies. Some of Tiger Global's investments in Brazil include online sports retail company Netshoes, Groupon Inc (GRPN.O) rival Peixe Urbano, and social game developer Vostu.

Coleman, 38, is one of the so-called "Tiger Cubs" - asset managers whose start was sponsored by hedge fund industry legend Julian Robertson. Coleman, a former technology analyst for Robertson's Tiger Management, has built Tiger Global into a firm with over $11 billion in assets under management, chiefly by his prowess in investing in internet companies before they sell shares to the public.

While Brazil's e-commerce market is expected to grow an average 18 percent annually by 2016, according to several consulting firms including E-bit and A.T. Kearney, some issues linger for online retailers. B2W, the largest Brazilian online retailer, has struggled over the past two years as a result of intense competition, eroding profitability and onerous upfront investment in technology to build up scale and improve customer service.

Shares of B2W are down 4.4 percent over the past 12 months.

With local interest rates at their highest level in about two years, household leverage peaking and persistently high inflation eating up disposable income, Brazil's leading online retailers are likely to post a net loss this year, according to Irma Sgarz, a Goldman Sachs Group retail analyst in Brazil.

Investors may react positively to the capital plan "since the subscription price was set at a large premium to B2W's current share price, avoiding dilution," said Marcel Moraes, a retail analyst with Deutsche Bank Securities. "On top of that, it should also reduce the concern over credit risk."

Minority shareholders should be granted preemptive rights. Those not participating could have their stakes diluted by about 38 percent, the filing noted.(GNN)(Reuters)(GNN INT)

(Editing by Rosalind Russell)

Batista's OGX ends bondholder talks as bankruptcy looms

OGX Petróleo e Gas Participações SA (OGXP3.SA), the cash-strapped Brazilian oil company controlled by former billionaire Eike Batista, said on Tuesday that debt restructuring talks with holders of $3.6 billion in bonds had ended with no agreement. The announcement, made in a predawn securities filing, came just hours after Reuters reported that OGX was preparing to file for bankruptcy protection in a Rio de Janeiro court as early as Tuesday, according to three sources with direct knowledge of the situation.

The company did not say why the talks collapsed. But sources close to the negotiations told Reuters in recent days that areas for disagreement between Batista, management and creditors ranged from the scope of a potential capital injection to the terms of a Batista departure from OGX, which has total debts of over $5 billion.

OGX's shares and bonds slumped in the wake of the announcement. Its stock dropped more than 20 percent, adding to a 90 percent-plus plunge this year, while the price on its 8.375 percent bond due in April 2022 slid to 9 cents on the dollar, down from about 10 cents on Monday and near an all-time low of 6 cents earlier this month.

OGX bonds are down 89 percent this year, the worst-performing bonds among emerging market corporate debt, according to Thomson Reuters data.

Once the flagship company of Batista's sprawling industrial and commodities empire, OGX's failure to meet expected oil output targets caused investors to doubt its ability to come up with enough revenue to service its debts. That, in turn, sparked a domino effect that forced Batista to start dismantling his Grupo EBX conglomerate to raise cash to pay debt.

The meltdown of EBX which included a port operator and a shipbuilder as well as mining, energy and entertainment companies - is a dramatic change of fortunes for the 56-year-old Batista, who just 18 months ago ranked as the world's seventh-wealthiest person. His rapid decline has also become a symbol of Brazil's own economic woes after the end of a decade-long boom that made it one of the world's hottest emerging economies.

OGX declined to comment further on the end of the debt talks or a potential bankruptcy protection filing.

Talks with a creditors' committee formed by half a dozen investment funds kicked off in August, as dwindling confidence in Batista's ability to shore up OGX caused its bonds to slump. Pacific Investment Management Co, the world's largest bond fund manager known as Pimco, and BlackRock Inc (BLK.N) are on the committee, whose members own more than half of OGX's outstanding bonds.

Officials at Pimco and BlackRock in Newport Beach, California, and New York, respectively, could not be immediately reached for comment.

LARGEST IN LATIN AMERICA

If OGX does seek court protection from creditors, it would be the largest-ever corporate bankruptcy filing in Latin America, according to Thomson Reuters data. The decision whether to file comes as a 30-day grace period for OGX to pay $44.5 million in interest to investors was about to expire.

OGX wants to exclude its OGX Maranhão natural gas unit from a bankruptcy protection filing, a source close to the situation told Reuters on Monday. Power producer Eneva SA (ENEV3.SA) reached a deal on Monday with OGX Maranhão's creditor banks to buy up to 66.7 percent of the unit should parent company OGX fail to honor its debts.

Eneva was previously known as MPX Energia SA, which was part of the EBX conglomerate. Batista, who founded the company, remains part of Eneva's controlling group alongside Germany's E.ON (EONGn.DE).

If an OGX bankruptcy request is approved by a court, the company will have 60 days to come up with a corporate restructuring plan. The company's creditors as well as the judge overseeing the case will then have 30 days to endorse or reject the plan.

OGX had buyout and financial advisory firm Angra Partners, Blackstone Group LP (BX.N) and Lazard Ltd (LAZ.N) as advisors in the negotiations with bondholders. The creditors' committee hired investment-banking firm Rothschild and law firms Cleary Gottlieb Steen & Hamilton LLP and Pinheiro Neto Advogados to advise members on the talks.

During talks, OGX and the bondholders discussed a potential $150 million credit line aimed at funding the company's exploration campaign for a few more months. But there was disagreement over Batista's plan to cut OGX's debt by offering bondholders a stake in the company as well as the terms of his potential departure from the company, sources said.

($1 = 2.18 Brazilian reais)

(Additional reporting by Sabrina Lorenzi; Editing by Todd Benson and Alden Bentley) (Reuters) (GNN) (Yoogle)