When the Brazilian billionaire Eike Batista appeared on the Charlie Rose show in 2010, he and his country were on a roll. In the interview, Batista was asked how rich he would become over the next decade. ?A hundred billion dollars,? he said, an amount that would most likely have made him the wealthiest person in the world.
Today, with the Brazilian stock market and the value of its currency falling as mass demonstrations hobble the country, Batista?s billions are evaporating. From a peak of $34.5 billion in March 2012, his wealth has dropped to an estimated $4.8 billion, according to the Bloomberg Billionaires Index. His lenders are growing anxious, and there are concerns that he might have to reorganise ? and possibly lose control of ? his dwindling empire.
Batista built his fortune by selling investors on the potential of Brazil, forming companies that would benefit from the country?s rich oil fields, vast mining resources and fast-growing middle class.
But over the last year, investors in Batista?s six publicly traded businesses ? none of which are profitable ? have unloaded their shares amid disappointing projections, missed deadlines and a heavy debt load. ?He bundled wind and sold it,? said Miriam Leit?o, an economic historian and columnist for O Globo, a leading Brazilian newspaper. ?The euphoria fooled a lot of people.?
Since the middle of last decade, Batista, through his EBX Group holding company, has formed six listed businesses: OGX (oil) and OSX (offshore equipment and services to energy companies), as well as MMX (mining), LLX (logistics), CCX (coal) and MPX (power). The X is meant to symbolise the multiplication of wealth.
The crisis at his empire is unfolding as Brazil is grappling with a decline in prices for some of the commodities the country exports, and ambitious infrastructure projects across the country face delays. While growth slowed to less than 1% in 2012, Brazil?s economy is not in crisis. Economists still expect the economy to grow about 2.5% this year, even as market turbulence shakes Brazil and other developing countries.