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Justice Court Accepts Judicial Reorganization Petition from OGX, but Excludes Companies Abroad

11/22/2013 - 08h32

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RACHEL LANDIM
FROM SÃO PAULO
RENATA AGOSTINI
FROM BRASILIA

This Thursday, Judge Gilberto Matos, from Rio de Janeiro, accepted the judicial reorganization petition from the oil company OGX, from Eike Batista.

The decision, however, only includes Brazilian companies from the group: OGX Petroleo e Gas SA and OGX Petroleo e Gas Participacoes SA. The two with subsidiaries abroad - OGX Austria GMBA and OGX International GMBH - were left out.

The decision was available today on the Internet and should be published in the Diario Oficial in the coming days. From there, OGX will have 60 days to submit a restructure debt plan to its creditors.

It is very likely that they have to accept a strong discount on values they will receive. The creditors general meeting should happen within 150 days, but it may be delayed due to lawsuits.

When excluding Austrian companies from judicial reorganization, the judge decided to consider the legal opinion made by the public prosecutor's office saying that the Brazilian legislation does not allow for judicial reorganization of companies not in the country.

"The judge decided on the principle of territoriality, while OGX considers it should be evaluated as a whole. We are evaluating whether we will appeal," said Márcio Costa, lawyer from Sergio Bermudez law office, in charge of the case.

OGX debt value - from US$ 5 billion - does not change, despite the exclusion of Austrian companies. This is because the Brazilian companies are co-debtors of its subsidiaries outside.

The fear is that the company's lenders promote a lawsuit "attack" against foreign subsidiaries, damaging some operations, such as oil exports through Austria.

Translated by SIMONE PALMA

Read the article in the original language

Dado Galdieri - 22.mai.2012//Bloomberg
Justice Court from Rio de Janeiro accepted the judicial reorganization petition from the oil company OGX, from Eike Batista
Justice Court from Rio de Janeiro accepted the judicial reorganization petition from the oil company OGX, from Eike Batista

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