The Billionaire Who Personified Brazil's Boom Goes Bust

Oct 31, 2013
Originally published on October 31, 2013 5:14 pm

He was boastful, he was brash and he came to represent a booming Brazil that was finally taking its place as an economic powerhouse on the world stage.

Eike Batista had the cars: a Mercedes McLaren worth a quarter of a million dollars parked in his living room; the boat, called "the Pink Fleet," and the women: He was married to a former Playboy model and a Carnival queen.

The Wall Street Journal called Batista "the face of Brazil's boom," which lifted 40 million people out of poverty.

At his peak, he owned oil, mining, infrastructure and real estate companies worth, according to Forbes, some $34.5 billion in 2012.

But it's all come crashing down: On Wednesday, Batista's oil company, OGX, filed for bankruptcy, imploding his empire.

His fall is being called the biggest default in Latin American history.

"It's a huge collapse and it's important because Eike Batista has been a model for Brazilian entrepreneurs," says Antonio Dos Santos, an economist at Pontificio Catholic University. "It's a big disaster."

A disaster not only for Batista but for Brazil: His rise tracked Brazil's global ascendancy, and now his collapse is being seen as an example of the decline in Brazil's economic fortunes.

A report on Batista, and the superport he was building, before his fall.

Batista was born affluent. His father was the minister of mining and led Vale, what was then the state-run mining company. The younger Batista sought out his own fortune by prospecting for gold in the Amazon region.

Over the years he became an icon — helping to successfully bankroll Rio de Janeiro's Olympics bid and giving money to help equip and train police who pacified some of Rio's most dangerous favelas.

Batista built his wealth on commodities and a Chinese appetite for what Brazil could provide. The jewel in his crown was his oil company, OGX. He promised it would provide 10 billion barrels of oil. Investors flocked when he took the firm public in 2008. At the time it was the biggest initial public offering of stock in Brazil's history.

Batista appears with Brazilian President Dilma Rousseff during a ceremony in celebration of the start of oil production by OGX, Batista's oil and gas company, in 2012. The company filed for bankruptcy Wednesday.
Ricardo Moraes / Reuters /Landov

He was helped along by Brazil's government. According to the AP, just 18 months ago President Dilma Rousseff called Batista "our standard, our expectation and, above all, the pride of Brazil when it comes to a businessman in the private sector."

But Batista couldn't deliver on his promises, and little of the oil he said was there materialized.

An editorial this week in his hometown paper, O Globo in Rio de Janeiro, said: "He's always exaggerated the potential of his companies and thus increased his stock. He built a house of cards."

It was a house of cards, though, that many people believed and invested in. Among those damaged are workers at the megaport he was building. Work there has ground to a halt, businesses are shuttered and no one knows what the future will hold.

Batista has said he is planning a comeback.

In one of his last tweets, he wrote: "A Brazilian businessman never stops dreaming."

For now though, he is living a nightmare.

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This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.


And I'm Audie Cornish.

It's being called the biggest default in Latin American history. Eike Batista was once Brazil's richest man, worth an estimated $34 billion. And he wasn't modest about his ambition for more. This was him in an interview in 2011.


CORNISH: But last night, it all came crashing down. Batista's oil company filed for bankruptcy, imploding his empire. And now, he's worth about 1 percent of what he had only a year ago. NPR's Lourdes Garcia-Navarro joins us now from Sao Paulo to talk about Batista's rise and fall. And to start, Lourdes, tell us a little bit about him. Who is he?

LOURDES GARCIA-NAVARRO, BYLINE: He was really a larger-than-life figure here. He had the cars, the boats, he's a speedboat racer; the wife, she was a former Playboy model. He was the richest man in Brazil, and he was everywhere. Dilma Rousseff, the president, only 18 months ago called him our standard and, above all, the pride of Brazil when it comes to a businessman in the private sector. He would fly journalists and investors in his private aircraft to see the megaport he was building. He was accessible, quotable, a Twitter fiend. Everyone knew him.

CORNISH: And we have a sense of how he spent his money. But how did he make it?

GARCIA-NAVARRO: He comes from money. His father was a government minister. But he is also a self-made man and he made a lot of that. He started off prospecting in the Amazon for gold, and then he rode the wave of the commodities boom here. He was into real estate, all sorts of things. But his crowning jewel was his oil company.

He promised great things, a megaport to take in the millions of barrels of oil he would be pumping from beneath the sea. But those barrels of oil didn't materialize, and that's when the bottom started falling out of his empire. As one editorial put it, everything was a house of cards. As you mentioned, he's lost 99 percent of his fortune by some estimates.

CORNISH: And he's also been called the face of Brazil's boom. Why is that?

GARCIA-NAVARRO: Well, he talked himself up as much as he talked Brazil up. He claimed Brazil was going to become the third biggest economy in the world. And as we heard, he said he was going to become the richest man. People, the media, bought into it. And as we rise, I guess so do we fall. So now, Eike has become the face of something else: Brazil's failure to make good on its promise, its slowing economy. His Icarus-like fall is being discussed as a symbol of all that's wrong with the Brazilian economy today.

CORNISH: But how is it being seen in Brazil and maybe elsewhere in the region?

GARCIA-NAVARRO: Well, people build you up and then they tear you down. And we've seen that story play over and over across the globe. At his zenith, he was a darling. He could do no wrong. And the Brazilian government had a big part to play in his success - easy credit, contracts. But now, everyone blames him for what they once celebrated him for, namely his big talk and his can-do spirit.

A lot of people are asking what's next for Batista. Well, he says there will be a comeback, that he's not finished, that he has a lot of companies that still have a great deal of potential, that he has many other deals in the works. But he has a lot of creditors and he's being sued. So a lot of analysts say it's going to be a tough road ahead for Mr. Batista.

CORNISH: That's NPR's Lourdes Garcia-Navarro in Sao Paulo, Brazil. Lourdes, thank you.

GARCIA-NAVARRO: You're welcome. Transcript provided by NPR, Copyright NPR.