Brazil’s once-richest man lost $19 billion last year. And it’s only getting worse.

Dark days for Eike.
Dark days for Eike.
Image: Bloomberg / Patrick Fallon
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Brazilian billionaire Eike Batista’s commodities empire seems to be unraveling with remarkable speed. The announcement yesterday that his flagship oil and gas production company OGX would likely shutter its only productive wells next year was just the latest blow.

Shares of OGX lost nearly all of their value over the last year. The stock is down more than 15% today in volatile trading as, effectively, a penny stock. With fears of default looming, investors are dumping OGX bonds for cents on the dollar, according to Bloomberg. S&P cut its credit rating to CCC yesterday, eight steps below investment grade.

Batista’s fortunes were already battered last year. In 2012, he was ranked as Brazil’s richest man and seventh on  Forbes’ billionaires list. When Forbes updated its calculations in March this year, they plopped him down to #100 on that list, shrinking his net worth by $19.4 billion, or nearly two-thirds of his wealth.

As Batista’s business empire looks increasingly desperate for cash, Batista himself may be asked to cough up some of his dwindling fortune to keep the company afloat. Moody’s credit analysts note that in October 2012, Batista granted the company the right to demand he buy as much as $1 billion in new shares in the company for $6.30 reals (or $2.78) a share, in something known as a put option.

“This option underpins my confidence in OGX’s technical expertise and quality assets, as well as the new opportunities that the oil and gas sector offer to OGX,” Batista was quoted as saying in the press release trumpeting the option.

That $1 billion would sure come in handy right about now, noted Moody’s analysts. “However, it is not clear if Mr. Batista can meet the full amount of the put obligation,” they wrote in a research note yesterday.