You can say that again

29 June 2012 By Christopher Swann

Stop us if you’ve heard this before. A flamboyant energy boss running a maze-like empire built on lofty promises and burning cash suffers a big loss of confidence from investors. Yes, it’s Chesapeake Energy and CEO Aubrey McClendon. But it’s also Brazil’s EBX and Eike Batista.

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OGX Petroleo e Gas, Brazil’s second-largest oil company by market value, said on June 28 that Chief Executive Paulo Mendonca has resigned but will remain an adviser to the company’s controlling shareholder.

Mendonca’s departure follows a 45 percent fall in the company’s shares in the two days since cutting its output targets on June 26.

The share decline wiped 17 billion reais ($8.2 billion) off OGX’s market value, costing Brazilian billionaire Eike Batista, the company’s controlling shareholder, some 10 billion reais of his paper wealth.

Mendonca will be replaced by Luiz Eduardo Carneiro, chief executive of shipbuilder and leaser OSX Brasil, OGX said in a Brazilian securities filing. OSX is also part of Batista’s EBX empire.
An earlier version of this item misstated the timing of the CEO resignation in paragraph two.

Context News

Mendonca’s departure follows a 45 percent fall in the company’s shares in the two days since cutting its output targets on June 26.

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