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Batista Party Boat Departs Rio as Olympic City Loses Patron (3)

September 04, 2013

Party Boat Departs Rio as Olympic City Loses Billionaire Patron

Brazilian businessman Eike Batista kisses girlfriend Flavia Sampaio during a fashion event at his yacht Pink Fleet, at Marina da Gloria in Rio de Janeiro on Nov. 11, 2008. Photographer: Berg Silva/Globo via Getty Images

The Pink Fleet party boat owned by Eike Batista has left Rio de Janeiro’s central marina as the former billionaire unloads luxury assets and retreats from projects in the city after his highly publicized difficulties.

The oil and mining magnate bought the Pink Fleet ship in 2007 and overhauled it to run tours and host parties in Guanabara Bay, home to Rio’s iconic Sugarloaf mountain. The vessel stopped booking tours in January, left the Marina da Gloria in July and now is docked at a distant shipyard. A ship broker familiar with Batista’s efforts to find a buyer said his EBX Group Co. has considered selling it for scrap to avoid tourism licensing fees.

The ship, registered as Spirit of Brazil VII, underscores how Batista’s decline has hobbled the city’s most visible patron a year before it hosts the soccer World Cup and three years before the Olympic Games. Batista, whose wealth plummeted by more than $30 billion since early 2012, intended to invest about 800 million reais ($339 million) in Rio projects, according to a video published by EBX in 2012. Now he has scaled back efforts to refurbish a landmark hotel and improve security in the slums.

The 54-meter (177-foot) Pink Fleet, bearing the sunburst logo inspired by the Inca symbol of wealth and optimism that Batista uses as his corporate logo, is now anchored at the Cassinu shipyard in Sao Goncalo, across the bay from the marina where the wealthy dock their yachts.

Jet Sale

Batista tried to sell the vessel to eliminate the 300,000 reais he was spending in monthly maintenance fees, O Estado de Sao Paulo newspaper reported this week. The objective now is to break the ship apart and sell its pieces, the newspaper said, without saying how it got the information.

Batista invested 35 million reais to buy and refurbish the ship, newspaper Jornal do Brasil reported in 2008. It’s worth about $2.5 million on the international market and much less as scrap, said the ship broker, who asked not to be named because EBX requested the information remain confidential.

The EBX press office in Rio declined to comment on the status of the ship in an e-mailed statement.

In May, Batista put his Embraer Legacy 600 jet up for sale on aviation publication Controller. The model has a list price of $26 million, according to Embraer SA. (EMBR3) Veja magazine reported that the plane was sold in July to Bank of America Corp. (BAC:US), which then leased it. Batista also sold an Embraer Phenom 300 plane and a helicopter, columnist Ancelmo Gois reported on July 24 in Rio-based newspaper O Globo.

The EBX press office declined to comment on the sales in an e-mailed statement.

Repay Debts

Batista, who routinely appeared at business conferences in Brazil and abroad during his rise in global wealth rankings, has withdrawn from public view this year. On July 19 he broke his silence by publishing an opinion piece in newspaper Valor Economico in which he promised to pay back his debts and said auditors were partly to blame for building up shareholder expectations.

Batista has also shut down philanthropic efforts and business projects in Rio. EBX concluded in December 2012 its participation in a project to clean up Rio’s scenic lagoon in partnership with the city and state governments after spending 23 million reais since 2008, the company press office wrote in an e-mailed response to questions. OGX Petroleo & Gas Participacoes SA, Batista’s oil company, last month halted the 20 million reais annual contribution it has made since 2010 to aid the pacification process in the city’s hillside slums.

OGX Shares

OGX fell 2.4 percent to 41 centavos at the close in Sao Paulo today. The stock is down 91 percent this year after missing output targets and announcing plans to abandon projects it had previously declared commercial. Batista sold 177.2 million shares, or 5.49 percent of OGX, between Aug. 29 and yesterday, the company said in a regulatory filing today.

After working for years to renovate the landmark Hotel Gloria, where Albert Einstein completed his theory of photons in 1925, Batista has agreed to sell the property to Switzerland-based investment fund Acron AG for 225 million reais, Veja reported Aug. 31. Acron declined to comment in an e-mail. Batista’s real-estate unit REX, which controls the hotel project, also declined to comment in an Aug. 31 e-mail statement.

Rio ‘Soldier’

“I am a soldier of Rio de Janeiro and will continue being a soldier,” Batista said during a March 2011 speech. “I don’t need a house in Cote d’Azur, I don’t need a flat in New York; here everything is much better.”

The plunge in Batista’s wealth began about a year later, when OGX reported oil production below its announced targets, hurting his ability to go ahead with their port, shipbuilding and mining projects. Since then, he has practically dropped out of the domestic and international conference circuit.

Batista, who in 2011 said he would surpass Carlos Slim and Bill Gates to become the world’s richest man, often spoke of his plans to modernize and beautify Rio while he harnessed Brazil’s natural resources to amass wealth. In front of the Hotel Gloria, he intended to revamp the marina where soap opera stars and politicians partied on the Pink Fleet. The REX division was created in 2008 to invest in real estate and urban development. He also invested in the city’s biggest music festival, Rock in Rio, and sponsored a volleyball team.

“It’s a pity that this cycle of difficulties has occurred,” Julio Bueno, Rio state’s economic secretary, said in a July 15 interview. “Very important investments from the Grupo X have been contemplated in Rio.”

To contact the reporters on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net; Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net

To contact the editors responsible for this story: Andre Soliani at asoliani@bloomberg.net; James Attwood at jattwood3@bloomberg.net


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