RIO DE JANERIO, July 11 — An OGX Petroleo & Gas Participacoes SA shareholder is asking a Rio de Janeiro court to block asset sales and payments to companies affiliated with billionaire controller Eike Batista.

The case was submitted by Rio lawyer and professor Jorge Lobo on behalf of his son Marcio Lobo, who owns 84,000 shares in the Brazilian oil company, according to the filing, a copy of which was obtained by Bloomberg News. The filing couldn’t immediately be verified in records at Rio’s Fifth Business Court.

“OGX’s situation is of dramatic pre-insolvency,” according to the document e-mailed by Jorge Lobo, citing Standard & Poor’s and Fitch Rating Ltd.’s CCC ratings as examples of the company’s financial situation. EBX Group Co., Batista’s holding company, is “in a deep financial crisis,” he wrote.

EBX, created by Batista as an umbrella group for his group of commodities and energy startups, announced yesterday that it restructured a US$2 billion (RM6 billion) investment by Mubadala Development Co. after the billionare’s six publicly-traded companies lost a combined US$10 billion in market value this year. OGX has tumbled 87 per cent in 2013 after missing targets and saying it will abandon fields it had previously declared commercial.

The press departments of EBX and OGX in Rio declined to comment on the injunction request. Batista announced last month that OGX and EBX restructured debt and only has long-dated maturities. The restructuring “is clear evidence of EBX’s high level of commitment toward its obligations with stakeholders,” he said then, without providing further details.

Partner Search

Batista is seeking to bring in partners and inject fresh capital into OGX, a person with direct knowledge of the plan said last week. Grupo BTG Pactual, the investment bank adviser to Batista’s companies, is scouring for prospective oil field partners, according to the person, who asked not to be identified because negotiations are private.

Injunctions are necessary because there is “a high risk of default and sale of assets and rights,” said Jorge Lobo, who is a professor at Rio de Janeiro State University and has published a book called Shareholders Rights, according to his firm’s website.

The Lobos request that OGX be barred from paying back any debt it has with EBX or any of Batista’s other companies. On July 1, OGX said it won’t lease an oil platform from Batista’s shipbuilder OSX Brasil SA, as was planned, and may return another platform next year. OGX also said that it will pay OSX US$449 million immediately and continue to pay the platforms fees until they are sold or relocated.

Bonds Fall

OGX shares gained 13 per cent to 59 centavos in Sao Paulo yesterday while its dollar-denominated bonds due in 2018 fell 3 cents on the dollar to 22 cents.

“It is very much on people’s radar,” Russ Dallen, a fixed-income investor at Caracas Capital Markets, said in a telephone interview from Miami, referring to the case. “The 2018 bonds were down and the lawsuit just added to the trouble. It definitely is getting confusing.”

The case is 0236942-88.2013.8.19.0001, according to the Rio Judiciary’s website. — Bloomberg