Batista stands down at MPX as Germany's Eon takes control Brazilian billionaire Eike Batista Brazilian billionaire Eike Batista's struggling empire of oil, mining and energy companies began to unravel on Thursday as he resigned as chairman from MPX Energia after Germany's Eon announced it would take control of the power generation arm. Germany's largest utility by sales, which is already the biggest shareholder in MPX, would tighten its hold over the company by subscribing to half of an R$800m capital increase in the unit. BTG Pactual, the Brazilian investment bank, would be "committed" to covering the remainder. IN Energy Eon said Mr Batista would resign as chairman and the company would be renamed. It did not say whether this would include removing the trademark "X," which signifies the promise of multiple returns in the names of all the companies in Mr Batista's EBX Group. "Eon appreciates Eike's great contribution to developing MPX to be one of the leading energy companies in Brazil since he founded it in 2001," said Jørgen Kildahl, a member of Eon's board of management who will replace Mr Batista and become interim chairman of MPX. Mr Batista will also step down from MPX's board of directors. "Building on this, Eon now is supporting the further development of MPX, a fundamentally solid company," Mr Kildahl said. The loss of control of MPX, one of the more established companies of Mr Batista's group, comes as the tycoon is struggling to save his flagship oil company, OGX, after it repeatedly missed production forecasts. The company invested heavily in its first oil production field, Tubarão Azul in the Campos Basin, only to announce this week that the project was a flop and would probably be wound down this year. The crisis at OGX is now threatening to unravel the entire group. Mr Batista, who once boasted he would overtake Mexican telecoms magnate Carlos Slim as the world's richest man, has suffered a precipitous decline in his personal fortune, from $30bn a year ago to about one-third of that as of March, according to Forbes. The deal with Eon to hand over MPX is likely to become the template for Mr Batista as he exits other parts of the heavily indebted group, according to a report in Valor Economico. Without citing sources, the newspaper said Mr Batista had agreed with his adviser BTG Pactual to dismember the group, starting with MPX and another more valuable asset, mining unit MMX, in which Mr Batista would be left with minority stakes. His Brazilian banking creditors would be repaid in full but international bondholders of OGX would have to take a severe haircut as part of a bond buyback or mix of buyback and debt for equity exchange. Mr Batista's EBX Group was not immediately available for comment, but the company has said in the past it is refinancing its short-term debt and looking for partners in its various businesses. On Thursday, neither Eon or MPX disclosed what the shareholding structure of the company would be after the capital injection. The partners originally expected to raise the money through a public share offering but this had to be cancelled following a deterioration in market conditions. In a prospectus released last month for the share offering, the company said Eon's stake in MPX at the time was 36 per cent and Mr Batista's 29 per cent while the equity arm of Brazil's development bank, BNDES, held more than 10 per cent. "BNDES . . . is currently analysing whether to participate in the capital increase," Eon said on Thursday. Any possible participation by Mr Batista in the capital increase was not disclosed. But he is thought to be struggling to raise cash after having committed to injecting $1bn into OGX through a put option. Eon said MPX would move its offices to those of an existing joint venture with the German group. While most of Mr Batista's companies are still at a very early stage, MPX is one of the most advanced in its plans. The company is producing power from plants with total capacity of 1,700 megawatts. Additional capacity of 1,100MW was due to come online this year as part of a grander plan to deliver a portfolio of projects with capacity of 10,000MW, Eon said. "MPX is now in a position to speed up significantly and to focus on the implementation of its ambitious growth plan," said Eon's chief executive, Johannes Teyssen.