The results have been tallied and Eike Batista has risen to the top 10 of Forbes’ billionaires list and joined the company of magnates such as Bill Gates, Warren Buffett, and Lakshmi Mittal. Batista is now the world’s 8th richest person with a net worth of $27 billion, quadruple his reported 2008 net worth. In 2009 he was ranked #61 ($7.5 billion), up from #142 ($6.6 billion) in 2008. There were 18 Brazilians on the list this year, the most of any country in Latin America (36 total).
His net worth will likely jump again this month with the IPO of OSX Brasil SA, a shipbuilding and oil services company. If successful, OSX would be the largest IPO this year and could raise 9.9 billion reais ($5.5 billion). Shares are scheduled to begin trading on March 19.
The table below illustrates how the component companies of Batista’s EBX Group have fared and his ownership position in each. As one can see, each of EBX Group’s listed companies performed well last year. MMX and LLX were big winners for Batista, skyrocketing 346% and 570%, respectively. OGX and MPX also did well, increasing 225% and 231%.
Eike Batista is increasingly being portrayed as the face of Brazil’s new prosperity. According to Forbes senior editor, Luisa Kroll, “Batista is a terrific illustration of how the Brazilian economy is doing.” I tend to find these comments worrisome. A country’s economic position does not and should not rest on the shoulders of one man, even figuratively. If it does, investors may have reason for concern. Bill Gates, #2 on the Forbes List at $53 billion, was never characterized as such, even during the infamous tech boom of the 1990s. While this symbolism is not entirely Batista’s fault, he seems to welcome it. Furthermore, unlike Warren Buffett, #3 at $47 billion, who is known for his humility and rarely speaks of his wealth, Batista doesn’t shy from his personal financial ambitions. He has vowed to become the world’s richest man and the world’s biggest philanthropist—although he has a long way to go on the latter.
Eike Batista’s success has also not been without controversy. Police raided his home in 2008 alleging he smuggled gold and unfairly influenced the acquisition of a railroad. The investigation has since been dropped with no charges filed. While I have no reason to suspect Mr. Batista of any wrongdoing, if further allegations were to surface it would undoubtedly shake investor confidence. Let us hope that never occurs, both for the sake of EBX Group and Brazil as a whole.
