The iron-ore mining company controlled by embattled Brazilian tycoon Eike Batista filed for bankruptcy Wednesday, the third unit of Batista’s EBX conglomerate to do so this year.
Batista’s failed oil and gas company OGX sought bankruptcy protection in October 2013 and shipbuilding company OSX Brasil petitioned for bankruptcy in November 2013.
MMX Sudeste Mineracao holds the majority of assets that belong to Batista’s MMX Mineracao e Metalicos. Both units are part of the EBX group that included holdings in the oil and gas sectors.
Slumping iron-ore prices and weak demand have eroded the mining unit’s profit margins.
The outcome of the bankruptcy petition could determine the fate of debt burdened MMX Mineracao e Metalicos, Reuters said.
Batista, 57, is set to face trial on November 18 for alleged financial crimes including insider trading and market manipulation.
He is accused of misleading investors by making overly optimistic statements about OGX’s Campos Basin assets and not following through with a $1 billion investment as the company failed.
OGX is a publicly listed exploration company that, prior to its 2013 bankruptcy, was Brazil’s second largest oil company.
Most of the Campos fields never came close to meeting production targets and four of the five fields were declared non-commercial.
Batista is also accused of insider trading, having sold off his OGX shares in 2013 as the company’s problems mounted.
The trades allegedly netted Batista $148.4 million, Brazilian news source Folha de Sao Paulo said.
In September, a Brazilian judge froze $639 million of Batista’s assets including $50 million investigators found in his bank accounts.
The frozen assets could be used to pay compensation for any losses Batista is found culpable for.
OGX’s bankruptcy sent Batista’s other holdings into a spiral.
Batista has denied any wrongdoing.
If convicted he could face up to 13 years in prison.
Batista, once the richest person in Brazil, said in September that his net worth has plummeted to negative $1 billion.