OGX HQ in Rio de Janeiro
The headquarters of OGX Petroleo e Gas Participacoes SA, the cash-strapped Brazilian oil company controlled by former billionaire Eike Batista, is pictured in downtown Rio de Janeiro. Reuters

OGX Petróleo e Gas Participações SA (BVMF:OGXP3), the oil company owned by Brazil’s once-richest man Eike Batista, will file for bankruptcy, Reuters reported. OGX is the largest business in Batista’s holding company, EBX, which has been in trouble since it revealed in July that its oil production was in trouble.

Saddled with $5 billion of debt that it cannot pay back, the Brazilian oil company announced Tuesday that it had not reached an agreement with its creditors, and will file for bankruptcy in early November. This will be the largest business ever to fail in Latin America, Reuters reported.

OGX revealed that it will run out of funds, currently at $82 million, completely by early December. The company will suspend its payments for 180 days, and present a restructuring plan within a month.

According to the company, 90 percent of shares will be sold to meet the debt, leaving current shareholders with 10 percent of the company. Batista currently holds 50.14 percent of the company, which, according to this plan, would be reduced to a little over 5 percent by early 2014.

This is the last blow for Batista, who barely a year ago was Brazil’s richest man and a regular in Bloomberg’s billionaire index. The tycoon’s fortune has slipped through his fingers to the point that he is no longer considered a billionaire -- his net worth is currently at just $200 million.

OGX shares dropped 20 percent in São Paulo on Tuesday, as the news broke. The Bovespa index closed on Tuesday with a decline of a 1 percent.