Related Work

1. Teaching Note | HBS Case Collection | May 2018

   Mubadala and EBX: To X or to X It?

   Nori Gerardo Lietz and Sayiddah Fatima McCree

   On April 3, 2013, Hani Barhoush and Oscar Fahlgren of Mubadala Capital (“Mubadala”) considered how to salvage Mubadala’s $2 billion preferred equity investment of a 5.63% stake in the EBX Group. At the time, EBX was the holding company of a myriad of subsidiaries and was one of the largest conglomerates in Brazil. EBX was founded by the larger-than-life character Eike Batista, at the time one of the wealthiest men in the world. EBX and its subsidiary companies were predominantly focused on commodities-based businesses including oil, gas, coal, and gold extraction, refinement and shipping. At the time of its investment, Mubadala valued the EBX Group at ~$27 billion. But within only 20 months, EBX’s value had declined significantly to ~$0.7 billion.

   Keywords: bankruptcy; private equity; Brazil; cross border; negotiations; UAE; oil and gas; Finance; Strategy; Negotiation; Insolvency and Bankruptcy; Private Equity; Restructuring; Energy Industry; Real Estate Industry; Shipping Industry; Financial Services Industry; Banking Industry; Brazil; Middle East;

   Citation:

   Lietz, Nori Gerardo, and Sayiddah Fatima McCree. "Mubadala and EBX: To X or to X It?" Harvard Business School Teaching Note 218-098, May 2018.  View Details

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2. Case | HBS Case Collection | March 2017 (Revised February 2018)

   Mubadala and EBX: To X or to X It?

   Nori Gerardo Lietz, Ricardo Andrade and Sayiddah Fatima McCree

   In April 2012, Mubadala, Abu Dhabi's sovereign wealth fund invested $2 billion in Brazilian conglomerate EBX, believing the company to be undervalued by the public markets. Shortly thereafter, however, EBX and its multiple business lines began to spiral downward. Hani Barhoush and Oscar Fahlgren, members of Mubadala's investment team, were now charged with leading the restructuring efforts on behalf of Mubadala. The situation was exceptionally complex and involved dealing with different creditors, untangling cross-collateral clauses from EBX’s subsidiaries’ loans, and foreclosing on personal guarantees from Batista. There were also strong political challenges, since most companies operated in tightly regulated markets, some were publicly-traded, and many had received substantial subsidized financing from Brazil’s Development Bank (BNDES). Finally, the country’s economic and political environments were rapidly deteriorating, with a combination of stagflation, rising interest rates, and successive popular demonstrations causing the gradual loss of governability and ultimate impeachment of President Dilma Vana Rousseff.

   Keywords: sovereign wealth funds; conglomerates; Investing; corporate structure; International; restructuring; Sovereign Finance; Business Conglomerates; Investment; Financing and Loans; Restructuring; Organizational Structure; Economy; Brazil; Abu Dhabi;

   Citation:

   Lietz, Nori Gerardo, Ricardo Andrade, and Sayiddah Fatima McCree. "Mubadala and EBX: To X or to X It?" Harvard Business School Case 217-065, March 2017. (Revised February 2018.)  View Details

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