UPDATE 1-Brazil's MPX scraps share sale as Batista quits as chairman

Thu Jul 4, 2013 6:53am EDT

* MPX shareholders approve $353.7 mln capital injection

* Founder Eike Batista agrees to step down as chairman

SAO PAULO/BRASILIA, July 4 (Reuters) - Embattled billionaire Eike Batista stepped down as chairman of MPX Energia SA on Thursday as dwindling market confidence forced the Brazilian power producer to scrap a planned share offering.

The Rio de Janeiro-based company halted the offering, which it sought to raise an estimated 1.2 billion reais ($528 million) from controlling and minority shareholders, because of a deterioration in market conditions, according to a securities filing. Grupo BTG Pactual SA, the company's financial advisor on the plan, recommended the decision, the filing said.

MPX will instead sell 800 million reais worth of shares at 6.45 reais each in a so-called private placement, the filing added. EON SE, which in recent months became a major shareholder of MPX, agreed to subscribe 367 million reais worth of stock in the private placement, while BTG Pactual committed to buy the remainder.

The private placement should be concluded within the next 40 days. A spokesman for E.ON, Germany's largest utility and major shareholder in MPX said of Batista's resignation as MPX chairman that it was "his personal decision,."

A replacement for Batista, who founded MPX in 2001, was not announced in the filing. Batista has seen his fortune shrink by more than $20 billion over the past 1-1/2 years after repeated delays and as output misses in his Grupo EBX conglomerate of mining, energy and logistics companies dented investor confidence.

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