Brazilian oil services provider Lupatech missed interest payments on $275 million of perpetual bonds two weeks after reporting annual losses doubled from a year earlier

Brazil’s Lupatech Misses Dollar Bond Payment After Loss Doubles

Lupatech Ezion

Brazilian oil services provider Lupatech SA (LUPA3) missed interest payments on $275 million of perpetual bonds two weeks after reporting annual losses doubled from a year earlier.The company said in a filing to securities regulators that it missed a $6.79 million payment on the bond, and that it hired Bank of America Corp. as a financial adviser as it seeks to raise funds by selling assets.

“Lupatech has been intensely working to balance its capital structures with its capitalization executed in 2012 in selling assets that are not considered strategic,” according to the filing from the Caxias do Sul, Brazil-based company.

Lupatech reported March 28 that its net loss surged to 574 million reais ($291 million) in 2012. The company made 17 acquisitions from 2007 through 2010 in anticipation of increasing sales as Brazilian oil companies led by Petroleo Brasileiro SA sought to tap the largest crude discoveries in a decade. Local content laws, designed to boost Brazil’s oil- service and shipping industries, oblige producers to use minimum amounts of locally manufactured products.

A spokesman for Lupatech who works for FSB Comunicacoes declined to comment beyond the filing.

Lupatech’s restructuring marks at least the fourth time a Brazilian company has halted payments on dollar bonds since February 2012.

Electric utility Centrais Eletricas do Para SA, parent Rede Energia SA and lender Banco Cruzeiro do Sul SA defaulted on a combined $2.3 billion last year, according to data compiled by Bloomberg.

To contact the reporters on this story: Boris Korby in New York at; Peter Millard in Rio de Janeiro at

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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