OGX Petroleo e Gas Participacoes, the main oil company owned by Brazilian businessman Eike Batista, is preparing to file for bankruptcy, according to Emily Glazer and Luciana Magalhaes of The Wall Street Journal. They cite “people familiar with the matter.”

Eike Batista

OGX prepares reorganization plan

According to their sources, the oil giant is preparing what’s called a judicial recovery plan which sets out a path for reorganization. That’s similar to how streamlined U.S. bankruptcy filings work, they report. This is a bit different from the traditional process followed by Brazilian companies filing for bankruptcy. That traditional process usually ends in liquidation.

The filing is expected sometime over the next week.

OGX struggles with billions in debt

Although OGX was once the main part of Batista’s empire, it has not been meeting its targets for production and is running very short on cash. OGX has been running with approximately $3.6 billion in debt, and the company has reportedly been trying to negotiate with creditors for a restructuring plan. Many of those creditors reportedly went to Brazil this week to meet with OGX’s management and advisors.

The company reportedly asked for a capital injection of $75 million, but the creditors didn’t immediately answer its request. The creditors are worried that they won’t get their money back from the struggling oil company.

Earlier this month, OGX missed a $45 million interest payment on a bond. Another $100 million payment is due in December. The oil company is using what’s left of its cash balance to begin production at what it believes could be one of its most productive holdings. That property is an oil field in Rio de Janeiro.

Creditors aren’t the only ones worried about doing business with OGX. Suppliers are also reportedly hesitating about continuing to do business with the company as it falls further and further into debt. Shares of the company’s stock have dropped over 90% over the last year. They’re down another 11% after news of the imminent bankruptcy filing was reported.