SAO PAULO (AP) -- Eike Batista, not long ago Brazil's richest man, has resigned as chairman of energy company MPX Energia after it was forced to call off a planned IPO, the company said Thursday.
MPX is part of Batista's EBX Group, a conglomerate that also includes logistics and mining firms.
The company said in a statement that MPX's board of directors approved a capital increase of 800 million reals ($356 million) at 6.45 reals ($2.96) per share. It said the increase replaced the planned IPO "after market conditions substantially worsened in the last few weeks."
The capital increase process is expected to be concluded in 40 days.
The statement did not say how much money the company hoped to raise with the IPO, but local media said MPX expected it would come in at 1.2 billion reals ($533 million).
MPX shares rose more than 9 percent on the Sao Paulo Stock Exchange after Batista's resignation and the capital increase were announced.
MPX's financial adviser, BTG Pactual Bank, recommended the IPO's postponement, the statement said.
It said the recommendation was justified, given the "current adverse equity market in Brazil and abroad."
The money collected with the capital increase is expected to help strengthen MPX's capital structure and business plan, it added.
German utility E.ON, which before Thursday's announcement had a 36 percent stake in MPX, will invest 366 million reals ($163 million) as part of the capital increase, expanding its stake in MPX. The statement did not say by how much E.ON's stake would rise. BTG Pactual Bank will cover the remainder.
Jorgen Kildahl, MPX's former vice chairman of the board and member of the board of management of E.ON replaced Batista as chairman.
Batista's resignation is emblematic of the problems faced by his conglomerate, which has been beset by rising debt and missed output targets.
"Eike created an empire with companies in the oil and gas, mining, naval construction, energy and logistics sectors, all of which were sustained more by promises than by results," the Folha de S. Paulo newspaper said in a Thursday editorial.
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