Brazilian energy magnate Eike Batista's troubled oil firm OGX said it was foregoing a $44.5 million interest payment due Tuesday as it scrambled to avoid debt default.
The company said in a note sent to the market that it opted not to pay because it "is in a process of revising its capital structure while at the same time revising its business plan."
Investment banks Lazard and Blackstone have been selected to coordinate negotiations with creditors, including those holding notes issued by OGX Austria, OGX said.
It added it has 30 days to take necessary measures before the debt matures.
In December, the company must also pay interest on $110 million in notes due in 2018.
Media reports put OGX's debt pile at $3.6 billion.
Analysts now expect OGX to seek bankruptcy protection as it negotiates with creditors to avert a debt default.
OGX, Brazil's second biggest oil and gas company by market value after state giant Petrobras, is the jewel in the crown of Batista's flagging EBX empire.
But its share price plunged 16 percent last week on fears it would be late in meeting the scheduled interest payment on 2022 dollar bonds.
The Economatica consultancy estimated OGX was worth $14.2 billion at the end of last year but put the figure at $1.3 billion at the start of September.
The company has been the worst-hit in the Batista group, forcing him to cast around for new investment to keep his oil projects afloat.
Batista's EBX has interests in oil, energy, mining, logistics, coal mining and offshore industries but the conglomerate has felt the heat with Brazil struggling to maintain its recent stellar growth trajectory.
Batista's recent market woes have cut an estimated $30 billion of value from his empire and the man who until earlier this year was purportedly the world's seventh richest man is now worth an estimated $900 million.
OGX last year suffered a market hit when it was forced to revise crude production estimates and suspended development at three offshore oil fields.