RIO DE JANEIRO, Aug 29 (Reuters) - Shares of Brazilian oil company OGX Petróleo e Gás Participaões SA fell more than 20 percent in early trading in São Paulo on Thursday in the wake of speculation that it will swap stock for $3.6 billion of outstanding bonds, diluting existing shareholdings.
OGX, controlled by Brazilian tycoon Eike Batista, fell 21.1 percent to 0.45 reais, on track for its lowest close in seven weeks.
Rio de Janeiro-based OGX has lost almost 90 percent of its value this year after failing to meet production targets. Lower than expected output has led to concern that it will not have enough cash to finance future output and repay debt.
The stock fell 17.4 percent on Wednesday. (Reporting by Jeb Blount and Asher Levine; Editing by Gerald E. McCormick)