In an emailed statement sent just after midnight, OGX Petróleo e Gas Participações SA said its months-long talks with its bondholders had ended. The Brazilian oil and gas company had been negotiating with holders of its bonds valued at USD3.6 billion. The bonds would be due in 2018 and 2022.

OGX had failed to produce the expected oil output targets, which prompted the cash-strapped oil company. The company is controlled by Brazilian tycoon Eike Batista.

OGX is currently in debt of over USD5 billion. Three sources told Reuters that OGX would be filing for bankruptcy protection in a local court. The filing might happen as early as Tuesday, the sources added. Should it happen, the filing would be the biggest in Latin America, according to Thomson Reuters data.

The 30-day grace period of OGX to pay off interest to its investors was to expire soon. OGX had to pay a whopping USD44.5 million so it would not default on its bond payments.