Eike Batista, ranked as the world’s eighth-richest person last year, is no longer a billionaire after Mubadala Development Co. opted to convert an investment in his Brazilian companies into debt.

Batista’s EBX Group Co. owes $1.5 billion to Mubadala after the Abu Dhabi sovereign-wealth fund restructured a $2 billion investment, said three people with knowledge of the deal. The fund no longer has equity in EBX, which paid back $500 million after renegotiating earlier this month, said two of the people, asking not to be named because terms are private.

By converting to debt, Mubadala will be shielded from equity losses after Batista’s commodities and logistics startups plunged about 80 percent on average since the deal was announced in March 2012. Batista had already amassed at least $2 billion in personal liabilities, meaning the 56-year-old entrepreneur now has a net worth of about $200 million, according to the Bloomberg Billionaires Index.

After peaking at $34.5 billion in March last year, Batista’s fortune has evaporated after a failure to meet output and reserve targets at his oil company OGX Petroleo e Gas Participacoes SA prompted investors to sell shares and bonds of his group’s traded units. As a creditor, Mubadala will have priority over shareholders in the reshaping of the group as the billionaire seeks to sell assets, trim projects and reduce debt.

EBX, based in Rio de Janeiro, said July 10 that it restructured an agreement with Mubadala after the selloff pushed down the value of Batista’s companies to about half their combined total debt. The parties also agreed to protect the fund’s remaining investment, EBX said, without elaborating.

Batista’s flagship OGX rose 3.7 percent to 56 centavos in Sao Paulo yesterday, reducing a decline this year to 87 percent.

A Mubadala official, who asked not to be identified citing company policy, declined to comment on terms of the restructured arrangement. EBX’s press office declined to comment on the Mubadala agreement and didn’t respond to an e-mail seeking comment during a local holiday about Batista’s billionaire status loss.

Mubadala said in an e-mailed statement yesterday that it is among a “number of parties” that see significant potential value in some assets held by EBX. The fund remains in talks with EBX as Batista’s holding company continues to restructure its business, it said in the e-mail, without elaborating.

The Abu Dhabi firm is considering acquiring assets or stake in assets from Batista by swapping some of the debt, said one of the people with knowledge of the sale process.

Mubadala took a “preferred equity interest” in Batista’s Centennial Asset Brazilian Equity Fund LLC and other offshore vehicles, according to a joint statement in March 2012, the peak of the Brazilian group’s market value. The deal gave the government-owned fund 5.63 percent of each of Batista’s stakes in his publicly traded, closely held companies and any new ventures as well as “certain rights and protections,” the companies said at the time, without giving more detail.