Citgo parent auction enters final stage as sale hearing begins
A long-awaited sale hearing to finalize the U.S. court-organized auction of PDV Holding, parent of Venezuela-owned Citgo Petroleum, kicked off on Monday in Delaware, with bidders and creditors battling over the future of the refiner.
Judge Leonard Stark will preside over four days of testimony from parties, witnesses, and experts before selecting a final winner. The hearing could extend into October if more evidence is required, News.Az reports, citing Reuters.
At stake is control of Citgo, the seventh-largest U.S. refiner, whose parent was ruled liable for Venezuela’s debts. The case has drawn in 15 creditors, including expropriated companies and defaulted bondholders, who together seek up to $19 billion from auction proceeds.
In July, court officer Robert Pincus named Gold Reserve, a Canadian miner, as the frontrunner. But a last-minute bidding war shifted his recommendation to Amber Energy, an affiliate of Elliott Investment Management, with a $5.9 billion bid that includes a $2.1 billion cash payment to holders of Venezuela’s 2020 PDVSA bonds.
Amber’s offer has sparked fierce opposition. Critics argue the bond issue is still under dispute in a separate New York court case, and that creditors should wait until its resolution before any payout. Gold Reserve, Venezuela’s lawyers, and several creditors back this position.
“The September 15 auction hearing will serve as the first stress test of whether the Amber bid can survive the full gauntlet of procedural, legal, and geopolitical risks,” said lawyer Jose Ignacio Hernandez of consultancy Aurora Macro Strategies.
The outcome of the Delaware proceedings will be pivotal in deciding how the $19 billion in claims will be divided among creditors who have pursued Venezuela’s U.S. assets since 2017.
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