Elliott affiliate emerges as frontrunner in Citgo auction
An affiliate of hedge fund Elliott Investment Management has become the leading bidder for the parent company of Venezuela-owned refiner Citgo Petroleum, potentially overtaking a group led by miner Gold Reserve, a U.S. court officer said Monday.
The update comes during the final stages of the PDV Holding auction, one of Citgo’s parent companies, after legal rulings encouraged new and improved bids, News.Az reports, citing Reuters.
Court officer Robert Pincus noted that Gold Reserve’s subsidiary, Dalinar Energy, has three business days to match or exceed the terms submitted by Elliott’s affiliate, Amber Energy, or risk losing the recommendation.
Dalinar had been previously recommended as the auction winner with a $7.4 billion bid before rival unsolicited offers emerged.
Amber Energy’s bid, raised on August 22, reportedly offers $5.86 billion to creditors and would settle an additional $2.86 billion in claims against Citgo’s parent company, PDVSA.
The proposed purchase includes both cash and non-cash considerations and is supported by creditor Koch Industries.
Gold Reserve criticized Amber’s proposal, saying the mining company would likely receive minimal compensation for the expropriation of its assets in Venezuela, valued at around $1.18 billion.
The auction proceeds aim to compensate at least some of the 15 creditors seeking to recover nearly $19 billion in U.S. courts since Venezuela expropriated assets and defaulted on debt in 2017.
A sale hearing before Delaware Judge Leonard Stark is scheduled for mid-September, when a final decision is expected.
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