Holders of Venezuelan bond ask New York court to protect their rights
Holders of a key bond defaulted by Venezuela’s state oil company PDVSA asked a New York judge on Thursday to ensure they can claim compensation from proceeds expected in an auction of shares in the parent of Venezuela-owned U.S. refiner Citgo Petroleum, News.az reports citing Xinhua.
The holders’ case in New York about the validity of their claim against Venezuela has not been resolved, but if they secure an injunction in the meantime, they could ultimately block the transfer of shares in Citgo’s parent PDV Holding to the auction’s winner.
A $7.4 billion bid for PDV Holding submitted by a group led by a unit of miner Gold Reserve was recommended last week as the auction’s winner by a court officer overseeing the bidding round in Delaware.
The court-organized auction aims to pay back Venezuela’s creditors after the South American country’s debt defaults and expropriations. But contrary to some competing offers, the Gold Reserve group’s bid does not include an agreement to pay the bondholders.
The holders are getting ready to move with an injunction if the Gold Reserve group’s offer is ultimately approved in Delaware under the proposed terms.
"We don’t want to interfere with the sale," Christopher Clark, who represents the holders, told Judge Katherine Polk Failla from the Southern District of New York, in a court hearing. "All we are trying to do is to protect our rights. Delaware is not the proper forum for that."
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