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U.S. Court Could Reopen Bidding for Oil Refiner Citgo After Failed Deal
A court adviser has proposed that the court-ordered auction of assets of Venezuela’s PDV Holding, the parent company of refiner Citgo, should be restarted after the current winning bid has failed to gather enough support from the creditors of the Venezuelan group.
The sale process of shares to pay creditors and claimants against Venezuela’s oil asset appropriation and debts owed by Citgo was launched by the Delaware court in October 2023.
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Overall, creditors and claimants have sought to recoup at courts in Delaware a total of $24 billion in claims and arbitration awards against Venezuela.
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Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels per day (bpd). It has plants in Texas, Louisiana, and Illinois, along with pipelines and a gasoline distribution network that supplies 4,200 outlets in the United States.
After the end of the bidding process to sell PDV Holding, the Special Master appointed by the Delaware court to oversee the sale, Robert Pincus, at the end of September selected Amber Energy to acquire Citgo.
Amber Energy, which is backed by a group of strategic U.S. energy investors, including Elliott Investment Management, earlier this month made a new $5.3-billion offer for Citgo’s parent company, $2 billion lower than the initial bid of $7.3 billion.
The revised offer followed complaints from many creditors of Citgo, who have been unhappy with the structure of the initially proposed transaction which envisages a trust structure for payments. The new bid has offered creditors would be paid directly after the acquisition is finalized.
With the creditors opposing the deal, Pincus now proposes to re-open Citgo’s financial and operational data to bidders and formally restart the court-ordered sale on December 18, according to court filings cited by Reuters.
The new plan from the special master envisages accepting bids for Citgo’s parent company for three months beginning on December 18.
By Tsvetana Paraskova for Oilprice.com
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