According to a court document, an affiliate of Elliott Investment Management was named the presumed winner on Friday in a U.S. court auction of shares in the parent company of oil refiner Citgo Petroleum with an offer that places the Venezuela-owned company’s enterprise value at up to $7.286 billion.
Shares of Citgo parent company PDV Holding are up for auction by a U.S. district court in Delaware in order to settle claims totaling up to $21.3 billion against Venezuela and state-owned oil company PDVSA for loan defaults and expropriations. Following the conclusion of the second and final round of bidding earlier this year, agreements were negotiated.Those with knowledge of the situation indicated that the offer consists of both cash and credit. According to the court, it is contingent upon the settlement of claims made by holders of defaulted Venezuelan bonds who are pursuing the same assets.
The winning bidder was identified by U.S. court officer Robert Pincus as the Elliott unit Amber Energy. However, he noted that “the buyer may elect to cancel the planned purchase agreement” in the event that a request to stop bondholders’ concurrent lawsuits is unsuccessful.
Gregory Goff, the CEO of Amber Energy, stated, “We will prioritize operational excellence to establish a foundation for stability, strength, and long-term success.” Goff joined Exxon Mobil (XOM.N), opens new tab’s board three years ago after resigning as vice chairman of Marathon Petroleum in 2019.
Elliott choose not to respond.
Following billions of dollars in gains from its holdings in refiners Marathon Petroleum (MPC.N), opens new tab, and Phillips 66 (PSX.N), opens new tab, the investment firm is pursuing the seventh-largest U.S. oil refiner.
Citgo achieved its second-best yearly result last year, earning $2 billion. It reported a $385 million profit for the first half of this year, and at the end of the quarter, its liquidity was $3.8 billion.
Elliott competed with rival bids from American oil refiner CVR Energy (CVI.N), opens new tab, and miner Gold Reserve (GRZ.V), opens new tab, by submitting offers in the two bidding rounds. Gold Reserve withdrew from the auction last week, alleging procedural delays and ambiguities.
Citgo’s attorneys described the $7.286 billion value as unsatisfactory because it is nearly comparable to the highest offer made during the first bidding round. During the legal proceedings, the refining company was valued at a range of $11 billion to $13 billion.
A portion of the 26 claims that the court approved will be covered by the offer; bondholder provisions will not be included.
Crystallex, Tidewater (TDW.N), opens new tab, ConocoPhillips (COP.N), opens new tab, O-I Glass (OI.N), opens new tab, Huntington Ingalls (HII.N), opens new tab, ACL Investments, Red Tree Investments, and Rusoro Mining (RML.V) are a few of the companies that stand to gain from the confirmation of the Elliott affiliate’s offer.
TERMS IMPOSSIBLE
The judge originally stated that the offer chosen would have to be definitive and binding, which is why Venezuelan parties to the case are opposing Elliott’s conditional bid.
“This action does not signify the process’s final closure or the end of the road,”
