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Elliott affiliate bids for Citgo parent company as competition heats-up

A filing updating the court-organized auction shows that an affiliate of hedge fund Elliott Investment Management raised its bid on the Venezuelan-owned parent of U.S. refiner Citgo Petroleum, bringing the total to $8.82 billion.

The auction of PDV Holding was relaunched by the government in January, after a yearlong process that ended in chaos amid disputes over Citgo’s value and parallel legal proceedings.

Last month, an officer of the Delaware Court supervising this auction recommended that a group headed by Gold Reserve bid $7.4 billion. The court received an $8.45 billion offer from a Vitol subsidiary last week, while the bid of Elliott affiliate Amber Energy came later.

Next week, the court will hold an hearing to decide on the winner.

Amber Energy's higher offer includes a payment provision for holders of a Venezuelan bond that has defaulted, according to an auction letter sent on Tuesday by Red Tree Investments, one of the creditors.

The company stated in its filing that "Red Tree is of the opinion that Amber Energy, under Delaware law, is the highest bidder and should be selected to win the bid."

Amber Energy didn't immediately respond to a comment request.

Citgo and PDV Holding, both subsidiaries of Venezuelan state oil company PDVSA, are listed on the NYSE. In the Delaware case, the court found PDV Holding responsible for Venezuela's obligations, allowing creditors to sue the refiner for payment. Reporting by Marianna Pararaga Editing Bernadettebaum, Kirsty Donovan

(source: Reuters)