Latest news with #Citgo
Reuters
13 hours ago
- Business
- Reuters
US Treasury extends license protecting Citgo from creditors to December
June 20 (Reuters) - The U.S. Treasury Department on Friday extended a general license protecting Venezuela-owned refiner Citgo Petroleum from creditors through December 20, the department's website showed, opens new tab. Washington has protected the Houston-based company from creditors in recent years even amid a court-organized auction of shares in its parent company, PDV Holding. Once selected, the auction's winner must be approved by the Treasury Department's Office of Foreign Assets Control. The license temporarily bans transactions with a Venezuela-issued bond collateralized with Citgo equity. The previous license was set to expire on July 3. As part of an eight-year case introduced by miner Crystallex against Venezuela, a federal court in Delaware has found Citgo's parent PDV Holding liable for Venezuela's debts stemming from debt defaults and asset expropriations. The auction, whose winner will by selected next month, is expected to compensate some of those creditors.
Bloomberg
5 days ago
- Business
- Bloomberg
Elliott Affiliate Weighs New Bid for Citgo as Legal Risks Ease
An Elliott Investment Management affiliate is considering rejoining the bidding for Citgo Petroleum Corp. 's parent company, according to people familiar with the matter. The affiliate, Amber Energy, had pulled out of the sale last month, leaving three groups of bidders to compete for the asset, including Red Tree Investments LLC, Vitol and a consortium led by Gold Reserve. But since then, other potential buyers, including TPG Angelo Gordon, have entered the contest, lured by easing legal risks related to the sale.
Yahoo
5 days ago
- Business
- Yahoo
Is Venezuela about to lose Citgo, its most prized foreign asset?
By Marianna Parraga HOUSTON (Reuters) -A U.S. court-organized auction of shares in the parent company of Venezuela-owned Citgo Petroleum has entered its final stages, with bidders submitting improved offers for the U.S. refiner and creditors hoping to recover a portion of the proceeds. The auction stems from an eight-year-old case that Canadian miner Crystallex initiated in Delaware against Venezuela. The court found Citgo's parent, PDV Holding, liable for Venezuela's debts and expropriations, paving the way for over a dozen other creditors to pursue compensation of nearly $19 billion. Despite delays, the auction has progressed, especially since last year, through two bidding rounds. A $3.7 billion offer by Contrarian Funds' affiliate, Red Tree Investment, was selected in March as a starting bid and is now being challenged by rivals. Besides Red Tree, companies competing with improved bids include trading house Vitol, and a consortium including an affiliate of Gold Reserve, Rusoro Mining, and Koch. Elliott Investment Management's affiliate Amber Energy is also considering whether to submit a bid, following a separate court decision favoring a possible offer, according to a source familiar with the matter. A court officer overseeing the auction, who last month said new bidders could emerge right before a June 18 deadline to submit offers, must recommend the auction's winner by July 2. The judge and parties in the case are expected to attend a final hearing on August 18. How big a loss could this be for Venezuela? If Venezuela, which owns 100% of the refiner and its U.S.-based parent companies, fails to retain some equity, it would lose its most significant overseas asset. The country, with foreign debt reaching $150 billion, has already lost other assets in Europe and Asia to creditors. Delaware Judge Leonard Stark has left open a possibility for parties representing Venezuela to submit an offer. But boards supervising the seventh-largest U.S. refiner would need to secure backing from politicians in both Caracas and Washington, a challenge given U.S. sanctions on the OPEC nation and otherwise strained ties. Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Since Citgo cut ties with its ultimate parent, Caracas-based PDVSA, in 2019, Venezuela has struggled to find new markets for its oil, while the Houston-based refiner has sourced crude from other suppliers. Venezuela's opposition has worked for years to retain Citgo, including funding legal defenses and lobbying in Washington. The U.S. Treasury Department, which has shielded Citgo from creditors in recent years, must approve the auction's eventual winner. Opponents of Venezuelan President Nicolas Maduro have stated Citgo could aid the nation's economic recovery if democracy is restored. Maduro's officials have rejected U.S. sanctions and called the auction the "robbery" of a sovereign asset. Can creditors claim post-auction compensation? Yes. Many creditors including ConocoPhillips, which holds the largest claims for almost $12 billion, and Gold Reserve, have pursued legal action outside of the U.S. to seize Venezuela-owned assets, such as bank accounts, tankers and PDVSA-controlled storage facilities. The creditors, who rejected the outcome of a bidding round last year due to conditions imposed by the selected winner, can submit objections if dissatisfied with its results. They can also continue parallel cases in other U.S. courts. Accumulating legal costs and uncertain recovery prospects led three of the 18 creditors originally cleared by the court to withdraw. Others, including an owner of artifacts that belonged to Venezuelan independence hero Simon Bolivar, did not fulfill all court requirements to participate. Will all creditors be compensated? Unlikely. While Citgo was valued between $11 billion and $13 billion as part of the Delaware case, expectations are that the auction will yield no more than $8 billion, factoring in potential side agreements with key creditors, like bondholders. Citgo's recent weak performance, including a profit that plummeted to $305 million last year from $2 billion in 2023, is also expected to affect its valuation. These factors suggest that more than half of the 15 registered creditors, collectively claiming $18.9 billion, may not receive distributions from the auction.
Reuters
5 days ago
- Business
- Reuters
Q&A: Is Venezuela about to lose Citgo, its most prized foreign asset?
HOUSTON, June 16 (Reuters) - A U.S. court-organized auction of shares in the parent company of Venezuela-owned Citgo Petroleum has entered its final stages, with bidders submitting improved offers for the U.S. refiner and creditors hoping to recover a portion of the proceeds. The auction stems from an eight-year-old case that Canadian miner Crystallex initiated in Delaware against Venezuela. The court found Citgo's parent, PDV Holding, liable for Venezuela's debts and expropriations, paving the way for over a dozen other creditors to pursue compensation of nearly $19 billion. Despite delays, the auction has progressed, especially since last year, through two bidding rounds. A $3.7 billion offer by Contrarian Funds' affiliate, Red Tree Investment, was selected in March as a starting bid and is now being challenged by rivals. Besides Red Tree, companies competing with improved bids include trading house Vitol, and a consortium including an affiliate of Gold Reserve (GRZ.V), opens new tab, Rusoro Mining (RML.V), opens new tab, and Koch. Elliott Investment Management's affiliate Amber Energy is also considering whether to submit a bid, following a separate court decision favoring a possible offer, according to a source familiar with the matter. A court officer overseeing the auction, who last month said new bidders could emerge right before a June 18 deadline to submit offers, must recommend the auction's winner by July 2. The judge and parties in the case are expected to attend a final hearing on August 18. How big a loss could this be for Venezuela? If Venezuela, which owns 100% of the refiner and its U.S.-based parent companies, fails to retain some equity, it would lose its most significant overseas asset. The country, with foreign debt reaching $150 billion, has already lost other assets in Europe and Asia to creditors. Delaware Judge Leonard Stark has left open a possibility for parties representing Venezuela to submit an offer. But boards supervising the seventh-largest U.S. refiner would need to secure backing from politicians in both Caracas and Washington, a challenge given U.S. sanctions on the OPEC nation and otherwise strained ties. Prior to the sanctions, Citgo's 807,000-barrel-per-day refining network was a primary processor of Venezuela's heavy sour crudes. Since Citgo cut ties with its ultimate parent, Caracas-based PDVSA, in 2019, Venezuela has struggled to find new markets for its oil, while the Houston-based refiner has sourced crude from other suppliers. Venezuela's opposition has worked for years to retain Citgo, including funding legal defenses and lobbying in Washington. The U.S. Treasury Department, which has shielded Citgo from creditors in recent years, must approve the auction's eventual winner. Opponents of Venezuelan President Nicolas Maduro have stated Citgo could aid the nation's economic recovery if democracy is restored. Maduro's officials have rejected U.S. sanctions and called the auction the "robbery" of a sovereign asset. Can creditors claim post-auction compensation? Yes. Many creditors including ConocoPhillips (COP.N), opens new tab, which holds the largest claims for almost $12 billion, and Gold Reserve, have pursued legal action outside of the U.S. to seize Venezuela-owned assets, such as bank accounts, tankers and PDVSA-controlled storage facilities. The creditors, who rejected the outcome of a bidding round last year due to conditions imposed by the selected winner, can submit objections if dissatisfied with its results. They can also continue parallel cases in other U.S. courts. Accumulating legal costs and uncertain recovery prospects led three of the 18 creditors originally cleared by the court to withdraw. Others, including an owner of artifacts that belonged to Venezuelan independence hero Simon Bolivar, did not fulfill all court requirements to participate. Will all creditors be compensated? Unlikely. While Citgo was valued between $11 billion and $13 billion as part of the Delaware case, expectations are that the auction will yield no more than $8 billion, factoring in potential side agreements with key creditors, like bondholders. Citgo's recent weak performance, including a profit that plummeted to $305 million last year from $2 billion in 2023, is also expected to affect its valuation. These factors suggest that more than half of the 15 registered creditors, collectively claiming $18.9 billion, may not receive distributions from the auction.
Reuters
11-06-2025
- Business
- Reuters
US judge extends Citgo auction's schedule, moves final hearing to August
HOUSTON, June 11 (Reuters) - A U.S. judge in Delaware has extended the schedule for a court-organized auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum, moving the sales process's final hearing to August 18, according to a filing on Wednesday. The eight-year court case, aimed at compensating creditors for debt defaults and asset expropriations in Venezuela, has endured multiple delays. A first bidding round last year failed to satisfy most of the companies expecting to cash proceeds. Houston-based Citgo, ultimately owned by Venezuela's state oil company PDVSA, is the seventh-largest U.S. refiner. Earlier this year, a $3.7-billion offer by Contrarian Funds' affiliate Red Tree Investments was selected by the court as a starting bid in the second bidding round. The offer includes an agreement to pay holders of a Venezuelan defaulted bond. Red Tree and rival bidders have until June 18 to submit improved offers. A court officer overseeing the auction last month said new bidders were expected to emerge. The new calendar, approved after lawyers representing Venezuela requested more time for due diligence and to secure robust bids, sets July 2 as the deadline for a judge to recommend the auction's winner, with a period for submitting objections through July 9. Judge Leonard Stark is trying to avoid long delays in the last part of the sales process by moving deadlines only at bidders' request. Once confirmed, the auction's winner will need approval by the U.S. Treasury Department, which has been protecting Citgo from creditors since 2019. "While heightened investor engagement may marginally delay the auction hearing, Judge Stark remains on course to finalize proceedings by late Q3 2025," said consultancy Aurora Macro Strategies in a report last week.
