Latest news with #PDVHolding
Reuters
2 days 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.
Yahoo
6 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
6 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.
Bloomberg
30-05-2025
- Business
- Bloomberg
Florida Congresswoman Asks Rubio to Stop Auction of Citgo Assets
By Bloomberg News Save US Representative Maria Elvira Salazar is pressing the Trump administration to block the forced sale of Venezuela's largest foreign asset, warning the move could undercut efforts to rebuild the nation when President Nicolas Maduro's regime eventually ends. At the center of the dispute is Citgo Petroleum Corp., a network of US-based refineries, lubricant plants and pipelines managed by Venezuela's opposition. Its parent company, PDV Holding — a subsidiary of Venezuela's state-owned oil firm — is being auctioned off in a federal court in Delaware to satisfy more than $20 billion in claims by creditors including Crystallex and ConocoPhillips.
Reuters
21-03-2025
- Business
- Reuters
Contrarian Funds' $3.7 billion offer recommended as starting bid in Citgo parent auction
HOUSTON, March 21 (Reuters) - A U.S. court officer overseeing an auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum is recommending a judge choose a $3.7 billion offer by an affiliate of Contrarian Funds to set the floor for a new bidding round this year, according to a court filing on Friday. Four potential "stalking horse" bids for shares in Citgo parent PDV Holding were received by a March 7 deadline, the filing said. here. The offer by Contrarian Funds' affiliate Red Tree Investments was recommended by the special master in charge of the auction. Judge Leonard Stark must accept or reject it before the auction moves on. "Red Tree's proposed transaction has the second highest purchase price, and the special master believes it has the least conditionality," the filing said. "The special master considers that the combination of value and the certainty of the proposed transaction results in its being the best available stalking horse." The Delaware court decided to set a minimum bid for PDV Holding after most creditors in an auction last year rejected a highly conditional $7.3 billion offer by an affiliate of hedge fund Elliott Investment Management. A topping-off period is expected to follow for rival bids to be submitted, with a final hearing set for July, according to the court's schedule. By choosing a starting bid, Stark hopes to maximize proceeds for creditors in the eight-year-long case, which previously found PDV Holding liable for the country's debts. Caracas-headquartered PDVSA is Citgo's ultimate parent. If it wins the process, the stalking horse would acquire 100% of PDV Holding's shares, with proceeds to be distributed to creditors at closing. Red Tree's proposed transaction provides for $3.24 billion in cash and $458 million in non-cash consideration, according to the court filing.
