Elliott affiliate emerges in Citgo auction as the frontrunner, filing states

An American court officer announced on Monday that an affiliate of the hedge fund Elliott Investment Management had made the highest bid for Citgo Petroleum's parent company, a Venezuelan refiner. This group was recommended to win the deal over a previous group led by Gold Reserve.

In the final stages of PDV Holding's auction, the parent company of the seventh largest U.S. refiner - PDV Holding - improved bids were made after court rulings in parallel legal proceedings that encouraged new, better offers.

If Elliott's Amber Energy affiliate does not match or surpass the terms of Elliott's Gold Reserve subsidiary Dalinar Energy, then Robert Pincus' evaluation could result in a new winner being recommended.

Dalinar's $7.4 billion bid was recommended as the winner of the auction in the month prior to the submission of competing unsolicited offers. Dalinar has three days business to increase its bid or modify the terms of its offer, according to a filing by Pincus.

Mid-September is the date set for a sale hearing before Delaware Judge Leonard Stark, who will make a final ruling.

Pincus didn't provide details on Amber's offer, which was made on August 22. However, a court document released earlier this month revealed that the company offered $5.86 Billion to creditors, while also settling with holders of a Venezuelan bond defaulted and collateralized by Citgo equity. This could resolve $2.86 Billion of claims against Citgo’s ultimate parent PDVSA.

The filing stated that the proposed price of Amber's purchase includes both cash and non-cash factors. Creditor Koch also supports this proposal.

The proceeds of the auction are expected to compensate a few of the 15 creditors who have been fighting in U.S. court since 2017 for nearly $19 billion after Venezuela expropriated its assets and defaulted.

(source: Reuters)