Elliott Investment Management is considering a bid for shares in the parent company of oil refiner Citgo Petroleum as part of a US court-ordered auction, reported Reuters, citing sources.
Elliott’s interest comes as a group of creditors, represented by Centerview Partners, attempts to attract ConocoPhillips to join a competing offer, sources familiar with the situation told the publication.
Centerview, an investment bank, has been engaged to prepare a potential bid on behalf of investors and creditors seeking to recover claims for expropriations and debt defaults from Venezuela’s foreign assets in a federal court in Delaware.
The group is urging ConocoPhillips, which holds the largest claims in the court case, to collaborate in their efforts before the final bidding round concludes in June.
However, ConocoPhillips has not yet decided on its involvement, according to a source familiar with the matter.
Elliott, a hedge fund with substantial investments in US oil refining, has already engaged with Citgo management to gather essential financial and operational information, preparing for the upcoming bidding round, the sources said.
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By GlobalDataPDV Holding, a US subsidiary of Venezuela’s national oil and gas company PDVSA, currently holds a 100% stake in Citgo.
The auction of shares in Citgo’s parent company follows a trial that established new legal precedents in sovereign immunity cases.
The court found the company liable for Venezuela’s past debt defaults and expropriations.
PDV Holding’s sole asset is Houston-based Citgo, and the auction is set to conclude in July after seven years of litigation.
A total of 18 creditors, with collective claims amounting to $21.3bn, have been authorised to receive proceeds from the auction.
During an initial bidding round in January, ConocoPhillips was among 12 groups that expressed interest.
The company may still join forces with either Centerview or Elliott, with binding offers due by 11 June.
The consortium led by Centerview does not plan to retain long-term ownership of Citgo, which ranks as the seventh-largest US refiner, the sources said.
Instead, it is considering the creation of a holding company that would enable participants to recover their claims and profits through future stake sales, they added.
Other oil refiners such as Koch Industries and PBF Energy are also contemplating binding offers for Citgo.
Centerview and Elliott did not comment on their bidding intentions, and representatives for Koch and PBF did not respond to inquiries.
A ConocoPhillips spokesperson declined to comment on the bidding process but stated: “We will pursue all legal avenues to obtain a full and fair recovery.”
Requests for comment from Citgo and boards overseeing the refiners did not receive immediate response.
The creditors seeking to recover from Venezuela’s foreign assets include ConocoPhillips, mining companies such as Crystallex, Rusoro Mining and Gold Reserve, oil services company Tidewater, and units of Koch and Huntington Ingalls.
Citgo cut its connection to PDVSA in 2019. It has since been protected from creditors by operating under a US licence.
To finalise the transaction, any buyer would require clearance from the US Treasury.
