Citgo Bidding Opened to Others to Try to Top Elliott Affiliate

(Bloomberg) — A US judge reset the bidding process for the parent company of Citgo Petroleum Corp. late Tuesday, a move that is poised to create competition for Elliott Investment Management’s pursuit of the oil refiner.  

Judge Leonard Stark ordered the bidding for the company to be reopened, allowing for new offers to be submitted. Any proposal would have to top the $7.3 billion bid made by an affiliate of Elliott earlier this year. 

Stark, who heard arguments on the matter on Dec. 13 in Wilmington, Delaware, has now cleared the way for other creditors  — including Gold Reserve, Crystallex International Corp. and Red Tree Investments LLC. 

The decision puts a new twist on a years-long legal battle over control of the parent of Citgo, a Venezuela-owned foreign asset that operates three refineries in the US, pipelines, terminals and fuel distribution channels. The proceeds of the sale will pay back a long list of creditors that are collectively owed around $20 billion by the Venezuelan government and its state-owned oil company, Petroleos de Venezuela SA, over asset seizures in the country.

Crystallex, which saw its Venezuelan gold mines seized by the late President Hugo Chávez, is first in line for a hefty slice of the proceeds. Others include Exxon Mobil Corp., ConocoPhillips Co. and Siemens AG. 

Stark, who authorized the auction last year, had hoped to have the sale of the parent company, PDV Holding, finished by the end of the year. 

In his ruling Tuesday, he set a new hearing on the sale for late July in Wilmington.

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