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Elliott Investment Management is the top bidder in a U.S. court-ordered auction for the parent company of Venezuelan refiner Citgo Petroleum Corp. Bloomberg Someone who is familiar with the process.
Elliott is competing with bidders including independent refiner Vitol Group and Canadian miner Gold Reserve, which is making a joint bid with billionaire Carl Icahn’s CVR Energy, the people said, asking not to be identified because they are not authorized to speak publicly. Now Elliott has been given exclusive rights to negotiate a deal, some of the people said.
The auction process is long and complex, and just because Elliott emerges as a leading contender doesn’t necessarily mean it will ultimately get the asset.
Citgo operates refineries in Louisiana, Illinois and Texas and has interests in terminals, pipelines and lubricant plants. The sale of its parent company has been controversial, with Venezuelan President Nicolas Maduro accusing the opposition, which controls the country’s foreign assets, of losing the company to creditors.
The sale marks the culmination of a years-long legal battle launched by another Canadian miner, Crystallex, which sued Citgo’s parent in court to collect an unpaid arbitration award over the expropriation of its assets in Venezuela by late President Hugo Chavez. A long list of creditors has since joined the process, with claims totaling $20 billion.
Robert B. Pincus, the court-appointed special master overseeing the sale, asked the judge in a filing late Friday to give him more time, from August to Sept. 16, to finalize his recommendation for a winning bidder for Citgo parent PDV Holding.
Pincus said he and his advisers have been in “intense negotiations” with an unnamed bidder and need time to complete “due diligence and clear documentation supporting a sale transaction.” If Pincus’s request is approved, a sale hearing would be postponed to Nov. 7.
To move forward with the sale, the buyer must obtain authorization from the U.S. Treasury Department’s Office of Foreign Assets Control (Ofac) because current U.S. sanctions protect Citgo from embargoes.
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