Icahn-owned oil refiner CVR bidding in Citgo share auction, sources say

Icahn Enterprises LP

02/07/2024 19:05

(Adds Wells Fargo comment decline, context in paragraph 5,
8-10)
    By Gary McWilliams and Marianna Parraga
       HOUSTON, July 2 (Reuters) - Oil refiner CVR Energy
 CVI.N , controlled by billionaire investor Carl Icahn, has
submitted a binding offer in an ongoing auction of shares in the
parent of Venezuela-owned Citgo Petroleum, according to three
people familiar with the matter. 
    Icahn controls about 66% of shares in CVR, based in Sugar
Land, Texas. CVR operates two U.S. refineries, the 115,000
barrel-per-day (bpd) Coffeyville in Kansas, and the 75,000-bpd
Wynnewood in Oklahoma.
    A U.S. court in Delaware is auctioning the shares to pay
creditors that have $21.3 billion in claims against Venezuela
for defaults and expropriations. The court has so far accepted
bids from CVR, trading house Vitol  VITOLV.UL  and others as
part of the historic sale process of one of the parents of
Citgo, the seventh largest U.S. oil refiner.
    CVR is working with investment bankers at Wells Fargo
 WFC.N  to raise the financing for its bid, the people said. The
company has the support of Icahn Enterprises in its offer, the
people added.   
    Icahn Enterprises, CVR's CEO, David Lamp, and Wells Fargo 
declined to comment.
    CVR's mid-continent oil refineries would make a solid
geographic match to Citgo's refineries in Texas, Louisiana and
Illinois, one of the people familiar with its bid said. 
    "The bid advantage that CVR has is its synergies (to
Citgo)," the person said. "Citgo is primarily a Gulf Coast
refiner and CVI operates in the middle of the country." 
    Hedge fund Elliott Investment Management was weighing
another bid, while a group of creditors represented by
Centerview Partners aimed to lure ConocoPhillips  COP.N  to join
a separate offer, people close to the matter said in April.
        In recent weeks, 
    financial allies
     began to build to support some of the bids, including firms
JP Morgan  JITAX.O , Morgan Stanley  MS.N  and Rotschild & Co.
  
    U.S. District Judge Leonard Stark, who is leading the case,
will host a hearing on Tuesday about the sale process' calendar
and progress with the second bidding round. He will discuss a
proposal to extend the period for evaluating the bids, which
have proven to be complex, through Sept. 19.

 (Reporting by Gary McWilliams and Marianna Parraga in Houston,
additional reporting by David French; Editing by David Gregorio)
 ((Gary.McWilliams@thomsonreuters.com; +1 469-691-7668;))