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

Icahn Enterprises LP

02/07/2024 22:29

(Adds details of the court's calendar in paragraphs 10-11)
    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.
    A representative of a court officer overseeing the auction
said on Tuesday in a hearing that the second bidding round was
"successful," with several competitive offers received. The
bidders were not identified.
     The special master of the court is scheduled to inform the
parties about the winning bid around July 31. U.S. District
Judge Leonard Stark, who is leading the case, on Tuesday
approved a motion to postpone the final hearing to Sep. 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;))