Delaware court sets Oct. 23 start for Citgo share auction process (updated)

Rusoro Mining

21/07/2023 23:43

(Adds reactions and decision details in paragraphs 4, 5 and 6)
    By Marianna Parraga and Gary McWilliams
       HOUSTON, July 21 (Reuters) - A federal court in Delaware
set Oct. 23 as the start date for a long-expected auction of
shares in Venezuela-owned refiner Citgo Petroleum's parent to
pay creditors with judgments against the South American nation.
    The sale process, which lays out a schedule that could lead
to formal approval of any sale of shares in PDV Holding, a
U.S.-based unit of state company Petróleos de Venezuela
 PDVSA.UL , a year from now, could lead to a breakup of the
seventh largest U.S. oil refiner.
    U.S. Judge Leonard Stark in Delaware this week accepted a
recommendation by a court official in charge of organizing the
auction. Proceeds from any sale of PDV Holding shares would be
used to pay off creditors previously cleared by the court. PDV
Holding's only asset is Citgo.
    Horacio Medina, head of the ad-hoc board that since 2019 has
overseen the refiner, was not immediately available for comment.
A spokesperson for Citgo declined to comment. 
        Judge Stark dismissed Venezuela's effort to stop the
auction. Venezuela had argued that the auction's conditions
would not ensure the best value for the assets, and that the
process should be delayed until other pending litigation is
resolved.
  
        "The Venezuela Parties' objection is utterly
unpersuasive, particularly in light of the lengthy history of
this case," he wrote. "There is simply no reason to further
delay starting the sale process."    
  
        Following a long wave of expropriations under late
Venezuelan President Hugo Chavez and the default of bonds issued
by PDVSA, the creditors flocked to U.S. courts to enforce
arbitration awards against the country.
    The creditors include miner Crystallex International, oil
producer ConocoPhillips  COP.N , Siemens Energy, and Red Tree
Investments, which are trying to recoup some $2.7 billion over
unpaid court and arbitration rulings.
    Another group of six companies recently won at an appeals
court their attempt to attach claims to the Delaware case. The
companies are O-I Glass Inc  OI.N , Huntington Ingalls
Industries  HII.N , ACL1 Investments, Rusoro Mining  RML.V ,
Gold Reserve  GRZ.V  and two Koch Industries units, which will
try to cash another $3.46 billion.
    

 (Reporting by Marianna Parraga and Gary McWilliams; Editing by
Richard Chang)
 ((marianna.parraga@thomsonreuters.com; +1 713 371 7559; Reuters
Messaging: @mariannaparraga))