More Venezuela creditors granted right to seize Citgo shares if sanctions change

Rusoro Mining

24/03/2023 19:15

By Luc Cohen and Marianna Parraga
       March 24 (Reuters) - A U.S. judge has granted four
companies the right to seize shares in the parent of refiner
Citgo Petroleum Corp  PDVSAC.UL  to collect on debts owed by
Venezuela, in the event U.S. sanctions on that country are
modified. 
    The decision on Thursday is the latest blow to Venezuela's
efforts to avoid a breakup of Citgo, which is owned by state oil
company Petroleos de Venezuela  PDVSA.UL  and controlled by
political opponents of the South American country's socialist
government.
    U.S. District Judge Leonard Stark in Delaware said the four
companies had proven that PDVSA was the "alter ego" of
Venezuela's government, meaning they could pursue the company's
assets to satisfy debts related mainly to expropriation claims. 
    But Stark said the companies could not seize shares in
Citgo's parent, Delaware-registered PDV Holding, until the U.S.
Treasury Department, which enforces sanctions, allows it. 
    The four companies are a unit of O-I Glass Inc  OI.N , a
unit of Northrop Grumman Corp  NOC.N , ACL1 Investments Ltd, and
Rusoro Mining  RML.V  Ltd. 
    Two other companies, Canadian miner Crystallex and U.S. oil
company ConocoPhillips  COP.N  had earlier won rulings from
Stark allowing them to potentially benefit from any sale of PDV
Holding shares once sanctions allow for it.
    In 2018, Stark said Crystallex had proven that PDVSA was
Venezuela's alter ego. Conoco's claim is against PDVSA.
    Washington imposed oil sanctions on PDVSA in 2019 in a push
to oust Venezuela's socialist President Nicolas Maduro, who it
has accused of human rights violations and rigging his 2018
re-election.
    Maduro denies the allegations and has said the U.S.
government wants Venezuela's oil. Venezuela is a member of OPEC.
    Horacio Medina, the chairman of the opposition-appointed
PDVSA board controlling the company's foreign assets, said
Venezuela will appeal.    
    A Citgo spokesperson did not immediately respond to a
request for comment.
    "Sooner than later, the sanctions as a protective wall will
break down and those creditors will be able to take away Citgo,"
said Jose Ignacio Hernandez, previously the opposition's chief
overseas legal representative.

 (Reporting by Luc Cohen in New York and Marianna Parraga in
Houston; Editing by Cynthia Osterman)
 ((luc.cohen@thomsonreuters.com; +1 646 361 1622; Reuters
Messaging: Twitter: @cohenluc))