Exclusive-Conoco’s Bid for Citgo Shares Set to Change Venezuela’s Oil Industry
Surprise Credit Bids Shake Up Citgo Share Auction
U.S. court auctioning Venezuela-owned oil refiner Citgo Petroleum has taken a surprising turn. Instead of cash, bidders are using claims to stake their bids, marking a historic case to settle Venezuelan debts.
ConocoPhillips Leads with Credit Bid Using Claims
Oil producer ConocoPhillips, the largest creditor in the case, has submitted a credit bid using its claims, amounting to $12 billion from asset expropriations in Venezuela. This move has sparked interest and speculation, leaving other creditors questioning their potential payout.
Uncertainty Surrounds Citgo’s Fate
The ongoing case has left much uncertainty regarding Citgo’s future. With multiple bidders trying to apply their claims against Venezuela in bids, the availability of sufficient cash to settle a total of $21 billion in claims has come under scrutiny. The unprecedented nature of the situation has left many creditors concerned about their share of the pie.
Interest from Energy Companies and Activist Investors
Aside from ConocoPhillips, several other energy companies and an activist investor have expressed interest in the sales process. The involvement of these entities adds further complexity to the already convoluted situation.
Valuation Challenges and Market Dynamics
The valuation of Citgo has presented new challenges amid the credit bids. The uncertainty of Citgo’s fair value, potential future lawsuits, and the need for U.S. approvals have all contributed to the complexities surrounding the auction.
The Role of Evercore Group and Future Auction Rounds
Investment banker Evercore Group is overseeing the auction’s marketing and data collection. The process has drawn early interest from dozens of companies and individuals in the first phase, setting the stage for a second bidding round tentatively scheduled for May.
Complexities of Credit and Cash Bids
This unique situation has raised questions about the use of multibillion-dollar claims as part of bids, prompting concerns about the court’s schedule and the potential exclusion of some creditors from the settlement.
“Will the court have the courage to accept a bid that only pays off a handful of creditors? That’s the issue,” one source said.
Citgo’s fate remains uncertain as the auction continues to unfold, with each development adding new layers of complexity to an already intricate case.
