US Court Receives 12 Bids in Citgo Share Auction
Interest in Citgo Shares
A U.S. court is currently evaluating 12 initial bids from private investment funds and companies participating in an auction of shares of Citgo Petroleum’s parent company. This level of interest has been deemed disappointing by Citgo.
Creditors’ Claims
Creditors seeking redress for past expropriations in Venezuela and defaulted debt have turned to U.S. courts to enforce arbitration awards through the auction of shares in Citgo’s parent company. The claims before the court exceed $22 billion, far surpassing Citgo’s estimated market value of $11 billion-$13 billion.
Bidding Process
The court and investment banker Evercore Group initially identified 90 parties eligible to participate in the bidding round. Ultimately, 12 parties submitted indications of interest, which were described as private investment funds and companies in petroleum refining and related industries.
Concerns and Analysis
Citgo expressed disappointment in the level of interest shown by bidders and requested time to evaluate the proposals. Judge Leonard Stark granted the request, allowing Citgo to analyze the bids further. Some creditors may raise objections to certain bids during this process.
Legal Battle and Auction
The auction, triggered by a legal battle initiated in 2017, has attracted interest from energy companies like Chevron, Reliance Industries, Koch Industries, and Valero Energy, as well as an activist investor. The sale is expected to be one of the largest U.S. court auctions to date.
Unresolved Issues
Not all details of the bidding process have been disclosed, and the final list of creditors and their priority remains pending. The court has received bids using claims instead of cash, with ConocoPhillips being the largest creditor involved in the process.
