Creditors Criticize Citgo Share Auction Terms

By Marianna Parraga and Gary McWilliams

HOUSTON (Reuters) – Creditors seeking proceeds from a U.S. court-ordered auction of shares in a parent of Citgo Petroleum to compensate for Venezuela’s debt defaults and expropriations criticized the terms of a conditional offer selected in the second bidding round on Tuesday.

An affiliate of Elliott Investment Management was named the presumptive winner of the share auction last Friday, with a bid valuing Venezuela-owned Citgo at up to $7.286 billion.

Amber Energy’s bid, pending resolution of claims by a group of bondholders, is viewed as the best option to maximize Citgo’s value for creditors, according to an attorney overseeing the auction.

“Our view is: let’s get this bid locked down and binding,” said attorney Ray Schrock. Creditor objections to undisclosed terms would allow for future review of details.

“They’ll have plenty of time to see the terms,” he added. “We have somebody prepared to move forward. What we don’t want to do is lose the bird in hand.”

However, Crystallex, which initiated the case against Citgo parent PDV Holding for unpaid judgments and has the highest-ranked claim, argued that Elliott’s Amber Energy terms could prevent creditors, collectively claiming $21.3 billion, from ever being paid.

Amy Wolf, representing ConocoPhillips, noted that the sales process was not concluding as hoped.