TPG Angelo Gordon among new bidders in auction for Citgo assets
New York-based TPG Angelo Gordon has launched a so-called 'topping bid' for the shares of Citgo's US-based parent PVD Holding, according to the people, who asked not to be identified because they weren't authorised to speak publicly about the bid.
TPG Angelo Gordon declined to comment last Friday. TPG agreed to acquire Angelo Gordon in May 2023 in a cash-and-stock deal valued at US$2.7bil. The bid is aimed at bettering a US$3.7bil offer by Red Tree Investments LLC for control of the refiner, which is Venezuela's largest foreign asset.
Seeking more offers
Red Tree's offer came after US Judge Leonard Stark in Wilmington, Delaware, shot down an earlier US$5.3bil lead bid by an affiliate of Elliott Investment Management because of flaws with the proposal.
Robert Pincus – a lawyer tapped by Stark to oversee the auction – said in court filings he supported pushing back the deadline for topping offers like TPG Angelo Gordon's by 21 days in hopes it will lead to a 'more robust bidding process'.
Stark granted the extension last Friday. Stark and Pincus are aiming to generate more money from the nearly year-long auction in hopes of satisfying more creditors' claims against Venezuela over the seizures initiated by late strongman Hugo Chavez.
Collectively the creditors are owed more than US$20bil by the Venezuelan government and its state-owned oil company, Petroleos de Venezuela SA, or PDVSA, which controls Citgo.
Those creditors include Crystallex International Corp, Exxon Mobil Corp, ConocoPhillips Co and Siemens AG.
Lost assets
The companies lost gold and oil assets in the seizures and obtained international arbitration awards against the country.
Investment manager Oaktree Capital Management LP is providing financing for multiple bidders, according to a person familiar with the matter who is not authorised to speak publicly.
Oaktree's involvement hasn't been previously reported.
The firm has more than US$200bil in assets under management and has experience in distressed debt and special situations.
'The court wants the best offer, even if that bidder is late to the game,' said Jason Keene, a strategist at Barclays who follows the auction process.
Bidders are interested in the refineries Citgo runs in the United States as well as its pipelines, terminals and fuel-distribution channels.
The battle goes back to the fallout from Chávez's decision to nationalise different industries as part of his socialist agenda.
Chávez died in 2013 and was succeeded by Nicolás Maduro.
In 2019, the US government gave the reins of the refinery to the opposition-led National Assembly, then presided by Juan Guaido, whom the United States and other governments formerly recognised as the country's legitimate leader as opposed to Maduro.
A Florida congresswoman has asked US Secretary of State Marco Rubio to halt the Citgo auction to preserve the political opposition's control of the asset.
Maria Elvira Salazar, a Republican who represents part of Miami, asked Rubio to stop any sale.
'Citgo needs to remain in hands of the opposition in order to be able to reconstruct Venezuela after the regime falls,' she wrote in a May 29 letter to Rubio. — Bloomberg
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