Latest news with #ContrarianFunds
Reuters
3 days ago
- Business
- Reuters
US judge extends Citgo auction's schedule, moves final hearing to August
HOUSTON, June 11 (Reuters) - A U.S. judge in Delaware has extended the schedule for a court-organized auction of shares in the parent of Venezuela-owned refiner Citgo Petroleum, moving the sales process's final hearing to August 18, according to a filing on Wednesday. The eight-year court case, aimed at compensating creditors for debt defaults and asset expropriations in Venezuela, has endured multiple delays. A first bidding round last year failed to satisfy most of the companies expecting to cash proceeds. Houston-based Citgo, ultimately owned by Venezuela's state oil company PDVSA, is the seventh-largest U.S. refiner. Earlier this year, a $3.7-billion offer by Contrarian Funds' affiliate Red Tree Investments was selected by the court as a starting bid in the second bidding round. The offer includes an agreement to pay holders of a Venezuelan defaulted bond. Red Tree and rival bidders have until June 18 to submit improved offers. A court officer overseeing the auction last month said new bidders were expected to emerge. The new calendar, approved after lawyers representing Venezuela requested more time for due diligence and to secure robust bids, sets July 2 as the deadline for a judge to recommend the auction's winner, with a period for submitting objections through July 9. Judge Leonard Stark is trying to avoid long delays in the last part of the sales process by moving deadlines only at bidders' request. Once confirmed, the auction's winner will need approval by the U.S. Treasury Department, which has been protecting Citgo from creditors since 2019. "While heightened investor engagement may marginally delay the auction hearing, Judge Stark remains on course to finalize proceedings by late Q3 2025," said consultancy Aurora Macro Strategies in a report last week.
Reuters
21-05-2025
- Business
- Reuters
List of bidders in Citgo auction narrows, remaining groups to sweeten terms
HOUSTON, May 21 (Reuters) - Groups led by affiliates of Contrarian Funds, Gold Reserve (GRZ.V), opens new tab and Vitol ( are working on improved offers for the parent of Venezuela-owned refiner Citgo Petroleum as the list of potential bidders narrows, sources close to the preparations said. The three consortia, which participated in an earlier competition for setting a starting bid, have been in talks with banks to secure the financing needed for their offers in the court-organized auction of shares. They are also working to provide assurance they can deliver the proposed terms to complete the deal, known as "certainty of closure," the sources said. A fourth bidder in the starting round in March, an affiliate of Elliott Investment Management, is not expected to submit an offer in this phase of competition, a source familiar with the decision said, citing legal risks. The Delaware court has been trying to auction Venezuela's most prized overseas asset since 2017 to pay up to $20.6 billion to 16 creditors for debt defaults and expropriations in the South American country. The government of President Nicolas Maduro has said the process constitutes the "robbery" of a sovereign asset. Houston-based Citgo, ultimately owned by Venezuela's state oil company PDVSA, is the seventh-largest U.S. refiner. A $3.7-billion offer by Contrarian Funds' Red Tree Investments was approved by Delaware Judge Leonard Stark in April as a starting bid. The investment firm and its rivals have until May 28 to submit improved offers. Following a June 11 deadline for a court officer to select a winner, a final hearing in the auction of shares in PDV Holding, one of Citgo Petroleum's parents, is scheduled for July 22. The consortia still have time to tune up offers or decide against bidding. A ruling earlier this week by a New York court dismissing arguments by some companies that could have allowed them to jump the line of creditors established in Delaware could lead to changes in some bids, the sources said. Robert Pincus, the court officer appointed by Stark to oversee the auction, last year selected a $7.3-billion offer by Elliott affiliate Amber Energy as the winner of the first bidding round. But most creditors registered in the auction ultimately rejected the proposal due to conditions preventing the distribution of proceeds. Pincus, who is being advised by investment bank Evercore (EVR.N), opens new tab, this time selected Red Tree's lower offer to kick off the bidding round due to what he described as its higher certainty of closure, and as a mechanism to encourage "robust competition." The bid includes a separate $3 billion to settle liabilities, mostly payments to Venezuela-linked bondholders, and up to $1.5 billion in notes to pay junior creditors, depending on Citgo's performance. Red Tree for the first time reached a payment agreement with holders of a defaulted Venezuelan bond collateralized with Citgo equity, which would remove a key obstacle to distributing proceeds from the auction to other creditors. The selection of Red Tree's bid as a starting offer unleashed a new battle among creditors, with some at the top of a priority list to cash proceeds supporting it because they would secure payments. Others further down the list said it was too low, with some arguing that a rival $7.1-billion offer by Gold Reserve's consortium should have been chosen. Though Stark has directed that price should be prioritized over certainty of closure when the court officer recommends a winner next month, Red Tree's agreement with the bondholders has prompted others to seek similar deals, the sources said. To bolster their ability to close a deal, the consortia have retained banks to structure and improve their financing. Red Tree is trying to improve all aspects of its starting bid, a source close to its preparations said, while other consortia are working to boost their financing or coverage of junior creditors. The firm is "confident in the bid's price and certainty of closing," the person said of Red Tree's offer. Gold Reserve, Vitol, Amber Energy, Red Tree and a firm representing holders of the Venezuelan 2020 bond declined to comment. Citgo and boards supervising the refiner did not reply to requests for comment. Citgo lost $82 million in the first quarter due to weak margins, marking its second consecutive loss. Its liquidity, a key metric for bidders, fell to $2.1 billion at the end of March from $3.8 billion in December. The company's net profit plummeted to $305 million in 2024 from about $2 billion the previous year. The refiner's recent performance and separate lawsuits in U.S. courts in pursuit of the same assets could limit the size of the bids, analysts have said. Lawyers representing Venezuela are fighting in Delaware for a floor price to be set, so Citgo's assets are not auctioned for a fraction of their value, which court advisers calculated at $11 billion to $13 billion. The process's complexity is also expected to make it difficult for Pincus to set clear evaluation criteria acceptable to the judge and most creditors, which could lead to new battles and delays. The auction's winner must be approved by the U.S. Treasury Department, which has protected Citgo from creditors in recent years.
Yahoo
17-04-2025
- Business
- Yahoo
US judge to decide on starting bid in Citgo parent auction following hearing
HOUSTON (Reuters) - A U.S. court is expected to confirm or reject in coming days a $3.7 billion offer by an affiliate of Contrarian Funds aimed at setting a floor for a new bidding round for shares in the parent of Venezuela-owned refiner Citgo Petroleum, following a hearing where creditors made their arguments on Thursday. Contrarian Funds' bid, recommended by a court officer overseeing the auction last month, has unleashed a battle among the 16 creditors that remain in the 8-year court case, aimed at compensating companies and bondholders for debt defaults and expropriations in Venezuela. Delaware judge Leonard Stark filed a document earlier this week saying he was "inclined" to accept the court officer's recommendation of the bid by Contrarian's affiliate Red Tree Investments, which was selected due to its certainty of closing. However, several creditors and lawyers representing Venezuela said in the hearing that starting with such a 'low' bid would make it difficult to approach a targeted $7 billion to $8 billion value for Citgo. Sign in to access your portfolio
Reuters
17-04-2025
- Business
- Reuters
US judge to decide on starting bid in Citgo parent auction following hearing
HOUSTON, April 17 (Reuters) - A U.S. court is expected to confirm or reject in coming days a $3.7 billion offer by an affiliate of Contrarian Funds aimed at setting a floor for a new bidding round for shares in the parent of Venezuela-owned refiner Citgo Petroleum, following a hearing where creditors made their arguments on Thursday. Contrarian Funds' bid, recommended by a court officer overseeing the auction last month, has unleashed a battle among the 16 creditors that remain in the 8-year court case, aimed at compensating companies and bondholders for debt defaults and expropriations in Venezuela. Delaware judge Leonard Stark filed a document earlier this week saying he was "inclined" to accept the court officer's recommendation of the bid by Contrarian's affiliate Red Tree Investments, which was selected due to its certainty of closing. However, several creditors and lawyers representing Venezuela said in the hearing that starting with such a 'low' bid would make it difficult to approach a targeted $7 billion to $8 billion value for Citgo.
