Creditors at Citgo stock auction object to terms of Elliott affiliate’s bid Reuters

By Marianna Parraga and Gary McWilliams

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

An affiliate of Elliott Investment Management was named the presumptive winner of the stock auction on Friday with a bid that puts an enterprise value of up to $7.286 billion for Venezuelan-owned oil refiner Citgo.

Amber Energy’s bid, subject to the resolution of parallel claims by a group of bondholders, is the best way to begin the process of maximizing Citgo’s value to creditors, a lawyer for the court officer overseeing the auction told the court.

“Our view is: Let’s block this offer and make it binding,” said attorney Ray Schrock. Lenders who object to the undisclosed terms of the offer would have a future opportunity to review the details.

“They will have plenty of time to see the terms,” ​​he added. “We have someone ready to step up. What we don’t want to do is lose the bird.”

But Crystallex, the company that in 2017 first filed a case alleging Citgo parent PDV Holding was liable for unpaid judgments and held the highest debt, said the terms proposed by Elliott’s Amber Energy would it meant creditors collectively claiming $21.3 billion were “unlikely to do”. to ever be paid.”

Amy Wolf, a lawyer representing ConocoPhillips (NYSE: ), which holds the largest claims in the case, said the sale process “is not ending the way we all would have liked.”