US decide points order to reopen Citgo information room, restart bidding

By Marianna Parraga

HOUSTON (Reuters) – A U.S. decide overseeing an public sale of shares within the guardian of Venezuela-owned Citgo Petroleum on Monday agreed to reopen an information room to permit potential consumers to organize new bids, a courtroom doc confirmed.

Decide Leonard Stark ordered the info room to be opened on Wednesday after listening to collectors within the case urge a brand new bidding spherical. The courtroom is auctioning shares in Citgo guardian PDV Holding to repay $21 billion in claims towards Venezuela and state oil agency PDVSA for expropriations and debt defaults.

A conditional provide of as much as $7.3 billion by an affiliate of hedge fund Elliott Funding Administration had failed to realize assist from collectors, resulting in the bidding restart.

“The digital information room shall be reopened on December 18,” Stark mentioned in his order. A courtroom officer supervising the public sale and collectors should current their arguments on points nonetheless in dispute within the coming days, he added.

For months this yr, Elliott affiliate Amber Power had unique entry to the info room whereas negotiating its bid. That exclusivity was broadly criticized by collectors and Venezuela’s legal professionals because it sidelined others, they instructed the courtroom.

Stark in latest weeks made public his inclinations on a brand new schedule and structural adjustments aimed toward granting a good bidding course of for all events, together with equal entry to the info room and a termination price.

If these proposals are confirmed, the public sale may set a stalking horse bid, which was not used within the first two bidding rounds this yr.

Amber’s extremely conditional provide and parallel lawsuits by the identical Venezuela-related collectors in different U.S. courts this yr soured the courtroom’s effort to craft a deal that might fulfill collectors.

The brand new bidding will relaunch a course of that had led to negotiations, however no accredited settlement.

An lawyer for Amber on Friday confirmed {that a} proposed buy settlement with the courtroom officer overseeing the public sale was “moot.”

Amber’s authentic provide proposed to withhold proceeds from collectors whereas it settled bondholder claims, doubtlessly leaving little or nothing for collectors who initially introduced the case.