A judge in a Delaware court has approved a $3.7-billion bid by Red Tree Investments as the floor-setting offer in a court-mandated auction of the parent company of Venezuela-owned refiner Citgo.
U.S. District Judge Leonard Stark decided that the offer from Red Tree Investments would be the starting bid in the auction which the Delaware court is holding for years to auction off assets of Venezuela’s PDV Holding, the parent company of Citgo.
The sale process of shares to pay creditors and claimants against Venezuela’s oil asset appropriation and debts owed by Citgo was launched by the Delaware court in October 2023.
Overall, creditors and claimants have sought to recoup at courts in Delaware a total of $24 billion in claims and arbitration awards against Venezuela.
The auction has been dragging on for months and this year the court re-launched the sale process after a previous attempted sale was rejected as too low by creditors last year.
The latest offer, from Red Tree Investments, has kicked off another battle among 16 creditors, as some disagree with the bid claiming it is too low.
The Red Tree Investments offer was recommended by court officer Robert Pincus, the Special Master appointed by the Delaware court to oversee the sale.
In his latest ruling on the matter, Judge Stark wrote that “Red Tree’s bid constitutes the best balance of the evaluation criteria, which may be fairly summarized as price and certainty of closing.”
The judge believes that the decision on the starting offer should encourage competition.
Judge Stark asked Pincus to propose a deadline for other offers topping the starting bid to be submitted. The winning bid in the auction is expected to be picked in the summer, with a final hearing slated for July.
Citgo is the seventh-largest refiner in the United States with a total capacity topping 800,000 barrels per day (bpd). It has refineries in Texas, Louisiana, and Illinois, along with pipelines and a gasoline distribution network that supplies 4,200 outlets in the United States.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com
- DOGE Hands US DOE The Budget Axe To Slash $10B in Clean Projects
- U.S. Strike on Yemen Oil Port Kills 58, Houthis Say
- China’s Oil Supertankers Face $5.2-Million Fee per U.S. Port Call
