An affiliate of Elliott Investment Management has been recommended as the winning bidder in a US court-supervised auction of shares in the parent of Venezuela-owned Citgo Petroleum, with a $5.89bn offer, according to a report by Reuters citing filings released on Friday.
Court officer Robert Pincus concluded that Elliott affiliate Amber Energy’s proposal remained superior to a rival $7.4bn bid from miner Gold Reserve’s Dalinar Energy, despite the latter’s late attempt to improve terms. Judge Leonard Stark is expected to issue a final ruling at a hearing next month.
Amber’s package includes $2.13bn in cash to settle claims with holders of a defaulted Venezuelan bond backed by Citgo equity and $500m in partial compensation to Gold Reserve, which has rejected the offer. Proceeds from the auction are expected to go towards satisfying a portion of nearly $19bn in creditor claims stemming from Venezuela’s defaults and expropriations.
Several creditors, including Gold Reserve, Siemens Energy and Valores Mundiales, have filed motions challenging Amber’s bid, arguing that bidding procedures were disregarded. Pincus, however, left open the possibility that his recommendation could be revisited depending on “intervening events.”
