An affiliate of Elliott Investment Management has emerged as the frontrunner in the high-stakes auction of Citgo Petroleum’s parent company, PDV Holding, after submitting an improved offer that now tops a rival $7.4bn bid from Gold Reserve’s Dalinar Energy, according to a report by Reuters.

The report cites a court filing as revealing that Delaware court officer Robert Pincus said Elliott’s vehicle Amber Energy presented the strongest bid in the latest round, which closed on 22 August. The offer reportedly includes $5.86bn in cash for creditors plus a $2.86bn settlement with bondholders tied to defaulted Venezuelan debt collateralised with Citgo equity – potentially resolving long-running disputes over claims on the refiner’s parent.

Dalinar, which was previously recommended as the winning bidder, has three days to match or exceed Elliott’s terms. A final sale hearing is scheduled for mid-September before Judge Leonard Stark.