A US court has given a boost to activist investor Elliott Investment Management’s bid for Citgo Petroleum’s parent company, PDV Holding, through an ongoing court-ordered auction of shares, according to a report by Reuters.
Delaware Judge Leonard Stark instructed the auction’s special master to terminate an agreement with a Gold Reserve subsidiary and instead sign a stock purchase agreement with Elliott affiliate Amber Energy, positioning it as the frontrunner.
Amber has offered $5.9bn, including a $2.1bn commitment to pay holders of defaulted Venezuelan bonds backed by Citgo equity — a feature that has strengthened its bid relative to Gold Reserve’s Dalinar Energy unit.
The ruling follows a New York court’s decision upholding the validity of PDVSA’s 2020 bonds, which are collateralised by Citgo shares, further reinforcing bondholders’ claims.
While Judge Stark has yet to make a final ruling, he also denied Gold Reserve’s motion to disqualify Amber’s bid. A written opinion is expected shortly.
More than a dozen creditors are seeking compensation through the auction process, tied to Venezuela’s historic defaults and expropriations.
