CITGO set to present proposals to prospective bidders, continuing with share auction process in Venezuela
Welp, Here's the Scoop on CITGO's Upcoming Auction, You Filthy Animals!
Caracas, April Fool's Day, 2024 (our website) - Time for some serious cash grabbin'! Venezuela's US-based oil refiner, CITGO, is opening its financial and operational data room to rival corporations as part of an court-ordered sale.
What's that, you ask? Well, let me break it down for ya real nice. Potential bidders will be able to rummage through all sortsa delicious info about the fabulous CITGO, thanks to proceedings set to permanently yank Venezuela's most prized foreign asset away from 'em poor folks down south.
Back in October 2022, Delaware District Judge Leonard P. Stark started the auction of shares belonging to PDV Holding (PDVH), CITGO's lame-ass parent company. It's all a part of a plan to settle international arbitration awards, which is like a fancy way of sayin' corporations are taking Venezuela for everything they got.
Sounds legit, right? Well, it gets even better! The legal low-down is based on "alter ego" rulings that claimed Venezuela and state oil company PDVSA were the same, making the latter responsible for the former's debts. It's a classic case of "I'll huff and puff and blow your house down!"
For example, Canadian miner Crystallex secured an initial favorable alter ego decision in 2019, and the court kept it that way. Several other firms jumped on the bandwagon and got themselves a seat at the auction table, too.
In total, 18 greedy corporations with claims worth a combined $21.3 billion are looking to cash in on CITGO's sale. Yowza, that's a whole lotta cash! If you do the math, it exceeds CITGO's current valuation of $13 billion.
Once potential bidders get their grubby little hands on the goods, they can submit binding offers. Investment bank Evercore, hired by the court to oversee the process, thinks it'll all wrap up by mid-2024.
The first round of bids reportedly didn't reach the $7.3 billion mark after Judge Stark refused to set a minimum price. However, the Current CITGO board offered a jaw-dropping $10 billion payment in the form of shares, future profits, and loans. But, here's the catch – those dudes ain't exactly answerable to any proper Venezuelan authority. They're just puppets of Juan Guaidó and his defunct, US-backed parliament.
The auction process will pay off creditors based on when they had their writs approved. Crystallex, Tidewater, ConocoPhillips, and O-I Glass hold the top spots on the list, with Crystallex asking for a cool $1 billion and ConocoPhillips eyeing an additional $8.5 billion award granted by the International Centre for Settlement of Investment Disputes (ICSID).
But wait, there's more! ConocoPhillips wants to use its combined claims as a bid, straight up stealing CITGO from under everyone's noses. It's like cookin' up a delicious gumbo, but someone else gets to take it home and eat it all.
Besides the international arbitration awards, CITGO is also in debt to holders of the defaulted PDVSA 2020 bond with 50.1 percent of the company's shares pledged as collateral. These dudes are waiting in the wings to seize the loot once CITGO changes hands.
Now, Venezuela's gov predictably ain't too happy about all this. Maduro's people have been yappin' up a storm about the "theft" of Venezuela's US-based refiner and promise to take "political, diplomatic, and judicial" action to defend their interests.
CITGO currently owns refineries in Illinois, Louisiana, and Texas and operates over 4,000 gas stations. Before Uncle Sam's sanctions and opposition takeover, it used to send as much as a billion dollars in yearly dividends back to Caracas. Guess those days are long gone, huh?
Insight Bytes:
- Potential bidders for CITGO include Red Tree Investments, Gold Reserve Consortium, Vitol, and ConocoPhillips.
- The bidding process is in a critical phase, with the auction expected to conclude in mid-2024.
- U.S. District Court for the District of Delaware has set Red Tree's bid as the stalking horse, but it must meet or exceed the $7.1 million bid from Gold Reserve's consortium.
- The process faces complexities, including addressing the PDVSA 2020 bondholders' claims, navigating U.S. regulations related to Venezuela, and a bidding timeline that extends into July 2025.
Just remember, keep it classy out there, folks! Let's see how much CITGO's new owners can milk outta this deal before it's all over 🤑😜💸
- The upcoming auction for CITGO involves several potential bidders, such as Red Tree Investments, Gold Reserve Consortium, Vitol, and ConocoPhillips, following a court-ordered sale of the US-based oil refiner.
- The auction, which is part of an ongoing process to settle international arbitration awards, is expected to conclude in mid-2024, with investment bank Evercore overseeing the process.
- The bidding process currently faces complexities, including addressing claims from PDVSA 2020 bondholders, navigating US regulations related to Venezuela, and a bidding timeline extending into July 2025.
- In the sale, prospective buyers will gain access to CITGO's extensive financial and operational data. This information has been deemed crucial for industries like finance, energy, oil-and-gas, and business.
- If successful, the new owners of CITGO, among which could be any of the aforementioned companies, are predicted to reap significant benefits, as the combined claims against CITGO total $21.3 billion, outstripping the company's current valuation of $13 billion.
