The delaware judge, Leonard Stark, is expected to choose the winner after a final sale hearing on August 18. The decision will determine the control of the Crown Jewel of Venezuela’s assets abroad, the seventh largest refinery in the United States
Subsidiaries of the Minera Gold Reserve (Grz.V) and the merchant of vitol raw materials are approaching the goal in a fiercely disputed auction organized by an American court that will determine the control of the American refinery Citgo Petroleum, owned by Venezuela, according to two sources with knowledge of the process and judicial documents.
A judicial officer who supervised the bidding round last month recommended an offer of 7.4 billion dollars by a group led by a Gold Reserve unit (Grz.V) based in Bermuda. As winner of the auction, of a total of five offers presented, including one of a Vitol subsidiary. The delaware judge, Leonard Stark, is expected to choose the winner after a final sale hearing on August 18.
The decision will determine the control of the crown jewel of Venezuela’s assets abroad, the seventh largest refinery in the United States.
Despite the leadership status of Gold Reserve, its offer faces objections of the parties in the case and the holders of a Venezuelan bonus, some of which the Vitol unit is looking to reach an agreement, in a movement that could shake the auction again.
Following his recommendation, the judicial officer Robert Pincus told the court last week that there was a competitive offer of a company that did not identify, but that so far had not fulfilled the criteria to be considered superior to the offer of the Gold Reserve group.
The offer to which it refers was made by the Vitol subsidiary, according to the sources, which spoke on condition of anonymity because they were not authorized to speak publicly.
Pincus’s revelation was the last turn in a complex judicial process initiated by the Crystallex mining company against Venezuela in 2017. More than a dozen additional companies affected by breaches in Venezuela or whose assets were expropriated by the State are looking for the profits of the auction.
Gold Reserve requested the court on Monday to proceed to the final sales hearing as scheduled and warned that any competitive offer, including a non -monetary consideration, would be rejected by the company, which is also crediting in the case that tries to recover $ 1.18 billion of the expropriation of its assets.
“This rival offer seems to be an attempt to derail a well -documented and advanced auction,” Paul Rivett, vice president of the Gold Reserve Board of Directors, told Reuters.
Vitol refused to comment.
Hot competition
Gold’s favorite condition reserve at the auction of the Citgo matrix, PDV Holding, could be threatened if the Vitol unit manages to ensure a payment agreement with the holders of the PDVSA 2020 Bonus, guaranteed with Citgo actions, sources close to the conversations said.
The Vitol initiative arises after objections of bidders and creditors, from mining and oil companies whose Venezuelan assets were expropriated to bond holders in default, which have flooded the court in recent weeks opposing some terms of the offer of the Gold Reserve subsidiary, Dalinar Energy, especially their lack of an agreement to pay for bond holders.
The improved offer of the Vitol subsidiary, presented at the end of June after rival consortiums sent and negotiated theirs, includes a purchase price of 8,450 million dollars for the shares of PDV Holding and intends to make a separate payment to the bond holders, according to the offer, presented with the name of the lazy bidder.
The 8,450 million dollars would cover the claims of 13 of the 15 registered creditors to claim the funds, compared to the 11 creditors that were expected to cover the offer of the Gold Group Reserve. However, since the offer of the Vitol subsidiary was not disseminated in its entirety, it is not clear if it includes non -monetary consideration.
“We intend to finance the transaction entirely with available cash and existing or new credit lines within the company,” the company told the court.
The Vitol subsidiary also informed the court that was in conversations with the 2020 bond holders confirmed the conversations last week, but at the time of its presentation on Thursday, documentation of said agreements had not been received.
“Although the preliminary figures seem good, the reality is that, unless everything is in cash, it does not fit what is required,” said Rivett of Gold Reserve, referring to the competitive offer.
Pincus did not say if a deadline for the Vitol unit had been set to provide the required agreements, but the time advances so that the judge adjusts to his proposed calendar without additional delays.
A procedure conference is scheduled for August 13, and a final hearing marked as the last step before Judge Stark made a decision about the winner is still set for August 18.
It is disconcerting because this company (the rival bidder) has been in this process. They have made due diligence. They understand how the process works. They could have submitted an offer and become the favorite offeror. They did not. They could have submitted an offer to be the recommended offeror. And they didn’t, ”Rivett added.
The PDVSA 2020 bonus rose 1,375 cents on Monday to quote 91 cents per dollar, the highest level in almost a month.
*Journalism in Venezuela is exercised in a hostile environment for the press with dozens of legal instruments arranged for the punishment of the word, especially the laws “against hatred”, “against fascism” and “against blockade.” This content was written taking into consideration the threats and limits that, consequently, have been imposed on the dissemination of information from within the country.
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