The sale order is the last major legal step to conclude a two-year auction aimed at paying up to 15 creditors for debt defaults and expropriations in the South American country.
A US judge authorized on Saturday, November 29, the sale of shares of the Venezuelan parent company of Citgo Petroleum to a subsidiary of Elliott Investment Management, after approving earlier this week a $5.9 billion offer from the company in an auction organized by the court to pay creditors linked to Venezuela.
The sale order is the last major legal step to conclude a two-year auction aimed at paying up to 15 creditors for debt defaults and expropriations in the South American country.
In a case first brought by miner Crystallex against Venezuela in 2017, the Delaware court found Citgo’s parent company, PDV Holding, liable for the OPEC country’s debt, opening the door for more than a dozen additional creditors to join the auction.
Elliott’s Amber Energy’s bid, which includes a key deal to pay $2.1 billion to holders of a defaulted Venezuelan bond, had been recommended earlier this year by a judicial official overseeing the auction, in a change from his previous recommendation of a bid from rival bidder Gold Reserve.
The change triggered a flurry of objections and challenges to Amber’s offer, which were dismissed by Delaware Judge Leonard Stark. However, the parties in the case, including Venezuela, have stated that they will appeal Stark’s confirmation of Amber’s offer.
“The consideration to be provided by the buyer under the share purchase contract is fair, adequate and reasonable consideration for the PDVH shares and constitutes an appropriate price for the purchase of the PDVH shares under the terms of the Sales Procedures Order,” Judge Stark said in his order.
More than half a dozen creditors are willing to collect the auction money if the transaction is completed. The sale is expected to close next year, pending approvals from regulators and the US Treasury Department, Amber stated earlier this week.
Among those creditors are oil producer ConocoPhillips, mining companies Crystallex and Rusoro Mining, and industrial conglomerates OI Glass and Koch.
At closing, the buyer will not assume any liability related to Citgo’s parent company, the Venezuelan oil company PDVSA, or to the Republic, the judge said.
*Journalism in Venezuela is carried out in a hostile environment for the press with dozens of legal instruments in place to punish the word, especially the laws “against hate”, “against fascism” and “against the 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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