An investment group including mining giant Gold Reserve and Koch Industries have offered $9 billion in cash and combined claims against Venezuela, two sources told Reuters. CVR Energy controlled by activist investor Carl Icahn separately submitted an $8 billion cash offer for Citogo.
An oil refinery backed by activist investor Carl Icahn and a group of creditors with claims against Venezuela are competing in the last mile of a U.S. court auction for Citgo Petroleum, according to three sources consulted by the agency. Reuters.
Eighteen creditors with debt defaults and expropriations in Venezuela totaling $21.3 billion are seeking to recover the money raised in the auction of shares of Citgo’s parent company, organized by a federal court in Delaware. But the bids are not expected to cover that amount in full.
An investment group that includes the mining company Gold Reserve and a unit of the Koch Industries conglomerate have offered about $9 billion in cash and combined claims against Venezuela, said two of the people consulted, who were not authorized to speak publicly on the matter.
Icahn-controlled CVR Energy separately submitted a cash offer of about $8 billion, people with knowledge of the auction told the news agency.
Both current offers are above the highest bid of $7.3 billion submitted in a first round earlier this year, but far from Citgo’s market valuation of between $11 billion and $13 billion.
The judicial official overseeing the auction, Robert Pincus, asked for more time to evaluate the complex bids and reach an agreement on terms. In some cases, creditors may use claims against Venezuela instead of cash.
The process has allowed companies such as Gold Reserve, which has a claim of more than $1 billion, and Koch Industries, with a claim of $457 million, to join forces with investors advised by investment bank Centerview Partners, who have contributed cash to the offering, two of the sources added. Creditors can submit claims as cash equivalents.
Gold Reserve and court official Robert Pincus declined to comment. Centerview had no immediate comment. Koch did not respond to requests for comment. CVR declined to comment, but the company’s chief executive in late July told investors it was exploring strategic transactions in refining.
Gold Reserve said in June it had raised $36 million through a private placement of shares and had secured a partner, FJ Management, to support its offering.
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