Although Citgo is currently valued at $13 billion and is in a better position than in previous years, its earnings are not enough to pay off all creditors. Claims by six plaintiff companies, including Crystallex, total about $2.6 billion.
On May 1, the US Treasury Department decided not to take “coercive measures” to block the auction of Citgo, a US-based refiner of Petróleos de Venezuela (PDVSA). This was done through general license number 42 and implied, among other things, the authorization to the Venezuelan Parliament elected in 2015 to carry out “certain transactions” in relation to “any debt of the Government of Venezuela”, the state oil company itself or any “entity” in which that company has a participation of 50% or more.
In the CocuyoClaroyRaspao on this May 11, the journalist Mayella Arms, specialized in the economic source, gave details in this regard. She pointed out, for example, that the National Assembly (AN) does not have much room for maneuver over the company, nor does the Asset Protection Committee, which is a body created by the legislative body with the opposition majority. The reason? It is the Executive who has powers on the subject.
“We do not know how far its authority (that of the AN) can go to talk with creditors. Perhaps you can deal with the issue of the proposal to extend the legal limit of Venezuelan bonds, you could support this type of measure, yes, but you needed a series of permits in the US to have a certain action. We are not clear about that level of action, “said the reporter.
Just three days ago, on May 11, a US appeals court granted Venezuela a motion temporarily suspending rights won by six companies to participate in a court-organized auction to satisfy expropriation claims. The Voice of America had previously explained that these companies had won conditional rights to take part in a federal process in which the judge approved a share auction to satisfy a $970 million arbitration award won by the Crystallex mining company. But that’s not all there is to it.
The claims by the six companies total about $2.6 billion. Hence Armas said that while Citgo, valued at $13 billion, is currently in a better position, its earnings are not enough to “serve all creditors.”
The also journalist for the Reuters news agency specified that the protection of the PDVSA refinery in the United States will depend on the Joe Biden administration and the negotiations that the Venezuelan opposition makes with it.
“The government (that of Nicolás Maduro) proposed to the bondholders to extend the legal date of the Venezuelan and PDVSA bonds. That was a proposal to prevent bondholders from suing, but soon more lawsuits may come. They (the creditors) welcomed them because the lawsuit process in the US is expensive. But there they do not recognize the Maduro administration and then support from the opposition would be needed, which does not have much room for maneuver over Citgo either, “he explained.
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