The sale process for shares of PDV Holding, parent company of oil refiner Citgo Petroleum, began on Monday, kicking off what could end up being the largest-ever court auction, according to a report from Reuters.
U.S. District Court Judge Leonard Stark, who is overseeing the auction, declined to obtain a low-end, or stalking horse, bid to begin the proceedings. The process will include two rounds of bidding, Reuters reported, with Jan. 22, 2024, being the deadline for the first round of non-binding bids.
The final sale hearing is scheduled for July 15, 2024.
Over a dozen creditors owed money by Venezuela, which controls the oil company, have made claims against Citgo totaling $23 billion. That is almost double the company’s estimated worth, according to Reuters.
In 2019, the U.S. had imposed sanctions that broadly prevented creditors from foreclosing on Citgo, but the federal government has since withdrawn that prohibition, clearing the way for this sale. Venezuela made an objection to the sale in August, but plans proceeded.
While the longer-term protections have been removed, earlier this month the U.S. Treasury Department extended temporary protection of Citgo to January, meaning the company could settle with some of its creditors before the first round of bids are due. However, that is not expected to impact the auction.
Houston-based Citgo has a retail network of over 4,200 independently owned and operated stores. In addition, the company owns refineries in Lake Charles, Louisiana; Corpus Christi, Texas; and Lemont, Illinois, along with a broad distribution network with 30 refined product terminals, joint ownership of another eight terminals and equity interest in four more.
