By Marianna Parraga
HOUSTON (Reuters) -A U.S. court has been asked to postpone a hearing until Sept. 19 to determine the winning bid at an auction of shares in the parent company of Venezuelan refiner Citgo Petroleum, according to a motion filed with the court on Friday . .
The Delaware court official who evaluated bids at a historic auction of shares in a parent company of the seventh-largest U.S. oil refinery requested a two-month extension to complete his review and finalize negotiations with bidders, the motion said. The request must be accepted by the judge to take effect.
The case has laid a new legal basis for enforcing international arbitration awards and for breaking the immunity of states and corporations. The auction is expected to lead to a transfer of ownership of Venezuela’s foreign crown jewel to settle $21.3 billion in claims against the South American country.
The court planned to conclude the sale process, which included two rounds of bidding, on July 15, days before Venezuela’s presidential election on July 28, which Washington sees as a possible way out of the South American country’s long-standing political crisis .
COMPETITIVE BIDDING
Of the several competing offers, “several bids were actionable,” Robert Pincus, the court official who oversaw the auction, wrote in the motion. Additional time is needed to clarify the terms of some bids and negotiate a final sales agreement, he added.
Pincus also asked the court for permission to consider unsolicited bids if he believed one was “higher or better” than the bids the court received within the June 11 filing deadline.
None of the bids submitted this month met the total number of claims submitted to the court, two people close to the matter told Reuters this week, predicting the delay. In the motion requesting a postponement, the number of bids in the second round and their amounts were not disclosed.
Citgo is the seventh largest U.S. oil refinery with storage terminals, pipeline holdings and three refineries that can process up to 807,000 barrels per day into fuels. In 2019, it cut ties with its ultimate parent company, Caracas-based state oil company PDVSA.
The government of Venezuelan President Nicolas Maduro and his political opposition have asked the US government to postpone or halt the auction so that the results do not change the election outcome.
In an initial round of bidding in January, investor bids reached $7.3 billion, compared with a market valuation of between $11 billion and $13 billion for the Houston-based refiner.
Lawyers representing Venezuela called them “disappointing” and recently urged the court to organize a third round if the bids in the second round that expired this month do not come close to a fair value for the company.
At least five groups of investors have submitted binding bids in the second round and three have secured funding commitments from banks and advisers including JPMorgan, Morgan Stanley and Rothschild & Co, people close to the matter told Reuters this month.
A hearing on July 2 is expected to update the court on the progress of its review. The judge can comply with the request at that time.
