A U.S. judge has issued an order to reopen the data room for the auction of shares in PDV Holding, the parent company of Venezuela-owned Citgo Petroleum, effectively restarting the bidding process. Judge Leonard Stark’s decision, made on Monday, allows potential buyers to prepare fresh bids, in an effort to resolve the ongoing dispute surrounding Venezuela’s $21 billion in claims due to expropriations and unpaid debts.
The move follows dissatisfaction with a conditional offer of up to $7.3 billion made by an affiliate of hedge fund Elliott Investment Management. That bid, presented by Amber Energy, failed to gain the support of creditors and failed to meet the expectations of stakeholders involved in the case. As a result, the court has ordered the reopening of the data room for new bids to be submitted by December 18.
The auction concerns the shares of PDV Holding, the parent company of Citgo, which is seeking to satisfy creditor claims. These claims stem from Venezuela’s debt defaults and expropriation actions, notably involving the state-owned oil company PDVSA. The decision to restart the bidding process is designed to ensure a fair and transparent process for all interested parties.
Judge Stark’s order emphasizes the importance of equal access to the data room, with a focus on giving all potential buyers the opportunity to prepare and submit competitive bids. The judge’s ruling also addresses prior concerns about exclusive access granted to Amber Energy, which had held negotiations for months. Creditors and Venezuela’s legal team had criticized this exclusivity, arguing it unfairly sidelined other bidders.
A New Bidding Framework to Address Legal and Structural Concerns
In recent weeks, Judge Stark expressed his preference for revising the auction’s structure to promote fairness. This includes equal access to key information and the introduction of a termination fee to ensure transparency and prevent any one party from gaining an undue advantage. Under these new guidelines, the auction could include a stalking horse bid, a mechanism not utilized in previous rounds.
Amber Energy’s highly conditional offer and the complex legal issues surrounding the case have made it difficult for the court to finalize a deal that satisfies creditors. Despite Amber’s attempts to negotiate, the court has now declared its earlier proposed purchase agreement “moot,” signaling a reset in the process.
With the reopening of the data room, the next few days will see a flurry of activity as bidders prepare new offers. The court officer overseeing the auction, along with the creditors, will address any remaining disputes in the coming days. Once the auction resumes, the court aims to evaluate all bids and determine the best path forward to resolve the claims against Venezuela and PDVSA.
The auction has now entered a new phase, where transparency and equitable access to information will be central to ensuring a competitive and fair bidding process.
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