By Marianna Parraga
HOUSTON (Reuters) – A U.S. judge who oversaw an auction of shares in the parent company of Venezuela-owned Citgo Petroleum agreed on Monday to reopen a data room so potential buyers can prepare new bids, a court document showed .
Judge Leonard Stark ordered the data room opened on Wednesday after listening to creditors in the case pushing for a new round of bidding. The court is auctioning shares in Citgo parent company PDV Holding to repay $21 billion in claims against Venezuela and state oil company PDVSA for expropriations and defaults.
A conditional offer of up to $7.3 billion by an affiliate of hedge fund Elliott Investment Management had failed to gain support from creditors, prompting a restart of bidding.
“The virtual data room will reopen on December 18,” Stark said in his order. A court official overseeing the auction and creditors are due to present their arguments in the coming days on issues that remain disputed, he added.
This year, Elliott affiliate Amber Energy had exclusive access to the data room for months during bid negotiations. That exclusivity was widely criticized by creditors and Venezuela’s lawyers because it sidelined others, they told the court.
Stark has made public in recent weeks his preferences for a new schedule and structural changes aimed at providing a fair bidding process for all parties, including equal access to the data room and a termination fee.
If those proposals are confirmed, the auction could launch a stalking horse bid, which was not used in the first two bidding rounds this year.
Amber’s highly conditional offer and parallel lawsuits by the same Venezuela-related creditors in other U.S. courts this year have soured the court’s efforts to reach a deal that would satisfy creditors.
The new offer will restart a process that had led to negotiations but no approved agreement.
An attorney for Amber confirmed Friday that a proposed purchase agreement with the court official who oversaw the auction was “debatable.”
Amber’s original offer proposed withholding creditor proceeds while bondholders’ claims were settled, potentially leaving little or nothing for the creditors who originally brought the case.
