By Gary McWilliams and Marianna Parraga
HOUSTON (Reuters) – The sale of shares in the parent of Citgo Petroleum to settle claims in Venezuela needs to be resolved, a court adviser recommended on Tuesday, admitting that the year-long sales plan was flawed and should be restarted.
The US District Court in Delaware is selling shares in PDV Holding to recover $21.3 billion in charges against Venezuela’s state oil company PDVSA for embezzlement and debt default.
This recommendation in the court came after the amount of 7.3 billion dollars paid by the mutual fund of the representatives of Elliott Investment Management failed to get support from the creditors. The two groups had told the court that they could donate if they were allowed to re-enter the bidding process.
The counsel of the court, Mr. Robert Pincus, planned to restart the market after he was reprimanded by the judge due to the lack of an agreement that met the requirements set more than last year. The adviser gave Elliott only negotiating rights and would have let it stop payments, a situation creditors said favored Elliott.
Elliott’s wholly-owned subsidiary, Amber Energy, which in September was declared the winner of the first auction but never completed the deal, said in court that the proposed terms “will create chaos that will affect the purchase price.”
Amber has previously said that she will quit if the judge in this case rejects her terms. A spokesman declined to comment immediately on its next steps.
The consultant’s plan to restart is largely a follow-up to Judge Leonard Stark’s order to revive sales. But Special Master Robert Pincus urged against Stark’s suggestion that the cases seeking the same assets continue, saying that some candidates may not be able to accept the risk of the candidates.
Pincus plans to reopen Citgo’s financial and operating data to potential buyers and resume a formal auction on Dec. 18 and accept bids for three months. A final recommendation to the court could come in April with Judge Stark handling the confirmation hearing for whichever winner ends in May, he said.
(Reporting by Marianna Parraga and Gary McWilliams in Houston; Editing by Christopher Cushing)