Elliott Investment Management Presses Court for Citgo Petroleum

By Gary McWilliams
HOUSTON (Reuters) – Hedge fund Elliott Investment Management on Monday urged a court to proceed with its bid for Citgo Petroleum, citing that the Venezuela-owned oil refiner's assets are "deteriorating in value" and asserting that creditors won't find a better offer elsewhere.

The remarks were made in a court filing following creditor claims last week that the up to $7.3 billion conditional bid by Elliott's wholly-owned Amber Energy was insufficient and likely to be rejected.

Amber Energy reiterated its intention to withdraw if the court does not address key issues, particularly its request to hold back over $2 billion of its offer as a set-aside in case Venezuelan bondholders prevail in a separate lawsuit. The company also seeks to block other lawsuits from claiming control over the same assets.

Citgo, which operates three U.S. refineries, 38 terminals, and six pipelines, supplies fuel to 4,200 independent retailers. The firm is central to a U.S. District Court in Delaware's auction aimed at satisfying $21 billion in claims against Venezuela for defaults and expropriations.

In support of its proposal, Amber stated it has secured a debt commitment letter from Barclays and Citigroup's Citibank, indicating its ability to finance the acquisition. Furthermore, it has assembled an eight-person refining management team ready to take over Citgo operations.

However, the court filing did not address additional concerns raised by creditors, such as an undisclosed breakup fee if the deal fails, and objections to other bidders accessing Citgo's financial data until the court rules on the breakup fee.

A spokesperson for Elliott declined to comment on these matters.

Amber claims its proposal is "the best and only realistic pathway for the largest number of creditors" to receive payments, despite creditors contending its terms are unlikely to yield auction proceeds "for years – if ever."