Lawyers representing Venezuela have asked a U.S. court to stop the execution of a sale of PDV Holding - the parent company of U.S.-based refiner Citgo Petroleum - arguing that Citgo's market value has risen since a Delaware judge approved the sale late last year.
In November, a Delaware judge authorized the sale of PDV Holding to Amber Energy, an affiliate of Elliott Investment Management, following a court-organized auction of shares intended to generate funds to pay creditors. The approved bid was for $5.9 billion, but that transaction has not yet closed and remains subject to approval by the U.S. Treasury Department. A U.S. appeals court is also considering a request from Venezuela and some competing bidders to suspend the sale, citing concerns over the company's valuation and asserted conflicts tied to advisers to the Delaware court.
In a May 12 letter filed with Delaware Judge Leonard Stark, and unsealed on Thursday, Venezuelan counsel Alexandra Cumings said oil refiners that trade publicly have become substantially more valuable in the months since the sale hearing. "In the months since the sale hearing, the value of publicly traded refiners has increased significantly," she wrote.
Using what Cumings described as the most conservative valuation that was discussed at the auction, she said Citgo should now be valued at $15.1 billion, a figure well above the $5.9 billion price tied to the court-approved sale. On that basis, she urged the court not to permit the execution of the sale at the prior bid.
"Such an outcome is plainly unfair - to CITGO, to the Venezuelan people, and to the out-of-the-money creditors," Cumings added in the letter, arguing the discrepancy between the earlier sale price and current valuations warrants halting the transaction.
The letter links higher valuations in part to changing energy market conditions. It notes that oil assets have been marked up in value partly because prices jumped about 50% after U.S.-Israeli joint attacks on Iran sparked a war that has now entered its third month and reduced global energy supplies.
Venezuelan lawyers contend Citgo should be central to a restructuring of Venezuela's roughly $150 billion in debt that was recently announced by interim President Delcy Rodriguez, rather than being sold at auction to satisfy a small group of creditors.
Cumings also raised procedural concerns about the auction process. She said an opinion article by Gregory Goff, chief executive of Amber Energy, revealed strategic details that violated a confidentiality agreement under which Citgo had supplied information to bidders. The letter further alleged potential conflicts of interest because some firms that advised court-appointed special master Robert Pincus - who oversaw the auction - reportedly also provided services to Elliott.
Elliott has denied the accusations. As of the filing, neither Robert Pincus nor Judge Stark had publicly responded to the competing claims between the parties.
Context and next steps: The sale approved in November remains conditional on U.S. Treasury sign-off and pending appeals court review. Venezuela's letter argues market developments and alleged procedural flaws justify pausing the sale.