A sale hearing in the court-mandated auction to buy US refiner Citgo has been rescheduled after private equity-backed Amber Energy rejoined the bidding.
The hearing, which was planned for 18 August, has been postponed to a date that will be determined later so the court can gather more information to evaluate a recent unsolicited bid, US District Judge Leonard Stark said in an order filed Thursday.
Stark did not name Amber Energy in the order but previous court filings show that Amber submitted a recent bid in the auction. Amber is backed by hedge fund Elliott Investment Management.
A different "unsolicited bid" was received by the court on 30 June, identified as "Bidder B," according to a 7 August court filing.
Citgo's three refineries, as well as its lubricant plants and its midstream and retail assets, are being auctioned to satisfy debts owed by Venezuela's state-owned PdV.
The 18 August hearing had been set to determine whether Stark should accept a recommendation from a court-appointed official of Bermuda-based Gold Reserve's $7.4bn bid as the winner in the auction.
The bid was made through Gold Reserve's US subsidiary Dalinar Energy and was supported by a consortium of creditors that includes Koch Minerals, Koch Nitrogen International and Rusoro Mining.
Gold Reserve opposed the postponement of the 18 August sale hearing, saying that the Amber Energy bid is a "non-actionable underbid" that should not be considered, according to a filing Thursday in the US District Court for the District of Delaware.
Gold Reserve "could suffer substantial financial harm if its final recommended bid were permitted to be displaced by this underbid," the company said in the filing.
Amber submitted a bid last weekend that includes a total value of $8.8bn, according to a filing by Red Tree Investments, a subsidiary of Contrarian Capital Management. Red Tree's initial $3.7bn proposal was previously picked as the stalking horse bid in the auction.
The Amber bid includes $5.9bn for creditors, while also settling litigation claims from a group of bondholders of PdV Holding and resolving an expected $2.9bn in claims against PdV, Red Tree said in the filing. PdV Holding is a US subsidiary of PdV that owns Citgo.
Last year, Amber was the top bidder in the Citgo auction with a bid of $7.3bn. But the recommendation did not receive support from the "sale process parties" or "additional judgment creditors" and the court officer pivoted to another round of bidding, according to court filings.
A federal judge this year restarted the Citgo sale with a new auction process and the Gold Reserve bid was recommended as the winning bid by a court-appointed official last month.
Several parties objected to the Gold Reserve pick including Red Tree and the group of PdV bondholders who are seeking a claim in a separate proceeding in the US District Court for the Southern District of New York.
Other bidders in the Citgo auction include investment firm Black Lion Capital Advisors, which submitted an $8bn cash bid and trading company Vitol.
Any sale of Citgo is subject to regulatory approvals including by the US Department of Treasury's Office of Foreign Assets Control.
Even though it is owned by PdV, Citgo since 2019 has operated under a board appointed by the Venezuelan opposition and vetted by the US government after the US rejected Venezuela's 2018 presidential election as illegitimate. PdV remains under the control of President Nicolas Maduro's government.
Citgo owns the 460,000 b/d Lake Charles refinery in Louisiana, the 165,000 b/d Corpus Christi plant in Texas and the 188,000 b/d Lemont refinery in Illinois.
