By Marianna Parraga
HOUSTON (Reuters) -Black Lion Citgo Group, a consortium led by private equity firm Black Lion Capital Advisors, submitted an $8 billion all-cash bid for the parent of Venezuela-owned U.S. refiner Citgo Petroleum as part of a court-organized auction of shares, the company said in a filing released on Wednesday.
Following the selection of a $3.7 billion offer by Red Tree Investments as starting bid in April, a court in Delaware received rival offers until June 18 for Citgo’s parent PDV Holding as part of a bidding round aimed to pay up to 15 creditors for debt defaults and expropriations in Venezuela.
The auction’s winner is expected to be recommended by a court officer overseeing the sales process by July 2, with a final hearing set for August 18, according to a schedule recently updated by the court.
Black Lion’s offer, submitted last week, is backed by investors Quazar Investment, Anex Management and Fortress Management and includes an $8 billion base purchase price plus court and government fees and insulation funds for up to $3 billion, according to the filing.
The Black Lion group did not participate in the first phase of the bidding round earlier this year, when a starting bid was chosen, according to court filings and sources. Black Lion did not immediately reply to a request for comment.
When the auction’s schedule was extended this month, court officer Robert Pincus said the resolution of parallel legal cases in pursuit of the same assets was expected to encourage new offers in the last mile of the sales process.
A consortium of miners Gold Reserve and Rusoro and conglomerate Koch also submitted an improved offer as part of the bidding round’s topping period, Gold Reserve said earlier this month, without revealing details.
The group, which only includes companies that also are creditors in the case, had offered $7.1 billion for the shares during the starting bid phase, but its offer was not chosen because of its lower “certainty of closure,” Pincus told the court.
Two rival groups led by affiliates of commodities house Vitol and hedge fund Elliott Investment Management were considering bids in this round, but their submissions have not been confirmed. A $7.3 billion offer by Elliott’s affiliate Amber Energy won the first bidding round last year, but was ultimately rejected by most creditors.
Black Lion’s offer “exceeds the current stalking horse bid and all reported topping bids publicly known to date” and “is backed by committed institutional funding, with documented capacity greatly exceeding $12 billion,” the company told the court.
