Commodities NewsTrading News

Citgo Valued at $32 Billion-$40 Billion Ahead of Auction


Venezuela-owned oil refiner Citgo Petroleum has been valued at an impressive range of $32 billion to $40 billion. As revealed during a court hearing in Delaware. This valuation comes in the midst of discussions about a court-ordered auction of shares in Citgo’s parent company. This aims to address claims exceeding $23 billion against Venezuela and its state oil company PDVSA.

Valuation Based on Earnings

Ray Schrock, representing a court official, disclosed that Citgo’s value was determined based on its earnings of $4 billion. It is calculated before interest, taxes, depreciation, and amortization. This valuation was crucial in the parent company’s pursuit of an indemnity bond in a related dispute regarding the parent’s share certificate.

Special Master’s Role

Schrock serves as a special master appointed by U.S. District Court Judge Leonard Stark in Wilmington, Delaware, to oversee the sale of Citgo’s holding company’s shares. A total of 21 creditors, with claims exceeding $23 billion against Venezuela and PDVSA, have informed the special master of their intentions.

Debt Resolution Through Share Acquisition

The creditors’ objective is to resolve their debts by acquiring shares of the company that owns Citgo Petroleum. However, Citgo has not yet responded to requests for comments on this matter. Meanwhile, Venezuelan President Nicolas Maduro has criticize the auction, alleging that the company has been “kidnapped by the United States.”

Citgo’s Significance

Citgo Petroleum, as the seventh-largest U.S. oil refiner, operates plants in Illinois, Louisiana, and Texas with a capacity to process up to 807,000 barrels per day of crude oil. Additionally, it maintains a retail network consisting of more than 4,400 outlets.

Auction Timeline

The court expects to finalize the sales procedure and schedule, potentially commencing the auction of shares as early as October 23. This process seems to extends over at least nine months. Judge Stark will soon determine the deadlines by which creditors must complete procedures to secure participation in the auction. A proposed date by the special master is around January 12, while Venezuela’s legal representatives have suggested December 22.

Stay tuned for further developments on this significant financial event.

Trading Compass

Disclaimer: This article serves solely for informational purposes and should not be construed as financial advice. Thus, we strongly advise readers to conduct thorough research and consult with financial professionals before making any investment decisions.


Related Posts

Leave a Reply

Your email address will not be published. Required fields are marked *