Elliott's Affiliate Increases Bid for Citgo Petroleum's Parent to $8.82 Billion Amid Auction for Venezuelan Debt Settlement

Elliott Investment Management's affiliate has increased its bid for Citgo Petroleum's parent company, PDV Holding, to $8.82bn. The bid comes amid a complex auction process to settle debts owed by Venezuela and its state oil company PDVSA to 15 creditors. The auction is overseen by a Delaware court officer and has seen various bidders, including Gold Reserve, Amber Energy, and Vitol, vying for Citgo's parent since the previous year.

Elliott Investment Management's affiliate, Amber Energy, has raised its bid for Citgo Petroleum's parent company, PDV Holding, to a total value of $8.82 billion, according to a filing providing an update on the court-organized auction [1]. The auction, which is overseen by a Delaware court officer, aims to repay 15 creditors for debt defaults and expropriations by Venezuela and state oil company PDVSA [1].

The auction process has been complex and contentious, with various bidders vying for Citgo's parent company. In January, the auction was relaunched after a year-long bidding process ended in shambles amid arguments over Citgo's worth and parallel legal cases [1]. The court had last month recommended a $7.4 billion bid by a group led by miner Gold Reserve (GRZ.V) [1]. However, this bid was recently surpassed by a higher offer from a subsidiary of commodities house Vitol, which submitted a bid of $8.45 billion [1].

Amber Energy's increased offer includes a provision to pay holders of a defaulted Venezuelan bond, according to a letter filed on Tuesday by one of the creditors in the auction, Red Tree Investments [1]. The court is scheduled to hold a hearing next week to make a decision on the winner [1].

Citgo and PDV Holding are subsidiaries of Venezuela's state oil company PDVSA. As part of the case, the Delaware court found PDV Holding liable for Venezuela's debts, opening the doors for the creditors to pursue the refiner to have their claims paid [1].

The auction's volatility and procedural delays have introduced uncertainty into the Delaware court-supervised sale, potentially upending Gold Reserve's standing and reshaping the race for control of Citgo [2]. The court-appointed Special Master in charge of the U.S. auction of PDV Holding requested that the final sale hearing be delayed to give more time to evaluate all qualifying offers before a winner is selected [2].

Gold Reserve's bid, initially recommended by Special Master Robert Pincus, has been under siege since the emergence of two unsolicited offers: Amber Energy's $8.82 billion proposal and Vitol's $8.45 billion all-cash bid [3]. Gold Reserve faces a precarious position, with its bid structured as a 44% equity stake in Dalinar Energy, backed by a $1.3 billion debt-laden balance sheet [3]. The company's ability to raise a topping bid—should the court demand it—remains uncertain, which could push its debt-to-EBITDA ratio beyond 3.0x, triggering covenant violations and liquidity crises [3].

The legal uncertainty is compounded by Venezuela's opposition, which has labeled the auction an “illegitimate robbery,” while U.S. regulators must approve the final bid through OFAC and CFIUS [3]. A delay in regulatory clearance could further strain Gold Reserve's liquidity, particularly if the company must hold its $1.3 billion in debt while awaiting a decision [3].

The CITGO auction underscores the importance of liquidity, legal agility, and creditor alignment in high-stakes asset acquisitions. For investors, the auction presents a high-risk, high-reward scenario. Gold Reserve's shares are volatile, with a 15% monthly swing in 2025, reflecting market uncertainty. A successful bid could yield a 300% return on equity, but the risk of a 50% drawdown is real [3].

References:
[1] Reuters. "Elliott affiliate raises bid for Citgo parent company to $8.82 billion." Reuters, August 13, 2025. [https://www.reuters.com/legal/legalindustry/elliott-affiliate-raises-bid-citgo-parent-competition-heats-up-2025-08-13/](https://www.reuters.com/legal/legalindustry/elliott-affiliate-raises-bid-citgo-parent-competition-heats-up-2025-08-13/)
[2] Oilprice.com. "Citgo swings to $100M profit as bidding war intensifies for parent company." Oilprice.com, July 02, 2025. [https://oilprice.com/Latest-Energy-News/World-News/Citgo-Swings-to-100M-Profit-as-Bidding-War-Intensifies-for-Parent-Company.html](https://oilprice.com/Latest-Energy-News/World-News/Citgo-Swings-to-100M-Profit-as-Bidding-War-Intensifies-for-Parent-Company.html)
[3] AInvest. "Gold Reserve Citgo auction: strategic implications, court-ordered delays, emerging bids." AInvest, August 25, 2025. [https://www.ainvest.com/news/gold-reserve-citgo-auction-strategic-implications-court-ordered-delays-emerging-bids-2508/](https://www.ainvest.com/news/gold-reserve-citgo-auction-strategic-implications-court-ordered-delays-emerging-bids-2508/)