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Venezuelan opposition set to retain control over Citgo following federal court ruling
US-VENEZUELA
VENEZUELA’S political opposition has report- edly scored a victory in its fight to retain control over Citgo, a US-based subsidiary of the national oil company (NOC), PdVSA.
Opposition leaders, including Interim Pres- ident Juan Guaido, staked their claim to Citgo by filing suit in the US District Court for the Southern District of New York. In the initial fil- ing, they petitioned the court to nullify a PdVSA bond issue that is due to reach maturity in 2020.
The NOC was due to make a payment of $913mn to bondholders on October 28 or run the risk of seeing creditors seize its collateral for the issue – namely, a 50.1% stake in Citgo. Guaido and his allies sought to forestall such a takeover, as they were keen to secure control over Citgo and its assets and cash flow. They also knew they did not have the money needed to make the $913bn payment on time.
They have had some help from the US Treas- ury Department. On October 24, that agency introduced a measure blocking the transfer of equity shares in Citgo until January 22, 2020.
The measure now looks set to remain in effect after that date. Reuters reported that Judge Kath- erine Folk Failla had set a schedule for litigation that will keep the court case going well beyond January 22. According to the news agency, she said that the discovery period would continue until February 10, followed by the recording of expert depositions before a hearing on May 5.
The schedule, which is recorded in a docu- ment known as a forbearance agreement, will give the Venezuelan opposition more time to try
consolidating its control over Citgo. According to Reuters’ source, Guaido and his team have already begun negotiating with bondholders in the hope of striking a comprehensive agreement that will settle the matter.
As of press time, neither PdVSA, Citgo not Guaido had commented on the latest decision by the courts.
Seeking seizure
Despite the Treasury Department saying last week that it would block any attempts at seizing Venezuelan property in order to enforce liens, judgements or arbitral awards, ConocoPhillips is seeking to do just that.
The US-based company filed a motion in a set a schedule for
Delaware court on November 26 seeking to seize shares in Citgo’s parent, PDV Holding, in a bid to claim an arbitration award against PdVSA.
litigation that will keep the court case going well
The move comes after ConocoPhillips was
awarded $2bn by the International Chamber of
Commerce last year as compensation for Ven-
ezuela’s takeover of company assets in 2007. beyond January ConocoPhillips said that PdVSA has not made
the payment in full, arguing that this gives it the right to enforce the award.
In October the company revealed that it had received a total of $754mn from PdVSA up to and including the third quarter. A Cono- coPhillips spokesman, Daren Beaudo, told Reuters that PdVSA was about $12mn short of its required third-quarter payment to the US company and had not paid any of the fourth-quarter amount.™
22.
Judge Katherine Folk Failla had
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w w w . N E W S B A S E . c o m Week 47 27•November•2019