HOUSTON (Reuters) -Blue Water Acquisition Corp said on Friday it submitted an offer valued in $10 billion for the parent of Venezuela-owned refiner Citgo Petroleum, which includes a $3.2 billion settlement proposal to holders of a defaulted Venezuelan bond.

A court-organized bidding round for PDV Holding to pay up to 15 creditors closed last month after improved bids were received by an officer overseeing the auction, but the court said it would allow unsolicited bids after the deadline.

Blue Water Acquisition Corp is a special purpose acquisition company formed to identify and complete businesses with high-potential companies across diverse sectors.

The company is offering cash or stock distributions to creditors, and a settlement for holders of the PDVSA 2020 bond to be paid either in cash or in shares of the publicly listed entity to own Citgo.

"Our $10 billion proposal would provide creditors with both immediate recovery and the opportunity to participate in the future of Citgo as a U.S. public company," said Joseph Hernandez, Blue Water's chief executive, in a release.