*

Hedge fund unit has Barclays ( JJCTF ), Citibank debt commitment

letter

*

Says Citgo assets 'deteriorating', urges acceptance of its

bid

By Gary McWilliams

HOUSTON, Oct 21 (Reuters) - Hedge fund Elliott

Investment Management on Monday pressed a court not to hold up

its bid for Citgo Petroleum, saying the Venezuela-owned oil

refiner's assets "are deteriorating in value" and creditors will

not get a better offer from others.

The comments came in a court filing after creditors last

week described an up to $7.3 billion conditional bid placed

before the court by Elliott's wholly-owned Amber Energy as

inadequate and likely to be rejected.

Elliott's wholly-owned Amber Energy repeated its threat to

walk away if the court "does not address threshold issues,"

referring to its desire to hold back more than $2 billion of its

offer as a set-aside were Venezuela bondholders to prevail in a

separate lawsuit. And it wants the court to bar other lawsuits

from seeking control over the same assets.

Citgo operates three U.S. refineries, 38

terminals, six pipelines and supplies fuel to 4,200 independent

retailers. The Houston-based oil refiner is the centerpiece in a

U.S. District Court in Delaware's auction seeking to satisfy $21

billion in claims against Venezuela for defaults and

expropriations.

In addition to Eliott's backing, Amber wrote it has obtained

a debt commitment letter from Barclays ( JJCTF ) and Citigroup ( C/PN )

's Citibank demonstrating its ability to finance the

purchase. It also has retained an eight person refining

management team ready to take over Citgo operations.

The court filing did not address other issues raised by

creditors, including an undisclosed breakup fee should the deal

not conclude, and opposition to other bidders accessing Citgo

financial data until after the court decides on its breakup fee.

A spokesperson declined to respond to those issues.

Amber wrote its proposal is "the best and only realistic

pathway for the largest number of creditors" to receive payment

despite creditors calling its terms as unlikely to provide them

with auction proceeds "for years - if ever."