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Bidding groups securing multi-billion dollar bank

financing

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Investors, oil and trading firms, Venezuela creditors in

running

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Auction manager could present high bid to court in

mid-July

By Marianna Parraga

HOUSTON, June 17 (Reuters) - At least five groups of

investors submitted binding bids this month in a U.S.

court-ordered auction of shares in Citgo Petroleum's parent, and

three have secured financing commitments for Venezuela's foreign

crown jewel, people close to the matter said.

In the last mile of an unprecedented auction to pay up to

$21.3 billion from past expropriations and debt defaults in

Venezuela, a federal court officer supervising the auction is

working to evaluate bids from big investors and creditors.

Wall Street banks JPMorgan ( JPM ) and Morgan Stanley ( MS )

, and advisors and investors Rothschild & Co

and Elliott Investment Management have secured financing for

several offers, the people said.

The involvement of prominent investors and banks raise the

chances of the auction producing a significant offer for the

seventh-largest U.S. oil refiner following a first round in

January criticized as "disappointing" by parties representing

Venezuela in the Delaware case as the highest bid was $7.3

billion.

The auction is expected to be the culmination of a historic

case that broke new legal ground in enforcement of international

arbitration awards and cracking of sovereign and corporate

immunity.

"We reject the robbery of Citgo ... Venezuela will not

recognize any fraudulent transaction," Venezuela's Vice

President Delcy Rodriguez said on X on Monday.

On Friday, Venezuelan Oil Minister Pedro Tellechea called on

the U.S. court to halt the auction.

The sale has attracted big name investors and energy and

trading firms including Vitol, ConocoPhillips ( COP )

and Koch Industries.

JPMorgan ( JPM ), Morgan Stanley ( MS ), Rothschild, Vitol and

ConocoPhillips ( COP ) declined to comment. Koch, Citgo and boards

supervising the refiner did not reply to requests for comment.

LAST MILE

Citgo has operated under U.S. protection since 2019 when it

severed ties with its ultimate parent, Caracas-based state oil

company PDVSA. Its three U.S. refineries process up

to 807,000 barrels of oil per day and the company has generated

$5.26 billion in combined net earnings in the last nine

quarters.

The court process now underway allows bidders to continue to

structure financing, "top off" credit bids and potentially raise

their offers by at least $100 million to best a competing offer.

Results are expected to be announced in mid-July, according

to the court's auction schedule. A July 2 update by the court

official supervising the auction, Robert Pincus, could provide

new details on the offers and investors.

Pincus' attorney declined to comment on the second

round's bidding procedures and results.

Some bidding groups are seeking financing to submit

100%-cash offers, while some creditors are combining credit bids

with cash. The court has allowed creditors to use the full

amount of their claims in bidding.

Miner Gold Reserve ( GDRZF ) has applied a $1 billion claim

against Venezuela as part of its bid, the company said.

Rusoro Mining ( RMLFF ) has said it retained banker Rothschild

as financial advisor to maximize the value of its $1.3 billion

claim. A spokesman declined to comment on its participation in

the auction.

Representatives of Venezuela could request a third bidding

round if the second round's offers are too low, people familiar

with their thinking said earlier this month.