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Court adviser proposes new bidding round beginning next

month

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Opposition to Elliott affiliate's offer prompts a

re-launch

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Ownership change at oil refiner Citgo unlikely before

mid-2025

By Gary McWilliams and Marianna Parraga

HOUSTON, Nov 27 (Reuters) - An auction of shares in a

Citgo Petroleum parent to pay claims against

Venezuela needs to be overhauled, a court adviser recommended on

Tuesday, conceding a year-long sale process was in shambles and

needed to start fresh.

U.S. District Court in Delaware is auctioning shares in PDV

Holding to repay $21.3 billion in claims against Venezuela and

state-oil firm PDVSA for expropriations and debt defaults.

The recommendation in a court filing came after an up to

$7.3 billion bid by an affiliate of activist fund Elliott

Investment Management failed to win support from creditors. At

least two groups had told the court they could present offers if

allowed to re-enter the bidding contest.

Court adviser Robert Pincus proposed to re-launch the

auction after being admonished by the judge for a lack of an

agreement that met terms set more than a year ago. The adviser

had granted Elliott exclusive negotiating rights and would have

let it defer payments, conditions that creditors said unduly

favored Elliott.

Elliott's wholly owned affiliate, Amber Energy, which in

September was named the original auction's winner but never

concluded a deal, said in a court filing the proposed terms

"will create a chaotic environment that will negatively impact

the purchase price."

Amber had previously said it would walk away if the judge in

the case rejected its terms. A spokesperson declined to

immediately comment on its next steps.

The adviser's plan for starting afresh largely followed

Judge Leonard Stark's prescription for how to revive the sale.

But Special Master Robert Pincus recommended against Stark's

suggestion that cases seeking the same assets go ahead, saying

other bidders likely would not accept the risk of rival claims.

Pincus proposed to reopen to bidders Citgo financial and

operational data and formally re-launch the auction on Dec. 18

and accept bids for three months. A final recommendation to the

court could come in April with judge Stark holding a hearing to

confirm any winner in late May, he proposed.