Venezuela pays $425 million to gold miner Crystallex in move to safeguard PDVSA Citgo
local10abc
Citgo Petroleum Corp., one of the largest oil refinery and distribution networks in the United States.
-
Crystallex International Corp. received payment in November
-
Canadian miner one of many companies vying for Citgo assets
By Patricia Laya and Andrew Rosati / Bloomberg
CARACAS
Petroleumworld 11 27 2018
Venezuela made an partial payment of a settlement designed to resolve a $1.2 billion arbitration award to a bankrupt Canadian gold miner that's laying claim to the assets of the parent of refiner Citgo Holding Inc. if it's not paid in full.
Crystallex International Corp. received $425 million in November, and will suspend all enforcement efforts until at least early next year, according to Canadian court documents. Venezuela is now required to pay the remaining balance in installments by early 2021, and deliver an “acceptable security interest” or collateral to ensure payments its outstanding obligations, according to the documents.
The payment helps Venezuela's state-run oil company PDVSA hold onto Citgo Holding Inc. for the time being, even as the line of creditors that could lay their hands on the U.S. refiner grows. The socialist nation, mired in a massive economic crisis exacerbated by the collapse of its all-important oil industry, counts on Citgo's refineries to handle Venezuelan crude that brings in desperately needed hard currency.
Crystallex has been paid in cash and liquid securities on deposit in a Canadian bank, according to an emailed statement from Crystallex Chief Executive Officer Bob Fung. The original settlement of lawsuits filed in federal court in Delaware seeking to seize assets tied to Houston-based Citgo was reached in September.
"We expect Venezuela to post collateral to secure the remaining payment it owes to Crystallex by Jan. 10th,” Fung said. "If it fails to do so, Crystallex will proceed with its action executing on PDVSA's shares in the parent company of Citgo."
Appeals Court
In October , a U.S. appeals court denied a bid to halt the sale of Citgo, helping clear the way for an auction for control of the refiner, worth as much as $8 billion. Last week, the same court temporarily stayed the case until Jan. 10 to work out final details of the settlement, according to court filings.
“While Crystallex is hopeful that the settlement will come to fruition, if the required steps to fully implement the amended settlement do not take place” the mining company will go back to court to seize assets linked to Citgo, the company's lawyers said in the filing.
Aside from Crystallex, those vying for Citgo's assets now include:
- Russia (as collateral for loans from state-run Rosneft )
- U.S. oil giant ConocoPhillips (which won international arbitration case against Venezuela)
- Citgo's own bondholders (as collateral on debt)
- PDVSA 2020 bondholders who were paid last month
The case is Crystallex International Corp. v. Bolivarian Republic of Venezuela, 17-mc-00151, U.S. District Court, District of Delaware (Wilmington).
— With assistance by Jef Feeley
Original article
_________________________
_________________________
Copyright© 1999-2018 Petroleumworld or respective author or news agency. All rights reserved.
We welcome the use of Petroleumworld™ (PW) stories by anyone provided it mentions Petroleumworld.com as the source.
Other stories you have to get authorization by its authors. Internet web links to http://www.petroleumworld.com are appreciated.
Petroleumworld welcomes your feedback and comments, share your thoughts on this article, your feedback is important to us!
We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com
By using this link, you agree to allow PW
to publish your comments on our letters page.
Any question or suggestions,
please write to: editor@petroleumworld.com
Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels
Norway 
