Gold Reserve signals confidence in Citgo team as $7.4bn deal for Venezuelan asset awaits ruling

Published: 2025-07-11 13:15:09 ET GRZ.V

Published on 07/11/2025 at 13:15

Gold Reserve Inc. expressed support for Citgo Petroleum Corp.’s current leadership as it awaits a federal court’s decision on its $7.4bn bid to acquire the refiner’s parent company, Reuters reported.

Executives at the Toronto-listed miner indicated they would be inclined to keep the Houston-based company’s management in place, should the Delaware court approve the offer submitted by its US subsidiary, Dalinar Energy.

Paul Rivett, executive vice president at Gold Reserve, praised Citgo’s management during a conference call, noting the team’s ability to navigate “exceptional circumstances.”

The remarks follow a recommendation from the court-appointed official overseeing the auction, who backed Dalinar’s proposal to acquire PDV Holding, Citgo’s parent, as part of a years-long legal process to recover damages tied to Venezuelan expropriations and debt defaults.

If approved by Delaware Judge Leonard Stark, the transaction would mark a change in ownership for the seventh-largest refiner in the US.

But opposition from rival bidders and major creditors, including ConocoPhillips and Crystallex, has raised questions about the bid’s financial backing and legal durability. Critics have pointed to Dalinar’s structure—which lacks an agreement with bondholders holding collateralised Venezuelan debt—as potentially vulnerable to challenge.

Dalinar, formed to acquire Citgo through the court process, will be majority-controlled by Gold Reserve through voting rights, though its board will consist solely of US citizens.

The financing includes a $4.5bn bridge loan and a $2bn revolving credit facility to support post-closing operations.

Citgo, long operating under a hybrid Venezuelan-American management structure, severed direct ties with PDVSA in 2019 after an opposition-led National Assembly restructured the board. The US Treasury Department has since shielded the company from creditor enforcement, making regulatory clearance another hurdle for Gold Reserve.

The company has until July 17 to request formal guidance from Treasury regarding the deal.