U.S. judge lets Canadian company pursue assets from Venezuela’s Citgo

http://curacaochronicle.com/region/u-s-judge-lets-canadian-company-pursue-assets-from-venezuelas-citgo/

TORONTO - A U.S. judge has granted a Canadian company the right to go after prized U.S. assets belonging to Venezuela, in a bid to get paid on an $1.4 billion award tied to the 2008 nationalization of its gold mining operations by the now cash-strapped South American country.

U.S. District Judge Leonard Stark in Delaware on Thursday granted a so-called writ of attachment to Crystallex International Corp in shares of Citgo Holding, which owns a U.S.-based oil refiner controlled by state-owned Petroleos de Venezuela SA (PDVSA).

Stark also imposed a temporary stay on Crystallex enforcing the writ to give other parties a chance to weigh in.

The judge ruled on Aug. 9 that Citgo Holding assets were subject to attachment. PDVSA said it would appeal.

Other companies may also lay claims on the assets, and the writ does not mean Crystallex will take over Citgo and run its refineries.

On Wednesday, lawyers for Rosneft Trading SA, a unit of Russia’s largest oil company, which had been pledged about half the Citgo Holding shares, in a letter urged a hearing on how to “structure a robust appraisal and sale process” for the shares.

Holders of PDVSA bonds maturing in 2020 were pledged the other half, the Rosneft lawyers said.

Crystallex has been seeking to recoup losses from a decade ago, when Venezuela nationalized its gold mining operations under then-President Hugo Chavez.

The $1.4 billion amount comprised roughly $1.2 billion plus $200 million of interest awarded by a World Bank arbitration tribunal in 2016.

OPEC member Venezuela has few offshore assets, which has encouraged creditors such as Crystallex to pursue Houston-based Citgo, its most valuable asset outside the country.

Venezuela last week devalued its currency by an effective 96 percent, as part of an economic overhaul to combat a myriad of problems including U.S. sanctions, debt defaults, hyperinflation, emigration and food shortages.

Stark said PDVSA should file a motion and post a bond if it wants to stop Crystallex from enforcing the writ, but can still appeal if it loses the motion or cannot post the bond.

The case is Crystallex International Corp v Bolivarian Republic of Venezuela, U.S. District Court, District of Delaware, No. 17-mc-00151.