Exclusive: Icahn-owned oil refiner CVR bidding in Citgo share auction, sources say – Reuters

By Gary McWilliams and Marianna Parraga

HOUSTON (Reuters) – Oil refiner CVR Energy, under the control of billionaire investor Carl Icahn, has made a binding offer in the auction for shares in the parent company of Citgo Petroleum, which is owned by Venezuela, according to sources familiar with the situation.

Icahn holds approximately 66% of CVR’s shares, which is headquartered in Sugar Land, Texas. The company operates two refineries in the United States: the Coffeyville refinery in Kansas, with a capacity of 115,000 barrels per day (bpd), and the Wynnewood refinery in Oklahoma, which processes 75,000 bpd.

A U.S. court in Delaware is conducting the auction to generate funds for creditors who have claims totaling $21.3 billion against Venezuela due to defaults and expropriations. So far, bids have been accepted from CVR, the trading group Vitol, and other interested parties as part of the unprecedented sale of one of Citgo’s parent companies, which is the seventh-largest oil refiner in the U.S.

CVR is collaborating with investment bankers from Wells Fargo to secure financing for its bid. The company is also backed by Icahn Enterprises in this endeavor.

Representatives from Icahn Enterprises, CVR’s CEO David Lamp, and Wells Fargo have not commented on the matter.

The oil refineries operated by CVR are strategically located in the mid-continent region, making them a compatible match for Citgo’s refineries, which are located in Texas, Louisiana, and Illinois, according to one source familiar with the bid. "CVR’s advantage lies in the synergies it shares with Citgo," the source stated. "Citgo primarily operates along the Gulf Coast, while CVR is situated in the central part of the country."

Hedge fund Elliott Investment Management is considering submitting its own bid, and a group of creditors represented by Centerview Partners is attempting to engage ConocoPhillips in a separate offer, according to reports from April.

In recent weeks, financial collaborations have begun to emerge to support certain bids, with firms like JP Morgan, Morgan Stanley, and Rothschild & Co. joining forces.

In a court hearing on Tuesday, a representative overseeing the auction indicated that the second round of bidding had been "successful," with several competitive offers received, although the identities of the bidders were not disclosed.

The special master of the court is expected to announce the winning bid by July 31. U.S. District Judge Leonard Stark, who is presiding over the case, recently approved a motion to delay the final hearing until September 19.