2024-09-27 19:53

Investment firm tops rival offers by CVR Energy, Gold Reserve Bid combining cash, credit is subject to court case resolutions Elliott's interest in Citgo follows good results from stakes in Marathon Petroleum, Phillips 66 HOUSTON, Sept 27 (Reuters) - An affiliate of Elliott Investment Management on Friday was named the presumptive winner in a U.S. court auction of shares in a parent of oil refiner Citgo Petroleum with a bid that puts an up to $7.286 billion enterprise value on Venezuela-owned Citgo, according to a court filing. A U.S. district court in Delaware is auctioning shares in Citgo parent PDV Holding to repay up to $21.3 billion in claims against Venezuela and state-oil firm PDVSA for expropriations and debt defaults. A second and final bidding round closed earlier this year, leading to negotiations on terms. The offer includes a combination of cash and credit, people familiar with the matter said. It is subject to the resolution of claims by holders of defaulted Venezuela bonds pursuing the same assets, the court said. U.S. court officer Robert Pincus said he chose Elliott unit Amber Energy as the successful bidder, but added that "the buyer may elect to terminate the proposed purchase agreement" if a proposed motion to block bondholder's parallel lawsuits fails. "We will prioritize operational excellence to lay a foundation for stability, strength, and long-term success," said Amber Energy CEO Gregory Goff, who joined Exxon Mobil (XOM.N) , opens new tab's board three years ago after retiring as Marathon Petroleum's vice chairman in 2019. Elliott declined to comment. The investment firm's pursuit of the seventh-largest U.S. oil refiner follows billions of dollars in gains from its stakes in refiners Marathon Petroleum (MPC.N) , opens new tab and Phillips 66 (PSX.N) , opens new tab. Citgo last year earned $2 billion, its second-best annual performance. In the first six months of this year, it posted a profit of $385 million and ended the period with a liquidity of $3.8 billion. Elliott submitted offers in the two bidding rounds, competing with rival bids from U.S. oil refiner CVR Energy (CVI.N) , opens new tab and miner Gold Reserve (GRZ.V) , opens new tab. Gold Reserve last week quit the bidding, citing delays and uncertainty in the process. The $7.286 billion valuation of Citgo is almost identical to the highest offer received in the first bidding round, which Citgo's lawyers called disappointing. The refining company was valued at between $11 billion and $13 billion as part of the court process. The offer will cover only a portion of the 26 claims approved by the court, excluding any provisions for bondholders. Among those that could cash proceeds if the Elliott affiliate's offer is confirmed are Crystallex, Tidewater (TDW.N) , opens new tab, ConocoPhillips (COP.N) , opens new tab, O-I Glass (OI.N) , opens new tab, Huntington Ingalls (HII.N) , opens new tab, ACL Investments, Red Tree Investments and Rusoro Mining (RML.V) , opens new tab. TERMS CHALLENGED The conditional nature of Elliott's bid is stirring opposition from Venezuelan parties in the case because the judge initially said the offer selected would have to be binding and final. "This action does not represent the end of the road or the definitive closure of the process," said Citgo's supervisory board in a release. "Even though we are facing a complex scenario, we must clearly say PDVSA still holds ownership over its U.S. subsidiaries and has legal means to protect its interests." Even though the court established a priority ranking, some bondholders including a group led by Gramercy Distressed Opportunity Fund have been pursuing their claims in separate court actions, threatening to derail the sales process that has been delayed five times. Earlier on Friday, Pincus notified the judge he had ended talks with holders of PDVSA's 2020 bonds without a resolution. The bonds are collateralized with Citgo equity, so the dispute can affect the proceeds available to creditors in the case. Pincus did not reply to a request for comment. Thomas Laryea, an attorney representing the Venezuela Creditor Committee that includes holders of the 2020 bonds, declined to comment. Venezuela's oil minister Delcy Rodriguez this week said the auction represents a "blatant theft" of Venezuela's assets, and recommended Russia and other nations not to hold assets in the United States or Europe. Judge Stark plans to discuss next week a proposal to block the bondholders from resorting to other courts and trying to "jump the line" set by Delaware's creditors list. The court has scheduled a Nov. 19 hearing to approve a sale. Even if Stark approves the motion, the Gramercy-led group can challenge his decision in other courts. The bondholders have good chances of escalating their cases, said Jose Ignacio Hernandez, a lawyer from consultancy Aurora Macro Strategies who has closely followed the court case. "Resolving those disputes will add at least three more months to the sales process, making unlikely to have a closure by mid-November as proposed," he said. Sign up here. https://www.reuters.com/business/elliotts-conditional-offer-selected-citgo-share-auction-case-sources-say-2024-09-27/

2024-09-27 19:49

CHICAGO, Sept 27 (Reuters) - Rail backlogs are disrupting export trade between the United States and Mexico and snarling agricultural supply chains as the fall harvest is under way, agriculture groups said on Friday. A potential East and Gulf Coast port strike that could begin on Tuesday would exacerbate the problems, nearly 200 agriculture groups said in a letter sent to the White House on Friday. While Mexico is the top U.S. corn export market, it's also been a key outlet this year for agricultural exporters looking to compensate for sluggish buying from China, a top commodity buyer. Mexico's imports of U.S. agricultural products increased 27% in the first seven months of 2024 over the prior year, government data showed. But rail capacity cannot keep up with the demand, said National Grain and Feed Association President Mike Seyfert. Union Pacific Corp (UNP.N) , opens new tab and Berkshire Hathaway-owned BNSF Railway (BRKa.N) , opens new tab have stopped issuing permits for grain shuttle trains to Mexico because of congestion and a growing backlog of loaded trains, according to Union Pacific's website , opens new tab and the U.S. Department of Agriculture , opens new tab. Ferromex, the Mexican railroad that interchanges with BNSF and Union Pacific, also has embargoed permits for grain trains at border crossings at Eagle Pass and El Paso, Texas, USDA said. Union Pacific said it is working to facilitate smoother crossings and reduce congestion at the border. BNSF and Ferromex could not be reached for comment. The situation has left some grain sellers scrambling to find new buyers for their crops and struggling to get empty rail cars back from Mexico for shipments, Seyfert said. "When you're trying to make space for what is predicted to be a large corn crop and a large soy crop, the last thing you need is to try to find new business if you can't deliver to your customer," Seyfert said. Sign up here. https://www.reuters.com/markets/commodities/us-mexico-rail-delays-hit-farm-sector-ahead-possible-ports-strike-2024-09-27/

2024-09-27 19:35

Sept 27 (Reuters) - The Biden administration on Friday canceled a planned auction of offshore wind development rights off the coast of Oregon after the state's governor said she did not support the sale. The announcement was a setback to U.S. President Joe Biden's vision to deploy turbines along every U.S. coastline as part of his efforts to fight climate change. It marked the second time this year that the U.S. Bureau of Ocean Energy Management has shelved an offshore wind lease sale as the nascent industry struggles with high costs and supply chain challenges. The agency called off an auction in the Gulf of Mexico in July. BOEM, a division of the Interior Department, in a press release cited a lack of interest from the offshore wind industry in the Oregon sale, which had been scheduled for Oct. 15. Though five companies had qualified to participate in the sale, just one expressed interest in bidding on the lease areas, BOEM said. Earlier on Friday, Oregon Governor Tina Kotek sent a letter to BOEM Director Elizabeth Klein seeking a halt to offshore wind leasing off the Oregon coast. Two weeks earlier, a group of Oregon tribes sued BOEM in federal court to block the sale. Kotek cited broad concerns from labor, fishing, conservation and renewable energy groups and said the state needed more time to complete an offshore wind "roadmap" process required by a state law passed earlier this year. "I remain convinced that offshore wind holds exciting promise to be part of our nation’s clean energy future, but in Oregon, actions of significance must be done the Oregon way," Kotek said in the letter. Also in the letter, Kotek said Oregon would withdraw from a federal, state and tribal task force set up to coordinate offshore wind planning in the state. BOEM would not comment on Kotek's letter. Offshore wind opposition has grown more sophisticated in the United States and beyond, with several active groups in Oregon. In its statement, BOEM said it had announced the Oregon sale after engagement with the Oregon Intergovernmental Renewable Energy Task Force. "BOEM will continue to collaborate with representatives from federal, state and local agencies and Tribal governments, to coordinate on potential leasing and support ongoing stakeholder engagement processes on broader offshore wind considerations, such as the state-led development of a strategic roadmap for offshore wind," the agency said. Sign up here. https://www.reuters.com/business/energy/us-shelves-oregon-offshore-wind-auction-2024-09-27/

2024-09-27 19:15

Sept 27 (Reuters) - The U.S. Securities and Exchange Commission on Friday charged cryptocurrency trading platform Mango Markets with unregistered sales of its digital asset token, which the regulator identified as a security. The SEC also settled charges against Mango Labs and Blockworks Foundation for failing to register as brokers, the agency said. Jurors in federal court in Manhattan earlier this year convicted a crypto trader of commodities fraud for rigging the Mango Markets exchange and stealing about $110 million from the platform. Sign up here. https://www.reuters.com/technology/us-sec-charges-mango-markets-with-offering-unregistered-crypto-token-2024-09-27/

2024-09-27 18:51

Canadian dollar falls 0.4% against the greenback For the week, the currency gains 0.4% Canada's GDP increases 0.2% in July Bond yields decline across the curve TORONTO, Sept 27 (Reuters) - The Canadian dollar weakened against its U.S. counterpart on Friday, giving back some of its weekly gain, as technical selling of the currency offset stronger-than-expected domestic GDP data for July. Canada's gross domestic product increased 0.2% in July from June, eclipsing estimates for a gain of 0.1%. Still, an advance estimate indicated that growth stalled in August, which left the market continuing to price in a roughly 50% chance of a larger-than-usual half-percentage-point interest rate cut by the Bank of Canada in October. The Canadian dollar initially rallied after the data but soon gave back the gains. "What we're seeing here is U.S. dollar bulls trying to push USD-CAD away from a month-end close that would be disadvantageous," said Michael Goshko, senior market analyst at Convera Canada ULC. "If we get a close below last month's low of 1.3440, that's looking particularly technically weak for dollar-Canada." The Canadian dollar was trading 0.4% lower at 1.3520 per U.S. dollar, or 73.96 U.S. cents, after trading in a range of 1.3464 to 1.3526. For the week, the currency was up 0.4% as the greenback (.DXY) , opens new tab extended recent losses against a basket of major currencies. The price of oil , one of Canada's major exports, rose 0.8% to $68.18 a barrel, but was on track for a weekly decline as investors weighed expectations for higher global supply against fresh stimulus from top crude importer China. Canadian bond yields fell across the curve ahead of a market closure on Monday for the National Day for Truth and Reconciliation. The 10-year was down 6.4 basis points at 2.956%, tracking the decline in U.S. Treasury yields after data showed U.S. inflation continuing to ease. Sign up here. https://www.reuters.com/markets/currencies/canadian-dollar-pares-weekly-gain-gdp-boost-proves-short-lived-2024-09-27/

2024-09-27 16:34

Asia private equity-backed M&A value is up 13% this year Lower funding cost, better market sentiment to boost PE exits SINGAPORE, Sept 27 (Reuters) - U.S. interest rate cuts and China's economic stimulus package for markets will be conducive to private equity deals in Asia, with lower funding costs and better market sentiment expected to make exits easier, industry players said. The U.S. central bank last week cut interest rates for the first time in more than four years, with more easing expected. High interest rates over the past two years have weighed on private equity firms' financing costs, making leveraged buyouts trickier. China, on the other hand, this week unveiled broader-than-expected monetary stimulus and property market support measures to restore confidence in the world's second-largest economy, with more fiscal measures expected to be rolled out soon. Private equity firms typically exit from their portfolio firms via initial public offerings of shares and trade sales, which have been made tougher due to the volatile market conditions. "With the Fed entering a rate-cut cycle, we expect financing conditions to improve which will likely drive a recovery in exit activity and asset valuations, narrowing the valuation gap between buyers and sellers and creating more opportunities for dealmaking," Janice Leow, head of Swedish private equity firm EQT (EQTAB.ST) , opens new tab Private Capital Southeast Asia, told Reuters. She added that liquidity would improve, creating a more favorable backdrop for private equity firms to achieve strong exits. A senior private equity investor, focusing on Asia, said the rally in the Asian stock markets would be helpful to get companies listed and get the "valuations back up to reasonable levels" for a lot of the portfolio companies. PE-backed mergers and acquisitions in the Asia Pacific, including Japan, jumped 14% on-year to $105 billion in the first three quarters this year, according to LSEG data, largely boosted by the $16 billion takeover of Australian data centre provider AirTrunk by a Blackstone-led consortium. Still, the number of new deals plunged 43% from the same period last year. Asian markets have climbed this week following the unveiling of China's stimulus measures, and latest data showing consumer confidence dropped by the most in three years have fueled expectations of another bumper rate cut in the U.S. "We are hopeful and optimistic that rates coming down will be positive for exits by GPs," said an executive at one of the world's biggest institutional investors, referring to general partners or fund managers which make the investment decisions for a PE firm. Blackstone (BX.N) , opens new tab is one of the GPs active in monetizing their assets recently. In July, the U.S. private equity firm announced it was selling Japanese drugmaker Alinamin Pharmaceutical to a North Asian buyout fund. "We have sold multiple companies in Japan and Korea to the other sponsors. So overall for us, I would say that finger cross (it is a) very robust exit environment," Blackstone's senior managing director Amit Dalmia said at a Singapore conference this week. Sign up here. https://www.reuters.com/markets/us-rate-cut-china-stimulus-spark-hope-more-asia-private-equity-deals-2024-09-27/