The US extends Citgo’s protection against its creditors for one year

Washington, Jan 20 (Latest) .- The US Department of the Treasury extended this Thursday for one year the protection of the Citgo company, owned by Petróleos de Venezuela (PDVSA), against the creditors of the country’s state oil company Latin American.

The director of the Treasury’s Office of Foreign Assets Control, Andrea Gacki, issued a notice authorizing the extension until January 20, 2023 of the license that prohibits holders of the PDVSA 2020 bond from executing the guarantee granted to them by the majority shareholding, protecting Citgo.

The protection of Citgo, which is under the control of the Venezuelan opposition leader Juan Guaidó, has been extended several times, although until now they had been extensions for a shorter period of three months.

Guaidó’s representative in Washington, Carlos Vecchio, stressed in a statement that “this is the largest license extension granted so far to protect and preserve Citgo for the future recovery of Venezuela.”

In that sense, he thanked “the Administration of President Joe Biden for this important step in favor of the people of Venezuela,” he said.

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Specifically, the Treasury license prohibits transactions with the PDVSA 2020 bond, which is in default and has 51.1% of Citgo shares as collateral, until January 20, 2023.

In October 2019, the interest payment of the 2020 bond of Petróleos de Venezuela (PDVSA) for 913 million was due.

If the Venezuelan government did not comply with the payment, the holders had the right to assume 51% of the shares of Citgo, which are the guarantee of the issue.

The control of Citgo is in the middle of the struggle between the ruling party and the opposition: while the US authorities recognize the ad hoc board of directors appointed by the National Assembly and Juan Guaidó, the government of Nicolás Maduro accuses the opponents of appropriating of a state asset.

Despite the restrictions represented by the US sanctions on Venezuela, the holders of the PDVSA 2020 bond, among which is the Russian state company Rosneft, will be able to execute the guarantee thanks to this license granted by the Treasury Department.

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To avoid this, the government of former President Donald Trump (2017-2021) and that of his successor, Joe Biden, have issued successive extensions since October 2019.

Citgo, based in Houston, Texas, has three refineries in the US that together process some 750,000 barrels of Venezuelan crude per day, as well as a network of some 10,000 gas stations throughout the country.