CITGO Sale Scrapped for Now

HOUSTON — The on-again, off-again sale of CITGO is off again.

CITGO Petroleum Corp. — which is owned by Venezuelan state oil company Petróleos de Venezuela S.A. (PDVSA) — has taken itself off the sales block, opting instead to raise funds for its home country through a debt sale, according to the Wall Street Journal.

People familiar with the sale process told the news outlet the company received several bids in early December. However, the auction was pulled in recent days in favor of a plan to raise $2.5 billion in debt instead.

CITGO has turned to Deutsche Bank to sell the new debt through a term loan and high-yield bonds that would allow the refiner to pay a dividend to its owners, the WSJ reported. Such a payout would be the company's second in the last year after CITGO in July sold $650 million of bonds in part to pay its owner a $300-million dividend.

The sale process could be restarted later.

In September, PDVSA hired investment bank Lazard Ltd. to explore the sale of the Houston-based division, which operates three U.S. refineries. CITGO also sells motor fuels via nearly 6,000 U.S. gas stations. It reportedly called off that previous sale in late October as bids came in below its $10-billion asking price, as CSNews Online previously reported.

Although the bids were confidential, various media reports pegged Western Refining Inc., Tesoro Corp., Valero Energy Corp., PBF Energy Inc. and HollyFrontier Corp. as potential bidders.

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