Gold Reserve's $7.1B Bid For PDVH Not Recommended As Stalking Horse

(RTTNews) - Gold Reserve Ltd. (GDRZF) Monday announced that its U.S. subsidiary, Dalinar Energy Corporation, submitted a $7.1 billion bid for PDV Holding, Inc., the indirect parent of CITGO Petroleum Corp., with fully committed financing from two major financial institutions.

However, the bid was not selected as the "Stalking Horse" or "Base Bid" by the Special Master overseeing the sale process for the U.S. District Court in Delaware.

Instead, the Special Master recommended a $3.699 billion bid from Red Tree Investments, a subsidiary of Contrarian Capital Management. Dalinar Energy expressed concerns over the decision, highlighting that its bid was 91% higher and that key documents related to Contrarian's bid were not disclosed. Gold Reserve has filed an emergency request regarding these undisclosed documents, with a potential court hearing set for March 27, 2025.

Dalinar Energy's bid was backed by senior judgment creditors, including Koch Minerals Sarl, Koch Nitrogen International Sarl, and Rusoro Mining Ltd. The proposal involved a purchase price exceeding $7.1 billion, with $3.9 billion allocated to senior creditors and $3.2 billion in equity capital from Koch, Rusoro, and Gold Reserve. It also included an option for junior creditors to participate via equity warrants.

The financing was fully committed, with JPMorgan Chase Bank and TD Bank providing up to $6.5 billion in debt financing, including $4.85 billion available at closing and $1.65 billion in post-closing asset-based lending.

Monday GDRZF closed at $2 or 4.76% lower on the OTC Markets OTCQX.