Citgo raises $1.2 billion loan to run operations, refinance debt

March 28, 2019

(Reuters) – Citgo Petroleum, the U.S.-based unit of Venezuelan state-run oil firm PDVSA, said on Thursday it raised $1.2 billion through a five-year term loan to cover operating expenses and to refinance existing debt.

Citgo said it settled a $320 million accounts receivable securitization facility and a $900 million revolving credit line.

The financing would help Citgo fund its operations following U.S. sanctions and its split from the parent company, which remains under control of Venezuelan President Nicolas Maduro and a military-led management team.

Last week, Reuters reported that Citgo was looking to raise $1.8 billion through a three-year term loan.

Washington imposed sanctions and barred U.S. firms, including Citgo, from importing Venezuelan crude as part of a strategy to starve the Maduro government of oil revenue and force his ouster.

Since Venezuelan congress head Juan Guaido invoked the constitution to assume interim presidency in January, saying Maduro’s May 2018 re-election was illegitimate, a fierce battle has emerged for control of Citgo, Venezuela’s largest foreign asset, which has been valued at $8 billion to $13 billion.

Following the refiner’s announcement, ratings agency Fitch removed Citgo from “negative watch” on revolver refinancing and gave it a “stable” outlook.

(Reporting by John Benny in Bengaluru; Editing by Shailesh Kuber)

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