July 15, 2020 / 3:19 PM / a month ago

U.S. Treasury extends protection for Citgo from PDVSA creditors

WASHINGTON (Reuters) - The U.S. Treasury on Wednesday extended a measure preventing creditors of Venezuelan state oil company PDVSA from seizing shares in the parent company of U.S. refiner Citgo, a PDVSA subsidiary, through October 20.

PDVSA pledged a majority stake in Citgo’s parent company as collateral for its 2020 bond, which is now in default. But the refinery is now under the control of Venezuela’s U.S.-aligned opposition, which has pushed Washington to prevent creditors from seizing the refinery to collect on the debt.

The administration of U.S. President Donald Trump has recognized Juan Guaido, the leader of the opposition-held National Assembly, as Venezuela’s rightful leader, and imposed sanctions on socialist President Nicolas Maduro’s government. Yet Maduro remains in power and in charge of PDVSA’s operations within Venezuela.

“This is a bridge decision until the court action finishes,” said Luis Pacheco, head of an ad-hoc PDVSA board appointed by Guaido to oversee Venezuela’s foreign assets.

A previous measure protecting Citgo from seizure was set to expire in late July.

Maduro calls U.S. sanctions illegal and accuses the opposition of trying to “steal” Citgo.

The extended protection is a transitory measure granted while creditors are fighting in U.S. courts to seize Citgo’s assets, said Luis Pacheco, head of an ad-hoc PDVSA board appointed by Guaido to oversee Venezuela’s foreign assets

“This is a bridge decision until the court action finishes,” Pacheco said.

Reporting by Timothy Gardner; additional reporting by Marianna Parraga in Mexico City; Editing by Nick Zieminski

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