- Gold Reserve (TSXV:GRZ) announced that its C$7.1 billion bid was not recommended by the special master for the purchase of shares of PDV Holding Inc., the parent company of CITGO Petroleum Corp.
- The special master recommended a much lower C$3.69 billion bid by Red Tree Investments, an indirect subsidiary of Contrarian Funds, as the Stalking Horse
- An emergency request was filed with the Court regarding these non-public documents, with a hearing potentially set for March 27th, 2025
- Gold Reserve stock (TSXV:GRZ) last traded at C$3.06
Gold Reserve (TSXV:GRZ) announced that its C$7.1 billion bid, submitted by its US subsidiary Dalinar Energy Corp., was not recommended by the special master as the “Stalking Horse” or “Base Bid” for the purchase of shares of PDV Holding Inc., the indirect parent company of CITGO Petroleum Corp., in the sales process conducted by the U.S. District Court for the District of Delaware.
The special master recommended a C$3.69 billion bid by Red Tree Investments, an indirect subsidiary of Contrarian Funds, as the Stalking Horse. Dalinar Energy expressed significant concerns, noting that its bid was C$3.38 billion higher than Contrarian’s bid, a difference of more than 91 per cent.
“We are very disheartened that after many years in this process and working tirelessly to put together a winning bid that Dalinar Energy’s fully priced and substantially higher C$7.1 billion bid was not recommended as the Stalking Horse Bid,” Paul Rivett, Gold Reserve’s chief executive and executive vice-chair said in a news release. “Our bid provided recovery for all senior claimants in the Delaware waterfall and a potential recovery for all junior claimants via the equity warrants. We are considering all of our legal options and look forward to our continued participation in the Delaware sale proceedings.”
Documents critical to Contrarian’s bid were also not made public. Dalinar Energy has filed an emergency request with the Court regarding these non-public documents, with a hearing potentially set for March 27th, 2025.
Dalinar Energy’s proposal was supported by a consortium including Koch Minerals Sarl, Koch Nitrogen International Sarl, and Rusoro Mining Ltd., with a purchase price exceeding C$7.1 billion. The proposal included C$3.9 billion to be paid to senior creditors and C$3.2 billion in equity capital from Koch, Rusoro, and Gold Reserve. Junior creditors were offered the option to participate by receiving warrants in Gold Reserve in exchange for contributing a portion of their attached judgments.
The proposal was backed by JPMorgan Chase Bank, N.A., and TD Bank, providing 100 per cent commitment papers on up to C$6.5 billion in committed debt financing.
Gold Reserve’s emergency request has stayed the deadline for objections to the special master’s recommendation pending the court’s resolution. This comes as the company’s subsidiary; GR Mining Inc. filed a request for arbitration against the Venezuelan government earlier this month.
Gold Reserve Ltd. is an exploration stage company is engaged in the business of acquiring, exploring and developing mining projects. The company owns certain wholly owned mining claims known as the LMS Gold Project, together with certain personal property.
Gold Reserve stock (TSXV:GRZ) last traded at C$3.06 and has risen 36.00 per cent since the year began, but has fallen 26.44 per cent since this time, last year.
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(Top image of the Siembra Minera Mining Project area. Source: Gold Reserve Ltd.)
