Blue Water Acquisition, a special purpose acquisition company (SPAC), has submitted a $10bn bid to purchase PDV Holding, the parent company of Citgo Petroleum, through an auction overseen by a court in Delaware, US.

The deal aims to offer financial recovery for PDV Holding's general creditors and a $3.2bn settlement for PDVSA 2020 bondholders, with payment options in cash or shares.

Citgo assets up for auction encompass three key US refineries with a merged capacity of more than 800,000 barrels per day (bpd), midstream infrastructure, lubricant and blending plants, and a retail distribution network with more than 4,000 service stations across the country.

The acquisition would return Citgo to US ownership and establish it as a publicly listed company.

Citgo, established in 1910, was a US company prior to being taken over by PDVSA, a state-owned oil company based in Venezuela.

Blue Water's bid aims to make Citgo a US public company again, ensuring it remains under US ownership and subject to public market transparency.

Blue Water Acquisition chairman and CEO Joseph Hernandez said: "Our $10bn proposal would provide creditors with both immediate recovery and the opportunity to participate in the future of Citgo as a US public company.

"This structure is designed to deliver value for creditors, stability for employees, and ensure Citgo's assets remain under US ownership and public market transparency."

At the start of the month, Amber Energy, associated with Elliott Investment Management, had been recommended as the preferred bidder following an offer of $5.89bn in the same auction.