An affiliate of Elliott Investment Management has escalated the bidding war for Citgo Petroleum's parent company, PDV Holding, by proposing a total value of $8.82bn (1.18trn bolivars), reported Reuters.

This move comes amid a complex auction process designed to settle debts owed by Venezuela and its state oil company PDVSA to 15 creditors.

The auction, overseen by a Delaware court officer, was restarted in January following a year-long process that concluded without consensus on Citgo's valuation and was further complicated by related legal disputes.

Last month, the court officer suggested a $7.4bn offer from a consortium led by Gold Reserve as the leading bid, with a hearing scheduled next week to determine the winner.

Despite this recommendation, the court officer has continued to entertain “unsolicited bids” from contenders such as Elliott's Amber Energy and commodities giant Vitol's unit, both of which have been vying for Citgo's parent since the previous year, as per recent filings.

A data room providing crucial Citgo information has been made available for potential buyers, as mentioned by sources familiar with the talks.

These enhanced bids come amidst challenges to the Gold Reserve group's proposal, which accounts for the claims of 11 creditors but lacks a plan to compensate holders of defaulted Venezuelan bonds secured by Citgo shares.

Vitol, Amber Energy and Gold Reserve have all refrained from commenting.

In contrast to Gold Reserve's bid, both Amber Energy and Vitol have included measures to settle the PDVSA 2020 bondholders' dues in their offers, as indicated by court documents.

However, only Amber's recent submission appears to have garnered the endorsement of a segment of the bondholders, an essential factor to prevent further legal complications, as stated in a letter by Red Tree Investments, one of the auction's creditors, on Tuesday.

“Red Tree believes that Amber Energy is the highest bidder for the PDVH shares under Delaware law and should be selected as the winning bidder,” asserted Red Tree in the filing.

Red Tree, associated with Venezuelan bondholder Contrarian Funds, had its $3.7bn offer set as the baseline bid for the current round in April but later withdrew from placing its own bid.

Gold Reserve has contested Amber's offer, claiming in a filing that the true value of its proposal is $5.86bn when the payment to bondholders is excluded.

Vitol's unit, referred to as 'Bidder B' in court documents, has placed an $8.45bn bid, with some terms undisclosed due to redactions.

Court officer Robert Pincus informed the court last week that this bidder had not yet substantiated certain crucial agreements including the bondholders' payment.

The PDVSA 2020 bond experienced a slight increase of $0.5 on Wednesday, trading at $0.91 on the dollar, having approached par value in early April.