Canada's Crystallex files complaint over Venezuela Citgo debt issue
CARACAS Nov 25 (Reuters) - Canadian miner Crystallex filed a complaint in a U.S. court, seeking to recover $2.8 billion it says it is owed from Venezuela's state-run oil company PDVSA and its U.S. subsidiary.
Crystallex, which filed the complaint Monday in Delaware, said PDVSA and its U.S.-based refining unit Citgo Holding designed a refinancing deal to lower Citgo's value and dissuade asset seizures stemming from arbitration awards.
Crystallex is also engaged in a $3.1 billion arbitration claim against Venezuela before an international tribunal. The company is seeking compensation for the termination of its Las Cristinas gold asset in Venezuela.
Citgo Holding this year issued bonds and loans worth around $2.8 billion, with dividends distributed to headquarters in Venezuela, which is suffering a recession and has been hurt by sliding oil prices.
The debt, Crystallex says in the complaint filed Monday, was designed to leave Citgo insolvent on an accounting basis just as arbitration cases are coming to fruition.
"Through PDVSA and its subsidiaries, Venezuela sought to monetize its interests in (Citgo) and repatriate those proceeds, thereby shielding them from attempts to enforce any arbitral award," Crystallex said in the filing.
"Because of this diminution in the value of (Citgo), Crystallex's ability to recover has been substantially impaired.
"Crystallex is therefore entitled to money damages in the amount of $2.8 billion or the final amount of its arbitration award against Venezuela, whichever is lower."
Dozens of companies have sought compensation after their projects were taken over under late leftist president Hugo Chavez, who led a wave of nationalizations during his 1999-2013 rule that included the oil, electricity and steel industries. Continued...