Evercore Group L.L.C. expressed its disapproval of the proposal to suspend the CITGO auction, countering alternative valuations of the Venezuelan refinery and showing support for the special expert, Robert B. Pincus, while assuring that he was prepared to reject offers that did not maximize the asset’s value.
This statement was conveyed by the financial advisory firm of Pincus through a corrected supplementary declaration from the company’s CEO, William O. Hiltz, who endorsed the final recommendation of the judicial expert in the case of Crystallex International Corp. against the Bolivarian Republic of Venezuela, which is ongoing in the U.S. District Court for the District of Delaware.
In his statement, William O. Hiltz describes Evercore’s role, detailing its experience and the fee structure agreed upon for the sale of shares of PDV Holding Inc. (PDVH), the owner of CITGO Petroleum Corporation. He also discusses the various sales strategies considered, such as an initial public offering (IPO) or a leveraged recapitalization. He explains the reasons for opting for an auction process and outlines negotiations with bidders and bondholders.
Evercore’s Advisory Role in the CITGO Auction
On August 7, 2025, William O. Hiltz, senior managing director at Evercore Group L.L.C., presented his second corrected supplementary declaration to the U.S. District Court for the District of Delaware in support of the final recommendation from the judicial expert of the CITGO auction, Robert B. Pincus.
In his report to the court, Hiltz indicates that Evercore Group L.L.C. is an investment banking and investment management advisory firm with “experience in providing high-quality investment banking services in traditional mergers and acquisitions and financial distress situations.”
The firm was selected on March 15, 2023, as financial advisor to Pincus in the CITGO auction. He explains that their fee structure includes a monthly fee and a “percentage of the consideration paid for the PDVH Shares (the ‘Sales Fee’).” This means, he warns, that “the higher the sale price, the greater the compensation received by Evercore.”
Evercore’s responsibilities involve assisting the judicial expert in implementing a sales process to maximize the value of the PDVH Shares. This includes advising on the design of the sale process, marketing the shares, and reviewing offers. He cautions, however, that “all material decisions, including the recommendation of offers, were ultimately made by the judicial expert.”
Design and Implementation of the CITGO Auction
William O. Hiltz notes that the judicial expert of the CITGO auction, Robert B. Pincus, with Evercore’s assistance, considered several alternatives to the sale process for the PDVH shares ordered by the court.
In this context, he indicates that various alternatives were considered, including:
- An initial public offering (IPO),
- Claims capitalization,
- Equity or debt financing solutions,
- A sale of less than one hundred percent of PDVH’s capital,
- Creating a trust to pay claimants over time,
- An asset sale of CITGO in parts to multiple buyers,
- A reorganization,
- Or some combination of the above.
He stated that no bidder showed interest in acquiring less than one hundred percent of the PDVH shares, nor was there flexibility for IPO proposals. Additionally, nobody expressed interest in partnering with Venezuela or PDVSA.
The judicial expert determined that an IPO “would almost certainly result in a lower value for judicial creditors than an auction sale.” This is due to market uncertainties, limited public investor interest in the energy sector, and the difficulty of communicating the complexity of valuation issues (such as Alter Ego Claims and the 2020 PDVSA Bondholders’ Pledge) to public shareholders.
Similarly, the leveraged recapitalization proposals did not seem conducive to maximizing the value of PDVH shares. This strategy could not satisfy as many creditors as the Dalinar transaction, which aims to satisfy USD 7.38 billion in attached judgments. Moreover, the pledge by the 2020 PDVSA Bondholders and other ongoing litigations create uncertainty.
CITGO Valuations and Projection Differences
Evercore prepared a preliminary valuation of CITGO based on the management’s projections from the Mid-Term Plan 2023-2028 from December 2022. This valuation assigned a valuation range for PDVH shares with a “mid-point discounted cash flow (DCF) value of USD 13.2 billion.”
The DCF valuation did not include adjustments for ongoing litigations—among them those related to the 2020 PDVSA Bondholders—nor for “structural limitations in the transaction, including the absence of representations and warranties and other typical seller covenants.”
CITGO’s financial performance is “highly dependent on commodity prices, which are subject to frequent changes.” They reported that the initial adjusted EBITDA projections for CITGO from management were USD 2.8 billion for 2023 and USD 1.8 billion for 2024. They caution that the preliminary valuation draft “does not accurately represent the fair market value of the company as it currently exists and should not be used as an indicator of the fair market value of the PDVH Shares.”
Evercore used a comparable companies analysis, which, when adjusted for CITGO’s performance and updated projections, yields an updated value range of USD 8.4 to USD 10.5 billion, which is significantly lower than the market multiple range of USD 13.0 billion to USD 18.5 billion presented by José Alberro in his report.
Regarding Alberro’s valuation, Evercore criticizes the calculation of the Weighted Average Cost of Capital (WACC) and suggests “a significantly higher WACC range of 10.08% to 10.84%” that would result from reasonable adjustments to his assumptions.
Key Interactions from the Judicial Expert of the CITGO Auction
Evercore’s report mentions:
Negotiations with the 2020 PDVSA Bondholders:
In early 2024, the judicial expert engaged in discussions with the 2020 PDVSA Bondholders to “resolve the associated risk.” Some bidders even conditioned their offers on negotiating a resolution with these bondholders. The parties from Venezuela opposed the negotiations, and despite bondholders preparing a settlement proposal, Robert B. Pincus “abandoned the negotiations” due to pressure.
Negotiations with Bidders:
The judicial expert negotiated with the bidders. Decisions, such as granting exclusivity and recommending Red Tree as the “Stalking Horse Bidder,” led Gold Reserve to raise its bid price, benefiting the sale process.
Negotiated Concessions:
The judicial expert negotiated “numerous concessions on material terms.”
Decision Not to Suspend the CITGO Auction:
Stopping the CITGO auction as requested by the Venezuelan parties to resolve the litigation of the 2020 PDVSA Bondholders and PDVH’s alter ego claims would have created “significant risk” coinciding with further decline in CITGO’s financial performance and a corresponding deterioration of the proposed purchase prices.
Short Pauses Supported:
Despite the above, Robert B. Pincus supported short pauses when potential benefits seemed to outweigh the downsides, such as a three-week extension of the Top Period after a relevant court decision that dismissed alter ego claims against PDVH, as bidders needed more time due to this legal development.
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