Gold Reserve's unit raises bid for Citgo parent in court-led auction

By Marianna Parraga

HOUSTON, Aug 28 (Reuters) - Miner Gold Reserve GRZ.V said on Thursday that its subsidiary Dalinar Energy has submitted an improved bid for the parent company of refiner Citgo Petroleum in a court-organized auction, with a final decision on the winning bid expected next month.

Earlier this month, a court officer overseeing the auction of PDV Holding, parent of Venezuela-owned U.S. refiner Citgo, said a $5.9 billion bid from an affiliate of hedge fund Elliott Investment Management was the strongest offer received to date, and granted Dalinar additional time to prepare a counteroffer.

Dalinar "has materially increased its proposed purchase price, arranged for additional financial support, and increased the certainty of its bid in non-economic ways," Gold Reserve said in a release.

The Bermuda-based miner, which seeks to recover a $1.18 billion claim related to expropriated assets from the auction proceeds, did not provide further details.

In June, Dalinar offered $7.4 billion for PDV Holding, but its bid lacked an agreement to pay holders of a defaulted Venezuelan bond backed by Citgo equity.

In contrast, Elliott's affiliate Amber Energy secured a payment agreement with the bondholders to settle a $2.86 billion claim.

However, this week, creditors Gold Reserve, Siemens Energy ENR1n.DE, Consorcio Andino and Valores Mundiales filed motions to disqualify Amber's bid.

Delaware court officer Robert Pincus is expected to submit his final recommendation on Friday for a winner ahead of a sale hearing where Judge Leonard Stark will rule on the topic next month.