Lionheart Capital SPAC in Talks to Buy Oil Fields in Venezuela

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(Bloomberg) — Lionheart Capital is lining up as much as $2.25 billion to invest in the Venezuelan energy industry through a special purpose acquisition vehicle, according to people familiar with the matter.

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The Nasdaq-listed blank-check company is in talks to purchase oil fields in the country for between $150 million and $400 million, the people said without giving details on the assets or timing of negotiations. The deals are not final and would require regulatory approval from Caracas and Washington.

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Clear Street LLC, a Wall Street brokerage, has agreed to provide $1.5 billion for the acquisitions and subsequent capital expenses to rehabilitate the fields, the people said, with the remainder coming from Lionheart’s own funds and bank financing.  

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Representative for Lionheart, Clear Street and Venezuela’s oil ministry didn’t immediately reply to messages seeking comment.

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Lionheart is among a growing number of investors seeking a foothold in Venezuela’s energy industry as Caracas loosens state control. The shift, which gained momentum in the wake of President Nicolas Maduro’s capture in January, has drawn interest from firms betting that private capital can help revive production after years of economic crisis and sanctions. 

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Venezuela, a founding member of OPEC, sits on the world’s largest oil reserves. But production, at around 1.1 million barrels a day, is still less than a third of its peak in the 1970s. Its infrastructure has been largely neglected and in need of massive capital injections, with the Trump administration urging foreigners to invest $100 billion to rebuild the industry.

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Washington recently lifted sanctions that forbade such investments while Venezuelan lawmakers passed a sweeping reform to the country’s hydrocarbons law that included privatization of operations. 

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Miami-based Lionheart in April announced a partnership with Latam Energy Partners LLC that it said would seek to acquire and rehabilitate gas and oil assets in the country. It didn’t identify which locations were under consideration. 

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Former Wall Street portfolio manager Freddy Martinez will join Lionheart’s board to advise on the investments, said the people. According to his LinkedIn profile, Martinez managed insurance and pension portfolios for Petroleos de Venezuela SA, the country’s state-owned oil company, while he was at Merrill Lynch.

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Led by founder and Chief Executive Officer Ophir Sternberg, Lionheart has backed companies including restaurant chain BurgerFi International Inc., reimbursement specialist MSP Recovery Inc. and technology company SMX (Security Matters) Plc. The firm was part of a group that bought powerboat maker Cigarette Racing Team.

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The SPAC has a $332 million market capitalization. Shares, which debuted in 2024 at $10 a piece, traded at $10.84 on Wednesday. 

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—With assistance from Fabiola Zerpa.

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