Shares of Viva Energy (VEA) dropped on Tuesday and were on...

Shares of Viva Energy (VEA) dropped on Tuesday and were on track for their worst day in more than three years after media reports emerged over Swiss-based Vitol's potential stake sale in the Australian fuel retailer.

Shares of Viva were one of the top losers in the benchmark index, falling as much as 7.3% to A$2.93 by 0209 GMT. The stock was poised for its worst day since March 2020, if losses hold.

Vitol, a multinational energy and commodity trading company, was considering trimming its equity interest in Viva through a block trade, the Australian Financial Review reported earlier in the day, without specifying how much the company wants to offload.

The Swiss-headquartered giant currently holds a 46% stake worth around $1.44 billion, according to LSEG data.

Viva did not respond to a Reuters' request for comment. Vitol would tap two investment banks to steer the sell-down, which would see at least A$500 million ($321.30 million) worth of stock offered, according to sources in the AFR report.

"It's yet to be confirmed why Vitol is making such a decision just 5 years after floating their Australian Viva Energy business," said Farhan Badami, analyst at eToro AUS Capital.

"The timing of their decision raises some questions as prices of oil have experienced a notable upswing this month."

Vitol Investment Partnership in 2014 had acquired the downstream operations of Royal Dutch Shell (now known as Shell) in a deal valued at about A$2.9 billion, which it renamed as Viva Energy.

The fuel supplier saw its shares hitting a record high in April after it announced plans to pay A$1.15 billion for On the Run network of stores.

($1 = 1.5562 Australian dollars)