Australia's Viva Energy slumps on reports of Vitol stake sale

Waypoint REIT

12/09/2023 03:56

By Rishav Chatterjee and Ayushman Ojha
       Sept 12 (Reuters) - Shares of Viva Energy  VEA.AX 
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)
    
    

 (Reporting by Rishav Chatterjee and Ayushman Ojha in Bengaluru;
Editing by Sherry Jacob-Phillips)
 ((Rishav.Chatterjee@thomsonreuters.com;))