Tokyo Gas is looking to improve its capital efficiency by selling underperforming assets, reported Reuters, citing the natural gas distribution company’s president Shinichi Sasayama.
The potential sale, which may include real estate assets, follows a regulatory filing revealing a 5.03% stake investment by US activist investor Elliott Management.
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Elliott aims to enhance shareholder value in the Japanese city-gas provider.
During a business update, Sasayama noted that the utility is exploring ways to improve capital efficiency by reviewing and potentially offloading low-efficiency assets.
However, he refrained from commenting on Elliott’s actions or any discussions with the investor.
“We will review and better utilise… not only real estate, but also any assets that are not efficient, to improve our capital efficiency,” the executive said.
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By GlobalDataAccording to sources, Elliott believes Tokyo Gas could boost capital efficiency, free up capital for shareholder returns and increase investments in decarbonisation by divesting non-core assets from its extensive real estate portfolio.
“Some real estate assets are making a good profit contribution but we may review and sell some underperforming real estate,” Sasayama was quoted as saying.
In October, it was reported that Tokyo Gas is in discussions with Australia’s Woodside Energy to acquire a stake in a multi-billion-dollar liquefied natural gas (LNG) export project in Louisiana.
Sasayama declined to comment on this deal but mentioned that the company may invest in US gas assets if they are profitable.
The company’s current focus in the US is on expanding the gas value chain including trading and marketing.
Regarding the new US sanctions on Russia’s Gazprombank, Sasayama stated that Tokyo Gas, a key LNG buyer, does not foresee any impact on its procurement from Russia’s Sakhalin-2 project, as it is exempt from the sanctions.
The US recently imposed these sanctions on Gazprombank, restricting new energy-related transactions involving the US financial system as part of broader measures against Moscow.
