TOKYO: Tokyo Gas aims to improve capital efficiency by selling underperforming assets including real estate, its chairman said on Thursday, following the disclosure of the activist investor’s 5 percent stake American Elliott Management.

Elliott took a 5.03% stake in Tokyo Gas, according to a regulatory filing released earlier this month, in a bid to push Japan’s largest city gas supplier to increase shareholder value.

Tokyo Gas President Shinichi Sasayama, at a news conference to provide an update on its operations, declined to comment on the details of the company’s dialogue with Elliott, but said the utility was seeking to improve capital efficiency in a variety of ways, including reviewing and offloading low-efficiency assets.

“We will review and better utilize not only real estate, but also any assets that are not efficient, to improve our capital efficiency,” he said.

Elliott, one of the world’s most influential activist investors, believes Tokyo Gas could improve capital efficiency, free up capital to improve shareholder returns and drive investment in decarbonization and other growth areas by selling off certain assets from its vast real estate portfolio that are not profitable. -at the heart of the main energy sector, according to a person familiar with the matter.

“Some real estate assets make a good profit contribution, but we may review and sell some underperforming real estate,” Sasayama said, without providing further details.

Reuters reported in October that Tokyo Gas was in talks with Woodside Energy to take a stake in a multibillion-dollar liquefied natural gas (LNG) export project in Louisiana, citing two people familiar with the discussions.

Sasayama declined to comment on the deal, but said the company could invest in U.S. gas assets if they contribute to profits, although its current focus in the U.S. is on expanding the gas value chain, including including trade and marketing.

Asked about new U.S. sanctions against Russian bank Gazprombank, Tokyo Gas, a major LNG buyer, sees no impact on its fuel supply from Russia’s Sakhalin-2 project because the project is exempt from sanctions, Sasayama said.

The United States imposed new sanctions on Gazprombank last week as part of a broader campaign to punish Moscow for its invasion of Ukraine, barring it, among other restrictions, from any new transactions related to the energy that affects the American financial system.