A Japanese activist investor calling for changes at oil company Cosmo Energy Holdings Co. says the industry needs consolidation as the nation’s demand for fossil fuels declines.
(Bloomberg) — A Japanese activist investor calling for changes at oil company Cosmo Energy Holdings Co. says the industry needs consolidation as the nation’s demand for fossil fuels declines.
“We have to discuss with other companies in the industry to figure out what’s best,” said Aya Murakami, a shareholder and daughter of activist investor Yoshiaki Murakami. She and City Index Eleventh, a fund linked to her father, combined own about 20% of Cosmo as of April 14, according to disclosure documents submitted to the finance ministry.
Her comments come at a time when Japanese refiners are forced to reckon with a dimming outlook for oil in the Asian nation. Demand is expected to drop in coming years due to population decline and a shift toward decarbonization.
Consolidation has left Cosmo, Eneos Holdings Inc. and Idemitsu Kosan Co. as the three main players in the country. Yoshiaki Murakami was an influential figure in pushing the merger of Idemitsu Kosan and Showa Shell Sekiyu K.K. in 2018.
When compared to the two other major refiners, Cosmo Energy hasn’t made a clear plan for the future of its fossil fuel business, Aya Murakami said in an interview with Bloomberg News on Wednesday.
A spokesperson for Cosmo Energy said the company doesn’t see a need for consolidation “for the time being,” noting that its refinery utilization rate has been high.
Read More: Japan’s Top Refiner Is Gearing Up for the Oil Industry’s Decline
City Index, which first disclosed its stake in the company last year, has urged the company to boost shareholder returns and list its renewable energy business. Cosmo President Shigeru Yamada said last month the company opposes a spinoff, adding he sees discrepancies between the company’s strategy and City Index’s desire for short-term returns.
The fund has made a shareholder proposal for Cosmo Energy’s annual general meeting scheduled for June, seeking to appoint a lawyer picked by the fund as an external director.
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