Cube Highways in talks to raise $ 1 billion


MUMBAI : Cube Highways, the largest investor in road projects in India, is in talks with pension funds and sovereign wealth funds to raise up to $ 1 billion through an infrastructure investment trust (InvIT), have said three people aware of the development.

Singapore-based Cube Highways, backed by infrastructure investor I Squared Capital, has 28 road projects in operation, with nearly 8,900 km of track across India.

The InvIT will include the largest portfolio of private road assets in the country.

“The Cube Highways InvIT will include almost all of the operating road assets in the company’s portfolio except for one or two. This is the largest portfolio of routes to be InvITed in India to date. They are working with a foreign investment bank on the structuring of InvIT and marketing to investors, ”said the first of the three people named above, on condition of anonymity.

The Cube Highways InvIT will be a privately listed InvIT, he added.

According to the second person cited above, several pension funds, sovereign wealth funds and some insurance companies are in talks with Cube for this investment.

“Canadian investors such as British Columbia Investments and an Abu Dhabi state sponsored investment firm are in the race to invest in the InvIT Cube. There are two rounds of talks after which the last group of investors will be chosen, ”he said.

An email sent to I Squared Capital did not elicit a response. British Columbia Investments declined to comment.

Existing shareholders of Cube Highways include I Squared Capital, Abu Dhabi Investment Authority, International Finance Corp., a consortium of Japanese investors including Mitsubishi Corp., Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development, East Nippon Expressway Co. Ltd and Japan Expressway Co. International Ltd.

Cube Highways has become the largest purchaser of operating road projects in India, including major road projects such as Chenani-Nashri Tunnelway Ltd, India’s largest road tunnel in the Union Territory of Jammu and Kashmir in ‘IL&FS Transportation Network Ltd; DA Toll Road Pvt. Ltd, a six-lane toll road connecting Delhi and Agra; Cube Highways acquired nine operating routes from the National Highways Authority of India under the Toll Transfer (ToT) model for $ 684 million.

InvITs manage income-generating infrastructure assets, typically providing investors with a steady return and a liquid method of investing in infrastructure projects.

They have become a favored structure for investors and are being set up to hold mining projects on roads, transmission lines, renewable energy projects, telecommunications towers and gas pipelines.

While companies such as Reliance Industries, Sterlite Power, IRB Infrastructure, L&T and others have set up InvITs to monetize their operating infrastructure assets, even public entities have become familiar with these structures.

In May, PowerGrid Corp. of India Ltd has raised more than ??7,700 crore via an InvIT of transmission lines.

NHAI is also working on its own InvIT of road projects.

Mint reported on September 3 that the government’s ambitious project ??The $ 6 trillion monetization program will be launched by leasing more than 2,229 km of gas pipelines from GAIL (India) Ltd to the private sector under the InvIT structure.

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