Mitsubishi-led Japanese consortium to pick 20% in Cube Highways

Deal is estimated at Rs 2,500 cr

A Mitsubishi Corporation-led Japanese consortium has agreed to acquire a 20 per cent interest in Cube Highways and Infrastructure Pte Ltd, for an estimated Rs 2,500 crore.
 
East Nippon Expressway Company  (“NEXCO East”) and Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development (“JOIN”) are also part of the consortium that has bought into Cube, an investment platform of the International Finance Corporation and private equity firm I Squared Capital.
 
Last month, the Abu Dhabi Investment Authority picked up a stake in Cube Highways. Edelweiss Financial Services were advised Cube Highways for both the deals.
 

The companies did not disclose the deal size though it is estimated that together with the ADIA stake buy, Cube has raised Rs 4,500 crore.

 
Cube Highways is one of the few platform investors in India's road sector. The Singapore-based company is a professionally managed toll-road and highways platform that owns and operates more than 1,700 lane-kilometers of highways in India.
 
Mitsubishi Corporation's engagement with I Squared Capital dates back to 2013 when the Japanese company made a capital commitment as a strategic anchor investor in the inaugural ISQ Global Infrastructure Fund.
 
It has also formed a partnership with NEXCO East, one of the largest expressway operators in Japan, to invest for the first time in an Indian toll-road platform with the support of JOIN, a Japanese government-sponsored entity established to finance transportation infrastructure projects by Japanese companies abroad.

 
A company statement said Mitsubishi, with its extensive infrastructure investment experience, and NEXCO East, with Japan’s best-in-class operational practice and technologies, would collaborate with the existing shareholders and the management of Cube Highways to further enhance the operations and performance of the toll-road assets.
 
"The Japanese partnership is committed to the improvement of India’s highways infrastructure to support the continuing growth in passenger and commercial traffic, while at the same time contributing to economic development across India," said the statement.
 
Mitsubishi is targeting urban development projects that integrate social and transportation infrastructure and real estate, primarily in emerging economies such as Myanmar, the Philippines, Indonesia and Vietnam where the rapid expansion of urban populations has been driving up demand for development in these sectors.

 
Shareholders of Cube Highways are planning to invest up to $1 billion in new capital towards the acquisition of additional roads and highways, as well as new platform company investment in areas such the NHAI’s toll-operate-transfer (TOT) programme, hybrid annuity model (HAM) and other areas. The company operates Jaipur Mahua Tollways and Western UP Tollways.
 
Cube Highways was also one of the contenders for Jaypee Infratech's Yamuna Expressway, but the Supreme Court rejected the Manoj Gaur-promoted Jaypee group's plea to sell the project after delinking it from the real estate projects.