First-of-its-kind road deal may free $4.5-billion stressed projects

Cube Highways & Infrastructure is weeks away from buying a road asset of a bankrupt company, a first-of-its kind purchase that could free up about $4.5 billion worth of stressed projects. 

The Singapore-based firm — backed by investors including the World Bank’s financial arm, Abu Dhabi Investment Authority and I Squared Capital — is using a novel method called ‘substitution,’ where lenders to insolvent Lanco Infratech are directly transferring Lanco’s road assets to Cube, without routing ownership through the state-run National Highways Authority of India. 

Lanco is in bankruptcy court and unable to service its debt. “All lenders have agreed and the formal handover will likely take place in the next three-four weeks,” Gautam Bhandari, managing partner at I Squared Capital, said in a phone interview on Thursday.