Infra PE firm I-Squared’s platform to buy 39% stake in Ghaziabad-Aligarh expressway
Photo Credit: VCCircle

Singapore-based Cube Highways & Infrastructure Pte. Ltd, which owns and operates toll roads in India, has agreed to acquire a stake in Ghaziabad-Aligarh Expressway Pvt. Ltd, an associate of Bharat Road Network Ltd (BRNL), according to a statement from the seller.

This is the third acquisition for Cube Highways this year.

The equity value of the proposed transaction is subject to adjustments of debt and other capital and operational costs at the closing date, and hence, the company did not disclose the deal value.

However, a report by the Press Trust of India said the deal is expected to result in a net income of about Rs 150 crore for BRNL and pegged the enterprise value of the associate company at Rs 1,830 crore.

BRNL owns a 39% stake in the expressway asset, having invested Rs 199 crore into the entity, while other investors have put in Rs 502 crore, the company's investor relations report stated.

The project was developed with a cost of Rs 1,929 crore. The four-lane project is 126.3-km long. It started charging toll in June 2015 and has another 16 years to generate toll revenue. It has annual toll revenue of around Rs 193 crore.

BRNL’s scrip rose marginally higher to trade at Rs 94.25 in a weak Mumbai market on Monday.

Cube Highways

The Singapore-based infrastructure investment firm is a joint venture of infrastructure-focused private equity firm I Squared Capital and the World Bank’s International Finance Corporation.

Besides the IFC and I Squared Capital, a consortium of Japanese investors including Mitsubishi Corporation, Japan Overseas Infrastructure Investment Corporation for Transport and Urban Development, East Nippon Expressway Company Ltd and Japan Expressway Company International Ltd are some of the other shareholders of Cube Highways.

Its most recent acquisitions include the Delhi-Agra toll road project owned by Reliance Infrastructure and two road projects of KNR Constructions Ltd.

Earlier, in December 2017, it agreed to sell a 20% stake to a consortium led by Japan’s Mitsubishi Corp. for an undisclosed amount.

In November 2017, it agreed to sell a minority stake to an entity owned by the Abu Dhabi Investment Authority.

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