Singapore-based Cube Highways and Infrastructure Pte Ltd has agreed to sell a 20% stake to a consortium led by Japan’s Mitsubishi Corporation for an undisclosed amount.
The consortium includes East Nippon Expressway Company Ltd, an expressway operator in Japan, and state-sponsored Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, Mitsubishi said in a press release.
Cube Highways is a joint venture between private equity firm I Squared Capital and International Finance Corp (IFC), the private-sector investment arm of the World Bank. It owns and operates more than 1,700 lane-kilometres of highways in India, according to the release.
Mitsubishi said that it, along with East Nippon Expressway, will collaborate with the existing shareholders and management of Cube Highways to enhance the operations and performance of the toll-road assets.
Mitsubishi was a strategic anchor investor in I Squared Capital’s first infrastructure fund, ISQ Global Infrastructure Fund.
The development comes after Cube Highways last month signed a pact to sell a minority stake to an entity owned by the Abu Dhabi Investment Authority, the soveregin wealth fund of the Gulf emirate.
Cube Highways has been expanding its operations via acquisitions.
Earlier this month, Cube Highways agreed to buy two toll-road projects of cash-strapped infrastructure company IVRCL Ltd.
In March, it acquired 100% ownership interest in Andhra Pradesh Expressways Ltd, an operating annuity road project, from IL&FS Transport Networks Ltd.
Its other acquisitions include Madhucon Agra Jaipur Expressways Ltd for Rs 248 crore and Jaipur Mahua Tollways Pvt. Ltd, which operates a road project in Rajasthan, for Rs 525 crore.
I Squared is an investment manager focusing on energy, utilities, telecommunications and transport in the Americas, Europe, and select high growth economies. The firm has offices in New York, Houston, London, New Delhi, Hong Kong and Singapore.
Deals in the road segment
Several long-term institutional investors have been acquiring stakes in road projects. In September, Canadian investor Brookfield Asset Management acquired two assets worth Rs 1,900 crore (close to $300 million) in the largest private equity buyout deal in the roads sector.
In August, construction firm Dilip Buildcon signed a pact with Shrem Group to sell its stake in 24 road projects for Rs 1,600 crore (around $250 million).
In April, IDFC Alternatives, the private equity arm of infrastructure lender IDFC Ltd, acquired a majority stake in two road assets from IPO-bound GR Infraprojects Ltd for an undisclosed amount.
In December 2016, Spainish toll roads operator Abertis entered India with the acquisition of two road assets from two infrastructure funds jointly managed by State Bank of India and Australian private equity firm Macquarie for €128 million (about Rs 905 crore).
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