This is ADIA’s first investment in India’s core surface-infrastructure space, with the sovereign Middle East fund looking to further diversify its assets base in the country where debt-laden local developers are increasingly seeking to offload their operating road assets to meet repayment commitments to lenders.
Cube Highways is an independent, professionally-managed roads and highways platform that owns and operates more than 1,300 lane-kilometres of highways in India. Set up by private equity investor I Squared Capital and the World Bank’s private investment arm International Finance Corp (IFC), Cube Highways owns, manages and operates four toll road projects in India.
“This new capital commitment comes at a very exciting time, especially following the positive reforms undertaken by NHAI and the ministry of road transport and highways,” said Gautam Bhandari, Director of Cube Highways and Partner of I Squared Capital. “Cube Highways, which we started from scratch, has built an experienced management team with world-class engineering and operational expertise and has now become a recognised leader in the highways sector in India.”
The transaction — predominantly primary infusion of funds with some secondary share sale — is coming at a time when the government last month announced an ambitious road-building plan, targeting the construction of 83,677km of roads, involving a capex outlay of Rs 6.9 trillion (around $106 billion) over the next five years. Edelweiss Financial Services and Barclays were advisors to transaction.
“After the bad experience of JP Morgan and 3i, the complexion of PE changed. The focus was more on buying and owning assets, and players like Brookfield became prevalent. But after a spate of M&As in the space, this looks like a comeback for growth-oriented PE,” said an official directly involved in the transaction.
Info Source- economictimes.indiatimes