Mubadala, Abu Dhabi’s sovereign investor, has partnered with Canada-based British Columbia Investment Management Corporation (BCI) to become the new anchor investor in Cube Highways Trust (CHT), an infrastructure investment trust (InvIT) which is listed in India.
Cube Highways Fund Advisors Private Limited, the Investment Manager to InvIT, has announced the listing of its fully subscribed privately placed ordinary units to $630 million.
The InvIT has a diversified portfolio of 18 toll and annuity road assets with an aggregate length of 1,423.60 km. Mubadala along with Canadian pension investment manager BCI and other domestic institutional investors have subscribed to the ordinary units.
The first tranche of assets held by the InvIT will have 17 National Highways Authority of India (NHAI) toll road assets and one NHAI annuity road asset. These road assets are located across 11 states, including Andhra Pradesh, Bihar, Haryana, Jharkhand, Karnataka, Kerala, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal.
In addition, pursuant to a right of first offer, CHT will also have an opportunity to access a pipeline of seven highway assets.
Saed Arar Executive Director & Head Traditional Infrastructure Mubadala
“India offers the most significant global growth opportunity inroads with a robust and well-regulated market for infrastructure investment. With more than $100 billion allocated to the road construction program, and a potential $20 billion+ addressable acquisition pipeline, Cube Highways is the most well-positioned platform for Mubadala to drive investments in roads and capitalize on this market opportunity. As a responsible investor, we are proud to be working with Cube Highways and supporting India’s road infrastructure ambitions to further deliver socioeconomic benefits to the country.”
Mr. UK Sinha, an independent director at Cube Highways Funds Advisors, said that “This marks a significant milestone in the development of India’s infrastructure sector and InvIT in particular. The trust in Cube by such marquee investors affirms its capability and personnel.”
The InvIT has signed a facility agreement with the State Bank of India for an amount of $1.2 billion to be used for refinancing of the existing debt within the initial portfolio,” stated Mr. Sinha, who is the investment manager for the InvIT.
The InvIT has been rated “Provisional Ind AAA/Stable” for its loan facilities from three rating agencies, including Crisil Ratings Limited, ICRA Limited and India Ratings & Research Private Limited, Mr. Sinha added.
Mr. Zaman Velji, Senior Managing Director, Infrastructure & Renewable Resources at BCI, said that “Our investment in Cube Highways is in line with our long-term strategy of investing in infrastructure platforms that meet the essential needs of the communities they serve. Additionally, this investment increases and diversifies our exposure in the infrastructure sector, as well as in India, enabling BCI to contribute to national economic growth. We look forward to working with Cube Highways to build long-term value for our public sector clients.”
