Canadian pension investment manager British Columbia Investment Management Corporation ("BCI") and Abu Dhabi's sovereign investor Mubadala Investment Company ("Mubadala") have become the new anchor investors in Cube Highways Trust ("CHT"), an infrastructure investment trust ("InvIT") in India.
Cube Highways Fund Advisors Private Limited, the Investment Manager to InvIT, announced the listing of its fully subscribed privately placed ordinary units to INR 52,258.27 million (c. US$ 630 Million). The InvIT has a diversified portfolio of 18 toll and annuity road assets with an aggregate length of 1,423.60 kilometres. BCI, Mubadala and domestic institutional investors have subscribed to the ordinary units.
The first tranche of assets held by the InvIT will have 17 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.
Mr. U K Sinha, an independent director at Cube Highways Funds Advisors Private Limited (acting as the Investment Manager for the InvIT), said, "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 Board and Cube's team are eager to work with all stakeholders to continue generating value and worth for all. I'm thrilled to participate in Cube's journey towards a more prosperous and sustainable future."
The InvIT has also signed a facility agreement with the State Bank of India for an amount of INR 100 billion (c. USD 1.2 billion) to be used for refinancing of the existing debt within the initial portfolio.
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. The ratings derive comfort from the portfolio's track record and geographic diversification, cash pooling structure, strong debt protection metrics and experienced management team.
Zaman Velji, Senior Managing Director, Infrastructure & Renewable Resources at BCI, said, "BCI's 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."
Saed Arar, Executive Director - Head of Traditional Infrastructure, Mubadala, said, "India offers the most significant global growth opportunity in roads with a robust and well-regulated market for infrastructure investment. With more than $100 billion allocated to the road construction program, and a potential $20bn+ 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."
Citigroup Global Markets India Private Limited; & J. P. Morgan India Private Limited are the placement agents and investment bankers.