Cube Highways lists InvIT with $630-mn inflow from Canada's BCI, Abu Dhabi's Mubadala

Cube Highways InvIT secures $630 million from BCI, Mubadala and others (Representative Image)

Cube Highways on April 19 announced the listing of its infrastructure investment trust  (InvIT) set up with investments from Canadian pension fund manager British Columbia Investment Management Corporation (BCI) and Abu Dhabi's sovereign Mubadala Investment Company.

Cube Highways Trust raised Rs 5,225.8 crore (approximately $630 million) from the investors, the company said. Moneycontrol was the first to write on September 8, 2021 that BCI and Mubadala were the likely anchor investors in the proposed InvIT of Cube Highways.

“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,” UK Sinha, an independent director at Cube Highways Funds Advisors Private Limited (acting as the Investment Manager for the InvIT), said in a release.

It was reported on April 1 that BCI, Mubadala and domestic investors, including Larsen & Tuobro's treasury operations and SBI Mutual Fund, were investing in Cube Highways InvIT.

Around Rs 3,802.5 crore of the proceeds will be used to repay or prepay road project debt financed by the InvIT. According to Sebi filings, the fundraising includes a secondary sale of units amounting to Rs 1,423 crore by existing shareholders and the rest will go towards issue-related expenses.

Japan Highways International BV, Abu Dhabi Investment Authority, and I Squared Capital are among Cube Highways' existing investors.

With an aggregate length of 1,423.60 kilometers, the InvIT's portfolio consists of 18 toll and annuity road assets.

NHAI toll roads and NHAI annuity roads will be included in the first tranche of assets held by the InvIT. Andhra Pradesh, Bihar, Haryana, Jharkhand, Karnataka, Kerala, Rajasthan, Tamil Nadu, Telangana, Uttar Pradesh, and West Bengal are among the states with road assets. Moreover, CHT will also have an opportunity to access a pipeline of seven highway assets through a right of first offer, the release said.

InvIT has also signed a loan facility with State Bank of India for Rs 10,000 crore to refinance debt within the original portfolio.

“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," Zaman Velji, Senior Managing Director, Infrastructure & Renewable Resources at BCI, said.

The investment increased and diversified the company's exposure in the infrastructure sector, as well as in India, he said.

Saed Arar, Executive Director – Head of Traditional Infrastructure, Mubadala, said, “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."