Cube divests Spanish cable operator to EQT

The Natixis-managed vehicle expects further divestments over the next few months as its general partner gears up towards raising Fund II.

Cube Infrastructure Fund (Cube) has agreed to sell its majority shareholding in IslaLink Submarine Cables (IslaLink), an operator of submarine fibre optical cables in and around Spain, to Swedish fund manager EQT for an undisclosed sum.

The Natixis Environment and Infrastructure Luxembourg-managed vehicle first invested in IslaLink in 2008. The company, founded as an alternative to an existing cable between Spain and the Baleares, has since expanded to the Canary Islands, Morocco and Algeria. Revenues have more than trebled in the process, Henri Piganeau, managing partner at Cube, told Infrastructure Investor.

Co-financed by a group of client telecom companies, Islalink generates revenues guaranteed by a 15-year contract, which kicked in as the company’s first cable entered in operation in 2001. It now needs a fresh injection of capital to continue exploring new markets, according to Piganeau, who said these could include Brazil at a future stage.

EQT, which bought the asset on the back of an unsolicited offer to Cube, will fund the transaction using its Infrastructure Fund II. The vehicle reached a close in 2012 on €1.93 billion.

Piganeau expects Cube to make further divestments over the next few months, and said the team is just starting to raise Cube Infrastructure Fund II, the vehicle’s successor. Cube Infrastructure Fund I reached a final close on €1.08 billion in 2007.