Deals

Japanese investors to buy stake in I Squared’s Indian road platform

Mitsubishi Corporation is also looking to invest in urban development projects, particularly in emerging countries such as Myanmar, the Philippines, Indonesia and Vietnam.

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A consortium led by Japanese industrial giant Mitsubishi Corporation has agreed to acquire a 20 percent stake in Cube Highways and Infrastructure, the India-focused toll road operator, following Abu Dhabi Investment Authority’s commitment to a minority stake in the company in November.

The investment will be made under the partnership between Mitsubishi and the East Nippon Expressway Company, one of the largest toll road operators in Japan, with support from Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development, a government-sponsored entity to finance transport infrastructure projects abroad by Japanese companies.

The Japanese entities said they are committed to improving India’s highways infrastructure and enhancing the operations and performance of the toll road assets under the platform by bringing in their international expertise, best-in-class practice and technologies. The financial details were not disclosed.

Cube Highways, which was founded by US fund manager I Squared Capital and the International Finance Corporation in March 2014, currently owns and operates more than 1,700 lane-km of highways in India.

In November, Cube Highways said it will look to invest up to $1 billion in new capital to acquire additional roads and highways, as well as new platform company investments in areas such as National Highways Authority of India’s Toll-Operate-Transfer programme, Hybrid Annuity Model and other areas, while ADIA agreed to buy a minority stake in the company.

In addition to the Cube Highways investment, Mitsubishi was one of the strategic anchor investors in the inaugural ISQ Global Infrastructure Fund in 2013.

Mitsubishi said it is targeting urban development projects that integrate social and transport infrastructure and real estate, primarily in emerging countries in Southeast Asia in view of their rapid urbanisation. It also looks to expand its footprint in India to capture the country’s “strong economic growth and increase in middle-income population”.