Cube Highways raises $473m to buy NHAI toll roads

Photo: Reuters

Cube Highways and Infrastructure on Tuesday announced an agreement with State Bank of India (SBI) for a ₹3,500 crore term loan facility to purchase the third bundle of road assets auctioned under the government’s toll-operate-transfer (TOT) model.

This is one of the largest financings in India’s road sector, said Cube Highways, which was set up by global infrastructure investment firm I Squared Capital and counts Abu Dhabi Investment Authority among its shareholders.

The company had won the TOT3 bundle with a bid of ₹5,011 crore in December. However, the transaction was delayed because of the impact on toll revenues following the coronavirus outbreak and the nationwide lockdown. Once the transaction is completed, Cube, India’s most prolific road assets buyer, will have 8,400 lane km across 27 highways, including assets that are under various stages of closing.

The TOT model developed by the National Highways Authority of India (NHAI) uses a one-time, upfront concession fee paid to the government in return for the right to operate, maintain and collect toll over 30 years on select national highway stretches. The TOT3 bundle consists of nine road stretches with 2,265 lane km across four geographically diverse states. These stretches have shown a healthy ramp-up of traffic after the lockdown was lifted, Cube said.

“The financing raised from SBI is a 20-year facility with an interest rate of 8%. The deal had slowed down because of covid-19 as SBI wanted to wait and see the recovery in toll collections. Now, with toll collections seeing a healthy recovery post the unlocking of the economy, the bank was comfortable with going ahead with the financing,” said a person aware of the discussions, requesting anonymity.

This article was first published on livemint.com

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Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.