Mitsubishi consortium invests in Cube infrastructure


A Japanese consortium led by Mitsubishi Corporation has picked up a 20% stake in Cube Highways and Infrastructure (Singapore) for US$385 million. The deal came shortly after Cube signed an agreement to acquire Salem Tollways and Kumarapalyam Tollways in Tamil Nadu state, and a month after it picked up a minority stake in an entity owned by sovereign wealth fund Abu Dhabi Investment Authority.

Singapore-based Cube was formed by financial institutions I Squared Capital and the International Finance Corporation and owns and operates four toll road projects in India – three build–operate–transfer (BOT) projects and one BOT (annuity) project – totalling over 1,300 lane kilometres of highways in the country. Cube acquired the four projects from the bidders that were initially granted the concession by the National Highways Authority of India.

Yashwant Mathur, a partner from AZB & Partners, led a team advising Cube Highways. The firm conducted vendor diligence on Cube’s subsidiaries and assets in India and advised on aspects of the transaction documentation from an Indian legal standpoint. “Since the above-mentioned road projects were acquired by Cube from the initial road developers, each of the special purpose vehicles had historic non-compliances with certain laws and regulatory issues under the concession agreement that required much deliberation and consideration from an Indian law perspective,” he told India Business Law Journal. “In addition, since the assets were in the infrastructure sector, we had specific nuances to deal with, which we ordinarily wouldn’t have in transactions involving non-regulated assets.”

AZB senior associates Esha Pruthi and Abhyudai Singh assisted Mathur on the deal.

This was the first investment in an Indian toll-road platform by the Mitsubishi consortium, which included East Nippon Expressway (NEXCO East) and Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development (JOIN). Mitsubishi plans to invest in more urban development projects that integrate social and transportation infrastructure and real estate in India and also in other emerging economies such as Myanmar, the Philippines, Indonesia and Vietnam.

Allen & Glendhill in Singapore was the legal adviser to Cube on the Singapore law aspects relating to the transaction.

Nagashima Ohno & Tsunematsu in Singapore represented the consortium of investors on Singapore law. Platinum Partners advised the investors on Indian law matters.