Cube Highways Trust Announces Proposed Acquisition of 7 Highway Assets

New Delhi, April 26, 2024 | Cube Highways Trust (“Cube InvIT”) [BSE/NSE: CUBEINVIT], managed by Cube Highways Fund Advisors Pvt. Ltd. (the “Investment Manager / IM”) today announced the proposed acquisition of up to 100% equity shareholding in seven highway assets from Singapore-based Cube Highways and Infrastructure III Pte Ltd. and Cube Highways Infrastructure Pte. Ltd., the Sponsors of Cube InvIT, in one or more tranches. The proposed acquisition was approved by the Board of Directors of the Investment Manager held on Thursday, April 25, 2024, subject to the approval of Ordinary Unitholders of Cube InvIT.

The seven highway assets, which include six Hybrid Annuity Model (HAM) assets and one Build-Operate-Transfer (BOT) asset, span around 2,200 lane kms and are spread across geographic footprints of Andhra Pradesh, Maharashtra, Telangana, and Tamil Nadu.

Pankaj C. Vasani, Group CFO of Cube InvIT, stated: “The proposed strategic addition of these seven assets will be a significant milestone, a testament to the confidence of our investors in Cube InvIT and complement the current portfolio of assets. These assets have an enterprise value of ₹5,172 crores as of February 29, 2024, and will be acquired through internal accruals and a mix of debt, subject to necessary approvals. After these acquisitions, the yield is expected to grow upward of c.1.5% p.a. over a period of next five years.”

The Board has also approved the postal ballot notice to seek the approval of Ordinary Unitholders for this proposed acquisition. With this acquisition, InvIT’s asset portfolio will consist of 25 diversified assets spread across 13 States.

Vinay C. Sekar, CEO of Cube InvIT, said, “This past year has been a period of significant achievements – robust revenue growth of over 11.5%, a distribution plan in line with expectations – and now this transaction will be aligned with Cube Highway’s strategy of transferring de-risked and yield assets that deliver reliable returns to the Cube InvIT. These assets will boost Cube InvIT’s Assets Under Management (AUM) by over 20% from ₹25,024 crores as of December 31, 2023. The Net Debt/ AUM will stand around 46 per cent post this acquisition, providing adequate headroom for growth.”

The trading window for dealing in the securities of Cube InvIT shall remain closed. The acquisition is expected to be completed subject to the satisfaction of customary closing conditions, including receipt of statutory clearances and approval of Ordinary Unitholders of Cube InvIT.