New Delhi, Oct. 8 -- Japan Expressway International Co Ltd (JEXWAY), a company set up by five Japanese expressway operators, will invest in Citius Transnet Investment Trust, a listed highway trust managed by Edelweiss Alternatives, and exchange operating expertise with the group's asset-management arm, the companies said on Thursday.
The companies did not disclose the size of JEXWAY's investment, its stake in the trust, or whether it bought new or existing units.
The arrangement has two parts. The first is the capital investment in Citius TransNet, which is managed by EAAA TransInfra Managers Ltd. The second is a "structured, long-term" exchange of technical solutions and operating practices between JEXWAY and Sekura India Management Ltd, a wholly owned subsidiary and the asset operating and management platform of Edelweiss Alternatives, also called EAAA. Sekura supports the group's business lines with operations, maintenance, monitoring, efficiency improvement and turnaround management. The exchange will cover highway and transport assets in India and Japan.
"India's transport infrastructure is evolving rapidly, with increasing focus on scale, efficiency and long-term asset management," said Amit Agarwal, chief executive of EAAA India Alternatives Ltd.
Sreekumar Chatra, managing director of its infrastructure yield funds, said the tie-up would strengthen local capabilities through a "meaningful two-way exchange of knowledge". Toru Suzuki, JEXWAY's president, called India a "compelling long-term growth opportunity" and said the Sekura arrangement was with an experienced investment manager with institutional-grade governance standards.
Newly listed InvIT
Citius TransNet is among the newest infrastructure investment trusts (InvITs) on Indian exchanges. InvITs pool investor money to own infrastructure assets and pay out their cash flows. Citius listed on the NSE and BSE on April 29 after a Rs.1,105 crore initial public offering. This was a smaller issue that it had planned earlier.
The trust is sponsored by Epic TransNet Infrastructure Pvt Ltd. Its initial portfolio was 10 road assets comprising seven toll and three annuity, covering more than 3,400 lane-km across nine states, according to its IPO documents. Data platform Infralogic reported that the trust has rights to 11 more concessions.
If these are transferred in, the portfolio would grow to 21 assets covering about 5,773 lane-km across 12 states.
In August the trust declared a distribution of Rs.2.06 per unit, totalling Rs.125.66 crore, for the quarter ended June 30. A follow-up filing showed Rs.1.35 of that came from debt repayment and Rs.0.71 from interest payments.
Edelweiss Alternatives is the alternatives arm of the Edelweiss group. It says it has more than 17 years of experience and fee-paying assets under management of about Rs.48,623 crore. It runs eight verticals, including infrastructure yield, commercial offices, special situations and performing credit.
Investor's background
JEXWAY was set up in September 2011 by East Nippon, Central Nippon and West Nippon Expressway Co (NEXCO East, Central and West), Metropolitan Expressway and Hanshin Expressway. It invests in, and provides technical services for, overseas toll road projects, mainly in Asia. The company says it has invested in public-private partnership road projects in Indonesia, Vietnam, the Philippines and India.
Its India exposure so far has been through Cube Highways and Infrastructure, the Singapore-based toll road platform formed by I Squared Capital and the International Finance Corporation.
Published by HT Digital Content Services with permission from VC Circle.