Cube Highways and Infrastructure has signed an agreement to acquire 100% stake in IVRCL subsidiaries Salem Tollways (STL) and Kumarapalayam Tollways (KTL) in the Indian state of Tamil Nadu.

STL operates a 53.5km section between Salem and Kumarapalayam while KTL is responsible for the 48.5km stretch between Kumarapalayam and Chengapalli.

Both roads form a part of National Highway 544, completed in 2010 and 2009. They are 20-year toll projects awarded in 2005 to broaden the two-lane highways into a four-lane system.

Cube Highways director and I Squared Capital partner Gautam Bhandari said: “This transaction fits well within our strategy of investing in mature operational assets.

“The roads increase the geographical diversification of the Cube Highways portfolio and strengthen our presence in southern India.”

“The roads increase the geographical diversification of the Cube Highways portfolio and strengthen Cube Highways’ presence in southern India.”

Cube Highways Advisors CEO Dr Harikishan Reddy said: “We expect to benefit from significant operational synergies since both the roads are contiguous to each other.

“These roads benefit from a high proportion of captive traffic between two large industrial centres of Coimbatore and Chennai, which is demonstrated by the stable and robust growth on this corridor.”

The closing of the deal is subject to lender approvals.

Cube Highways and Infrastructure has been formed by financial institutions I Squared Capital and the International Finance. The company is based in Singapore.

The company focuses on investing in road and highway projects and other infrastructure sectors in India. It owns and operates around 1,300 lane-kilometres of toll roads.