From Singapore Business Review:

C&G to sell WTE business and assets in China for S$389.7m
As focus shifts to Southeast Asia.

SGX Mainboard-listed Waste-to-Energy investor and operator C&G Environmental Protection Holdings Limited (C&G) has announced that its wholly-owned subsidiary, C&G Environmental Protection (Hong Kong) Company Limited (C&G (HK)) has entered into a conditional acquisition agreement with Grandblue Environment Co. Ltd (Grandblue) in relation to the Proposed Sale of the entire shareholdings in C&G Environmental Protection (China) Company Limited.

Under the acquisition agreement, the Group will sell its WTE business and assets (including concession rights) and its principal operating subsidiaries in China to Grandblue for RMB1.85 billion (approximately S$389.7 million ) which will be satisfied in cash and Grandblue shares. The principal terms of acquisition agreement are substantially the same as Framework Agreement entered into 23 December 2013.

Upon execution of the acquisition agreement, the Group will deploy the proceeds to fund the expansion of the Group's WTE business and other environmental related projects in the Southeast Asian markets, as well as working capital for its existing projects. Further to this, the Group intends to distribute a portion of the proceeds as special dividend to its shareholders.

Completion of the Acquisition Agreement is subject to relevant government and regulatory approvals from both the People’s Republic of China and Singapore, as well as C&G’s shareholders. C&G will hold an extraordinary general meeting to seek the approval of the shareholders for the Proposed Sale in due course.

Mr. Lin Yan, Executive Chairman and CEO of the Group said, "We are delighted to have concluded negotiations and reached a more definitive acquisition agreement with Grandblue for the sale of our China business in just over a month of signing the Framework Agreement. As we turn our attention to the emerging WTE space in Southeast Asia and explore the business opportunities in other environmental related businesses such as the provision of technology advice, equipment and installation services for the treatment of industrial waste water and air pollution (PM2.5) by way of investment, acquisition or strategic alliance, we hope that our stakeholders, including shareholders will support our continual transformation ahead.”

With the sale of its China businesses and assets to Grandblue, C&G will shift its focus to the WTE industry in Southeast Asia. With increasing urbanisation and growing green concerns, governments are increasingly seeing ways to deal with their municipal waste in a more environmentally friendly manner.

Most recently, on 22 January 2014, C&G through its joint-venture company, C&G Padu Sdn Bhd (C&G Padu), received a letter of support from the Economic Planning Unit of the Malaysian state of Terengganu for the development of an 800 tonnes/day WTE Plant for a concession period of 30 years.

C&G Padu will enter into negotiations with the State Government of Terengganu on the terms of the investment and seeks to obtain all necessary approvals, including but not limited to the Renewable Energy Power Purchase Agreement with Tenaga Nasional Bhd, Malaysia’s power distribution company. The Terengganu WTE project is subject to a negotiation process and is expected to contribute financially to the Group upon commencement of operations.

"Malaysia is an interesting market to be in and its government has been seeking means to grow their energy generation capabilities to meet increasing demand in their developing states. We are delighted to be able to contribute to Terengganu's waste management and power generation infrastructure and look forward to serving Malaysian citizens well as we explore various opportunities in the country.

“Southeast Asia presents very exciting prospects and we intend to further expand our presence in the region through investments into new projects or with partners with immense on-the-ground experience. We are also open to exploring various other opportunities in the environmental sector that complement our WTE business such as air or water purification. As a green-focused company, it is our responsibility to protect the environment and ensure its sustainability for the benefit of future generations", concluded Mr. Lin.

I got the following comments from Sharejunction forum:
>
> Grandblue is now RMB13.08. C& G sits on a further paper gain now of
> $242,527,628 based on shares alone.
>
> *** Cash consideration is RMB1.1billion = S$231.25m (exchange rate of
> 4.7567)
>
> *** 89,928,058 Grandblue shares at an issue price of RMB8.34 (approximately
> S$1.74 or total S$156,474,820.92) per share
>
>
> Shares of Grandblue is trading now at RMB 13.08 (approx. S$2.6969)
>
> This translates to a paper gain of $0.9569 per share or S$86,052,158
> (S$86million)
>
> This also brings the total consideration to S$231.25m + (89928058 shares x
> S$2.6969) = S$231.25m + S$242,526,979 = S$473.77m as compared to S$385.4
> million.
>
> Total Float in C& G = 973,023,354 shares
>
> Value of C& G shares now is approx. $0.4869. huat ah!

C&G Environmental Protection Hldgs Ltd : China : C&G ENVIRONMENTAL PROTECTION HOLDINGS proposed a sale to GRANDBLUE ENVIRONMENT
01/03/2014 | 03:17pm US/Eastern
C&G Environmental Protection Holdings owns and operates waste to energy facilities in China and Southeast Asia. It has proposed a sale of its Chinese waste to energy business.
This move will enable it to reposition itself to focus on expansion of its business in Southeast Asia.
The group said that it entered a legally binding framework agreement with Grandblue Environment (formerly known as Nanhai Development) for a 100% sale of its equity in C&G Environment Protection.
The sale of its waste to energy business and assets in China is valued at RMB1.85 billion ($305 million) which will be satisfied by cash and the issuance and allotment of new shares in the capital of Grandblue.
Lin Yan, executive chairman and group CEO of C&G Environmental Protection Holdings, said, through this strategic arrangement, we will become the second largest shareholder in Grandblue, enabling a change of our business platform to hold our WTE business in China through Grandblue.
This is also in line with our strategy to monetise our assets to enhance shareholder value and explore additional growth, he continued.
The experience gained from waste to energy projects will reposition and expand C&G's energy recovery and other environmental related business.
We have already made some inroads into Thailand, securing our first WTE energy project in Nong Khaem Bangkok with a daily capacity of 500 tonnes and incorporating our energy management company in this country last year, the CEO noted.
The Asian market offers potential for renewable energy as global investors look towards Southeast Asia as new destination for investment in this area. There is a trend that governments of the Philippines, Indonesia, Thailand, and Malaysia are setting aggressive targets for renewable energy to be achieved in 20 years.
Grandblue is an established utility and environmental player in the water sector, who will have more potential to participate in diversified business after the completion of this transaction.
© Al Bawaba Ltd., Acquiremedia 2014