C&G Environmental Protection Holdings, which is listed on the Singapore Exchange, will sell its waste-to-energy business in China for 1.85 billion yuan (S$385.4 million), the company said on Tuesday.

It will receive 1.1 billion yuan of the sale price in cash and the remaining amount in new shares of Grandblue Environment, the buyer of the China business.

The Grandblue shares will be issued at 8.34 yuan each, compared with its share price before the announcement of 10.22 yuan. Up to 89.9 million shares will be issued, C&G said.

After the transaction is completed, C&G will be the second-biggest shareholder in Grandblue, with a stake of more than 10 per cent.

Grandblue, which is listed on the Shanghai Stock Exchange, invests in and operates systematic environmental services in China. Its main businesses are tap water supply, sewage treatment, solid waste treatment and disposal, gas services and waste incineration power generation.

"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," said C&G's executive chairman and group chief executive officer Lin Yan.

"In addition, as Grandblue is an established, listed utility and environmental player with its business extending to the water sector, our shareholders too will have the potential to participate in a more diversified business upon completion of this significant transaction."