Grand Power Logistics Group Inc.

Grand Power Logistics Group Inc.

January 14, 2010 08:17 ET

Grand Power Subsidiary Signs Mou to Develop Yangshan International Container Transit Logistics Park

CALGARY, ALBERTA and HONG KONG, CHINA--(Marketwire - Jan. 14, 2010) - Grand Power Logistics Group Inc. (TSX VENTURE:GPW), a leading China-based international logistics provider, today announced that its 70 percent owned subsidiary, Grand Power Logistics Development Co. Ltd ("GPLD"), has signed a memorandum of understanding ("MOU") to develop Yangshan International Container Transit Logistics Park. The MOU was signed with the Shengsi County People's Government ("SCPG") in Zhejiang Province, China.

As part of Yangshan Deep-Sea Port's next phase of growth, SCPG and GPLD are committed to develop and operate Yangshan International Container Transit Logistics Park (the "Logistics Park") located at the north shore area of the Port, which covers 867,700 square meters (214 acres) of reclamation land. The Logistics Park will facilitate the trans-shipment of containers arriving into and departing from Yangshan Deep-Sea Port to their final destination points throughout inland China and Asia region.

"The MOU is an important milestone for Grand Power, marking significant progress in our strategy to develop and invest in logistics infrastructure complementary to the services we provide to our customers," said Mr. Ricky Chiu, President and CEO of Grand Power Logistics Group Inc. "China's government recognizes that China needs to expand and enhance its logistics infrastructure to support the continued economic growth. We look forward to collaborating with the SCPG on the continued build-out of the Yangshan Port."

Under the terms of the MOU, GPLD is expected to have at least RMB 100 million ($15.6 million) in registered capital. GPLD has arranged for new equity to raise the registered capital, which will dilute GPW's 70 percent interest in GPLD. The total estimated investment to develop the Logistics Park is expected to be approximately RMB 3.1 billion ($485 million), which GPLD expects to source through a combination of debt and equity funding, further diluting GPW's interest in GPLD. The MOU sets out that the final terms of the land purchase for the development, including price, will be agreed to no later than October 2010. In addition, the MOU sets out responsibilities for SCPG, including the facilitation of government approvals and the provision of utilities to the site. 

"While this is a significant undertaking, Grand Power intends to fund the development by raising debt and equity at the GPLD subsidiary level, with none of the financing or dilution expected at the public company level," Mr. Chiu also said. "As we proceed with the development of the Logistics Park, we expect that our ownership of the subsidiary will decrease as we attract new partners, each providing appropriate levels of investment and expertise."

GPLD is currently owned 70% by Grand Power, with the balanced owned by a group of private investors, including Ricky Chiu, Grand Power's President and CEO.

About Yangshan Deep-Sea Port

Located 26 kilometers off of Shanghai's southern coast, China's leaders consider the Yangshan Deep-Sea port project very important in Shanghai's bid to become a dominant shipping logistics centre and global economic player. When the port is fully developed in 2020, it will be lined with over 50 berths capable of accommodating up to 15 million twenty foot equivalent containers. The entire project will be completed in four phases at a total estimated cost of US$12 to $18 billion. Phases 1 and 2 have already been completed, including the Donghai Bridge which, at 32.5 kilometers and six lanes, is the second longest cross Sea Bridge in the world. The goal of the Port is to ultimately become the biggest international shipping hub in the world, facilitating China's ever growing trade with an internationally competitive and state of the art facility.

About Grand Power Logistics Group Inc.

Grand Power Logistics Group Inc. operates principally through its wholly owned Hong Kong based subsidiary, Grand Power Express International Limited (GP Express) and provides air-freight forwarding and sea-freight services, customs brokerage, logistics, warehousing and distribution, as well as other value added services. GP Express has established operations in various regions, particularly in the Greater Pearl River Delta (GPRD), China's largest economic region. GP Express' Subsidiaries or Branch Offices in this region are located in Macau, Shenzhen, Guangzhou and Jiangmen. GP Express also operates in other regions through Subsidiaries and Branch Offices or Supporting Offices in Shanghai, Taipei, Bangkok and Los Angeles. For more information visit

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