Grand Power Logistics Group Inc. ("Grand Power" or the "Corporation") is pleased to announce that, further to its press release dated January 14, 2010 in which it was announced that Grand Power Logistics Development Co. Ltd ("GPLD") had signed a memorandum of understanding to develop the Yangshan International Container Transit Logistics Park ("Yangshan Logistics Park"), GPLD has now signed a subsequent Assignment of Contract agreement, which gives it the "State Owned Construction Land Use Right" (awarding of the contract to purchase and develop the land).
In relation to the foregoing, a new partner, Hong Kong Shengya Technology Limited, has recently injected $12,000,000 USD into the Yangshan Logistics Park project. The purpose of these funds was to secure the deposit (or "application fee") for the Yangshan Logistics Park project. Upon this successful completion of deposit, all the necessary requirements had been met by GPLD to qualify being awarded approval for the contract to own and develop the 430 mu (70.8 acre) first phase of the 744 mu (122.5 acre) two phase project.
As a result of the injection of the fund, Grand Power's indirect ownership of the Yangshan Logistics Park project will now decrease from 36.67% to 13.2%.
The purchase cost of the land for Phase One will be approximately RMB 481.6 million (approx. $78.7 million USD). GPLD expects to source its funding through a combination of debt and/or equity funding, which may further dilute Grand Power's indirect interest in the project. Grand Power does have the option to invest its proportional share in the project phases to minimize its dilution.
A valuation report is currently being conducted to determine the completed (post construction) project value. A copy of the report will be made available as soon as it is completed.
Ricky Chiu, President and CEO of the company said "This is a very exciting development for Grand Power. We now look toward the next steps in the process, of planning out the development and infrastructure, and finding suitable operation and investment partners who can assist us in bringing this project to final completion."