Grand Power Announces Private Placement Offering



    CALGARY, June 17 /CNW/ - Grand Power Logistics Group Inc. ("Grand Power")
is pleased to announce that it has entered into an agreement to sell, on a
private placement basis, a minimum of $5 million and a maximum of $10 million
of units (the "Units"). The "best efforts" private placement, which is subject
to regulatory approval, will be sold by a syndicate of agents led by Canaccord
Adams and GMP Securities L.P., and including Macquarie Capital Markets Canada
Ltd. (collectively, the "Agents").
    Each Unit will consist of one common share and one-half of one common
share purchase warrant. The Offering will be marketed on a "best efforts"
basis in Canada, the United States, and Europe. Securities sold under the
Offering will be subject to a statutory four month hold period, and will be
priced in the context of the market prior to Closing.
    The net proceeds from the private placement will be used by Grand Power
to grow revenues and expand margins in its core import / export air-freight
business, to expand its warehousing and ocean freight business and to initiate
the building of, a wholly owned domestic express network in China and for
general corporate and working capital purposes.
    Historically, almost all of the Company's revenues have been from air
freight co-loading, which grew by 68% to $99.6 million in revenues for the
year ended December 31, 2007 and is expected to continue its strong growth in
2008, even as the Company is focusing on expanding into higher margin
logistics businesses. In the first quarter of 2008, the Company generated
gross margins of 15.7% and 30% for direct sales air-freight and warehousing
respectively, as compared with gross margin of approximately 7% for air
freight co-loading for the year ended December 31, 2007. Since the direct
sales business began operations in 2008 and the warehousing business in late
2007, they comprised only 4% of revenues in Q1 2008, but accounted for 16.4%
of gross profit due to their higher profit margins. The Company has recently
hired approximately 100 new employees to expand these initiatives.
    Grand Power intends to use a portion of the net proceeds of the private
placement to increase revenues and margins in its core import / export
air-freight business, as well as its warehousing and sea freight operations.
In the core import / export air-freight business, revenue growth will be
achieved by opening new sales offices and hiring experienced local sales
people in Chinese cities with major airports, by increasing air freight
capacity (including charter flights) and by signing additional airline
partnerships. Margin expansion will be achieved by targeting direct sales,
thereby eliminating agents and facilitating load optimization, and by
expanding its importing business, which generally garners higher margins than
exports. Furthermore, as Grand Power has reached a critical mass in the scale
of its operations, it is now in a position to attract volume discounts, make
long term commitments on the air cargo space it purchases, and achieve
economies of scale on its operating expenses.
    Grand Power intends to use the remainder of the net proceeds to initiate
the building of a domestic express network in China. A domestic express
network is a small package door-to-door express courier service within China
which targets small and medium sized enterprises. In 2007, China's domestic
express network market generated revenues of approximately US$5.9 billion
(Booz Allen). Management believes the market is highly fragmented, with over
30,000 companies operating in the space. Despite its scale and fragmentation,
the domestic express network market in China is experiencing rapid growth,
having grown at a compound annual growth rate of over 28% since 2004 (Booz
Allen).
    Depending on the size of the private placement, Grand Power intends to
enter the domestic express network market by hiring between up to 200
experienced professionals, opening a head office for the domestic express
network in Beijing and establishing satellite offices in other major cities in
China. Grand Power believes that establishing this business will allow the
Company to achieve significantly higher gross margins and will further enhance
the Company's growth profile going forward.
    Marketing of the Offering will begin immediately and closing is
anticipated as soon as practicable thereafter subject to approval of the TSX
Venture Exchange and other customary conditions.

    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.

    Forward-looking statements: Statements included in this press release
that are not historical facts may be considered "forward looking statements".
All estimates and statements that describe the Company's objectives, goals or
future plans are forward looking statements. Forward-looking statements
involve inherent risks and uncertainties where actual results could differ
materially from those currently anticipated.

    The TSX Venture Exchange does not accept responsibility for the adequacy
    or accuracy of this release.





For further information:

For further information: Canada, Alan Chan, CFO, Telephone: (403)
237-8211, Facsimile: (403) 228-3013, Email: alanchan@grandpowerlogistics.com,
Website: www.grandpowerlogistics.com; Hong Kong, Sean Webster, Senior Vice
President, Finance & Business Development, Canada: (403) 237-8211, Hong Kong:
(852) 3104 3008, Email: sean.webster@grandpowerlogistics.com

Organization Profile

GRAND POWER LOGISTICS GROUP INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890