Zongshen PEM Power Systems Inc. Engages GMP Securities L.P.

VANCOUVER, Nov. 18 /CNW/ - Zongshen PEM Power Systems Inc. ("ZPP" or the "Company") (TSX: ZPP) announced today that it has engaged GMP Securities L.P. for a formal independent valuation (the "Valuation") in connection with ZPP's proposed acquisition (the "Proposed Acquisition") of the two wheeled gas motorcycle business (the "Business") of Zongshen Industrial Group Co., Ltd. ("ZIG"). Further details regarding the Proposed Acquisition can be found in the Company's press release dated October 23, 2009.

The Proposed Acquisition is a "related party transaction" under Multilateral Instrument 61-101, and as such requires the preparation of the Valuation and approval by shareholders of the Company other than ZIG, its related parties and joint actors.

The Company believes that the Proposed Acquisition represents a unique opportunity to acquire a leading Chinese motorcycle brand in one of the world's largest growth markets. In addition, the Company believes that the gas motorcycle business will provide ZPP with a strong manufacturing, technology and distribution platform for its electric motorcycle business. The Proposed Acquisition will also further align the interests of ZPP and ZIG.

ZIG has estimated that the Business will generate approximately RMB 2 billion (CAD $315.4 million) in revenue and net income of approximately RMB 100 million (CAD$15.8 million) for the year ended.

The purchase price for the Proposed Acquisition (the "Purchase Price") is expected to include a base price of up to six times of the net income of the Business for the financial year ended December 31, 2009 (the "2009 Net Income") to be paid at the closing date, and performance payments of up to two times 2009 net income to be paid subject to achieving growth targets, and will be definitively determined following an audit of the Business.

Completion of the Proposed Acquisition will be subject to a number of conditions including the receipt of board, regulatory, TSX, shareholder and other governmental and third party approvals and consents, entering into a definitive purchase agreement, the completion of the audit of the Business for the financial year ended December 31, 2009, and the completion of a Valuation by GMP Securities L.P. which supports the Purchase Price payable by the Company.

Forward-Looking Statements:

This news release contains forward-looking statements relating to the Proposed Acquisition, including statements regarding the terms and conditions of the Proposed Acquisition including the Purchase Price, the projected 2009 Net Income and revenues and other statements that are not historical facts. Such forward-looking statements are subject to important risks, uncertainties and are based on certain factors and assumptions such as foreign exchange rates, expected growth, results of operations, performance, business prospects and opportunities and effective income tax rates. The results or events predicted in these forward-looking statements may differ materially from actual results or events. As a result, you are cautioned not to place undue reliance on these forward-looking statements.

The completion of the Proposed Acquisition is subject to a number of terms and conditions, including, without limitation: (i) approval of the TSX and applicable PRC regulatory authorities, (ii) required shareholder approval of the Company, (iii) satisfactory due diligence of the Business by the Company and the entering into of a definitive purchase agreement, (iv) completion of an audit of the Business for the financial year ended December 31, 2009, (v) completion of the Valuation which supports the Purchase Price and (iv) certain termination rights which are expected to be available to the parties under the definitive purchase agreement. These approvals may not be obtained, or the conditions of the transaction may not be satisfied in accordance with their terms, and/or the parties to letter of intent or definitive purchase agreement may exercise their termination rights, in which case the proposed transaction could be modified, restructured or terminated, as applicable.

The forward-looking statements contained in this news release are made as of the date of this release. Except as required by applicable law, the Company disclaims any intention and assume no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Additional information relating to the Company, including the risks and uncertainties relating to the Company's business, may be found in the Company's filings with the Canadian securities regulatory authorities, which are available on SEDAR at http://www.sedar.com under the Company's profile.

SOURCE ZONGSHEN PEM POWER SYSTEMS INC.

For further information: For further information: Ali Mahdavi, Zongshen PEM Power Systems Inc., Vice President, Corporate Finance & Investor Relations, (416) 962-3300, 1-877-775-8734, amahdavi@zongshenpem.com

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ZONGSHEN PEM POWER SYSTEMS INC.

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