CALGARY, ALBERTA–(Marketwired – Oct. 28, 2016) – Grand Power Logistics Group Inc. (the “Company”) (TSX VENTURE:GPW) announces that it has entered into an Amalgamation Agreement (the “Agreement”) with 2001123 Alberta Ltd. (“Newco”) pursuant to which the Company will be taken private by way of an amalgamation (the “Amalgamation”) between Newco and the Company.

Newco is a corporation owned by Mr. Tong (Ricky) Chiu (“Chiu”) and Sheng Ning (Candace) Wong (the “Acquirors”). The Acquirors collectively own approximately 18,154,627 common shares or 22.33% of the issued and outstanding common shares (the “Shares”) in the capital of the Company. As at October 27, 2016, the Company had outstanding 81,309,278 Shares.

Pursuant to the Agreement, the Acquirors will, directly or indirectly, through the Amalgamation, pay $0.09 per Share in cash (the “Offer Price”) to holders of all of the issued and outstanding Shares that are not directly or indirectly, owned by the Acquirors. Each shareholder of the Company, other than Acquirors, will receive one redeemable preferred share of the amalgamated company for each Share held immediately prior to the Amalgamation. Each redeemable preferred share will then be redeemed for the Offer Price. The total cash consideration for the aggregate Offer Price will be $5,683,915. The Amalgamation, if consummated, will result in the Company being taken private and delisted from the TSX Venture Exchange.

The Offer Price represents a 64% premium to the closing price of the Shares on October 27, 2016 on the TSX Venture Exchange.

The Amalgamation, if consummated, will constitute a “business combination” for the purposes of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”).

The board of directors of the Company (the “Board”) formed a special committee (the “Special Committee”) comprised of independent directors Gerry Peacock and Rudolph Cech to evaluate the Amalgamation and make recommendations to the Board. The Special Committee has engaged Burstall Winger Zammit LLP as its legal advisors.

The Company intends to seek approval from the majority of minority shareholders to comply with requirements of MI 61-101. Because the Company is listed on the TSX Venture Exchange, the Amalgamation will, pursuant to Section 4.4(1)(a) of MI 61-101, be exempt from the formal valuation requirements of MI 61-101.

The Special Committee retained Evans & Evans, Inc. as an independent valuator, who prepared a Comprehensive Valuation Report and Fairness Opinion dated October 12, 2016 (the “Report”) with respect to the proposed Amalgamation. The Report concluded that the Offer Price was not fair from a financial point of view. The Special Committee, however, after considering both the Report and other factors relevant to the Amalgamation, resolved that the Board should:

• submit the Amalgamation to a vote of the shareholders at a shareholders’ meeting and, in furtherance thereof, authorize the Company to enter into the Amalgamation Agreement; and
• make no recommendation to the shareholders as to how they should vote in respect of the Amalgamation but advise shareholders they should take into account the consideration discussed by the Special Committee in the information circular for the shareholders’ meeting.

The Company has convened an annual general and special meeting of shareholders (the “Meeting”) which will take place on December 22, 2016 for shareholders to consider and, if thought appropriate, to approve the Amalgamation.

The completion of the Amalgamation is subject to a number of conditions precedent that are customary to this type of transaction, including, but not limited to, the approval of at least two-thirds of the votes cast by holders of Shares at the Meeting, the approval by at least a simple majority of the votes cast by the shareholders other than the Acquirors, and the acceptance of the Amalgamation by the TSX Venture Exchange.

Assuming the satisfaction of all conditions, the proposed transaction is expected to close as soon as practicable following the Meeting. However, there can be no assurances that the Amalgamation, or any other transaction with the Acquirors, will be completed.

Details of the terms and conditions of the Amalgamation, together with a summary of the Report, will be included in a management information circular, which will be mailed to the shareholders as soon as practicable and will also be available for download at www.sedar.com.

No actions are required to be taken by shareholders at this stage. The Company will communicate with shareholders in due course with respect to the Amalgamation.

Neither the TSX Venture Exchange nor its Regulations Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION

Forward-looking statements or information are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or information, including, without limitation, risks and uncertainties relating to the completion of the Amalgamation or related transactions, obtaining the required shareholder approval of the Amalgamation and applicable regulatory approvals required with respect to the Amalgamation. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements or information. Accordingly, readers are advised not to place undue reliance on forward-looking statements or information. The Company disclaims any intent or obligation to update forward-looking statements or information except as required by law, and the reader is referred to the full discussion of the Company’s business contained in the Company’s reports filed with the securities regulatory authorities in Canada at www.sedar.com.