News from CNW Group

Zongshen PEM Power Systems Inc. Announces Normal Course Issuer Bid

08:00 EDT Wednesday, October 15, 2008

TSX:ZPP

VANCOUVER, Oct. 15 /CNW/ - Zongshen PEM Power Systems Inc. ("ZPP" or "the Company") (TSX:ZPP), announced today that it will, subject to the approval of The Toronto Stock Exchange ("the Exchange"), make a Normal Course Issuer Bid (the "Bid") to purchase through the facilities of the Exchange, from time to time, as it considers advisable, up to 3,045,211 of the issued and outstanding Common Shares (being approximately 5% of the 60,904,230 Common Shares outstanding at September 30, 2008).

The Bid will commence on or about November 15, 2008 after the filing of the Company's third quarter financial statements and terminate on the earlier of the anniversary of the Bid or the date on which ZPP acquires all of the shares sought pursuant to the Bid. The price which ZPP will pay for any shares purchased by it will be equal to the prevailing market price of such shares on the Exchange at the time of purchase. Any shares acquired by ZPP pursuant to the Bid will be cancelled.

At June 30, 2008, the Company had cash and short-term deposits, including the short-term deposit with Zongshen Industrial Group, totalling $38.9 million, compared to $36.5 million at December 31, 2007 and no long-term debt. The Company has approximately $10 million committed to capital projects, comprising the construction of ZPP's Chongqing production facility and battery exchange club trial project. The Company is well capitalized to fund the expansion of its electric motorcycle and small gas motorcycle business and take advantage of strategic investment opportunities, which may include acquisitions, joint ventures and the development of new products.

"Given the growth opportunities that are available to us and the growing demand for ZPP's product line in China and in export markets, we are confident that the Company's share price is undervalued and not reflecting the true value of the business," noted Zongshen Zuo, Chairman and Chief Executive Officer of Zongshen PEM Power Systems Inc. "We have a strong balance sheet which will be deployed cautiously to explore growth opportunities to increase shareholder value."