BlueStar Completes Sale-Of-Business Transactions
BlueStar Battery Systems International Corp. (Raleigh, NC) announced that it has successfully completed two transactions that advance the strategic repositioning of the company. The first transaction is the sale of BlueStar Battery Systems Corp. (Vancouver, Canada) and BlueStar Advanced Technology Corp. (Vancouver, Canada), the company's specialty manufacturing and research and development subsidiaries. The second transaction consists of an agreement entered with the previous owner of the company's California subsidiary to discontinue the business operations and liquidate the net assets of that subsidiary.BlueStar Battery Systems Corp. and BlueStar Advanced Technology Corp. were sold for an undisclosed amount to Eagle-Picher Technologies LLC (Joplin, MO). According to BlueStar, the sale of the company's specialty manufacturing and research and development subsidiaries will better focus the company on its core business of distribution in the automotive aftermarket and its emerging e-commerce initiative.BlueStar's decision to discontinue the relationship with its California subsidiary will allow the company to reduce its outstanding debt and eliminate a future acquisition payment of $4.0 million that was due in early July 2000. While the former owner will retain certain amounts paid under the original acquisition, the company has cancelled 666,666 share purchase warrants that were originally issued. In addition, the company may be able to reduce the number of its common shares outstanding, as the former owner of the company's California subsidiary is returning approximately 3.5 million common shares to the company in exchange for a future cash payment of $2.5 million from the proceeds of sales by the company of the returned shares."Both of these initiatives better position the company for the future as a more focused distribution company with less debt and a greater ability to capitalize on our emerging e-commerce capabilities," said James A. Risher, BlueStar chairman and CEO. "While we were obviously disappointed that we have had to discontinue our California acquisition due to the lack of performance and adequate returns on invested capital, we anticipate maintaining certain customer relationships in the region and will serve them through alternative means to preserve a market presence."