Newstar given extension to file financial statements
Newstar Resources Inc NER
Shares issued 35,419,867 May 19 close $0.28
Wed 19 May 99 News Release
Mr. Jason Piedmonte reports:
Newstar Resources (Nasdaq: NERIF; Toronto: NER) is not able, at this time,
to present annual audited consolidated financial statements for its year
ended Dec. 31, 1998, (the "1998 annual financial statements") or quarterly
audited consolidated financial statements for its quarter ended March 31,
1999, (the "first quarter interim financial statements") for the following
reasons:
Effective April 1, 1999, the company's wholly owned subsidiary, Newstar
Energy U.S.A., Inc., ("Newstar Energy"), and Newstar Energy's 90 per cent
owned subsidiary, Newstar Energy of Texas, LLC, ("Newstar Texas") filed
bankruptcy petitions under Chapter 11 of the United States Bankruptcy Code
(the "code").
Sufficient funds were not available prior to April 1, 1999, to permit the
preparation of the 1998 annual financial statements.
Newstar Energy and Newstar Texas have been negotiating with creditors the
terms of a plan of reorganization, which was presented to the bankruptcy
court on April 28, 1999.
As part of the reorganization, the company, Newstar Energy and Newstar
Texas (collectively, "Newstar") have closed their Ohio and Texas field
offices, are pursuing divestitures of non-core properties and are
negotiating financing or joint venture arrangements to assist them in
continuing the development of their core properties, resulting in
additional funds being made available to Newstar.
A motion of the creditors of Newstar (the "motion") authorizing the release
of sufficient funds currently held in escrow to permit the preparation of
independent reserve reports with respect to Newstar's oil and gas
properties (the "reserve reports"), and the preparation of the 1998 annual
financial statements and the first quarter interim financial statements,
among other matters, is expected to be approved on or prior to June 14,
1999.
The company has not yet prepared the 1998 annual financial statements or
the first quarter interim financial statements as the company's ability to
obtain the reserve reports and prepare such financial statements is
dependent upon the creditors of Newstar approving the motion which is not
expected to be approved until after the May 20, 1999, and May 31, 1999,
respective deadline dates under applicable securities laws.
An order has been issued by the Ontario Securities Commission and an
application has been filed with the Alberta Securities Commission granting
additional time to the company to obtain the reserve reports necessary to
prepare the 1998 annual financial statements and first quarter interim
financial statements and to file and disseminate such financial statements
to its shareholders. Assuming the creditors of Newstar approve the motion
on or before June 14, 1999, the company will send to its shareholders the
1998 annual financial statements and the first quarter interim financial
statements on or prior to July 15, 1999.
WARNING: The company relies on litigation protection for "forward-looking"
statements.
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