DUBLIN, Ohio, Jan. 28 /PRNewswire-FirstCall/ -- Startec, Inc. (Pink Sheets: STIN) announces the closing of the sale of its primary physical asset in the form of a coal briquetter machine known as a Komar (Startec Roll) Briquetter S/N 3307, including all accessory equipment required for operation. Ownership of the machine was held by I Briquetter, Ltd., a Nevada entity, wholly owned by Startec, Inc., and Startec Development, LLC, another subsidiary of Startec, Inc.
The sale to a Delaware limited liability company known as I Synfuels, LLC was completed on January 25, 2005. The terms of the sale provide for an initial payment of $1.6 million and the possibility of future deferred income from the machine if specified conditions are satisfied. The bulk of the initial money received from the asset sale was paid directly to Startec, Inc.'s secured creditors, in partial satisfaction of Startec obligations, and to Dycoal Inc., as provided below. The cash paid to Startec from this initial payment in the approximate sum of $121,000 is being used to satisfy Startec's obligations to other creditors, which will remain substantial, even after this payment.
By Order of the United States Bankruptcy Court for the Western District of Pennsylvania in the Dycoal Inc. case, one-half any income from the asset sold is to be divided evenly between the Seller and Dycoal, Inc., debtor in the bankruptcy case. Startec's portion of the remaining income will be divided equally between Startec's subsidiary, as Seller, and its secured creditors, Komar Industries, Inc./ KI Development, Ltd. until such time as obligations totaling in excess of $6,000,000.00 have been paid to those creditors.
Startec presently also owes significant sums to creditors other than those secured creditors. If the machine performs as expected during an initial period, and if an agreement is reached by the Buyer and other parties concerning certain legal and tax questions that must be resolved in order to qualify the machine under the terms of the contract of sale, the venture should produce an income stream for I Briquetter, Ltd. beginning, possibly, in the third quarter of 2005 and continuing through the end of 2007. Any income is subject to the interests of Dycoal and Startec's secured creditors described above. The exact amount of any income that might be payable to Startec cannot be calculated because of many variables with respect to the amount of coal processed, the BTU content of the coal, the price of oil on the open market and other factors, all of which are beyond the control of I Briquetter or Startec. Any revenue stream generated from the machine will terminate no later than the end of 2007.
Except for the historical information contained in this press release, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "expects," "anticipates," "intends," "plans," "seeks," "estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon management's expectations and beliefs concerning future events and are subject to uncertainties, risks and other factors, (including, but not limited to, those mentioned above, and those specified below), which are difficult to predict and in most instances are beyond the control of the company. As a result, actual results of the company may differ materially from those expressed or implied by such forward-looking statements. Factors that may cause the actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to, the fact that the buyer of the equipment maintaining contracts for the feed stock supply and/or maintaining adequate syn-fuels sales contracts. All of the above as well as other limiting factors are beyond the control of Startec Energy, Inc.
Startec, Inc.
The sale to a Delaware limited liability company known as I Synfuels, LLC was completed on January 25, 2005. The terms of the sale provide for an initial payment of $1.6 million and the possibility of future deferred income from the machine if specified conditions are satisfied. The bulk of the initial money received from the asset sale was paid directly to Startec, Inc.'s secured creditors, in partial satisfaction of Startec obligations, and to Dycoal Inc., as provided below. The cash paid to Startec from this initial payment in the approximate sum of $121,000 is being used to satisfy Startec's obligations to other creditors, which will remain substantial, even after this payment.
By Order of the United States Bankruptcy Court for the Western District of Pennsylvania in the Dycoal Inc. case, one-half any income from the asset sold is to be divided evenly between the Seller and Dycoal, Inc., debtor in the bankruptcy case. Startec's portion of the remaining income will be divided equally between Startec's subsidiary, as Seller, and its secured creditors, Komar Industries, Inc./ KI Development, Ltd. until such time as obligations totaling in excess of $6,000,000.00 have been paid to those creditors.
Startec presently also owes significant sums to creditors other than those secured creditors. If the machine performs as expected during an initial period, and if an agreement is reached by the Buyer and other parties concerning certain legal and tax questions that must be resolved in order to qualify the machine under the terms of the contract of sale, the venture should produce an income stream for I Briquetter, Ltd. beginning, possibly, in the third quarter of 2005 and continuing through the end of 2007. Any income is subject to the interests of Dycoal and Startec's secured creditors described above. The exact amount of any income that might be payable to Startec cannot be calculated because of many variables with respect to the amount of coal processed, the BTU content of the coal, the price of oil on the open market and other factors, all of which are beyond the control of I Briquetter or Startec. Any revenue stream generated from the machine will terminate no later than the end of 2007.
Except for the historical information contained in this press release, certain statements contained herein are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Words such as "believes," "expects," "anticipates," "intends," "plans," "seeks," "estimates" or variations of such words and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are based upon management's expectations and beliefs concerning future events and are subject to uncertainties, risks and other factors, (including, but not limited to, those mentioned above, and those specified below), which are difficult to predict and in most instances are beyond the control of the company. As a result, actual results of the company may differ materially from those expressed or implied by such forward-looking statements. Factors that may cause the actual results to differ materially from those contemplated by such forward-looking statements include, but are not limited to, the fact that the buyer of the equipment maintaining contracts for the feed stock supply and/or maintaining adequate syn-fuels sales contracts. All of the above as well as other limiting factors are beyond the control of Startec Energy, Inc.
Startec, Inc.
© 2005 PR Newswire
