BlueStar Announces Notice of Public Sale of Assets of All Wholly-Owned Subsidiaries.

Business Editors

RALEIGH, N.C.--(BUSINESS WIRE)--June 27, 2001

BlueStar Battery Systems International Corp. ("BlueStar" or the "Company") announced today the receipt of notices for the public sale of the assets of its wholly-owned subsidiaries, BlueStar Systems Canada Corp. (Alberta, Canada), BlueStar Systems Group, Inc. (Delaware, U.S.A.) and BlueStar U.S.A. Inc. (Indiana, U.S.A.) (collectively, the "Subsidiaries").

In the Company's May 31, 2001 Press Release, it was reported that the Company's secured lender, Lumina Group, LLC ("Lumina") had notified the Company on May 21, 2001 of its demand for immediate payment of the principal amount of $1,262,673.38 with accrued and unpaid interest of $45,940.43 pursuant to the terms of an Amended and Restated Loan Agreement dated February 6, 2001 (the "Loan Agreement") between BlueStar and Lumina. As of today's date, the total amount of indebtedness under the Loan Agreement inclusive of interest is approximately $1,550,000 (the "Outstanding Indebtedness"). Lumina is controlled by James A. Risher, Chairman and Chief Executive Officer of BlueStar.

Under the Loan Agreement, the receivables, inventory, equipment and general intangibles of the Subsidiaries (the "Assets") are pledged as collateral in favour of Lumina. As the Company is unable to make the loan repayment, the Assets will be offered for sale on June 29, 2001 at 11:00 a.m. (Eastern Time) at the offices of Lumina's counsel, Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan, LLP, 25th Floor, First Union Capitol Center, Raleigh, North Carolina 27601.

Lumina has received an offer to purchase the assets of BlueStar Systems U.S.A. Inc. from Advanced Power Systems, L.L.C. ("APS"). APS is an Indiana incorporated company in which Stan Smith is a director and principal shareholder. Mr. Smith is also the President of Sales of BlueStar Systems U.S.A. Inc. (Indiana, U.S.A.). As consideration for the purchase of these assets, APS has offered $1,200,000 payable in the form of a promissory note. The successful purchaser at the public sale shall be expected to present to Lumina an offer more favourable than that presented by APS.

Lumina will make an initial offer to purchase the assets of BlueStar Systems Canada Corp. by making a credit bid on these assets in the amount of $200,000 which will be credited against the Outstanding Indebtedness. The successful purchaser at the public sale shall be expected to present to Lumina an offer more favourable than that presented by Lumina's initial offer.

Lumina will make an initial offer to purchase the assets of BlueStar Systems Group, Inc. by making a credit bid on these assets in the amount of $60,000 which will be credited against the Outstanding Indebtedness. The successful purchaser at the public sale shall be expected to present to Lumina an offer more favourable than that presented by Lumina's initial offer.

The liquidation of the Assets pursuant to the public sale is not expected to satisfy the Outstanding Indebtedness. Upon liquidation of the Assets, the Company will have no other assets for distribution to remaining creditors and existing shareholders.

BlueStar sells power and charging systems in North America. The Company markets battery products and certain related components from several of the world's leading manufacturers. BlueStar's common stock currently trades on the Canadian Venture Exchange under the symbol BSG.