Bluestar Announces Private Placement of Units

    RALEIGH, N.C., Jan. 31 BlueStar Battery Systems
International Corp. (CDNX: BHW)("BlueStar" or the "Company") today announced
its intention to privately place up to 2.5 million units of BlueStar at a
post-consolidation price (subject to exchange approval) of Can.$1.10 per Unit
("Unit") for a maximum aggregate proceeds of Can.$2.75 million, each unit
comprising of one Series 1 Convertible Preferred Share ("Preferred Share") and
0.25 of a share purchase warrant ("Warrant").  Each Preferred Share will be
convertible into one (1) Common Share of BlueStar at a post-consolidation
conversion price of Can.$1.10 per share.  Each full Warrant will entitle the
holder to acquire an additional Common Share of BlueStar.  The Warrants may be
exercised at any time up to two (2) years from the date of issue at a price of
Can.$1.10 per whole share.  The private placement is not anticipated to close
until after the Canadian Venture Exchange ("CDNX") has called the Company's
shares for trading on a consolidated basis reflecting the recent consolidation
of the Company's shares on an approximate 22 for 1 basis.
    The Company anticipates that the final terms of the private placement will
provide that holders of Preferred Shares will be entitled to 12% cumulative
dividends, of which 4% will be payable in cash semiannually, and 8% will be
payable in additional Preferred Shares.  Dividends and liquidity distributions
payable on the Preferred Shares will be paid in preference and in priority to
any dividends payable on any other class of shares.
    The proceeds from the sale of the units, which is subject to CDNX
approval, is expected to occur before April 15, 2001, and will be used by
BlueStar for general working capital and payment of transaction fees and
related expenses of the private placement.
    BlueStar sells power and charging systems in North America.  BlueStar
markets battery products and certain related components from many of the
world's finest suppliers.  BlueStar enhances its product lines through
strategic alliances with some of the world's leading manufacturers and
continues to strengthen the BlueStar participant network throughout North
America.  BlueStar's common stock currently trades on the Canadian Venture
Exchange under the symbol BHW and will trade under the symbol BSG once the
share consolidation is effective.