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PAAT Expands Territory

    CALGARY, Alberta--Feb. 15, 2001--PanAmerican Automotive Corp. (OTC:PAAT) is pleased to announce that it has entered into the following transactions by way of Letter Agreement.
    PAAT is pleased to announce that it is purchasing WorldStar Paez S.A. whose principal assets include the Manufacturing License for its WorldStar manufacturing facility in Cali colombia as well as its marketing facilities in Bogota, Colombia. PAAT has agreed to purchase 53 percent of the company for approximately $440,000 US Cash from the existing shareholders including company founder Carlos Ronderos. The remaining 18 percent of the company held by the shareholders will be purchased with shares of PanAmerican to be valued and issued on closing of the transaction, scheduled to occur on or before March 30, 2001.
    PAAT has agreed to assume a certain amount of short and long term debt relating to the Paez operation and will be acquiring all inventories and leases and improvements relating to the manufacturing and marketing facilities. The total value of this transaction in cash and stock and with the assumption of debt is expected to be around US $1,000,000. This value includes the 29 percent of Paez to be purchased from WorldStar Andino.
    WorldStar Paez S.A. is presently producing WorldStar vehicles. In January, 10 vehicles were produced, and it is expected that the same number will be produced in February; 12 vehicles for the month of March; 20 vehicles for the months of April and May, with full capacity being forecast for the month of June. Presently the company has on site or on order, sufficient parts to carry it through the month of June.
    On the marketing side, the company has fulltime personnel devoted at present to a target market, which represents fleet needs of companies that require urban distribution of their goods. To that end, the company is in the final stages of negotiating a 140 vehicle fleet unit deal with a major South American food producer and distribution company. The deal calls for Paez, by way of a test pilot program, to supply up to 60 vehicles to this company by the end of June, which will ensure the sale of all of the factory's production for that time period. This fleet deal is qualified and has bank financing in place from a major Colombian bank. These milestones that are being met have been the result of tremendous planning and execution carried out under the direction and leadership of Paez, by Ronderos.
    PanAmerican is also pleased to announce that it has agreed to, by way of letter agreement, purchase WorldStar Andino, a Panamanian corporation whose principal assets are a 29 percent interest in the WorldStar Paez operation. Andino is the holder of Master Licenses for Panama and all of South America. PanAmerican has agreed to purchase Andino from the shareholders of the corporation in a transaction expected to close simultaneously with the closing of the WorldStar Paez transaction. This transaction will be financed by the issuance of PanAmerican shares. The final number of shares to be issued will be determined and valued upon closing of the transaction. Upon closing, PAAT will assume all of the current and future financial commitments pertaining to the Master Licenses held by WorldStar Andino relating to World Transport Authority Inc. At present, Andino has identified and is at various stages of discussion and negotiation with five countries under license with respect to selling Manufacturing Licenses for the production of the WorldStar vehicle.
    At closing, it is the intention of Ronderos to join the Board of Directors of PanAmerican Automotive Corp. It is further the intention of PAAT and Ronderos that he will take on the position of vice president in charge of marketing and development for all of PAAT's licensed territories. Ronderos will be bringing a wealth of Latin American business experience to the company. He was a former Minister of Trade for Colombia as well as formerly chairing the Council of Foreign Ministers for the Andean Countries. Ronderos also played a key role in the development and building of the World Trade Centers throughout South and Central America and Europe. He currently sits on the Board of Directors of one of Colombia's national airlines.
    Company President Daniel Peterson is quoted as saying, "We are obviously delighted with the business we are able to announce today. Our company, upon closing these transactions, will have completed many of its intended short-term goals. We have now expanded our territory under license to a point where we control a massive area geographically (over 35 countries). The combined population of our territories is in excess of 450 million people and the entire region is connected predominantly by a common language and by common business practices. We have, in addition, strengthened our company with the acquisition of the Paez facilities which will be used to market our entire region, as well, it will be utilized as a training facility as we bring new factories online. Additionally, we feel fortunate having Carlos Ronderos join our company and feel very strongly that he will facilitate rapid and profitable expansion throughout our territories."
    PanAmerican also wishes to report that Renmark Financial communications will no longer be representing the company.

    This press release contains forward-looking statements within the definition of section 27A of the Securities Act of 1933, as amended and such section 21E of the Securities Act of 1934 amended. These forward-looking statements should not be used to make an investment decision.