DALLAS, Jan. 16, 2009 (GLOBE NEWSWIRE) -- Earth Biofuels, Inc. (Pink Sheets:EBOF) (the "Company") today announced that the Company has exchanged its ownership of 5,800,000 shares of PNG Ventures, Inc. (OTCBB:PNGX) stock to Castlerigg PNG Investments, LLC ("Castlerigg") for payment of approximately $90 million against its total debt of $100,651,173 owed to Castlerigg and certain secured note holders (the "Noteholders"). The Company issued a new convertible debenture in the amount of $20,000,000 to Castlerigg that can be converted to common stock of the Company within twelve months at $0.50 per share. The transaction will translate into a net gain of approximately $70,000,000 on the Company's income statement.
Management is confident that as a result of the Company's ability to eliminate the vast majority of its debt, it is now in a position to move forward with its plan for clean, renewable forms of energy as emphasized by our country's new administration. The company is now poised to aggressively pursue its strategy to develop next generation biofuels.
On June 30, 2008, as part of a restructuring plan, the Company closed on a share exchange agreement with PNG Ventures, Inc. that exchanged ownership of the Company's subsidiary, New Earth LNG, for 7,000,000 shares of PNG common stock, which were pledged as security to the Noteholders pursuant to the related agreements.
Earth Biofuels, Inc. endeavors to produce and distribute biodiesel fuel and cellulosic ethanol through wholesale and retail outlets. The Company's Web site is www.earthbiofuels.com.
Forward-Looking Statements Disclosure
This press release may contain "forward-looking statements" within the meaning of the federal securities laws. In this context, forward-looking statements may address the Company's expected future business and financial performance, and often contain words such as "anticipates," "believes," "estimates," "expects," "intends," "plans," "seeks," "will," and other terms with similar meaning. These forward-looking statements by their nature address matters that are, to different degrees, uncertain. Although the Company believes that the assumptions upon which its forward-looking statements are based are reasonable, it can provide no assurances that these assumptions will prove to be correct. In connection with the "safe harbor" provisions of the federal securities laws, including the Private Securities Litigation Reform Act of 1995, important factors that, among others, could cause or result in actual results and experience to differ materially from the Company's anticipated results, projections, or other expectations are disclosed in the Company's filings with the Securities and Exchange Commission. All forward-looking statements in this press release are expressly qualified by such cautionary statements, risks, and uncertainties, and by reference to the underlying assumptions.