Megastar Provides Information Regarding the Plan of Arrangement
March 30 2011 - 4:35PM
Marketwired
Megastar Development Corporation ("Megastar" or the "Company") (TSX
VENTURE: MDV)(FRANKFURT: M5Q) wishes to advise that the
reorganization of its business through the completion of a Plan of
Arrangement, as detailed in the November 25, 2010 Information
Circular and which included a share exchange by the Megastar
shareholders of record on January 7, 2011 of the Megastar Class A
Shares for Megastar New Common Shares and Eloro Resources Ltd.
("Eloro") Shares, completed on March 15, 2011. Megastar has
determined that the fair market value of each Eloro Share
distributed on the exchange was equal to $0.087, with 1.6616329869
Eloro Shares distributed for every Megastar Class A Share. Further,
Megastar has determined that the paid-up capital of each Megastar
Class A Share was equal to $0.1504. Accordingly, management has
concluded that no deemed dividend should result.
A Shareholder will only recognize a capital gain on the Share
Exchange to the extent that the fair market value of the Eloro
Shares ($0.087) and the adjusted cost base of the Megastar New
Common Shares received on the Share Exchange, less the amount of
any dividend deemed received ($nil) exceeds the adjusted cost base
of the Shareholder's Class A Common Shares determined immediately
before the Share Exchange.
The adjusted cost base to a Shareholder of the Eloro Shares
received on the Share Exchange will be equal to their fair market
value ($0.087). The adjusted cost base to a Shareholder of the
Megastar New Common Shares received on the Share Exchange will be
equal to the excess, if any, of such Shareholder's adjusted cost
base of the Class A Common Shares less the fair market value of the
Eloro Shares received by such Shareholder.
You may find this information useful for tax purposes. This
summary is not intended to be, nor should it be construed to be,
legal or tax advice to any particular Shareholder. Shareholders
should consult their own tax advisors for advice with respect to
their particular circumstances including, where relevant, the
application and effect of the income and other taxes of any
country, province, territory, state or local tax authority.
These tax consequences are explained in greater detail in the
Management Information Circular of Megastar dated November 25,
2010. All capitalized terms used herein have the meanings given to
them in the Management Information Circular.
ABOUT MEGASTAR DEVELOPMENT CORP.
Megastar Development Corp. is an emerging resource company
engaged in the acquisition, exploration and development of mineral
properties in Canada. Megastar owns gold and base metal properties
in Quebec and British Columbia. For further information, investors
and shareholders are invited to visit the Company's website at
www.megastardevelopment.com or call the office at 604-683-6648.
ON BEHALF OF THE BOARD OF DIRECTORS
Dusan Berka, P. Eng., President & CEO
Neither the TSX Venture Exchange nor its regulation services
provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
Contacts: Megastar Development Corp. Dusan Berka, P. Eng.
President & CEO (604) 683-6648 (604) 683-1350 (FAX)
www.megastardevelopment.com
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