Nextnation Communication Berhad ("Nextnation" or "Company") - Proposed Acquisition of 60% Effective Equity Interest in PT Elasitas Multi Kreasi ("Elasitas"), Jakarta, Indonesia ("Proposed Acquisition")

1. INTRODUCTION

Further to the announcement dated 10 March 2006 in relation to the Proposed Acquisition, Nextnation wishes to announce that the Company had on 16 June 2006, via its subsidiary, Godynamic Investments Limited (“Godynamic”), entered into a conditional Subscription Agreement (“Subscription Agreement”) with Guillemard International Limited (“Guillemard”) and High Speed Group Limited (“High Speed”) to subscribe for 59 new ordinary shares of USD1.00 each in Guillemard, representing 62.11% of the entire enlarged issued and paid up share capital of Guillemard, for a total cash consideration of USD854,025 (“Proposed Subscription”).

Upon completion of the Proposed Subscription, Godynamic will indirectly hold 60% of the enlarged equity interest in Elasitas.

2. OTHER CONDITIONAL DEFINITIVE AGREEMENTS ENTERED INTO AND BACKGROUND INFORMATION

The following Definitive Agreements were also executed:-

(a) Profit Guarantee Agreement dated 16 June 2006 between Godynamic, High Speed and the existing shareholders of Elasitas, i.e., Cun Cun Kizana, Soejanti Soesanto and Nathalia Suwita Widjaya (collectively defined as “Guarantors”) wherein the Guarantors have guaranteed the profit after tax arising from Elasitas, for the financial years ending 31 December 2006 and 31 December 2007 to be IDR3,000,000,000 and IDR5,000,000,000 respectively upon the terms and subject to the conditions of the Profit Guarantee Agreement;

(b) Option Agreement dated 16 June 2006 between Godynamic and High Speed wherein Godynamic has the option to purchase 15 existing ordinary shares of USD1.00 each in Guillemard (“Option Shares”) from High Speed upon the terms and subject to the conditions of the Option Agreement. Should Godynamic exercise its right to purchase the Option Shares, Godynamic will then hold 77% of the equity interest in Guillemard, and will indirectly hold 75% of the enlarged equity interest in Elasitas;

(c) Shareholders Agreement dated 16 June 2006 between Godynamic, High Speed and Guillemard wherein the parties thereto agreed to record the terms and conditions governing the structure and organization of Guillemard and the parties’ respective rights and obligations in relation thereto; and

(d) Shareholders Agreement dated 16 June 2006 between Guillemard, the Guarantors and Elasitas wherein the parties thereto agreed to record the terms and conditions governing the structure and organization of Elasitas and the parties’ respective rights and obligations in relation thereto.

3. INFORMATION ON GUILLEMARD

Guillemard is a company incorporated in the British Virgin Islands. The authorised share capital of Guillemard is USD50,000.00 comprising 50,000 ordinary shares of USD1.00 each, of which 36 ordinary shares of USD1.00 each have been issued and fully paid-up. The principal activity of Guillemard is investment holding.

4. INFORMATION ON HIGH SPEED

High Speed is an investment holding company incorporated in the British Virgin Islands. The authorized share capital of High Speed is USD50,000 comprising 50,000 ordinary shares of USD1.00 each, of which 2 ordinary shares of USD1.00 each have been issued and fully paid-up. High Speed currently holds all the issued and paid-up capital of Guillemard comprising 36 ordinary shares of USD1.00 each.

5. INFORMATION ON ELASITAS

Elasitas is a private limited company incorporated in Jakarta, Indonesia. The authorised share capital of Elasitas is IDR600,000,000 comprising 600 ordinary shares of IRD1,000,000 each, of which IRD150,000,000 comprising 150 ordinary shares of IRD1,000,000 each have been issued and fully paid-up.

Elasitas is a technology enabler for the mobile and Internet industries which focuses on platform development and system integration, provisioning of mobile services and production of creative content and multimedia (“Elasitas Activities”).

6. RATIONALE FOR THE PROPOSED SUBSCRIPTION

(i) The Proposed Subscription is expected to bring the synergistic benefits and value creation to the Company and its subsidiaries (“Group”) with Elasitas’ established clientele and partners such as the telecommunication companies, media partners, channel partners, content providers, mobile and technology vendors and corporate organization which would allow the Group to fast track its expansion into Indonesia by tapping onto these existing networks of Elasitas.

(ii) With the advent of 3G technology and the growing telecommunication industry in Indonesia, Elasitas is poised to widen its revenue and profitability base in the coming years.

(iii) The Proposed Subscription is in line with the principal business activities of the Group and is expected to complement its existing business and enhance the Group's position in relation to the provision of mobile multimedia application services.

(iv) Elasitas has built strong partner and client reference sites. This demonstrates the viability and reliability of its products and services.

7. RISK FACTORS

The Elasitas Activities are subject to various risk factors inherent in the telecommunications industry, in particular the wireless value-added services market in Indonesia. These include but are not limited to factors such as economic and industry conditions, competition with other service providers, changes in government legislation and policies. In addition, any loss or deterioration in relationship with Elasitas’ clientele and partners may result in disruptions to the business operations of Elasitas.

To mitigate the risk factors as mentioned above, Elasitas will constantly monitor the development of the industry and develop products and services that are in line with the technology and market trends and in compliance with government policies and requirements. In addition, good working relationships with Elasitas’ clientele and partners will always be maintained.

8. EFFECTS OF PROPOSED SUBSCRIPTION

(a) Share capital and substantial shareholding structure

The Proposed Subscription will not have any effect on the issued and paid-up share capital and substantial shareholders’ shareholdings in Nextnation.

(b) Earnings

The Proposed Subscription will not have any material effect on the earnings per share of the Group for the financial year ending 30 April 2007.

(c) Net Assets

The Proposed Subscription will not have any material effect on the net assets per share of the Group for the financial year ending 30 April 2007.

9. APPROVAL REQUIRED

The Proposed Subscription is not subject to the approval of the shareholders of Nextnation.

10. DIRECTORS' AND SUBSTANTIAL SHAREHOLDERS' INTERESTS

None of the Directors of the Company or persons connected to them has any interest, direct or indirect, in the Proposed Subscription. The Directors of the Company are not aware of any substantial shareholders of the Company or persons connected to them who have any interest, direct or indirect, in the Proposed Subscription.

11. DIRECTORS’ STATEMENT

Taking into consideration the rationale of the Proposed Subscription, the Board of Directors of the Company is of the opinion that the Proposed Subscription is in the best interest of the Company.

12. EXPECTED COMPLETION DATE

Barring unforeseen circumstances, the Proposed Subscription is expected to be completed within three (3) months from the execution of the conditional Subscription Agreement and Definitive Agreements.

This announcement is dated 19 June 2006.