PROPOSED PRIVATE PLACEMENT OF UP TO 10 PERCENT OF THE EXISTING ISSUED AND PAID-UP SHARE CAPITAL

1. INTRODUCTION

On behalf of the Board of Directors of Nextnation (“Board”), Public Merchant Bank Berhad (“PMBB”) wishes to announce that the Company proposes to implement a private placement of up to 25,200,000 new ordinary shares of RM0.10 each in Nextnation (“Placement Shares”), representing ten percent (10%) of the existing issued and paid-up share capital of the Company.

2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT

2.1 Particulars

The Proposed Private Placement will entail the issuance of up to 25,200,000 Placement Shares, representing ten percent (10%) of the existing issued and paid-up capital of the Company.

The Placement Shares will be placed out to non-related investors to be determined at a later stage and may be implemented in tranches.

2.2 Basis of pricing

The issue price of the Placement Shares shall be determined by the Board after receiving the relevant approvals for the Proposed Private Placement and after taking into consideration, inter alia, the market demand and prevailing market conditions in the following manner:

(a) the par value of RM0.10; or

(b) at a discount of not more than five percent (5%) from five (5)-day weighted average market price of Nextnation Shares immediately preceding the price-fixing date,

whichever is higher.

2.3 Ranking of the Placement Shares

The Placement Shares shall, upon allotment and issue, rank pari passu in all respects with the existing Nextnation Shares, except that the Placement Shares will not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is prior to the date of allotment of the Placement Shares.

2.4 Utilisation of proceeds

The exact amount of gross proceeds to be raised from the Proposed Private Placement is dependent on the actual issue price and the number of Placement Shares to be issued.

For illustration, based on the assumption that up to 25,200,000 Placement Shares are issued and are placed out at RM0.45 per Placement Share, after taking into consideration a five percent (5%) discount from the five (5)-day weighted average market price of Nextnation Shares up to 13 March 2006 of RM0.474, the Proposed Private Placement is expected to raise gross proceeds of approximately RM11.34 million.

The proceeds to be raised will be mainly used for the working capital requirements of Nextnation and its subsidiaries (“Nextnation Group”) as set out in Table 1.

3. RATIONALE

The Proposed Private Placement will enable Nextnation to raise funds to finance the Nextnation Group’s working capital requirements.

4. FINANCIAL EFFECTS OF THE PROPOSALS

4.1 Share Capital

The proforma effects of the Proposed Private Placement on the issued and paid-up share capital of Nextnation are set out in Table 2.

4.2 Net Assets

Based on the audited consolidated balance sheet of Nextnation as at 30 April 2005, on the assumption that the Proposed Private Placement had been effected as at that date, the proforma effects of the Proposed Private Placement on the net assets of the Nextnation Group are set out in Table 3.

4.3 Earnings

The Proposed Private Placement is not expected to have any material effect on the earnings of the Nextnation Group for the financial year ending 30 April 2006. The increase in the Company’s issued and paid-up share capital pursuant to the Proposed Private Placement may dilute the Company’s earnings per share in the future. However, the proceeds from the Proposed Private Placement are expected to contribute positively to the future earnings of the Nextnation Group.

4.4 Substantial Shareholders’ Shareholdings

The effects of the Proposed Private Placement on the shareholdings of the substantial shareholders of Nextnation as at 10 March 2006 are set out in Table 4.

4.5 Dividends

The Board does not expect the Proposed Private Placement to materially affect the dividend policy of the Company. Any dividends to be declared by Nextnation in the future would depend on, inter-alia, the profitability and cashflow position of the Nextnation Group.

5. APPROVALS REQUIRED

The Proposed Private Placement is conditional upon approvals being obtained from the following:

(a) the Securities Commission (“SC”);

(b) Bursa Malaysia Securities Berhad (“Bursa Securities”), for the listing of and quotation for the Placement Shares on the MESDAQ Market of Bursa Securities; and

(c) Any other relevant authorities, if required.

The Board had obtained the approval of its shareholders for the issuance of new Nextnation Shares of up to ten percent (10%) of the total issued and paid-up share capital of the Company at the time of issue, pursuant to Section 132D of the Companies Act, 1965 at the Company’s last Annual General Meeting (“AGM”) on 12 August 2005. Such authority shall continue to be in force until the conclusion of the next AGM of the Company. As such, no further approval is required from the shareholders of Nextnation for the Proposed Private Placement.

6. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS

Nextnation intends to place the Placement Shares to non-related investors to be identified. Therefore, the Directors and substantial shareholders of Nextnation and persons connected to them would not have any interest, direct or indirect, in the Proposed Private Placement.

7. DIRECTORS’ STATEMENT

After considering all aspects of the Proposed Private Placement, the Board is of the opinion that the Proposed Private Placement is in the best interests of the Company.

8. ADVISER AND PLACEMENT AGENT

PMBB has been appointed by Nextnation to act as the Adviser and Placement Agent for the Proposed Private Placement.

9. APPLICATION TO THE AUTHORITIES

Application to the SC for the Proposed Private Placement is expected to be made within one (1) month from the date of this announcement.

This announcement is dated 14 March 2006.