Nextnation Communication Berhad (“NEXTNATION’ or “COMPANY”) Signing of the Subscription Agreement in relation to the Proposed Acquisition of a Subsidiary for Business Expansion in the People’s Republic of China (“Proposed Acquisition”)

1. Introduction

Further to the announcement dated 13 April 2006 in relation to the Proposed Acquisition, on behalf of the Board of Directors of Nextnation, Public Merchant Bank Berhad wishes to announce that the Company had on 23 May 2006, via its subsidiary, Godynamic Investments Limited (“Godynamic”), entered into a conditional subscription agreement (“Subscription Agreement”) with Often Reach Investments Limited (“Often Reach”) and Jumpstart Investments Limited (“Jumpstart”) to subscribe for 700 new ordinary shares of USD1.00 each at par (“Subscription of Ordinary Shares”) and 250,000,000 new irredeemable convertible preference shares of USD0.01 each at par (“Subscription of ICPS”) in Often Reach. Upon completion of the Subscription of Ordinary Shares and Subscription of ICPS, Godynamic will have 50% control based on the voting rights in Often Reach.

Godynamic is a company established in the British Virgin Islands and is principally an investment holding company for some of the overseas operations of Nextnation group of companies (“Nextnation Group”).

2. Other Salient Terms of the Subscription Agreement and Background Information

Some salient terms of the Subscription Agreement are as follows:

(a) Often Reach shall utilise the proceeds from the Subscription of ICPS for the investment in research, development and the provision of mobile communication, wireless technologies, wireless value added services, Internet and related software and business ancillary thereto (“Subject Activities”) in the People’s Republic of China (“PRC”), as well as for working capital and such other purpose to be agreed by Jumpstart and Godynamic.

(b) The Subscription of ICPS shall be conditional upon, inter-alia, the completion of the establishment of the wholly-owned foreign entity (“WOFE”) by Often Reach in the PRC to undertake the Subject Activities and the execution of the relevant agreements between WOFE and Beijing Himo Tech Co. Ltd in accordance with the terms and conditions of the Heads of Agreement (as stated in the announcement dated 13 April 2006).

For further background information, please refer to the announcement dated 13 April 2006 on the Proposed Acquisition.

3. Prospects of the Nextnation Group

As stated in the announcement dated 13 April 2006, the Proposed Acquisition will enable the Nextnation Group to penetrate the fast-growing wireless value-added services market and the related industry in the PRC, and this is in line with the Nextnation Group’s overseas market expansion strategies to diversify and grow its revenue base.

Pursuant to Rule 4.5 of the Listing Requirements of Bursa Malaysia Securities Berhad for the MESDAQ Market, for a transaction where any one of the percentage ratios is equal to or exceeds 15%, the listed company must send a circular to the shareholders of the listed company for information (“Information Circular”). Since all of the relevant percentage ratios for the Proposed Acquisition are below 15%, the Information Circular on the Proposed Acquisition is no longer required to be issued to the shareholders of Nextnation.

This announcement is dated 23 May 2006.