(i) Proposed bonus issue of 36,514,286 new ordinary shares of RM0.50 each in Freight Management Holdings Bhd ("FMH" or "Company") ("Bonus Shares") On the Basis of 3 bonus shares for Every 7 Existing Ordinary shares of RM0.50 Each In FMH ("Shares" Or "FMH Shares") Held By the Shareholders of FMH ("Proposed Bonus Issue"); (ii) proposed transfer of the Listing of and Quotation For the Entire enlarged issued and paid-up share capital of FMH From the Second board to the Main Board of Bursa Malaysia Securities Berhad ("Bursa Securities") Upon Completion of the proposed bonus issue ("Proposed Transfer Listing"); and (iii) proposed Placement of up to 12,171,428 New FMH Shares ("Placement Shares"), Representing Up To 10% of the Enlarged Issued And Paid-up Share Capital Of FMH After The Proposed Bonus Issue ("Proposed Placement")

General Announcement

Reference No MI-070911-58938

Submitting Merchant Bank	:	RHB INVESTMENT BANK BERHAD
Company Name	:	FREIGHT MANAGEMENT HOLDINGS BERHAD
Stock Name	:	FREIGHT
Date Announced	:	11/09/2007

Type	:	Announcement
Subject	:	(i) Proposed bonus issue of 36,514,286 new ordinary shares of RM0.50 each in Freight Management Holdings Bhd ("FMH" or "Company") ("Bonus Shares") on the basis of 3 Bonus Shares for every 7 existing ordinary shares of RM0.50 each in FMH ("Shares" or "FMH Shares") held by the shareholders of FMH ("Proposed Bonus Issue"); (ii) Proposed transfer of the listing of and quotation for the entire enlarged issued and paid-up share capital of FMH from the Second Board to the Main Board of Bursa Malaysia Securities Berhad ("Bursa Securities") upon completion of the Proposed Bonus Issue ("Proposed Transfer Listing"); and (iii) Proposed placement of up to 12,171,428 new FMH Shares ("Placement Shares"), representing up to 10% of the enlarged issued and paid-up share capital of FMH after the Proposed Bonus Issue ("Proposed Placement")

Contents :

1.0 INTRODUCTION
 

On behalf of the Board of Directors ("Board") of FMH, RHB Investment Bank Berhad (formerly known as RHB Sakura Merchant Bankers Berhad) ("RHB Investment Bank") wishes to announce that FMH proposes to undertake the following:

(i) Proposed Bonus Issue; (ii) Proposed Transfer Listing; and

(iii) Proposed Placement.

The Proposed Bonus Issue, Proposed Transfer Listing and Proposed Placement shall be collectively known as the "Proposals".

Details of the Proposals are set out in the ensuing paragraphs.

2.0 DETAILS OF THE PROPOSALS

2.1 Proposed Bonus Issue

2.1.1 Number of Shares to be issued

Based on the number of FMH Shares in issue as at 7 September 2007 of 85,200,000 FMH Shares, the Proposed Bonus Issue will involve the issuance of 36,514,286 Bonus Shares, to be credited as fully paid-up, on the basis of 3 Bonus Shares for every 7 existing FMH Shares held by the shareholders of the Company whose names appear in the Record of Depositors of the Company as at the close of business on a date to be determined and announced later by the Board ("Entitlement Date").

2.1.2 Capitalisation from reserves

The Proposed Bonus Issue will be affected by way of capitalisation of:

• RM4,075,506 from the share premium account of the Company; and
• RM14,181,637 from the retained profits of the Company.

Based on the latest audited financial statements for the financial year ended ("FYE") 30 June 2007 ("FYE 2007"), the share premium and retained profits account balances of the Company stood at RM4,075,506 and RM18,857,800, respectively. In this respect, FMH has sufficient reserves to capitalise the Bonus Shares entirely.

Based on the Company's latest audited consolidated financial statements for FYE 2007, the reserves required for capitalising the Bonus Shares are unimpaired by losses on a consolidated basis.

2.1.3 Ranking of the Bonus Shares

The Bonus Shares shall, upon allotment and issue, rank pari passuin all respects with each other and the then existing Shares in issue.

2.1.4 Listing of the Bonus Shares

Application will be made to Bursa Securities for the listing of and quotation for the Bonus Shares on the Second Board of Bursa Securities and prior to the implementation of the Proposed Transfer Listing.

2.2 Proposed Transfer Listing

FMH also proposes to transfer the listing of and quotation for its entire enlarged issued and paid-up share capital from the Second Board to the Main Board of Bursa Securities.

As at 7 September 2007, the issued and paid-up share capital of the Company isRM42,600,000 comprising 85,200,000 Shares. Subsequent to the completion of the Proposed Bonus Issue, FMH will have an issued and paid-up share capital of RM60,857,143 comprising 121,714,286 Shares, which exceeds the minimum issued and paid-up share capital of RM60,000,000 required for companies seeking listing on the Main Board of Bursa Securities.

FMH is expected to meet the conditions as set out in the Policies and Guidelines on Issue/Offer of Securities issued by the Securities Commission ("SC") ("SC Guidelines") and the Listing Requirements of Bursa Securities for the Proposed Transfer Listing.

2.3 Proposed Placement

The size of the Proposed Placement will be up to 12,171,428 Placement Shares, representing up to 10% of the enlarged issued and paid-up share capital of FMH after the Proposed Bonus Issue.

The Placement Shares will be placed out by RHB Investment Bank, as the Placement Agent, to investors to be identified in accordance with Guidance Note 8C of the SC Guidelines ("GN8C") after the completion of the Proposed Bonus Issue. It is not the intention of the Board to place the Placement Shares to Directors or substantial shareholders of FMH and/or persons connected with them.

The Proposed Placement may be implemented in tranches depending on market sentiment and pricing of the Placement Shares at the point of implementation. In this regard, there could potentially be several price fixing dates pursuant to the Proposed Placement depending on the number of tranches and timing of implementation.

2.3.1 Pricing of the Placement Shares

The issue price of the Placement Shares shall be based on market-based principles and at a level which is in the best interest of the Company as well as to take into account the interest of the minority shareholders of FMH.

The issue price of the Placement Shares shall be determined by the Board in accordance with GN8C, at a later date following the receipt of the approval from the SC for the Proposed Placement in the following manner:

(a) based on the weighted average market price of the FMH Shares for the 5 market days immediately prior to the price fixing date, with a discount (if deemed appropriate by the Board) of not more than 10%; or

(b) the par value of the FMH Shares of RM0.50 each;

whichever is higher.

2.3.2 Ranking of the Placement Shares

The Placement Shares shall, upon allotment and issue, rank pari passuwith the existing ordinary shares of FMH, save and except that they shall not be entitled to any dividends, rights, allotments and/or other distributions, unless the allotment of the Placement Shares were made on or prior to the entitlement date of such dividends, rights, allotments and/or other distributions.

2.3.3 Utilisation of proceeds

The Proposed Placement will enable FMH to raise funds for general working capital purposes, while enlarging its issued and paid-up share capital to strengthen its financial position. Please refer to Table 1of this announcement for further details.

The exact quantum of gross proceeds from the Proposed Placement would depend on the actual issue price and the number of Placement Shares issued.

For illustrative purposes only,assuming the Placement Shares are issued at RM0.718 per Placement Share, which represents a 10% discount to the theoretical ex-all price of FMH Shares of RM0.798 (based on the weighted average market price of the FMH Shares for the 5 market days to 7 September 2007 of RM1.14 per Share (being the latest practicable date prior to the date of this announcement)), the maximum indicative proceeds to be raised will be approximately RM8,739,085, to be utilised in the manner set out in Table 1of this announcement.

3.0 RATIONALE FOR THE PROPOSALS

3.1 Proposed Bonus Issue

The Proposed Bonus Issue will enable FMH to reward shareholders of FMH for their continuing support and allow the existing shareholders of FMH a greater participation in the Company's equity in terms of the number of FMH Shares held.

3.2 Proposed Transfer Listing

The Proposed Transfer Listing is expected to enhance the Group's reputation and the confidence of its customers, suppliers, employees and bankers. It is also expected to further enhance FMH's standing amongst its investors and improve the marketability of the FMH Shares.

3.3 Proposed Placement

The Proposed Placement will enable FMH to raise funds for general working capital purposes, while enlarging its issued and paid-up share capital to strengthen its financial position.

4.0 EFFECTS OF THE PROPOSALS

The Proposed Transfer Listing is not expected to have any effect on the issued and paid-up share capital, net assets ("NA"), earnings, substantial shareholders' shareholdings and dividend policy of FMH.

The proforma effects of the Proposed Bonus Issue and Proposed Placement are set out below.

4.1 Issued and paid-up share capital

The proforma effects of the Proposed Bonus Issue and the Proposed Placement on the issued and paid-up share capital of FMH as at 31 August 2007 is set out in Table 2below.

4.2 NA and Gearing

For illustrative purposes only, based on the audited consolidated balance sheet of FMH as at 30 June 2007 and assuming the Placement Shares are issued at RM0.718 per FMH Share and that the Proposed Placement and Proposed Bonus Issue have been effected on that date, the proforma effects of the Proposed Bonus Issue and Proposed Placement on the consolidated NA per FMH Share and gearing of FMH are set out in Table 3 of this announcement.

4.3 Earnings

The Proposed Bonus Issue and Proposed Placement will not have any material effect on the earnings of the FMH Group for FYE 30 June 2008. However, the consolidated earnings per share of FMH will be reduced as a result of the increase in the number of new FMH Shares upon completion of the Proposed Bonus Issue and Proposed Placement.

4.4 Substantial shareholders' shareholdings

The Proposed Bonus Issue will not have any effect on the substantial shareholders' percentage of shareholdings in the Company as the Bonus Shares are pro-rated to all shareholders of the Company. Accordingly, the number of Shares held by each shareholder will be increased proportionately pursuant to the Proposed Bonus Issue.

Based on the Record of Depositors of FMH as at 30 August 2007, the proforma effects of the Proposed Placement on the shareholdings of the substantial shareholders (holding 5% or more FMH Shares) are set out in Table 4of this announcement.

4.5 Dividend

The Proposed Bonus Issue will reduce the available reserves of FMH for declaration of dividends. However, the Proposed Bonus Issue is not expected to have any material effect on the future dividend to be declared by the Company, which is dependent on the future profitability and the cash flow position of the Company at that point in time.

5.0 CONDITIONS OF THE PROPOSALS

The Proposals are conditional upon the Company obtaining approvals from the following:-

(i) SC under the SC Guidelinesand SC (Equity Compliance Unit) pursuant to the Guidelines on the Acquisition of Interests, Mergers and Take-overs by Local and Foreign Interests issued by the Foreign Investment Committee for the Proposed Placement and Proposed Transfer Listing;

(ii) Bursa Securities, for the Proposed Bonus Issue and Proposed Transfer Listing and the listing of and quotation for the Bonus Shares and Placement Shares;

(iii) shareholders of FMH for the Proposed Bonus Issue at an extraordinary general meeting to be convened; and

(iv) any other relevant authority, if required.

The Proposed Bonus Issue and Proposed Transfer Listing are inter-conditional. The Proposed Placement is not conditional upon the Proposed Transfer Listing and Proposed Bonus Issue and vice-versa.

At the Company's last Annual General Meeting ("AGM") held on 8 December 2006, shareholders of FMH passed a resolution that empowers the Board to issue new FMH Shares subject to the Companies Act, 1965 ("Act"), the Articles of Association of the Company and the approvals of the relevant authorities, upon such terms and conditions and for such purposes as the Board deems fit, provided that the aggregate number of new FMH Shares to be issued shall not exceed 10% of the total issued and paid-up share capital of FMH at the time of the issue, pursuant to Section 132D of the Act. Such authority shall continue to be in force until the conclusion of the next AGM of the Company, upon which the renewal of such authority will be sought from shareholders of FMH. Should such authority be renewed or the Proposed Placement be completed prior to the expiry of the shareholders' mandate at the conclusion of FMH's next AGM, shareholders' approval is not further required for the Proposed Placement.

6.0 DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS

None of the Directors and major shareholders of FMH and/or persons connected to them has any interest, either direct or indirect, in the Proposals, save for their respective entitlements under the Proposed Bonus Issue, to which all the existing shareholders of FMH are also entitled.

7.0 DIRECTORS' STATEMENT

The Board of FMH, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company.

8.0 SUBMISSION TO THE RELEVANT AUTHORITIES

The applications for the Proposals to the relevant authorities shall be made within 2 months from the date of this announcement.

9.0 ADVISER

RHB Investment Bank has been appointed as the Adviser to the Company for the Proposals.

10.0 ESTIMATED TIMEFRAME FOR COMPLETION

The Proposals are expected to be completed by the 4th quarter of 2007.

11.0 DEPARTURE FROM THE SC Guidelines

The Board of FMH is of the opinion that the Proposals do not depart from any of the requirements of the SC Guidelines.

This announcement is dated 11 September 2007.


FMH_TABLE 110907_FINAL.doc