Financing Transaction

The board of directors (" Directors ") of Fraser and Neave, Limited (" Company ") wishes to announce that the Company and its subsidiaries have entered into the following financing transactions (" Transactions ") with DBS Bank Ltd. (" DBS ").

The proceeds from the Transactions will be used by Centrepoint Properties Ltd (" CPL "), a wholly-owned subsidiary of the Company, solely for repaying its existing borrowings, its working capital and such other purposes as may be agreed between CPL and DBS.

The Transactions will allow CPL to raise equity financing by way of allotment and issue by CPL to DBS of 330,000 redeemable non-voting Class A Preference Shares of par value S$1.00 each (" Subscription Shares ") at an aggregate subscription price of S$330 million. The Subscription Shares are of no fixed maturity and are redeemable at the option of CPL, shall rank pari passu with the existing issued preference shares of CPL and rank in priority to the ordinary shares of CPL. Holders of the Subscription Shares may at the discretion of the Board of CPL receive preferential gross dividends at a specified rate, and are entitled to certain liquidation preferences.

The security arrangement for the Transactions is as follows:

(i) a wholly-owned subsidiary company of the Company incorporated in Labuan, Malaysia, F&N Services (L) Bhd. (" F&NS(L) "), has entered into a Forward Purchase Agreement under which F&NS(L) has agreed to purchase from DBS the Subscription Shares at the agreed purchase price in the circumstances, and subject to terms and conditions, agreed;
(ii) F&NS(L) has executed a Debenture in favour of DBS over certain assets of F&NS(L); and
(iii) the Company has executed an Undertakings and Indemnity Deed in favour of DBS, under which the Company will, inter alia , provide certain undertakings and indemnify DBS in certain specified circumstances.

The Directors are of the view that the Transactions provide CPL with an alternative source of funding to repay existing borrowings and for general working capital purposes and facilitate stronger balance sheet management for CPL.

The Transactions are not expected to have any material effect on the net tangible assets per share or earnings per share of the Company for the current financial year.

As far as the Directors are aware, none of the Directors or substantial shareholders of the Company has any direct or indirect interest in the Transactions.

Submitted by Anthony Cheong, Group Company Secretary on 19 August 2005.