Type	:	Announcement
Subject	:	IRE-TEX COPORATION BERHAD ("ITCB" OR THE "COMPANY") - PROPOSED PRIVATE PLACEMENT OF NEW ORDINARY SHARES OF RM1.00 EACH OF UP TO TEN PERCENT (10%) OF THE ISSUED AND PAID-UP SHARE CAPITAL OF ITCB

Contents:
This announcement is dated 4 August 2006.
1. INTRODUCTION
	On behalf of the Board of Directors of ITCB ("Board"), AmMerchant Bank Berhad (a member of Amlnvestment Group) ("AmMerchant Bank"), is pleased to announce that the Company is proposing to undertake a proposed private placement of new ordinary shares of RM1.00 each ("Placement Shares"), representing up to ten percent (10%) of the issued and paid-up share capital of ITCB ("Proposed Private Placement").
2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT
	2.1 Size of the Placement
		The size of the Proposed Private Placement will be up to ten percent (10%) of the issued and paid-up share capital of ITCB at the point of implementation. The maximum number of Placement Shares to be issued would depend on the issued and paid-up share capital of the Company at the point of implementation after taking into consideration the following:- (i) The issued and paid-up share capital of the Company as at 10 July 2006 of RM40,743,000 comprising 40,743,000 ordinary shares of RM1.00 each ("Shares"); (ii) 1,005,800 of the Company's Employee Share Option Scheme ("ESOS") options which have been granted but not exercised as at 10 July 2006; and  (iii) 2,251,200 ESOS options which may be granted as at 10 July 2006.  Based on the issued and paid-up share capital of ITCB as at 10 July 2006 of RM40,743,000 comprising 40,743,000 Shares and assuming that all the remaining ESOS options granted/ to be granted are fully exercised prior to the implementation of the Proposed Private Placement, the quantum of the Placement Shares will be up to 4,400,000 Shares ("Maximum Scenario"). However, assuming none of the ESOS options are exercised prior to the implementation of the Proposed Private Placement, the quantum of the Placement Shares will be up to 4,074,300 Shares ("Minimum Scenario"). Approval has been obtained from the shareholders of ITCB at the Annual General Meeting ("AGM") of the Company convened on 27 June 2006, authorising the Board to allot and issue new Shares not exceeding ten percent (10%) of the issued and paid-up share capital of the Company pursuant to Section 132D of the Companies Act, 1965 ("Act"). The approval is valid until the next AGM of the Company.
	2.2 Placement Arrangement
		The Company intends to place the Placement Shares to third party investors to be identified. ITCB has appointed Ammerchant Bank as its placement agent to procure prospective placees for the Placement Shares at a price to be determined in accordance with the Policies and Guidelines on Issue/Offer of Securities issued by the Securities Commission ("SC") ("SC Guidelines"). The Company proposed to implement the Proposed Private Placement (either in full or in tranches) within a period of six (6) months from the date of approval by the SC.
	2.3 Basis of Pricing
		The pricing of the Placement Shares to third party investors will be based on the weighted average market price of the Company's Shares for the five (5) market days prior to the price-fixing date, with a discount of not more than ten percent (10%), if deemed appropriate, in compliance with the SC Guidelines. In any event, the issue price for the Placement Shares ("Placement Price") shall not be lower than RM1.00, being the par value of ITCB's Shares. The price-fixing date will be determined after obtaining all relevant regulatory approvals for the Proposed Private Placement. For illustration purposes only, the indicative Placement Price will be approximately RM1.22 per Share (assuming a ten percent (10%) discount from the weighted average market price of ITCB's Shares for the five (5) market days prior to the date of announcement from 28 July 2006 to 3 August 2006 of RM1.36 per Share).
	2.4 Ranking of the Placement Shares
		The Placement Shares to be issued and allotted shall, upon allotment and issuance, rank pari passu in all respects with the existing issued and paid-up Shares of the Company except that the Placement Shares so issued will not be entitled for any dividend, rights, allotment and/or any other distribution declared, made or paid to the shareholders, the entitlement date of which is prior to the allotment date of the Placement Shares.
	2.5 Rationale for the Proposed Private Placement
		After due consideration of the various methods of fund raising, the Board is of the opinion that the Proposed Private Placement is the most appropriate means to finance ITCB's working capital requirements and to reduces its bank borrowings.
	2.6 Utilisation of Proceeds
		The proceeds from the Proposed Private Placement will be utilized for the working capital requirements, repayment of bank borrowings of ITCB and its subsidiaries ("ITCB Group" of "Group") and to defray expenses in relation to the Proposed Private Placement as detailed in Table 1. Any variation in the actual expenses from the estimated amount will be adjusted in the working capital. For illustration purposes only, based on an indicative Placement Price of approximately RM1.22 per Share as mentioned in Section 2.3 above, and assuming a total of 4,074,300 to 4,400,000 Placement Shares in ITCB are placed out under the Minimum Scenario and Maximum Scenario respectively, the Proposal Private Placement is expected to raise gross proceeds of approximately RM4.97 million to RM5.37 million respectively.
3. SUMMARY OF THE FINANCIAL EFFECTS OF THE PROPOSED PRIVATE PLACEMENT
	The financial effects of the Proposal Private Placement are as follows:-
	3.1 Share Capital
		The effects of the Proposed Private Placement on the issued and paid-up share capital of ITCB are shown in Table 2
	3.2 Earnings
		Save for the dilution in the earnings per Share of the ITCB Group arising from the increase in the number of issued and paid-up share capital of the Company pursuant to the Proposed Private Placement, the Proposed Private Placement is not expected to have any material effect on the earnings of the ITCB Group for the financial year ending 31 December 2006. However, the Proposed Private Placement is expected to contribute positively to the earnings of the ITCB Group in the future as part of the proceeds to be raised from the Proposed Private Placement will be utilised to repay the bank borrowings of the Group and any interest savings will translate to an improvement to the Group's earnings.
	3.3 Net Assets
		The proforma effects of the Proposed Private Placement on the net assets of the ITCB Group based on the audited consolidated balance sheet of ITCB as at 31 December 2005 are illustrated in Table 3.
	3.4 Major Shareholders' Interests
		ZH-CN;mso-bidi-language:AR-SA'>The shareholdings of the major shareholders of the Company will be diluted following the Proposed Private Placement. The effects of the Proposed Private Placement on the shareholdings of the major shareholders of ITCB are illustrated in Table 4.
	3.5 Dividends
		The Company did not declare any dividend for the financial year ended 31 December 2005. The level of dividends to be declared for the future financial years would be determined by the Board after taking into consideration the performance of the Company and the prevailing economic conditions.
4. APPROVALS REQUIRED
	The Proposed Private Placement is subject to the approvals of the following parties:- (i) The SC; (ii) The Unit Pematuhan Ekuiti, Jabatan Pengambilan dan Percantuman of the SC under the Foreign Investment Committee requirements; (iii) The Ministry of International Trade and Industry; (iv) The Bursa Malaysia Securities Berhad for the listing of and quotation for the Placement Shares; and (v) Any other relevant authorities (where applicable).      Approval has been obtained from the shareholders of ITCB at the AGM of the Company convened on 27 June      2006,authorising the Board to allot and issue new Shares not exceeding ten percent (10%) of the issued and paid-up share      capital of the Company pursuant to Section 132D of the Act. The approval is valid until the next AGM of the Company.
5. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
	None of the Directors and/or major shareholders and/or persons connected to the Directors and/or major shareholders of ITCB have any interest, either direct or indirect, in the Proposed Private Placement as the Company intends to place the Placement Shares to third party investors to be identified. However, should the Company decides to place the Placement Shares with any of the Directors and/or major shareholders and/or persons connected with them, a separate announcement will be made and the Company will seek the approval of its shareholders.
6. DIRECTORS' STATEMENT
	After taking into consideration the rationale for the Proposed Private Placement, the Board is of the opinion that the Proposed Private Placement is in the best interest of the Company.
7. APPLICATION TO THE RELEVANT AUTHORITIES
	An application to the relevant authorities seeking approval for the Proposed Private Placement is expected to be made within three (3) months from the date of this announcement
8. ADVISER
	AmMerchant Bank has been appointed to act as the Adviser to the Company for the Proposed Private Placement.