Freightways Dividend Reinvestment Plan

Freightways Limited (NZSX:FRE) is pleased to offer its ordinary shareholders residing in New Zealand, Australia and the United States of America the option to participate in a dividend reinvestment plan (DRP). As a capital management initiative the DRP will enable the Company to preserve cash to further strengthen its balance sheet.

The DRP will allow eligible shareholders to elect to reinvest all or part of the cash component of their dividends in additional Freightways shares. The issue price to be used in calculating the number of shares applicable will be based on the volume weighted average sale price (VWAP) of Freightways shares over the five trading days immediately following the dividend record date, less any discount which the Board, in its discretion, determines from time to time. The full terms and conditions of the DRP are set out in the Dividend Reinvestment Plan Offer Document that is planned to be despatched to eligible shareholders by 24 August 2009. The application of the DRP will be reviewed for each dividend declared by the Company.

The first dividend that the DRP will apply to will be the final dividend for the financial year ended 30 June 2009, that is payable on 30 September 2009. The Board has determined that for the time being a discount of 2.5% will be applied against the applicable 5-day VWAP in calculating the issue price for the DRP.

The Company has signed an underwriting agreement with Forsyth Barr Group Limited (on normal commercial terms, which include termination events for adverse changes in market conditions) in respect of this upcoming dividend at the same 2.5% discount to the underwriter as is being offered to eligible shareholders who elect to participate in the DRP.

The following documents are planned to be despatched to eligible shareholders by 24 August 2009 in relation to the implementation of the DRP:

• Letter to Shareholders;
• Dividend Reinvestment Plan Offer Document; and
• Participation Notice.

Participation Notices must be received by Freightways’ share registrar, Computershare Investor Services Limited, by 5.00pm New Zealand time on 18 September 2009 to be effective to participate in the DRP for this final dividend for the financial year ended 30 June 2009.

For further information contact:

DEAN BRACEWELL
Managing Director
Freightways Limited
Ph: (09) 571 9670
Fax: (09) 571 9671