Kardan N.V. — Capital/Financing Update 2005

Nov 25, 2005

KARDAN

PRESS RELEASE

KARDAN SIGNS AGREEMENT TO ENTER THE CONSUMER FINANCE SECTOR IN RUSSIA

Amsterdam, 25 November 2005 – Kardan N.V. (Kardan) announces that its Group company TBIH Financial Services Group N.V. (TBIH) has signed an agreement for the purchase of 50% of Arka Finance, a Russian consumer finance company, for a consideration of USD 4.2 million.

In addition, TBIH will grant loans to Arka Finance (Arka) for a period of two years in the amount of up to USD 25 million. The loans will be secured by Arka's customers' receivables and by pledges of all the subsidiaries shares in Arka's group companies.

Arka has been active in the Central Eastern Russia region since 1993, providing consumer loans in Central Eastern Russia from more than 300 points of sale and branch offices. For the first 11 months of 2005 Arka generated loans for the amount of USD 94 million.

TBIH's expansion into the Russian consumer finance market is consistent with its strategy, which views Russia as providing substantial growth opportunities and potential for value creation due to its large population and the relatively undeveloped state of its financial services industry.

TBIH believes that a balanced partnership with Arka's management, which founded the group, will ensure continued growth over the coming years.

Arka has achieved substantial success in Central Eastern Russia and represents a strong foundation for accelerated growth, through the existing products and services and the development of additional consumer finance and other financial products. TBIH intends to support Arka achieving national coverage and expanding its product range.

Closing of the transaction is subject to certain conditions and regulatory approvals.

TBIH is a leading investor in financial services, including general and life insurance, pension fund management, asset management, mortgage finance and lending activities in several CEE countries. Kardan indirectly holds approximately a 51% equity interest in TBIH.

About Kardan

Kardan is an international investment company with a focus on three sectors: Real Estate, Financial Services and Infrastructure. Kardan is primarily active in Central and Eastern Europe, where it conducts more than 75% of its activities. Kardan holds controlling interests in its investee companies and is actively involved in the definition and implementation of their strategy. Total assets per December 31, 2004 amounted to USD 1,437 million, with revenues of USD 337 million. The number of employees engaged by the

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KARDAN

group amounted to approximately 4,160 as of December 31, 2004. Kardan is listed on Euronext Amsterdam and the Tel-Aviv Stock Exchange.

For further information please contact:

Citigate First Financial uneke Dekkers Floor van Maaren phone +31 (0)20 575 40 10 mobile +31(0)6 50 26 16 26 mobile +31(0)6 29 59 77 46