Kardan N.V. — Capital/Financing Update 2005

Nov 16, 2005

KARDAN

PRESS RELEASE

KARDAN FORMS STRATEGIC PARTNERSHIP WITH WIENER STADTISCHE IN ITS FINANCIAL SERVICES SECTOR

Amsterdam, 16 November 2005 – Following the press release of 10 November 2005, Kardan N.V. (Kardan) announces that it has signed an agreement with Wiener Stadtische Allgemeine Versicherung Aktiengesellschaft (WS) for an equity investment in its financial services sector. WS will acquire a 40% stake in Kardan Financial Services B.V. (KFS), for EUR 112.6 million. KFS' sole holding being its 58.18% stake in TBIH Financial Services Group N.V. ("TBIH"), the transaction reflects a TBIH valuation of EUR 340 million.

Kardan currently anticipates that its capital gain from the transaction will amount to approximately USD 33 million (EUR 28 million).

WS will inject EUR 105.6 million of capital into KFS, in exchange for newly issued shares, and will purchase 4% of KFS (pre-issuance) from minority shareholders for a purchase price of EUR 7 million. After the transaction, Kardan will hold approximately 55% of KFS.

WS is the leading Austrian insurance group in Central and Eastern Europe. Among the international insurance companies, WS has an excellent second rank in the region. WS is traded in the prime market segment of the Vienna Stock Exchange and included in the Austrian Traded Index with a market capitalization of over EUR 4 billion. As of 31 December 2004 WS had total premium of EUR 4.1 billion, total assets of EUR 12.7 billion and 12,347 employees. WS is rated A+ by Standard & Poor.

This agreement will further strengthen the relationship between TBIH and WS, which already exists through a partnership in Omniasig Life, a life insurance company in Romania. Kardan and WS intend to cooperate in pursuing financial services opportunities in the CEE countries.

Under the terms of the transaction, the parties intend to use the proceeds from WS capital investment to (i) repay EUR 21.8 million of KFS debt, and to (ii) subject to certain conditions including the approval of TBIH minority shareholders, increase KFS' holdings in TBIH through a capital increase of at least EUR 35 million. If feasible, additional amounts will be used to purchase additional TBIH shares currently held by minority shareholders. After such capital increase, TBIH shareholders' equity would exceed EUR 200 million. In addition, WS has committed to provide loans to KFS, under certain conditions, to enable KFS to acquire additional shares in TBIH.

Within five years from the date of the transaction, WS may increase its percentage shareholding in KFS to 50%, through the purchase of additional shares and through capital increases.

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KARDAN

Completion of the transaction is subject to certain conditions, including due diligence and receipt of regulatory approvals.

KFS (former name Herfstzon Beheer) is a holding company through which Kardan holds its interests in TBIH. TBIH is a leading retail financial services provider (including insurance, pension fund management, asset management, leasing, consumer finance and mortgages) in several CEE countries. Kardan indirectly holds an equity interest of approximately 51.3% 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 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 floor van Maaren Uneke Dekkers phone +31 (0)20 575 40 10 mobile +31(0)6 29 59 77 46 mobile +31(0)6 50 26 16 26