Kardan N.V. — Capital/Financing Update 2007

Feb 21, 2007

KARDAN

PRESS RELEASE

KARDAN TO EXPAND ITS LENDING OPERATIONS IN RUSSIA

Amsterdam, 21 February 2007, Kardan N.V. (Kardan) announces that its financial services group company TBIF Financial Services B.V. (TBIF) signed a term sheet with the shareholders of a regional bank in Russia (the Bank) to merge TBIF's Russian lending operations with those of the Bank. TBIF and the Bank are complementary in geography as well as activities. These clear synergies between the parties will provide substantial benefits to such merger.

Under the terms of the proposed transaction, TBIF will merge its lending operations in Russia with the activities of the Bank under a joint holding company. In addition, TBIF will increase the capital of the holding company by USD 39.5 million, through contribution of cash and receivables from its Russian lending operations.

Following the completion of the transaction, TBIF will have a 47% interest in the bank (indirectly, through the joint holding company) and 50% of the voting rights. TBIF will have the option to increase its shareholdings to 50%.

The bank is primarily active in western Russia (including Moscow) while TBIF is active in the eastern regions of Russia. In addition, the bank has a strong deposit basis and focuses on SME lending while the lending activities of TBIF are focused on the retail sector.

The transaction is consistent with TBIF's strategy to expand its lending activities and presence in Russia and the Ukraine. The merger will strengthen the retail and SME lending activities of the group as a result of clear geographic and operational synergies.

The final agreement and the closing of the transaction are subject to certain conditions precedent including the completion of due diligence.

TBIF is a leading retail financial services provider (banking, leasing, consumer finance, mortgages and asset management) active in Bulgaria, Romania, Russia and Ukraine. TBIF is controlled by Kardan Financial Services (KFS), a subsidiary of Kardan.

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 most of its activities. Kardan holds controlling interests in its main businesses and is actively involved in the definition and implementation of their strategy. Total assets per December 31, 2005 amounted to USD 1,769 million, with revenues of USD 547 million. The number of employees engaged by the group is approximately 6,100 as of December 31, 2005. Kardan is listed on Euronext Amsterdam and the Tel-Aviv Stock Exchange.

For further information please contact:

Citigate First Financial

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KARDAN

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