Kardan N.V. — Capital/Financing Update 2012

Jul 12, 2012

KARDAN ANNOUNCES NEW PLAN TO PURCHASE DEBENTURES OF UP TO EUR 50 MILLION

Amsterdam, July 12, 2012 – Kardan N.V. ("Kardan" or "the Company"), active in Real Estate, Water Infrastructure and Financial Services in emerging markets, announces that as of today its subsidiary, GTC Real Estate Holding B.V. ("GTC RE") will initiate a new plan to purchase Kardan Debentures ("the Plan") listed on the Tel Aviv Stock Exchange ("TASE"). Under the Plan, GTC RE could purchase up to an amount of EUR 50 million, during a period of one year, starting on July 12, 2012.

The Board of Kardan has approved the Plan today. Approval of the Plan is in line with the Company's strategy to decrease the leverage on the holding and intermediate holding company levels. The Board of Kardan has approved the Plan today. Approval of the Plan is in line with the Company's strategy to decrease the leverage on the holding and intermediate holding company levels. Purchasing the debentures at the current market conditions will create profit, increase the equity of the Company and improve the Company's financial ratios. The Plan will be funded by resources of the Company and GTC RE.

The debentures can be purchased both through (daily) transactions executed on TASE and transactions outside of the stock exchange (over the counter transactions).

Execution of the Plan will not result in any taxes payable.

Kardan will provide progress updates to the market on a monthly basis by means of a press release. In the event of purchases within the month, (an) immediate report(s) will be posted on the Kardan corporate website, under Media / News/ Immediate Reports.

The Plan will be interrupted during the closed periods, the first of which will start as of August 9, 2012, until August 30, 2012, when the Company releases its H1 – 2012 results. In the event that Kardan decides to prematurely end / change the Plan, this will be publicly disclosed by means of a press release.

In the period June, 2011, until today, GTC RE and TCE purchased 342,752,276 Debentures Series A and 48,311,499 Debentures Series B for a total amount of approximately EUR 82.3 million; through these purchases, as of today Kardan, through its subsidiaries GTC RE and TCE, owns 28.8% of Kardan Debentures Series A and 3.6% of Kardan Debentures Series B. Since GTC RE has approximately EUR 1.4 million that was not used from the previous purchase Plan which was announced on December 15, 2011, the total amount available for repurchasing Debentures currently is EUR 51.4 million.

On June 18 last, Maalot, the Israeli subsidiary of Standard & Poor's ("S&P") reported that it has changed the rating of the debentures issued by Kardan, from ilBBB+ positive outlook into ilBBB negative outlook on higher leverage and difficult business environment.

In their analysis, S&P clarified that in the event Kardan would announce a new repurchase plan it could be regarded as "Distressed Exchange Offer". Therefore, following the publication of the Plan, S&P may downgrade Kardan's rating and put it on "Credit Watch" negative and decrease the rating of the Debentures (series A and/or B).

At a later stage, following a significant repurchase of Debentures by Kardan, S&P could decide to further downgrade Kardan to Selective Default ("SD") and the Debentures (Series A and Series B combined or one of the Series solo) to D (Default). However, immediately after Kardan announces to have prematurely ended / finalized the Plan, the rating will be changed to the new applicable rating as S&P (Maalot) shall decide. The rating update will take place shortly following the termination of the Plan.

DISCLAIMER

This press release contains forward-looking statements and information, for example concerning the financial condition, results of operations, businesses and potential exposure to market risks of Kardan N.V. and its group companies ("Kardan Group").All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements (including "forward looking statements" as defined in the Israeli Securities Law).. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. These forward-looking statements are identified by the use of terms and phrases such as ''anticipate'', ''believe'', ''could'', ''estimate'', ''expect'', ''intend'', ''may'', ''plan'', ''objectives'', ''outlook'', ''probably'', ''project'', ''will'', ''seek'', ''target'', ''risks'', ''goals'', ''should'' and similar terms and phrases. A variety of factors, many of which are beyond Kardan Group's control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of Kardan Group to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. For Kardan Group, particular uncertainties arise, amongst others but not limited to and not in any order of importance, (i) from dependence on external financing with the risk that insufficient access to capital threatens its capacity to grow, execute its business model, and generate future financial returns (ii) from concentration of its business in Central Eastern Europe and China as a result of which Kardan Group is strongly exposed to these particular markets (iii) from risks related to the financial markets as a result of Kardan's listings and (iv) from it being a decentralized organization with a large number of separate entities spread over different geographic areas in emerging markets, so that Kardan Group is exposed to the risk of fraudulent activities or illegal acts perpetrated by managers, employees, customers, suppliers or third parties which expose the organization to fines, sanctions and loss of customers, profits and reputation etc. and may adversely impact Kardan's ability to achieve its objectives and (v) from any of the risk factors specified in Kardan's Annual Report 2010 and in the "Periodic Report for 2011"published by Kardan N.V. in Israel on March 31, 2011 and which is also available at the Kardan website. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the relevant forward-looking statement as expected, anticipated, intended, planned, believed, sought, estimated or projected. Kardan N.V. does not intend or assume any obligation to update or revise these forward-looking statements in light of developments which differ from those anticipated.

About Kardan

Kardan identifies and develops assets in promising emerging markets, mainly in the CEE, CIS and China. Its activities are mainly focused on three sectors that benefit from the rising middle class: Real Estate, Water Infrastructure and Retail Lending. Company headquarters are in the Netherlands. Kardan aims at holding controlling interests in its investments and, through the development of local business platforms, is actively involved in the definition and implementation of their strategy. Total assets as of March 31, 2012 amounted to EUR 4.3 billion; revenues totalled EUR 85 million in Q1 - 2012. Kardan is listed on NYSE Euronext Amsterdam and the Tel-Aviv Stock Exchange.

The Q2 – 2012 and H1 - 2012 results of Kardan N.V. will be published on August 30, 2012.

For further information please contact:

Caroline Vogelzang Director Investor Relations +31 (0)20 305 0010 Vogelzang@kardan.nl www.kardan.nl

"This press release contains regulated information (gereglementeerde informatie) as defined in the Dutch Act on Financial Supervision (Wet op het financieel toezicht)"