Kardan N.V.

Capital/Financing Update • Jan 13, 2021

Debt Settlement Presentation

• Kardan is in default on the payment of its debentures since February 2018
• In the last years, the equity standing of Kardan eroded substantially to a deficit level of over EUR 200 million. This is mainly due to very high interest expenses along the years and the performance of the subsidiaries
• Kardan will not be able to fully serve the current level of debt and accrued interest
• A settlement with the creditors which will include reduction of the debt is the only way Kardan could continue its operation
• The settlement includes conversion of more than half of the debt into equity
• This will re-capitalize the Company and allow it to meet its obligations
• At this point the parties are exchanging advanced drafts and started seeking necessary approvals

MAIN TERMS OF THE SETTLEMENT

• The current contractual debt of Kardan stands at circa EUR 370 million. This figure includes principal, interest and penalties (figure may vary over time)
• The debenture holders will agree to convert more than 50% of the debt
• For the conversion of debt-to-equity Kardan will issue to the debenture holders new shares which, after their issuance, will constitute 89.9% of the issued share capital of the Company
• The remaining debt will be structured as a bullet repayment by 31/12/2023
• Current contractual interest rate will remain as today (circa 6.8%) and will be the same for both series of the debentures (series A and B)
• Kardan will be required to use proceeds from divestment of assets and from dividends to make early repayments upon availability of such proceeds
• Kardan will be entitled to retain amounts to cover its running G&A

MAIN TERMS OF THE SETTLEMENT (CONT.)

• Notwithstanding the requirement to make early repayment in case of early repayment Kardan will need to pay an early repayment fee which is equal to:
  • The interest expense that would have been paid to the creditors if no early repayment was made with a discount of 2% in comparison to the contractual interest rate (may vary based on yield of government bonds that are used as index)
  • The rational behind this early repayment fee is that the conversion amount takes into consideration future interest expenses. If interest expenses are saved because of faster divestment, this means that the conversion amount should have been lower. Hence the debenture holders request to be compensated for excess debt conversion
  • However, as mentioned, the early repayment fee is calculated with an interest rate which is lower than the contractual rate by 2%. This still provide a proper incentive to the company to make early divestment and repayment, should the conditions allow

MAIN TERMS OF THE SETTLEMENT (CONT.)

• As in the previous deeds of trust, Kardan Land China will be entitled to keep funds that are required to cover liabilities for the coming 12 months and will pay upstream to Kardan the remaining free funds
• No limitations on the operation of Tahal. Only limitations will apply to the matters related to the shares of TGI which are pledged in favor of the debenture holders
• The settlement will be brought to approval of the commercial court in Israel. This will allow issuance of shares without a mandatory prospectus. Furthermore, this will provide certainty with respect to relations and disputes between the debenture series

ADDITIONAL CONDITIONS

• The new shareholders will have the right to amend the board structure and composition
• Sale of material assets will require approval of the debenture holders
• The Company will engage in an expense reduction program
• Conditions precedent include delisting from Euronext Amsterdam, ruling of no tax payment, validity of pledges
• Default events could be called in case of breach, insolvency etc.

PROCESS OUTLINE

Application to the Israeli court for expert exemption •Submitted – November 2020; •Approved – December

2020

Approval of the GM:

new capital structure and allocation of new shares to the Debenture holders

Indicative approval of the Debenture Holders of the new settlement

Submitting application to the Israeli court to call for the Debenture Holders assembly for the approval of the debt settlement

Fulfillment of conditions precedent and completion of the debt settlement; Debt settlement comes into effect

Approval of the Israeli court of the debt settlement by way of a court order

Debenture Holders assembly – approval of the debt settlement

Approval of Kardan's board of the complete debt settlement

Thank you

Disclaimer

This presentation has been prepared on behalf of Kardan N.V. solely for information purposes. It is not an investment advice or an offer or solicitation for the purchase or sale of any financial instrument. While reasonable care has been taken to ensure that the information contained herein is not untrue or misleading at the date of the presentation, Kardan N.V. makes no representation that it is accurate or complete. The information contained herein is subject to change without notice. Neither Kardan N.V. nor any of its officers or employees accepts any liability for any direct or consequential loss arising from any use of this presentation or its contents. Copyright and database rights protection exist in this presentation and it may not be reproduced, distributed or published by any person for any purpose without the prior express consent of Kardan N.V. All rights are reserved.