Kardan N.V. — M&A Activity 2007

Sep 4, 2007

PRESS RELEASE

KARDAN ACQUIRES ITS FIRST INFRASTRUCTURE ASSETS IN CHINA

Amsterdam, 4 September 2007 – Kardan N.V. (Kardan) announces that its infrastructure subsidiary, Kardan Water International Group Ltd. (KWIG), part of Tahal Group B.V. (Tahal), signed an acquisition agreement with Tianjin Trust and Investment Co, Ltd. for 88.15% of Tianjin Huanke Water Development Ltd. (Tianjin Huanke) for a consideration of approximately EUR 12 million. Tianjin Huanke owns long term concession agreements for 6 operational waste water treatment plants in China.

Tianjin Huanke owns the concession agreements to operate and maintain 6 waste water treatment plants, 4 in Tianjin and 2 in Shandong Province. The plants are currently operational and profitable with a total capacity of 198,000 cubic meters per day with concession agreements for an average of 20 years. Following the upgrading and expansion during the next 3 years it is expected that the capacity of these plants can be increased to 292,000 cubic meters per day.

The other 11.85% of Tianjin Huanke is held by Tianjin Environment Protection Science Research Institution. Closing of the transaction is subject to regulatory approvals.

The signing of the acquisition agreement for Tianjin Huanke is an important step in Tahal´s strategy to further develop its asset ownership activities. KWIG plans to invest approximately EUR 64 million (which includes the consideration of approximately EUR 12 million for this acquisition) during the next 20 months in selected projects in China relating to the development, management, operation and maintenance of water supply and waste water treatment infrastructure.

KWIG is a joint-venture between Tahal and a group of experienced local professionals from the Chinese water industry. Tahal holds a 66.67% interest in KWIG.

Tahal is the holding company of the infrastructure activities of Kardan. Tahal operates internationally in the fields of investments, planning, design, construction and project management as well as in turnkey and 'build operate transfer' projects. Approximately 90% of the activities of Tahal are directly related to water and sewage systems.

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, 2006 amounted to EUR 2.2 billion, with revenues of EUR 588 million. The number of employees engaged by the group is approximately 7,980 as of December 31, 2006. Kardan is listed on Euronext Amsterdam and the Tel-Aviv Stock Exchange.

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