Kardan N.V. — M&A Activity 2015

Jan 15, 2015

KARDAN SELLS ITS WATER INFRASTRUCTURE COMPANY IN CHINA

Amsterdam, January 15, 2015 – Kardan N.V. ('Kardan'/ the 'Company'), active in Real Estate, Water Infrastructure and Financial Services in emerging markets, announces that Tahal Group Assets BV ('Tahal Assets'), its indirectly held subsidiary, today signed a Share Purchase Agreement ('the Agreement') with China Gezhouba Group Investment Holding Co. Ltd. ('CGGC Investment') to sell its shares in the Chinese water infrastructure company Kardan Water International Group Ltd. ('KWIG'). The sale of KWIG will take place in two phases (75% and 25%) to be finalized before the end of June 2015. The total consideration of the two phases amounts to RMB 630 million (approximately EUR 86 million / USD 102 million, 'the Consideration') ('the Transaction'). Additionally, on top of the Consideration and as part of the Transaction, CGGC Investment will repay all outstanding loans provided to KWIG by Kardan Group companies, totaling approximately USD 49 million (approximately EUR 42 million).

The Transaction is conditional on certain conditions precedent, such as regulatory approvals. Closing of the first phase of the Transaction is expected to take place in February 2015 at which time the Purchaser will pay 75% of the Consideration and will repay all outstanding loans provided to KWIG by Kardan Group companies. The second phase of the Transaction is to take place before June 30, 2015, by way of exercising a put option that has been given to Tahal Assets at the signing of the Agreements, when the remaining 25% of the Consideration will be paid to Tahal Assets.

The decision to sell KWIG is due to Tahal Group International's ('Tahal') wish to focus on its core competences as an Engineering, Procurement and Construction player and KWIG's need for funding in order to further grow its capital intensive operations as well as due to Kardan's need to generate cash.

The funds of the Consideration will be used by Tahal for its ongoing business operations as well as for repayment of debt, and Kardan is expected to receive at least EUR 65 million of the net proceeds.

The Company estimates that the Transaction will generate a profit of approximately EUR 5 million, based on KWIG's financial statements as of 30 September 2014, current exchange rates and other assumptions. Therefore, the profit may change and the Company is still investigating all aspects of the Transaction.

Tahal and CGGC furthermore agreed to cooperate in order to expand their activities both in China and abroad.

KWIG, a fully owned subsidiary of Tahal Assets, develops, constructs and manages water assets – such as wastewater treatment, water re-use and water supply plants – in China. Currently, KWIG operates 11 water projects in China, with a maximum combined capacity of 630 k t/day.

CGGC Investment is a wholly owned subsidiary of CGGC. CGGC, founded in 1970, is a leading Chinese engineering construction corporation. CGGC masters world-leading technologies and consequently has extraordinary influence worldwide in the field of water conservancy and hydropower works, doing business in over 100 countries and regions in the world and ranking among the top 100 of the largest worldwide contractors.

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 (jointly "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 N.V.'s listings on NYSE Euronext Amsterdam and the Tel Aviv Stock Exchange 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 Group's ability to achieve its objectives and (v) from any of the risk factors specified in Kardan N.V.'s Annual Report and in the related "Periodic Report" (published by Kardan N.V. in Israel) published in April, 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 Asia (predominantly China), Africa and selected CEE and CIS countries. Its activities are mainly focused on three sectors that benefit from the rising middle class: Real Estate, Water Infrastructure and Banking & Retail Lending. Company headquarters are in the Netherlands. Kardan aims at holding controlling interests in its investments and is actively involved in the definition and implementation of their strategy through its local business platforms. Total assets as of September 30, 2014 amounted to EUR 1,013 mn; revenues totalled EUR 161 mn in the first nine months of 2014. Kardan is listed on NYSE Euronext Amsterdam and the Tel Aviv Stock Exchange.

For further information please contact: Caroline Vogelzang Director Investor Relations Phone: +31 20 30 50 010 Mobile: +31 6 10 949 161 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)"