Kardan N.V. — M&A Activity 2016

Jun 5, 2016

AGREEMENT ON SALE OF REMAINING 25% SHARES OF KWIG (CHINA) SIGNED

Amsterdam, June 3, 2016 - Kardan N.V. ('Kardan' or 'the Company'), active in Real Estate, Water Infrastructure and Financial Services in emerging markets announces that - further to the announcements of January 15, March 6, June 30, and September 24, 2015 – on June 3, 2016 its indirectly held subsidiary Tahal Group Assets B.V. ('Tahal Assets') signed an agreement for the sale of the remaining 25% of the shares in the Chinese water infrastructure company Kardan Water International Group Ltd. ('KWIG') to China Gezhouba Group Investment Holding Co. Ltd. ('CGGC Investment') (the 'Transaction').

According to the agreement, the Transaction is due to be completed by June 30, 2016. The parties may however extend this date, by mutual consent, until July 31, 2016.

The total consideration for the 25% stake is estimated at USD 27.5 million, including interest as detailed in the agreement. In addition, a trust agreement was signed according to which Tahal Assets is required to deposit USD 10 million to cover taxes due by Tahal Assets following the sale of KWIG shares. The tax deposit amount includes USD 4 million which will be withheld from the consideration, and USD 6 million already reserved by Tahal Assets from the proceeds of the first phase of the sale of KWIG. The trust agreement includes provisions regarding release of the funds subject to tax payments having been made prior to the completion date. The Company estimates that Tahal Assets will be able to pay the tax due on the first part of the transaction before the completion date.

The net consideration for this second phase of the Transaction (net of the tax deposit of USD 4 million and transaction costs) is estimated at USD 23 million, and will be used by Tahal Assets for dividend distribution to Kardan. Kardan intends to use the received funds for part repayment of its debentures, in accordance with the provisions of the Amended Deeds of Trust dated July 2, 2015.

The second phase is part of the overall agreement regarding the sale of KWIG and consequently is not dependent on additional conditions precedent.

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 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 December 31, 2015 amounted to EUR 975 million; revenues totalled EUR 216 million in the year 2015.

Kardan is listed on Euronext Amsterdam and the Tel Aviv Stock Exchange.

For further information please contact:

Floor van Maaren / Eva Lindner +31 (0)6 2959 7746 / +31 (0) 6 3422 2831

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