Kardan N.V. — M&A Activity 2020

Aug 7, 2020

TAHAL TO SELL AN ISRAELI SUBSIDIARY

Amsterdam, 6 August 2020 – Kardan N.V. ('Kardan' or 'the Company'), active in real estate and water infrastructure, informs that its subsidiary, Tahal Group International B.V. ('TGI'), through a subsidiary, has entered into an agreement with a third party for the sale of its entire holdings (55.49%) in an Israeli subsidiary (Palgey Maim Ltd.). The consideration – up to €6.3 million – will be used to finance TGI Group's operations and to repay its debts.

The transaction was made as part of TGI's activity to realize its assets, in light of the financial situation of the TGI Group, as detailed in the Company's financial statements for 2019, which were published on 21 April 2020, and as stated in the Company's financial statements as of March 31, 2020, which were published on June 30, 2020, and regarding TGI's financial position, breach of covenants, TGI's negative cash flow, delays in carrying out new projects and the negotiations it is conducting with the banks financing its activities regarding the reorganization of the debts.

The agreement has been signed by TGI's indirect subsidiary, Tahal Consulting Engineers Ltd. ('TCE'). In accordance with the provisions of the sale agreement, in exchange for the sale of shares in Palgey Maim Ltd. ('the Subsidiary'), TCE will be entitled to a consideration in the amount of between NIS 22.5 million and NIS 25.5 million (between € 5.6 million and € 6.3 million), less payments to be made (or already paid) by the Subsidiary to TCE ('the Adjustment Amounts'). At the time of completion of the sale of the Subsidiary, Tahal will be paid in cash in the amount of approximately NIS 22.5 million, minus the Adjustment Amounts. The balance, in the amount of approximately NIS 3 million (approximately € 0.7 million), will be deposited in trust and will be used to ensure presentations and adjustments, in respect of certain payments specified in the agreement. Completion of the transaction is subject to the fulfillment of a number of conditions precedent, the main ones being the approval of the competition commissioner, the approval of the financing banks of TCE, and the approval of certain third parties.

Given TGI's financial condition, the Company does not expect to recognize a profit on completion of the transaction. Also, in view of the financial situation of TCE and TGI, the proceeds are expected to be used to finance TGI Group's activities and to repay its debts to the banks that finance their activities, all as agreed between them and the banks.

As stated above, the completion of the transaction is subject to the fulfillment of the conditions precedent set forth in the sale agreement. Accordingly, as of the date of this report there is no certainty as to the fulfillment of the conditions precedent and the completion of the sale transaction.

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 two sectors that benefit from the rising middle class: Real Estate and Water Infrastructure. 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. 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)"