Amsterdam, July 12, 2012 – Kardan N.V. (“Kardan” or “the Company”), active in Real Estate, Water Infrastructure and Financial Services in emerging markets, announces that as of today its subsidiary, GTC Real Estate Holding B.V. (“GTC RE”) will initiate a new plan to purchase Kardan Debentures (“the Plan”) listed on the Tel Aviv Stock Exchange (“TASE”). Under the Plan, GTC RE could purchase up to an amount of EUR 50 million, during a period of one year, starting on July 12, 2012.

The Board of Kardan has approved the Plan today. Approval of the Plan is in line with the Company’s strategy to decrease the leverage on the holding and intermediate holding company levels. The Board of Kardan has approved the Plan today. Approval of the Plan is in line with the Company’s strategy to decrease the leverage on the holding and intermediate holding company levels. Purchasing the debentures at the current market conditions will create profit, increase the equity of the Company and improve the Company's financial ratios. The Plan will be funded by resources of the Company and GTC RE.

The debentures can be purchased both through (daily) transactions executed on TASE and transactions outside of the stock exchange (over the counter transactions).

Execution of the Plan will not result in any taxes payable.

Kardan will provide progress updates to the market on a monthly basis by means of a press release. In the event of purchases within the month, (an) immediate report(s) will be posted on the Kardan corporate website, under Media / News/ Immediate Reports.

The Plan will be interrupted during the closed periods, the first of which will start as of August 9, 2012, until August 30, 2012, when the Company releases its H1 – 2012 results. In the event that Kardan decides to prematurely end / change the Plan, this will be publicly disclosed by means of a press release.

In the period June, 2011, until today, GTC RE and TCE purchased 342,752,276 Debentures Series A and 48,311,499 Debentures Series B for a total amount of approximately EUR 82.3 million; through these purchases, as of today Kardan, through its subsidiaries GTC RE and TCE, owns 28.8% of Kardan Debentures Series A and 3.6% of Kardan Debentures Series B. Since GTC RE has approximately EUR 1.4 million that was not used from the previous purchase Plan which was announced on December 15, 2011, the total amount available for repurchasing Debentures currently is EUR 51.4 million.

On June 18 last, Maalot, the Israeli subsidiary of Standard & Poor’s (“S&P”) reported that it has changed the rating of the debentures issued by Kardan, from ilBBB+ positive outlook into ilBBB negative outlook on higher leverage and difficult business environment.
In their analysis, S&P clarified that in the event Kardan would announce a new repurchase plan it could be regarded as “Distressed Exchange Offer”. Therefore, following the publication of the Plan, S&P may downgrade Kardan’s rating and put it on “Credit Watch” negative and decrease the rating of the Debentures (series A and/or B).
At a later stage, following a significant repurchase of Debentures by Kardan, S&P could decide to further downgrade Kardan to Selective Default (“SD”) and the Debentures (Series A and Series B combined or one of the Series solo) to D (Default). However, immediately after Kardan announces to have prematurely ended / finalized the Plan, the rating will be changed to the new applicable rating as S&P (Maalot) shall decide. The rating update will take place shortly following the termination of the Plan.