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.