KARDAN N.V.
PRESS RELEASE
KARDAN TO RAISE CAPITAL FROM ISRAEL DISCOUNT BANK
BASED ON VALUATION OF EUR 500 MILLION FOR ITS
FINANCIAL SERVICES SUBSIDIARY
Israel Discount Bank to acquire 10% equity in Kardan Financial Services
through capital increase of EUR 50 million
Total capital of EUR 275 million raised, EUR 50 million in equity and EUR
225 million in debt
Amsterdam, 25 September 2007
Following the press release dated 10 September 2007,
international investment company Kardan N.V. (Kardan) announces that it's Supervisory
Board and the Board of Directors of Israel Discount Bank Ltd. (Discount Bank) have
approved signing a term sheet for an equity investment by Discount Bank of 10% in Kardan
Financial Services B.V. (KFS) through a capital increase of EUR 50 million. In addition,
Discount Bank will provide KFS with a credit facility of EUR 225 million. The EUR 50 million
consideration for the shares reflects a post-transaction valuation of KFS of EUR 500 million
(approximately USD 700 Million). Discount Bank will have the option to increase its holding
to 11% until the closing.
Discount Bank will provide KFS with various credit facilities totalling EUR 175 million with
maturities ranging from 6 to 11 years for which KFS will provide certain pledges and will maintain
certain commitments. KFS will also receive an additional facility of EUR 50 million maturing in 11
years against a guarantee to be provided by Kardan.
This transaction marks a significant increase in value of the financial services activities of the
group. A third party transaction last year valued KFS at EUR 210 million while this transaction
values KFS at EUR 500 million (post transaction and after a capital increase by Kardan of EUR 20
million). This value increase demonstrates that Kardan has created a better balance between its
real estate and financial operations.
Kardan is currently evaluating the impact of signing the term sheet and the completion of the
transaction on its financial statements.
The completion of the transaction is subject to certain conditions precedent, including the
completion of due diligence and the signing of final agreements. Discount Bank will have
customary minority rights and the right to nominate up to 20% of the Supervisory Board members
of KFS.
KFS intends to primarily use the funds to further develop its activities, capitalizing on the strong
growth opportunities in the financial services sector in the CEE region. Part of the funds will also
be used to refinance certain loans.
Israel Discount Bank is the third largest bank and a leading financial group in Israel. In Israel, the
Discount Bank Group is comprised of commercial banks and financial services companies active
in credit cards, investment banking, portfolio management, trustee services and leasing. Discount
Bank operates internationally through a network of subsidiaries, branches and representative
offices in North America, Europe and Latin America, with a focus primarily on private banking and
commercial finance. As of 31 December 2006, total assets aggregated to $38.5 billion.
Kardan Financial Services (KFS) is the holding company of TBIF and TBIH. Kardan holds a direct
stake of 90% in KFS, which in turn holds 89.5% and 40% in TBIF and TBIH respectively. TBIF is a
leading retail financial services provider (banking, leasing, consumer finance, mortgages and
asset management) active in Bulgaria, Romania, Russia and Ukraine. TBIH is a leading provider
of insurance and pension services in several CEE and CIS countries. TBIH is jointly controlled
by Kardan and Wiener Stdtische Versicherung AG Vienna Insurance Group.
About Kardan
Kardan is an international investment company with a focus on three sectors: Real Estate,
Financial Services and Infrastructure. Kardan is primarily active in Central and Eastern Europe,
where it conducts most of its activities. Kardan holds controlling interests in its main businesses
and is actively involved in the definition and implementation of their strategy. Total assets per
December 31, 2006 amounted to EUR 2.2 billion, with revenues of EUR 588 million. The number
of employees engaged by the group is approximately 7,980 as of December 31, 2006. Kardan is
listed on Euronext Amsterdam and the Tel-Aviv Stock Exchange.