Kardan receives binding and irrevocable offer investment in Tahal Group
Amsterdam, December 8, 2019 – Kardan N.V. (‘Kardan’ or ‘the Company’), active in Real Estate and Water Infrastructure, announces that on Friday, December 6, 2019 it has received a binding and irrevocable offer from Shikun & Binui (an Israeli real estate and infrastructure company) regarding the investment transaction in its indirect subsidiary Tahal Group B.V. (‘Tahal Group’, a 100% subsidiary of Tahal Group International B.V., ‘TGI’).
The offer includes the following principles: 1. Shikun & Binui, directly or through a holding company (‘the Investor’) will grant Tahal Group a US$ 11.95 million loan convertible into Tahal Group shares (‘the Loan). The Loan will be granted for a period of 24 months and will bear a 5% annual interest rate, accumulated semi-annually, payable upon repayment of the Loan principal or conversion of the Loan, whichever is earlier. 2. The Investor shall have the right during a period of 19 months from the date of completion of the transaction to convert the Loan (in whole or in part) into Tahal Group shares, subject to receipt of regulatory approvals, as required. The Investor will receive 49.9% of Tahal Group shares against full conversion. 3. In addition there are two options to allocate Tahal Group shares to the Investor which will be exercisable subject to the conversion of the Loan into Tahal Group shares: (a) an option exercisable within 24 months of the transaction being completed, for the purchase of shares Tahal Group for US$3.15 million, so that, upon realization, the investor will hold 55.7% of Tahal Group (‘the First Option’); and (b) an option exercisable within 36 months from the date of the transaction, subject to the exercise of the first option, to the purchase of additional shares of Tahal Group for up to US$25 million, so that upon full exercise, if exercised, the Investor will own 75.1% of Tahal Group (‘the Second Option’). 4. Furthermore, TGI will grant the investor an option to purchase the shares of Tahal Group that TGI holds for a period of 12 months at the end of the Second Option period, in three equal tranches, at a value to Tahal Group of US$30 million, US$40 million, and US$50 million, respectively (before the Investor’s investments and the conversion of the Loan). If this option is not exercised, the Investor will negotiate with TGI to find an alternative solution for acquiring TGI's holdings in Tahal Group. If the parties will not reach an agreement within 60 days, the Investor will act to list Tahal Group’s shares for trade on the Tel Aviv Stock Exchange, subject to legal and regulatory requirements. 5. In order to ensure the fulfillment of the obligations to the Investor by virtue of the Offer, all the rights and holdings in two companies indirectly held by Tahal Group will be pledged (‘the Pledged Assets’). 6. The transaction will be carried out AS-IS, without any representations or commitments on behalf of Tahal Group, the Company or anyone acting on their behalf, except as expressly stated in the Offer, and except providing the financial statements of the Pledged Assets. Breach of any representations in relation to the said financial statements will give the investor the right to make the Loan payable immediately. 7. As of the closing date of the transaction the Investor will have the right to appoint two members of the board of directors of Tahal Group and of its investee companies, and no resolutions will be taken at the meetings of the shareholders of Tahal Group and its investee companies, without the consent of the Investor or the directors appointed by the Investor, as applicable, on matters concerning protecting rights of the minority and the allocation of shares and / or convertible securities. After the full or partial exercise of the First Option, the Investor may appoint the majority of the members of the board of directors of Tahal Group and its investee companies. 8. The Loan will be granted subject to conditions precedent, which include, in particular: obtaining the approval of the directors and shareholders of Tahal Group and of TGI for the Offer, as required; obtaining approval of the Company's debenture holders (Series A and B) to execute the Offer and to cancel all of TGI’s commitments relating to Tahal Group and its investee companies and any restrictions imposed on them under the Company's debt settlement effective the date of granting the Loan; obtaining the approval of the banks to execute the transaction and to provide the pledges in favor of the Investor; obtaining the approval of the other shareholders of one of the Pledged Assets to create the pledge in favor of the Investor; and any approvals required by law to execute
the transaction and create the pledges. 9. If all necessary approvals will not be received by January 15, 2020, and the transaction will not be completed by January 31, 2020, the Offer will expire without TGI, Tahal Group, the Company, the Company's debenture holders or anyone on their behalf will make any claim or demand against the Investor. The completion of the transaction and making the Loan available should take place within 7 business days in the Netherlands from the date of receipt of the full approvals, or any other date agreed by the parties. 10. During the period from the receipt of the approval of the debenture holders to the date of the transaction (if and when completed), the Company, TGI, and Tahal Group, will not negotiate with third parties regarding investment in Tahal Group and / or TGI and / or in any other matter contrary to the Offer.