1.2. Subsequent Events
? On August 4, 2016 S&P has ratified the rating (ilB with outlook Negative) of Kardan and its Debentures Series A and series B following the completion of the sale of KWIG at the end of June 2016 and the prospective sale of TBIF.
? On July 24, 2016 the Company made an early repayment of accrued interest and principal of debentures series A and series B amounting to €26 million, using the proceeds of the sale of the 25% of KWIG and existing funds. On August 17, the Company announced that it intends to make an additional early repayment of accrued interest and principal of debentures series A and series B amounting to €62 million using the net proceeds from the sale of TBIF.
? On August 11, 2016, Kardan Financial Services B.V. (‘KFS’), the Company’s wholly owned subsidiary, completed the sale of its 100% holding in the subsidiary TBIF, comprising the banking and retail lending activities of the Kardan Group. The total consideration of the Transaction comprises two parts, a sum of circa € 69 million which was paid at the time of closing, plus an adjustment to take into account the reviewed result of the sold assets since January 1, 2016. The adjustment is expected to be paid within the coming weeks. To secure payment of this adjustment, the buyer has pledged shares of TBIF in favor of KFS. The Company expects to record a total increase in equity of approximately € 15 million through profits and release of capital reserves. Prior to the completion of the transaction TBIF had transferred to KFS all assets that are not part of TBIF’s banking and retail lending activities. These assets, including Avis Ukraine, are not part of the Transaction. KFS undertakes to indemnify the buyer for costs and damages which might occur under circumstances which have been specifically detailed in the Agreement, including a breach of the customary representations and warranties given by KFS. Accordingly, KFS has deposited an amount of € 6 million for a period of two years and pledged this in favor of the buyer as collateral for the indemnification, which amount will be reduced to € 5 million after one year. In addition, Kardan will guarantee KFS’s obligation in this respect. The buyer, 4finance Holding S.A., is one of Europe’s largest and fastest growing online and mobile consumer lending groups with operations in 14 countries.