Share Sale by Controlling Shareholder

15 March 2010

Engel East Europe N.V.

Share Sale by Controlling Shareholder

Engel East Europe N.V. ('Engel' or 'the Company'), the AIM-listed Central and Eastern European high-end property developer (EEE: LN), was notified on 11 March 2010 by Azorim Investment Development & Construction Co. Ltd ('Azorim') that, on 31 December 2009, Azorim reached agreement with the bondholders in Lagna Holdings Limited ("Lagna"), a member of Engel's parent company group, to transfer the majority of its holdings in Lagna amounting to 50.1 per cent of the issued share capital of Lagna and all its direct holdings in Lagna's subsidiaries to Reznik Paz Nevo Trust Ltd ("RPNT"), which will hold the shares on behalf of the Lagna bondholders.

As part of the agreement, Azorim has transferred to RPNT its entire shareholding in Engel of 5,655,732 Ordinary Shares, representing 6.4 per cent of the total issued share capital of the Company.

Accordingly, RPNT now controls the Engel parent company group on behalf of the bondholders in Lagna. Azorim retains an interest in 15.1 per cent of the total issued share capital of Engel General Developers Ltd, which holds 59,996,111 Engel Ordinary Shares representing 68.4 per cent of the issued share capital of Engel.

Mr. Shaya Boymelgreen is a director of Engel and a director of Azorim.

ENDS

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