Black Sea Property AS

Capital/Financing Update • Mar 1, 2021

BLACK SEA PROPERTY AS: UPDATE ON REFINANCING – PROPOSED CONVERSATION OF SELLER CREDIT

BLACK SEA PROPERTY AS: UPDATE ON REFINANCING – PROPOSED CONVERSATION OF SELLER CREDIT

Reference is made to earlier stock exchange notices from Black Sea Property AS (the "Company"), including the stock exchange notice dated 29 July 2020. EPO Aheloy OOD ("EPO Aheloy"), the development company for the Sunrise Gardens Resort (the "Resort") and a subsidiary of the Company, has now received a non-binding offer for refinancing of existing bank debt and for additional financing of construction activities at the Resort from a Bulgarian bank.

Even though the Company is very pleased to have received a loan offer during a very challenging period for the travel and tourism industry, the time spent on the refinancing process so far and the currently unclear status of the COVID-19 pandemic implies that an opening of the Resort for the summer season of 2021 is no longer feasible. The Company and EPO Aheloy will therefore work towards an opening of the Resort for the summer season of 2022, with anticipated opening on 1 May 2022.

As part of the loan offer, the bank has requested that EPO Aheloy contributes with an equity self-participation amount of 20% prior to any utilization of the financing for construction activities. For this purpose, as well as for satisfying requirements for establishing a reserve account with certain funds deposited and for payment of various fees to the lender, EPO Aheloy has a funding need of approximately EUR 3.5 million.

In order to cover the funding need of EPO Aheloy, the Company must provide equity financing to EPO Aheloy in the range of EUR 2.5 million to EUR 3.0 million, while our local Bulgarian partner Boyan Bonev will contribute the remainder of the abovementioned amount of EUR 3.5 million.

In order to prepare for raising the funds mentioned above, the Board of Directors of the Company considers that the approx. EUR 4 million debt the Company owes to the former owners of EPO Invest KS and Aheloy Beach Commercial AS (the predecessors of Black Sea Property) (the "Seller Credit") should be converted into new equity in the Company. In order to achieve, the Board has now received pre-acceptances from lenders representing approximately 60% of the amounts outstanding under the Seller Credit to convert their parts of the Seller Credit into new shares in the Company at a price per share of NOK 3.38 (corresponding to the closing price of the Company's shares on Friday 26 February 2021).

During the next three weeks period, the Board will seek to contact as many of the creditors under the Seller Credit as possible and will thereafter propose to an extraordinary general meeting of the Company to approve the conversion of the Seller Credit into new shares in the Company. The completion of the conversion of the Seller Credit will be conditional upon approval from the extraordinary general meeting.

Simultaneously with the process for converting the Seller Credit, the Board will assess the Company's possibilities for raising new equity cash to fund the Company's contribution of EUR 2.5 – EUR 3.0 million towards EPO Aheloy. Further information about this will be given at a later time.

For further information, please contact:

Egil Melkevik, Chairman

Tel: +47 90 77 09 76

E-mail: em@ms-solutions.no

About Black Sea Property AS:

Black Sea Property AS is a real estate company with holdings in a real estate project on the Black Sea

coast called Sunrise Gardens. Sunrise Gardens Resort is a partially completed project and will upon completion comprise approximately 950 apartments as well as significant commercial space. Black Sea Property AS owns indirectly 75% of the project. Black Sea Property AS will work to finalize Sunrise Gardens Resort, to realize the project's added value through the sale of residential units and hotel operations.