Black Sea Property AS

Capital/Financing Update • Dec 2, 2019

BLACK SEA PROPERTY AS: UPDATE ON FINANCING AND OPERATIONAL ACTIVITIES

BLACK SEA PROPERTY AS: UPDATE ON FINANCING AND OPERATIONAL ACTIVITIES

Reference is made to the stock exchange notice issued by Black Sea Property AS (the "Company") on 5 August 2019 regarding the assessment of possible quality increasing measures at the Sunrise Gardens Resort (the "Resort") and a financing need of up to EUR 4.8 million.

Since that stock exchange notice, the Company has worked on several leads to achieve a refinancing of bank debt within the group. Given the status of these discussions, the Company is optimistic that a refinancing can be concluded in Q1 2020. However, no assurance can be given that the Company and the group will be able to conclude such refinancing and the group has not yet received any binding offers for such refinancing.

An important factor in achieving the possible refinancing is that all major historical collateral security (so-called interdictions) has now been completely removed. The interdictions related to previous debts owed by the original developer of the Resort (the now bankrupt Aheloy Residence OOD). Further, the Company has received proposals from global leading management companies for management of the Resort which (if the proposals are formalized in a binding agreement) should increase the attractiveness of the Resort to tour operators and tourists.

If the Company is able to achieve the abovementioned refinancing during Q1 2020, the financing need will be reduced from EUR 4.8 million to EUR 1.5 million until opening of the Resort.

The Company has also been in dialogue with the group's current lender, Unicredit Bulbank, regarding a possible deferral of the downpayment of approximately EUR 1.5 million that is due for payment in late December 2019. Such deferral has not been granted, and the Company therefore has a liquidity need of EUR 1 million until late December 2019 to cover our part of the downpayment. This liquidity need is not expected to increase the overall financing need of the Company, but the payment to be made to UniCredit Bulbank is likely to delay the remaining construction works on the Resort and the Resort can currently not be expected to be opened in May 2020 as previously announced.

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.