Black Sea Property AS

AGM Information • Dec 20, 2018

BLACK SEA PROPERTY AS – PRIVATE PLACEMENT OF NOK 8.65 MILLION – CALL FOR EXTRAORDINARY GENERAL MEETING

BLACK SEA PROPERTY AS – PRIVATE PLACEMENT OF NOK 8.65 MILLION – CALL FOR EXTRAORDINARY GENERAL MEETING

Reference is made to the stock exchange notice made by Black Sea Property AS (the "Company") on 10 December 2018 regarding a liquidity need of approximately EUR 1.3 million in order to make a downpayment to UniCredit Bulbank on an earlier construction loan and further to the stock exchange notice dated 12 November 2018.

The board of directors of the Company (the "Board") has now received binding pre-commitments to subscribe for 43,225,000 new shares for gross proceeds of NOK 8,645,000 in a conditional private placement (the "Private Placement"). Completion of the Private Placement is conditional upon the general meeting of the Company resolving a share capital increase pertaining to the Private Placement. The Board will also propose a repair issue.

If the Private Placement is approved by the general meeting of the Company, the Private Placement will imply issuance of 43,225,000 new shares in the Company, each with a par value of NOK 0.01, at a subscription price of NOK 0.20 per new share.

The net proceeds from the Private Placement will be used to partially fund the downpayment of approximately EUR 1.3 million to UniCredit Bulbank. The remaining funds needed to make the downpayment will be drawn from the available liquidity of the Company and from VAT to be refunded to EPO Aheloy (the development company for the Sunrise Gardens Resort) in early January 2019.

The Company's obligation to complete the Private Placement is conditional upon the following:

- The Company's extraordinary general meeting resolving the share capital increase pertaining to the Private Placement;

- Receipt of payments for share deposits in the Private Placement; and

- Due registration of the share capital increase pertaining to the Private Placement in the Norwegian Register of Business Enterprises.

The subscription price in the Private Placement has been set based on discussions with the Company's larger shareholders and taking into account the Company's urgent need for additional capital to make the downpayment to UniCredit Bulbank within 25 January 2019. If the Company is not able to make such downpayment, the Company does not expect that a new construction loan of EUR 3 million will be disbursed and consequently delay the construction process of the Sunrise Gardens Resort further. The delayed disbursement of the new construction loan has already delayed the construction process, and made it difficult to receive advance payments from tour operators. If the new construction loan is not disbursed, the Board expects that the Resort will not be opened for the summer season of 2019.

The Private Placement constitutes a deviation from the preferential rights of the Company's shareholders. The Board considers that this deviation is justifiable as the Company will raise funds in a faster manner than through a rights issue, and with less completion risk. Other forms of financing has not been considered to be relevant at this time. Further, in order to limit dilutions for shareholders who were not offered to participate in the Private Placement, the Board will propose that the Company's general meeting resolves to carry out a repair issue (the "Repair Issue").

The Repair Issue will consist of an offer to subscribe for up to 19,750,000 new shares at a subscription price per share of NOK 0.20 (i.e. the same subscription price as in the Private Placement). The Repair Issue will be directed towards the Company's shareholders as of 20 December 2018, as registered in the Company's shareholder register in the VPS on 27 December 2018 (the "Record Date"), less (i) shareholders who were offered to participate in the Private Placement, and (ii) shareholders who are resident in a jurisdiction where such offering would be unlawful or would require any filing, registration or similar action (the "Eligible Shareholders").

Each Eligible Shareholder in the Repair Issue will receive approximately 0.6611 non-transferable subscription rights for each share registered as held by such Eligible Shareholder in the Company's shareholders register in the VPS as per the Record Date. A prospectus to be registered with the Norwegian Register of Business Enterprises, will be registered and published prior to the start of the subscription period in the Repair Issue, and will constitute subscription material for the Repair Issue.

The existing shares in the Company will trade exclusive of the right to participate in the Repair Issue from and including 21 December 2018. A separate stock exchange announcement will be made to inform of relevant key dates for the Repair Issue.

Completion of the Private Placement and launch of the Repair Issue is subject to approval by the Company's general meeting. The Board has therefore resolved to call for an extraordinary general meeting to be held on 7 January 2019 at 12.00 hours, in the offices of Advokatfirmaet CLP in Sommerrogata 13-15, 0255 Oslo. The notice for the extraordinary general meeting is attached to this stock exchange notice.

For further information, please contact:

Egil Melkevik, Chairman

Tel: +47 90 77 09 76

E-mail: egil.melkevik@imenco.com

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 Aheloy Beach Resort. Aheloy Beach Resort is a partially-completed project and will upon completion comprise over 1,000 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 Aheloy Beach Resort, to realize the project's added value through the sale of residential units and hotel operations.