Black Sea Property AS

Capital/Financing Update • Sep 10, 2018

BLACK SEA PROPERTY AS: AHELOY BEACH RESORT STATUS UPDATE

BLACK SEA PROPERTY AS: AHELOY BEACH RESORT STATUS UPDATE

Black Sea Property AS (the "Company" or "BSP") is pleased to inform that EPO Aheloy (the development company for the Aheloy Beach Resort (the "Resort")) has now signed the definitive loan agreement with UniCredit Bulbank to obtain an additional EUR 3m as a construction loan. The final terms are mainly in line with what has been communicated earlier. Prior to disbursement of the funds, the mortgages in favor of the bank must be established in accordance with Bulgarian law and existing shareholder loans in EPO Aheloy must be converted to equity. BSP is active on both issues and expects to solve them shortly in order to allow for disbursement of funds.

The construction works at the Resort are currently concentrating on finalizing "P", "N", "M" and "L" buildings, including on the planning and work execution of the Commercial Space both on kitchen and restaurant/shops levels. We have imposed a formal deadline for completion of the façade of building "L" with insulation, roofing, windows and stone ornaments by 30 September 2018. On the same date, the units in buildings "N" and "M" will be officially inspected for formal takeover. One month later, on 31 October 2018, the common areas as well as own apartments in the "P" building will also be inspected .

Going forward we have put in place a team of engineers that will control closely the work execution and cost, which is also a fundamental part of the new EUR 3m Bank loan financing.

BSP has made good progress in planning and constructing the Water & Sewage network and installations. A procedure for technical parameters of the infrastructure, zoning, approvals and passage parcel plan execution are well underway, with expectations for building permit to be issued in October 2018. Application for electrical connection is submitted and we expect to receive an overview of the relevant terms by the network operator shortly.

In the short term, we will schedule execution of the remaining subprojects. This includes the Commercial Space, Reception building, Amphitheater, pool repair, second swimming pool, outside restaurant seating with cover and Landscape improvements.

Over the years, there have been several disputes between Aheloy Commercial AD (and Aheloy Residence (and related company Zlatarsko EOOD). Previously, Zlatarsko EOOD brought a claim against Aheloy Commercial for the amount of BGN 4,454,101.11 BGN. The claims of Zlatarsko EOOD were rejected by Decision of 30 May 2018. However, Zlatarsko EOOD has submitted an appeal against the decision of the first instance court, and a reply to the appeal have been filed in order to ask for a dismissal of the appeal. A new hearing will take place on 13 September 2018. The Company is working in close co-operation with our Bulgarian legal counsel and believe that there are no grounds for the appeal made by Zlatarsko EOOD.

In addition to the already established relations with Thomas Cook, as part of EPO Aheloy's plans for operating the Resort, other major tour-operators' in the Central European, German, British and Russian markets will be introduced to the Resort in order to make the Resort available for booking for the summer season of 2019.

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.