Black Sea Property AS

Share Issue/Capital Change • Jan 30, 2017

BLACK SEA PROPERTY AS - OPTION ISSUE - START OF SUBSCRIPTION PERIOD AND SUBSCRIPTION MATERIAL - UPDATE ON CONSTRUCTION PROCESS

BLACK SEA PROPERTY AS - OPTION ISSUE - START OF SUBSCRIPTION PERIOD AND SUBSCRIPTION MATERIAL - UPDATE ON CONSTRUCTION PROCESS

Reference is made to Black Sea Property AS' ("BSP" or

the "Company") announcement of 20 January 2017

regarding an offer of options (the "Option Issue") to

buy apartments in Aheloy Beach Resort (the "Resort").

Option Issue

As announced earlier, the Company needs additional

financing to complete the planned construction works,

apartment furnishing and works on the commercial

areas. To partly finance the costs associated with

this, the Company has launched the Option Issue.

The subscription period in the Option Issue starts

today, 30 January 2017, at 09:00 CET. The subscription

period will end on 10 February 2017 at 16.30 CET.

The Option Issue is directed towards the Company's

shareholders, but will also be open for third party

investors that are approved by the Company's board of

directors. In the Option Issue, investors may purchase

an option to acquire one apartment at the Resort. The

price payable for one option is EUR 7,500, which will

be deductible from the total purchase price if the

option is exercised. Subscribers should note that the

period for exercising options may be extended with one

year by paying an additional 1 000 EUR for the option.

The invitation letter (the "Invitation Letter")

attached to this announcement constitutes the

subscription material for the Option Issue. The

Invitation Letter includes, inter alia, the term sheet

(also attached to the Company's announcement of 20

January 2017), a subscription form and a presentation

of the Resort. Details on how to subscribe for options

are set out in the Invitation Letter.

For further information about the Resort, please refer

to Appendix B of the Invitation Letter.

Update on construction process

The building works on the Resort resumed on 1

September 2016 and the construction works are now well

underway. The constructions works on building N, with

175 units, is almost fully completed, however lift

installation and final finishing touches are still

outstanding. The Company expects that the building

will be formally handed over to the Company's

subsidiary EPO Aheloy OOD ("EPO Aheloy"), being the

development company for the Resort, in medio February

2017. Further, the landscaping works on the grounds

surrounding buildings P, N and M are expected to be

finished by the end of May 2017. The Company is very

satisfied with the construction works performed on the

Resort so far and has therefore requested an offer for

the construction works on buildings P and M from the

construction firm "San Marko". This offer is currently

being evaluated by the Company.

Following the successful refinancing of the Company's

loan with UniCredit Bulbank (as announced in December

2016), EPO Aheloy has started a procedure to acquire

the remaining assets of the insolvent company Aheloy

Residence OOD (the original developer of the Resort),

which consist of the Resort's land, building K and a

small number of remaining units in buildings P and L

not currently owned by EPO Aheloy. Successful

acquisition of these assets are subject to sufficient

financing being in place. The Company and EPO Aheloy

will seek to finance any acquisitions of these assets

through debt and expects to complete such procedure

within Q3 2017.

As announced in November 2016, sewage connection and

electrical supply for the Resort is outstanding.

However, the Company and EPO Aheloy are working

against solving these outstanding matters within May

2017 and are working on obtaining financing for sewage

connection and electrical supply through European and

regional development funds

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.