Black Sea Property AS

Capital/Financing Update • Nov 21, 2016

BLACK SEA PROPERTY, FINANCING AND PROGRESS

BLACK SEA PROPERTY, FINANCING AND PROGRESS

Black Sea Property's partly owned Bulgarian company

have after extensive negotiations received an offer

from the UniCredit Bulbank where the loan maturity is

restructured from full repayment to the bank in May

2018 to a long term loan financing agreement with 8

years and regular principal repayments. This solution

gives the company flexibility to sell apartments over

time, and optimize management of the resort.

As informed at the extraordinary general assemble on

the 20th of October, there is a timing related risk of

obtaining necessary capital through sale of

apartments, to fund the projected and ongoing

construction process at the resort. After feedback

both connected to the process of selling apartments

and the process of VAT return from the local revenue

agency, the company now envisions as highly probable

that there will be a need for funding to succeed

resort opening for Summer 2017. We estimate that

additional funding will be limited to EUR 2 million.

This capital should be available by the end of January

or early February.

The company evaluates four alternative solutions:

1. Sale of apartments towards existing

shareholders;

2. Sell a right (option) to buy one or more

apartments to a favorable price (with preferential

rights for existing shareholder)

3. Short term loan

4. Direct placement towards existing shareholders;

The board will investigate the different alternatives

further to find the solution that fits the company and

the shareholders in the best possible way. Final

solution could consist of combinations of above

alternatives.

To further strengthen the liquidity, the board has

also agreed to put forward a model where the board

refrains from ongoing board renumeration and only have

a remuneration based on achieved milestones.

When the company has clarified the different

alternatives, there will be a call for extraordinary

General meeting where the defined proposal will be

presented together with a model for remuneration of

the board.

Completion of building "N" goes according to plan,

with the apartments finished in December followed by

installation of lifts and common areas finishing in

January. There are ongoing processes connected to

water & sewage in cooperation with the local town

municipality (Aheloy) as well as the central

government to find an optimal solution. The company

considers the fact that a solution must be in place

the 01st of May at latest to complete the resort as

planned for opening Summer 2017. Delays in this

process could negatively impact the opening of the

resort. The board will inform further about status in

this respect on the forthcoming general assembly.

For more information please contact:

Egil Melkevik, Chairman Black Sea Property AS

Tel: +47 90770976

E-mail: egil.melkevik@imenco.com