"Black Sea Property" AS, org. no. 914 892 902 Market Report "Aheloy Resort"
Report Headlines:
- Building works at "Aheloy Resort" are resumed as of 1st September 2016.
- Signed "Construction Contract" with "San Marko Group" EOOD for the execution of finishing works at "Aheloy Resort" (building "N", vertical planning, landscape and access road) in line with the LOI described in Market Update of 23st June.
- All necessary arrangements are made with the construction supervision company, the architect and investor control team.
- Amendments to parts of the plans is in preparation in order to comply with present regulations.
- "Aheloy Resort" is scheduled to open and operate for the full 2017 summer season.
Construction works resumed.
Resuming construction works at "Aheloy Resort" as of September 1st 2016. Signed Construction agreements with the construction company "San Marko Group" EOOD.
- For fully finishing building "N" for the amount of BGN 1'520'000 w/o VAT.
- The vertical planning, landscape all around buildings "P", "N" and "M" and access road to the site for the amount of BGN 257'000 w/o VAT. Currently updating the landscape idea plans to final technical approved by the municipality building commission.
- The timeframe for execution of CIW and completion to a level required for obtaining Act.16 under the construction agreements is six months.
- Two sample units are to be constructed meeting and showing our requirements as to quality, materials and approved installations. These two units will serve as a base and exact quality of the rest of the units will be required upon acceptance.
- EPO Aheloy agreed on partial payment to the contractor with apartments to intercept 15% of their final remuneration, where the price is set at EUR 500 per sq. m without VAT. San Marko also has excellent connections with Real Estate agencies, who now experience high demand of clients willing to buy second homes in Bulgaria. EPO Aheloy considers selling at a preference price 30 additional units at a price of EUR 500 per sq. m without VAT in order to provoke initial interest
towards the development using Real Estate network connection of the construction company.
Focus on the construction works start.
- All relevant and requested documentation for the site and buildings is in the process to be submitted to the contractor "San Marko Group".
- The construction supervision company "Ineks Consult" is to be engaged, and contract is to be signed outlining their obligations. Boyan Bonev (BSP's local partner) intends to involve engineers from his team to assist and somewhat reduce their scope of work.
- BSP is ready to place an Investor Control team "Et Koliana" to report promptly and to monitor quality, approved materials, problem matters, timeline and expenses during the construction process.
- The architect Dimitar Kabapchiev revise some of the plans (electrical building N, section N1, the landscape, pool and the existing villas) from idea plans into technical and submit them to regulators for an approval. We also need to prepare new plans for fire notification installation.
- EPO Aheloy is still trying hard to find reasonable solution for the new sewage plans approval. As to the electrical supply to the site, EVN are pushing us to sign a new contract that envisages each apartment unit to have its own electricity meter and that they are the ones to perform the works of bringing power to the site. This would mean that we need a new project for the electrical part of the buildings and increased cost of the electrical installations.
To summarize:
- Building works are active at "Aheloy Resort" and the resort is scheduled to open and operate for the full 2017 summer season.
- Signed "Construction Contract" for the execution of finishing works at "Aheloy Resort" with San Marko Group.
- The tasks that will occupy EPO Aheloy's focus going forward during the coming months are:
- o Overseeing the execution of the building works
- o Deciding and building the commercial areas and restaurants
- o Constructing the outside utility connections
- o Securing long term bank financing.
- o Sale of apartments to secure necessary working capital.
- o Organizing for opening the resort and its hotel operations
You will be punctually informed of further advances related to the project.
Oslo, 1 st September 2016
The Board of Black Sea Property AS
Disclaimer
Black Sea Property AS has produced this report. Black Sea Property has made no enquires as to the correctness of the information provided to us by the Developers, and we have not requested or taken part in any due diligence reviews discussed in this report:
- Black Sea Property has relied primarily on information provided by the board and management of the Developers in written or oral form;
- The information includes non-factual information with regard to forward looking information which intrinsically is subjective and based on "best judgment".
Accuracy and completeness of information:
- Although Black Sea Property believes the information to be correct as the time of the issuance of this presentation, there is no certainty that the information is correct or that it is complete. It is fully possible that had Black Sea Property had access to other or more extensive information, the conclusion and information of the report could have been materially different;
- The conclusions in this report are made on the basis of a number of important assumptions. Whereas these are made to the best of our ability, based on discussions with management and access to relevant information, there is no certainty with regard to the correctness of these assumptions. Even relatively moderate changes to our assumptions may lead to material changes in the conclusion of this report and the valuation of the developers and developments.
Black Sea Property judgment with regard to non-factual information:
Whereas the information provided to us has been the basis for the valuation and analysis, Black Sea Property has, as far as possible, evaluated the substance of the information independently and made its own opinion with regard to the implication of the information on the value of the developments.
Liability
- Black Sea Property expressly disclaim any representation and warranty with regard to the content and conclusions of this report;
- Black Sea Property will not accept any responsibility for the use of or reliance up on the information contained in this report whatsoever.
The report is confidential and strictly for the use of the parties to whom it is presented.
Appendix I
Forward plan. The following plan is coordinated with the existing budget estimates and the progress made.
| "EPO Aheloy "Forward Project plan |
|
|
|
| Activity |
Status |
Expected Start Date |
Expected Finish Date |
| Building works |
|
|
|
| Finding contractor |
Completed |
|
|
| Tendering |
Completed for Building "N" and Landscape |
|
|
| Contract signings |
Completed engaged "San Marko Group" EOOD as a contractor |
|
|
| Outdoor works |
In Progress |
Sep-16 |
May-17 |
| Building "N" |
In Progress |
$Oct-16$ |
May-17 |
| Building "M" |
Projected |
Sep-16 |
May-17 |
| Building "P" |
Projected |
Nov-16 |
May-17 |
| Deciding on Commercials |
Pending |
Sep-16 |
Oct-16 |
| Building Commercials |
Projected |
Nov-16 |
$May-17$ |
| Deciding Water & Sewage |
Awaiting Planning Approval |
Sep-16 |
$Oct-16$ |
| Building W&S |
|
Nov-16 |
Mar-17 |
| Deciding Electric connection |
Expecting Contract form EVN |
Aug-16 |
Sep-16 |
| Building outside electric |
|
Sep-16 |
Mar-17 |
| Financing |
|
|
|
| Budgeting |
To be finalized and Board approved |
|
Oct-16 |
| Selling apartments "N" Building |
Pending |
Nov-16 |
ongoing |
| Selling apartments in the market |
Pending |
Feb-17 |
ongoing |
| Opening Resort |
|
|
|
| Organizing operating team |
Pending |
$F$ eb-16 |
Mar-17 |
| Establish resort management company |
Pending |
$Oct-16$ |
Feb-17 |
| Contract |
Pending |
$Jan-17$ |
Mar-17 |
| Contractual Issues |
|
|
|
| Making contract management |
In Progress |
|
Mar-17 |
| Making contract maintenance |
In Progress |
|
Feb-17 |
| Making contracts units sale |
In Progress |
|
Oct-16 |