Black Sea Property AS

Share Issue/Capital Change • Mar 14, 2023

Black Sea Property AS - Conditional Private Placement successfully placed

Black Sea Property AS - Conditional Private Placement successfully placed

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, HONG KONG OR JAPAN, OR ANY OTHER JURISDICTION IN WHICH THE RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS ANNOUNCEMENT DOES NOT CONSTITUTE AN OFFER OF ANY OF THE SECURITIES DESCRIBED HEREIN.

Reference is made to the stock exchange announcement published by Black Sea Property AS (the "Company", and together with its consolidated subsidiaries, the "Group") on 10 March 2023 regarding a contemplated conditional private placement (the "Private Placement") consisting of up to 22,500,000 new shares (the "Offer Shares") at a fixed subscription price of NOK 0.40, thereby raising gross proceeds of up to NOK 9 million.

Following the expiry of the subscription period, the Company is pleased to announce that it has raised NOK 8,168,000 in gross proceeds through the allocation of 20,420,000 Offer Shares.

The net proceeds from the Private Placement will be utilized towards construction activities at the Sunrise Gardens Resort, to facilitate expected capital requirements in connection with a refinancing of the Group's credit facility with UniCredit Bulbank and for general corporate purposes of the Company.

Completion of the Private Placement is subject to the satisfaction of the following conditions; (i) increase of EPO Aheloy OOD's loan facility with Penchev Consult up from EUR 7.5 million to EUR 10 million, (ii) all corporate resolutions of the Company's Board of Directors to proceed with the Private Placement and to allocate the Offer Shares having been made, (iii) the shareholders of the Company having approved the issue of the Offer Shares in a general meeting of the Company (the "EGM"), and (iv) that the allocated Offer Shares have been fully paid, validly issued (by way of registration of the share capital increase pertaining to the issuance of the New Shares in the Norwegian Register of Business Enterprises) and registration of the Offer Shares in the VPS (jointly, the "Private Placement Conditions").

ALLOCATION TO PRIMARY INSIDERS

The following close associates of primary insiders have been allocated Offer Shares in the Private Placement:

- MTB Invest AS, a close associate of Chairman Egil Melkevik, has been allocated 575,000 Offer Shares at the subscription price of NOK 0.40 per Offer Share, corresponding to a total subscription amount of NOK 230,000;

- North Bridge Management AS, a close associate of Board member Dag Espen Arnesen, has been allocated 500,000 Offer Shares at the subscription price of NOK 0.40 per Offer Share, corresponding to a total subscription amount of NOK 200,000;

- DEA Holding AS, a close associate of Board member Dag Espen Arnesen has been allocated 250,000 Offer Shares at the subscription price of NOK 0.40 per Offer Share, corresponding to a total subscription amount of NOK 100,000;

- Christinedal AS, a close associate of Board member Hans Gulseth, has been allocated 1,400,000 Offer Shares at the subscription price of NOK 0.40 per Offer Share, corresponding to a total subscription amount of NOK 560,000; and

- Rødningen Invest AS, a close associate of Board member Kåre Rødningen, has been allocated 475,000 Offer Shares at the subscription price of NOK 0.40 per Offer Share, corresponding to a total subscription amount of NOK 190,000.

Formal primary insider notifications will be released following approval of the share capital increase pertaining to the Private Placement by the EGM.

As announced on 10 March 2023, the Company's Board of Directors expected to initiate a subsequent offering towards eligible shareholders (the "Subsequent Offering") to reduce the dilution of such shareholders and to raise additional capital. The Board of Directors has now resolved to propose to the EGM to carry out a Subsequent Offering to raise gross proceeds of up to NOK 6,832,000 through issuance of up to 17,080,000 new shares in the Company.

The Subsequent Offering will be directed towards the Company's shareholders as of 14 March 2023 (as documented by the Company's shareholder register in the Norwegian Central Securities Depository (VPS) as of the end of 16 March 2023, except; (i) shareholders who were allocated New Shares 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 (other than publishing of a prospectus in Norway) (the "Eligible Shareholders"). The subscription price per new share in the Subsequent Offering will be equal to the subscription price in the Private Placement.

Further information about the Subsequent Offering, along with a notice for the extraordinary general meeting, will be given in due course.

The Company's Board of Directors is further of the opinion that the Private Placement complies with the equal treatment obligations. The Board of Directors of the Company considered alternative structures for the raising of new equity. Following careful considerations, the Board of Directors resolved that it will be in the common interest of the Company and its shareholders to raise equity through a private placement setting aside the pre-emptive rights of the shareholders. By structuring the transaction as a private placement, the Company was in a position to raise capital in an efficient manner and with significantly lower risks compared to a rights issue. The Board of Directors also emphasized that the Subsequent Offering will give the Eligible Shareholders the possibility to reduce their dilution from the Private Placement.

Advokatfirmaet CLP DA acts as legal advisor to the Company in connection with the Private Placement.

For further information please contact:

Egil Melkevik, Chairman

Tel: +47 90 77 09 76

E-mail: em@ms-solutions.no

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 Sunrise Gardens. Sunrise Gardens Resort is a partially completed project and will upon completion comprise approximately 950 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 Sunrise Gardens Resort, to realize the project's added value through the sale of residential units and hotel operations.

The information in this announcement is considered to be inside information pursuant to the EU Market Abuse Regulation. This stock exchange announcement was published by Egil Melkevik, Chairman, at the time and date provided.