Black Sea Property AS

Share Issue/Capital Change • Mar 10, 2023

Black Sea Property AS: Launch of conditional Private Placement

Black Sea Property AS: Launch of conditional Private Placement

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 earlier stock exchange announcements from Black Sea Property AS ("BSP" or the "Company", and together with its consolidated subsidiaries, the "Group") regarding the Company's financing activities, including the stock exchange notice published on 9 February 2023 where it was announced that the Company was seeking to raise funds for construction activities on the Sunrise Gardens Resort (the "Resort") and to facilitate expected capital requirements in connection with a contemplated refinancing of the Group's loan taken up with UniCredit Bulbank.

On this background, the Company is therefore announcing that it is contemplating carrying out a conditional private placement of new shares (the "Offer Shares") in the Company to raise gross proceeds of minimum NOK 6 million and up to NOK 9 million. The price per Offer Share will be a fixed price of NOK 0.40.

Assuming subscription of all Offer Shares, the Company will issue 22,500,000 Offer Shares in connection with the Private Placement, each Offer Share with a par value of NOK 0.25.

The 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.

The Company and its local Bulgarian partner, Mr. Boyan Bonev, is currently seeking to increase EPO Aheloy OOD's (the development and property-owning company for the Resort) loan facility with Penchev Consult from EUR 7.5 million to EUR 10 million, and completion of the Private Placement will be subject to obtaining such increase. The purpose of such increase is to ensure sufficient capital for the upcoming summer season for 2023 as well as for full repayment of the Group's credit facility with UniCredit Bulbank if a refinancing is not achieved.

If the Private Placement is completed, the Company expects to launch a subsequent offering towards shareholders as of the date of the Private Placement that did not subscribe for Offer Shares (the "Eligible Shareholders") (the "Subsequent Offering"). In the Subsequent Offering, the Company will seek to raise an amount corresponding to the difference between the gross proceeds actually raised in the Private Placement and NOK 15 million. The subscription price in the Subsequent Offering will be equal to the subscription price in the Private Placement. Completion of the Subsequent Offering will be subject to, amongst other things, approval by the Company's shareholders in a general meeting and registration and publication of a national prospectus.

Subscribers in the Private Placement will be given the opportunity, pro-rata based on subscriptions in the Private Placement, to subscribe for any new shares in the Subsequent Offering that are not subscribed for by the Eligible Shareholders. The exercise of this right is subject to not all shares in the Subsequent Offering being subscribed by Eligible Shareholders and there can be no assurance that any shares may be subscribed on this basis.

In September 2022, the Company raised an amount of NOK 1,915,000 through a loan from certain investors. The Private Placement will trigger conversion of the outstanding loan amounts and accrued interest to new shares in the Company. The price per new share will be the same as in the Private Placement, i.e. NOK 0.40.

The subscription period in the Private Placement will commence today, 10 March 2023 at 16:30 CET and close on 14 March 2023 at 16:30 CET. The Company may, however, at any time resolve to shorten or extend the subscription period for any reason. If the subscription period is shortened or extended, any other dates referred to herein may be amended accordingly.

The Private Placement will be directed towards certain existing shareholders of the Company and certain new investors, subject to and in compliance with applicable exemptions from relevant prospectus, filing or registration requirements. The minimum subscription and allocation amount in the Private Placement will be the NOK equivalent of EUR 100,000, provided that the Company may, at its sole discretion, allocate an amount below EUR 100,000 to the extent applicable exemptions from the prospectus requirement pursuant to applicable regulations, including the Norwegian Securities Trading Act and ancillary regulations, are available.

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, 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").

The payment date for Offer Shares will be on or about 30 March 2023.

The Company's Board is 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 will be in a position to raise capital in an efficient manner and with significantly lower risks compared to a rights issue. The Board also emphasized that the Subsequent Offering is intended to be carried out following the Private Placement and that the Subsequent Offering will allow all shareholders to reduce their dilution from 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.