BLACK SEA PROPERTY NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTOTHE UNITED STATES ,AUSTRALIA ,CANADA ,HONG KONG ORJAPAN , 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.Black Sea Property AS (the "Company") is happy to announce that the Company and Bulgaria Eiendom Invest AS ("BEI") have entered into a term sheet regarding a conditional combination of the two companies through a statutory merger (the "Merger"). In connection with the Merger, the Company will carry out a conditional Private Placement (as defined below). A Merger will greatly contribute to securing the Company's portion of a capital contribution to EPO Aheloy EOOD ("EPO Aheloy") (the owning and development company of theSunrise Gardens Resort (the "Resort"), as announced on1 March 2021 , as well as increasing the Company's asset base inBulgaria . INFORMATION ON THE MERGER: BEI is a project investment company owning certain land plots inBulgaria (through 3 fully owned Bulgarian subsidiaries). In addition, BEI held cash and fund investments of approximatelyNOK 12.5 million as of30th April 2021 . The Company will use the proceeds from the Merger and the Private Placement to fund the Company's portion of a capital contribution to EPO Aheloy, and which together with the Debt Financing (as described below) and the Partner Contribution (as described below) is expected to fully finance the construction and other completion costs at the Resort, and which financially is expected to enable EPO Aheloy to open the Resort for business for the summer season of 2022. Through the Merger, the shareholders of the Company will hold 80% of the shares in the combined entity and the shareholders of BEI will hold 20% of the shares in the combined entity, calculated after the completion of the Merger, however excluding shares to be issued in the Private Placement (as defined below) and any subsequent repair offering. In order to formalize the Merger, the boards of the Company and BEI will prepare a joint merger plan. Subject to successful negotiation of the merger plan, the merger plan will be presented for approval by the general meetings of the Company and BEI during lateJune 2021 . The completion of the Merger is subject to the following conditions, (i) approval by the general meetings of the Company and BEI of the merger plan, (ii) EPO Aheloy must receive a binding term sheet for the refinancing of its existing bank debt and raising of additional debt financing, for a total loan amount ofEUR 12.56 million (the "Debt Financing"), (iii) the Company shall have received binding commitments for subscription of new shares in the Company for total gross proceeds of minimumNOK 13 million and up toNOK 18 million through one or more share issues (as further described below), (iv) the Bulgarian partner of the Company and 25% shareholder in EPO Aheloy, Sunset Resort Holding EOOD (owned and controlled byBoyan Bonev ), shall have given a binding commitment to contribute equity financing ofEUR 400,000 (the "Partner Contribution"), and (v) the long-term debt of the Company shall not exceedEUR 500,000 and the long-term debt of EPO Aheloy shall not exceedEUR 7,500,000 prior to closing of the Debt Financing. In connection with the ongoing Merger process, the Company has requested thatYrro Ltd. extend the option period for the option agreement announced on9 December 2020 . Further information on the Merger will be published in due time. INFORMATION ON THE PRIVATE PLACEMENT: A condition for the completion of the Merger is that the Company shall have received binding commitments for subscription of new shares in the Company for total gross proceeds of minimumNOK 13 million and up toNOK 18 million . The Company is therefore contemplating an equity offering through the issuance of minimum 3 333 334 and maximum 4 333 334 shares (the "Offer Shares ") each share at a fixed subscription price ofNOK 3 (the "Subscription Price"), to raise gross proceeds of minimumNOK 10 million and up toNOK 13 million (the "Private Placement"). If the Company raise gross proceeds of less thanNOK 13 million in the Private Placement, the remaining funds needed to satisfy the Merger Conditions will be sought raised through the Repair Offering (as defined below). The subscription period in the Private Placement will commence today,28 May 2021 at16:30 CEST and close on31 May 2021 at08:00 CEST . 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 net proceeds from the Private Placement, along with the funds and assets held by BEI, will be utilized to fund the Company's portion of a capital contribution to EPO Aheloy in order to satisfy requirement for disbursements of the loan proceeds under the Debt Financing. The Private Placement will be directed towards certain existing shareholders of the Company, 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 ofEUR 100,000 , provided that the Company may, at its sole discretion, allocate an amount belowEUR 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. The members of the Company's Board of Directors have jointly pre-committed to subscribing forOffer Shares forNOK 4.5 million . The completion of the Private Placement by delivery ofOffer Shares is subject to (i) all necessary corporate resolutions for consummating the Private Placement being validly made by the Company, including without limitation, the Company's board of directors resolving to approve the Private Placement and the general meeting resolving issue the Offer Shares having been made, (ii) the shareholders of the Company having approved the issue of the Offer Shares in a general meeting of the Company (the "AGM"), and (iii) that the allocatedOffer Shares have been fully paid, validly issued (by way of registration of the share capital increase pertaining to the issuance of the Offer Shares in theNorwegian Register ofBusiness Enterprises ) and registration of the Offer Shares in the VPS. The payment date forOffer Shares will be three business days following satisfaction or waiver of the conditions for the Merger. The Board of Directors of the Company intend to propose to the AGM to carry out a repair offering of new shares towards the Company's shareholders as of28 May 2020 (as documented by the shareholder register in theNorwegian Central Securities Depository (VPS) as of the end of1 June 2021 ) except (i) shareholders who were allocatedOffer 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 inNorway ) (the "Repair Offering"). The subscription price in the Repair Offering will be equal to the subscription price in the Private Placement. The Board of Directors may at its discretion decide not to proceed with the Repair Offering. The Company's Board 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 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 took into consideration that a Repair Offering is intended to be carried out following the Private Placement. For further information please contact: Egil Melkevik, Chairman Tel: +47 90 77 09 76 E-mail: em@ms-solutions.no AboutBlack Sea Property AS :Black Sea Property AS is a real estate company with holdings in a real estate project on the Black Sea coast calledSunrise 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 finalizeSunrise 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. Thisstock exchange announcement was published by ChairmanEgil Melkevik at28 May 2021 16.30 CEST.
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