EPO Aheloy OOD (the holding company for the Sunrise River Beach Resort, "EPO
Aheloy" and the "Resort") has now received an updated appraisal from Cushman &
Wakefield. The updated appraisal indicates a market value of the completed part
of the Resort of approximately EUR 25 million on an as-is basis, but assuming
that the planned capacity increase for the summer season of 2024 is completed.
The planned capacity increase includes completion of additional apartments in
the P building, increasing the total number of apartments in Phase 1 to 493
apartments (corresponding to 2,100 beds), also including 50 apartments owned by
a company affiliated with Boyan Bonev. The planned capacity increase further
includes increased food and beverage capacity through an extra restaurant hall
in the K building. 
In addition, the valuation report indicates an Investment Value of EUR 8.2
million for the uncompleted K and L buildings (i.e. Phase 2) on an as-is basis.
The total valuation of the Resort is therefore indicated to EUR 33.2 million. 
The valuation has been carried out based on a Discounted Cash Flow model,
calculated over a 10-year period. Annual cash flows have been discounted with a
discount rate of 10.75%, and where the exit value of the property through a sale
after 10 years have been determined based on a yield of 9,0 %. The annual cash
flow has been calculated on the assumption that the Resort is operated as a
tourist resort for four months annualy (mid June - mid September), and also with
specific assumptions including, but not limited to, number of guests, room
pricing, achievement, operational and administrative expenses, maintenance and
investments. Consequently, the valuation is not based on the current usage of
the Resort as a kids and family camp for three months annually, primarily as
Cushman and Wakefield Bulgaria considers that they do not have sufficient data
to conduct a valuation of the Resort as a kids and family camp. The valuation
also assumes that the K and L buildings are completed for rental from the summer
season of 2025, at an estimated investment cost of approximately EUR 11 million.
 
Taking into account the total interest-bearing debt in EPO Aheloy of
approximately EUR 16 million at season opening in June, the calculated net value
of EPO Aheloy (including the 50 apartments owned by a company affiliated with
Boyan Bonev) is therefore approximately EUR 17.2 million, or approximately EUR
16 million adjusted for the mentioned 50 apartments. The Company's share of the
net value is thereby approximately EUR 12 million, assuming that the Company's
ownership of 75% in EPO Aheloy is re-established after repayment of the debt
owed by EPO Aheloy to Penchev Consult. The total net asset value  (NAV) in BSP
is therefore approximately NOK 140 million (based on current EUR/ NOK exchange
rates), corresponding to a NAV per share of approximately NOK 1.35 - 1.40. 
 
The Board wishes to highlight to each investor that the figures stated in the
valuation report are inherently subject to several risks and uncertainties, and
changes or deviations from the assumptions set out in the report may result in
significant variations in valuations as presented above. 
 
Black Sea Property is also pleased to announce that the Resort is now fully
booked for the peak summer weeks of 2024 (approx. 7 weeks), with some spare
capacity in the early and later part of the summer season 
 
Further, Black Sea Property is currently assessing its funding requirements and
funding sources. EPO Aheloy has a funding need in order to fund the capacity
increase as described above including a new restaurant hall. This funding need
has arisen as a consequence of an earlier repayment of principal under the
credit facility from Penchev Consult with approximately EUR 1 million, and
because Penchev Consult is not willing to extend further funds under the credit
facility unless an additional equity injection is made into EPO Aheloy.  As of
today, Black Sea Property anticipates that EPO Aheloy will require an equity
injection of approximately EUR 800,000 to EUR 1,400,000, of which Black Sea
Property shall cover 75%. At the higher end of the range, the Company
anticipates that the increased equity level in EPO Aheloy may also be used to
improve certain terms of the credit facility with Penchev Consult, including a
possible extended loan period.Further information will be given in due course.
 
The sales process of the Resort was initiated in 4th quarter 2023 as previously
reported. Potential buyers are being identified and some preliminary early
interest has been shown, but no indications or offers have been received. The
objective to conclude a sale by end 2024 remains, but demanding market
conditions makes it likely that more time will be needed to conclude a sale. 
 
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 River Beach Resort. Sunrise River
Beach Resort is a partially completed project and will upon completion comprise
approximately 950 apartments as well as significant commercial space. Black Sea
Property AS has indirect ownership to the project and will work to finalize
Sunrise River Beach Resort, to realize the project's added value through the
sale of residential units and hotel operations.