Reference is made to the stock exchange notice from Black Sea Property AS ("BSP" or the "Company") on 22 April 2024, where the Company announced, inter alia, that it was assessing its funding requirements and funding sources.
The Company is pleased to announce that it has now entered into agreements with a consortium of existing shareholders (the "Investors") for an investment in the Company of NOK 12.35 million, whereby the Investors will initially lend the Company the above amount as shareholder loans (the "Shareholder Loan"). The Shareholder Loans will carry an interest of 16% per annum.
The Investors have further agreed to partially underwrite a contemplated rights issue of new shares to raise gross proceeds of up to NOK 18 million (the "Rights Issue"), where the Investors shall underwrite subscription of new shares for gross proceeds of NOK 12.35 million (i.e., the same amount as the Shareholder Loan). The Investors will settle their share deposits for shares allocated in the Rights Issue through conversion of the Shareholder Loan and accrued interest thereunder.
The Company has agreed with the Investors that the price per new share in the Rights Issue shall be NOK 0.12 per new share, which is below the current par value of the shares of the Company. The Company's Board of Directors will therefore propose to the upcoming annual general meeting of the Company (the "AGM") to carry out a share capital decrease in order to reduce the par value of the Company's shares to NOK 0.05 per share. The completion of any share capital decrease, Rights Issue and the conversion of the Shareholder Loans will be subject to approval by general meetings of the Company.
The contemplated share capital decrease process is expected to be completed during September 2024 and the Rights Issue will only commence after completion of the share capital decrease process. The commencement of the Rights Issue will also be subject to registration and publication of a national offering prospectus.
Subject to completion of the Rights Issue, the Investors shall be entitled to an underwriting commission of 10% of their respective underwriting obligations, which shall be settled by delivery of newly issued shares in the Company at the issue price in the Rights Issue.
Upon disbursement of the Shareholder Loan, the Company will be in compliance with its share of the funding requirements for the ongoing construction and completion works at the Sunrise River Beach Resort for the summer season of 2024.
Further, an agreement has been reached with the private lender Penchev for an extension of the current EUR 5.2 million loan (excluding accrued interest) with 2 years, ie., until November 2026. As part of this agreement, the interest under the loan will be increased to 18 % starting 30 November 2024 and a payment of an interest contribution of EUR 200,000 prior to 7 November 2024 and EUR 250.000 prior to 7 November 2025.
The Company can also announce that it has been offered to enter into a put option agreement with Trem Holding AD (a company controlled by Mr. Boyan Bonev, the Company's local Bulgarian partner, and formerly known as Sunset Resort Holding), whereby Trem Holding AD will be required to purchase the shares of EPO Bulgaria OOD (a holding company owned by the Company for its investment in the Sunrise River Beach Resort) for an amount of EUR 4,000,000 if the put option is exercised by the Company. The put option may be used before 30 November 2026. The Company does currently not consider that the value of the put option reflects the underlying values held by EPO Bulgaria OOD, but deems that the put option offered provides the Company with a security for realizing certain value in its investment in EPO Bulgaria OOD.
Further information about the Rights Issue and ancillary transactions will be given in due course.
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.
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.