For immediate release
12 October 2007

Up-date re. Strategic review, board and extraordinary general meeting


On 31 August 2007 the Board announced that it had received notice from Vidacos Nominees Limited, on behalf of QVT Fund LP, on 29 August 2007, requisitioning an extraordinary general meeting of the Fund to consider ordinary resolutions for the removal of Melville Trimble and Roger Maddock from the Board and for the appointment of John Chapman, Angelo Moskov, Andrey Kruglykhin and Antony Gardner-Hillman as directors of the Fund. Under Jersey company law, the Fund was required to send out a notice convening that extraordinary general meeting no later than 19 September 2007 and, on 19 September 2007, the Fund published a circular which included a notice convening the EGM for 3.00 p.m. on Monday, 29 October 2007 (the "Circular").

Prior to publication of the Circular, the Board and its advisers endeavoured to consult a broad range of Shareholders regarding the Fund's future. However, feedback from certain of the largest Shareholders was not available prior to the publication of the Circular but has since been received.

Notwithstanding the QVT Requisition, the Board and its advisers have continued to pursue the strategic review announced by the Board on 24 August 2007. However, the Board believes that it is unreasonable for any party to expend significant time and expense in pursuing their interest in submitting proposals for enhancing Shareholder value whilst the current uncertainty regarding the future composition of the Board remains and, as a result, the Board does not believe that it is practicable to complete the strategic review in advance of the EGM. Accordingly, the Board concluded that resolving the future composition of the Board is in the immediate best interests of all Shareholders as this will ensure that that those who form the Board going forward can all participate fully in the strategic review process. The Board decided, therefore, to invite John Chapman, Angelo Moskov, Andrey Kruglykhin and Antony Gardner-Hillman to join the Board in advance of the EGM and these invitations have been accepted.

Melville Trimble and Roger Maddock have tendered their resignations as Directors. The Jersey Financial Services Commission has confirmed that it has no objection to these appointments and resignations, which will become effective as soon as practicable. A further announcement will be made once these changes to the Board have been effected. In view of his imminent resignation as a Director, Mr Trimble has resigned as chairman of the Board with immediate effect and William Drysdale has been appointed in his place. The Directors would like to thank Mr Trimble and Mr Maddock for their contributions to the Board.

The Board has also decided that it would be inappropriate to continue the strategic review until the newly constituted Board has had an opportunity to meet and agree the way forward. Accordingly, the current strategic review has been suspended. However, those Directors who will be continuing on the Board (namely, William Drysdale, Roger King, Irena Komitova and Bogdan Stanchev) are committed to working with their new Board colleagues to enhance Shareholder value. This will include considering in detail proposals form QVT.

As the notice convening the EGM has already been sent out, the Board intends to proceed with the EGM and is now recommending Shareholders to vote in favour of resolutions 3 to 6 set out in the notice convening the EGM, which would confirm the appointments of Messrs Chapman, Moskov, Kruglykhin and Gardner-Hillman as Directors. On the assumption that the Board changes referred to above are implemented, as planned, in advance of the EGM, resolutions 1 and 2 set out in the notice convening the EGM, relating to the removal of Messrs Trimble and Maddock as Directors, will have been superseded and, therefore, will not be proposed at the EGM.

The Board undertook, in the Circular, to write to Shareholders again, in advance of the EGM, with an up-date on the progress of the strategic review. A further circular is being posted to Shareholders today to up-date them on the strategic review, the Board's composition and the EGM.


Sue Inglis/Chris Whittingslow Intelli Corporate Finance Limited (Financial adviser) T: 020 7653 6300
Charles Farquhar/ Nick Westlake Numis Securities Ltd (NOMAD and Broker) T: 020 7260 1000


Intelli Corporate Finance, which is authorised and regulated in the United Kingdom for the conduct of investment business by the Financial Services Authority, is acting solely for The Black Sea Property Fund Limited and for no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than The Black Sea Property Fund Limited for providing the protections afforded to clients of Intelli Corporate Finance or for affording advice in relation to the matters referred to in this announcement.

Words and expressions defined in the Circular have the same meanings when used in this announcement.