For immediate release
29 January 2015

Loan Agreement

On 12 December 2014, the Board of Black Sea announced proposals to recommence investment activities in the residential real estate, holiday homes, commercial real estate and distressed real estate markets of Bulgaria and that it would shortly write to shareholders to seek approval to adopt a new investing policy, extend the life of the Company and raise funds as soon as practically possible to invest the Company's resources in the Bulgarian real estate market, subject to the approval of the Jersey Financial Services Commission.

In order to fund the current running costs of the Company, the Board of Black Sea announces that it has today entered into a loan agreement ("Loan Agreement") with Mamferay Holdings Limited ("Mamferay") whereby Mamferay will provide the Company with an unsecured loan of up to £350,000 (the "Loan"). £100,000 of the Loan is to be drawn down by the Company immediately, and the remaining £250,000 may be drawn down once the Company has received approval from the Jersey Financial Services Commission to extend the life of the Company. In the event that the Jersey Financial Services Commission does not approve the extension of the life of the Company or the Company is unable to raise sufficient funds to cover its working capital requirements, the Loan shall be free of interest and shall be used to fund the costs of winding up the Company, with any surplus being repayable to the lender (who will have no claim against the Company in respect of the balance). Subject to the above, the Loan will bear an interest rate of 3 months' Euribor plus two point five per cent per annum over the utilised portion of the loan, payable at the end of the term of the Loan. The Loan will be repayable on the earlier of a) one year after today's date or b) the date on which the Board determines that the Company has raised sufficient funds for its investment strategy.

The Company also has the option to convert the Loan and any accrued interest into shares in the Company at a price per share to be determined by reference to the volume weighted average price for the shares on the five immediately preceding days (such days to be selected by the Board in good faith as close as conveniently possible to the conversion date) on which trading took place on the AIM market of the London Stock Exchange, provided such a conversion would not result in additional financial expenses or further statutory obligations for Mamferay, including but not limited to an obligation for Mamferay to make an offer pursuant to the City Code on Takeovers and Mergers.

As Mamferay is a substantial shareholder in the Company, the Loan Agreement is deemed to be a related party transaction under the AIM Rules. The Board, having consulted with the Company's nominated adviser, Cairn Financial Advisers LLP, considers that the terms of the Loan Agreement are fair and reasonable insofar as shareholders are concerned.


The Black Sea Property Fund Limited         +44 (0) 7747 020600
Alex Borrelli

Nominated Adviser
Cairn Financial Advisers LLP         +44 (0) 20 7148 7900
Sandy Jamieson

Sole broker
Peterhouse Corporate Finance Limited         +44 (0) 20 7469 0930
Charles Goodfellow
Heena Karani