Black Sea Property Fund Limited Placing and Suspension (0629T)

TIDMBKSA

RNS Number : 0629T

Black Sea Property Fund Limited

15 July 2015

The Black Sea Property Fund Limited

("Black Sea" or the "Company")

Placing to raise GBP1.5m, Appointment of Investment Advisor and Notification of Suspension

Black Sea is pleased to announce that it has received firm commitments from institutional investors and existing shareholders to raise GBP1,520,000 before expenses by means of a placing by its broker, Peterhouse Corporate Finance Limited, of 152,000,000 new ordinary shares (the "Placing Shares") at a price of 1p per share (the "Placing"). The new shares issued in the Placing will rank pari passu in all respects with the Company's existing ordinary shares (the "Existing Shares") and will represent approximately 41.63% of the Company's enlarged issued share capital. It is intended that the Placing will be completed by the end of July, at which point a further announcement will be made.

The Company intends to use the net proceeds to acquire property assets in Bulgaria in accordance with the Company's Investing Policy, and for general working capital purposes. The Board believes that the funds raised will enable Black Sea to fulfil its obligations under AIM Rule 15.

As the Company had not implemented its investing policy by 15 July 2015, being 12 months after the disposal of the last of its assets, trading in the Existing Shares will be suspended on AIM from 7.30 a.m. London time on 16 July. Once the Company has implemented its investing policy, the Company will apply for the suspension to be lifted and for the Placing Shares to be admitted to trading on AIM. If the investing policy has not been implemented within 6 months of the suspension, being 16 January 2016, the admission of the Company's Shares to AIM will be cancelled and the Directors will convene a general meeting of the Shareholders to consider whether to continue seeking investment opportunities or to wind up the Company and distribute any surplus cash back to Shareholders.

The Company also announces that it has appointed BLD Asset Management EOOD as Investment Adviser with responsibility for advising on the investment of the Company's Property Portfolio. In consideration for the services rendered by the Investment Adviser the Fund shall pay the Investment Adviser an advisory fee of 2% per annum of the capital raised and a Carried Interest Fee of 20% on realised profits up to a 20% IRR and 25% on realised profits above a 20% IRR. A hurdle rate (preferred return to shareholders) of 8% plus a 2% catch up fee to the Investment Adviser will be applied before the Carried Interest Fee calculation. The Preferred return (hurdle rate) would be satisfied first, and then the catch up fee before carried interest is distributed to the Investment Adviser in tandem with distributions to shareholders.

AG Capital indirectly holds 90% of the issued share capital of BLD Asset Management and the remaining 10% of the issued share capital is indirectly controlled by Dimitar Savov. AG Capital holds 60,814,581 Shares in the Company through its wholly owned subsidiary, Mamferay Holdings, representing 28.54 % of the issued share capital of the Company. As AG Capital is a substantial shareholder in the Company, the Investment Advisory 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 Investment Advisory Agreement are fair and reasonable insofar as Shareholders are concerned.

For further information please contact:

The Black Sea Property Fund Limited

Alex Borrelli, Chairman Tel: +44 7747 020600

Cairn Financial Advisers LLP Tel: +44 20 7148 7900

Nominated Adviser

Sandy Jamieson, Emma Earl

Peterhouse Corporate Finance Limited Tel: + 44 20 7469 0930

Sole broker

Charles Goodfellow, Heena Karani

This information is provided by RNS

The company news service from the London Stock Exchange

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