EPO Aheloy OOD (the holding company for theSunrise River Beach Resort , "EPO Aheloy" and the "Resort") has now received an updated appraisal fromCushman & Wakefield . The updated appraisal indicates a market value of the completed part of the Resort of approximatelyEUR 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 withBoyan 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 ofEUR 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 toEUR 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 approximatelyEUR 11 million . Taking into account the total interest-bearing debt in EPO Aheloy of approximatelyEUR 16 million at season opening in June, the calculated net value of EPO Aheloy (including the 50 apartments owned by a company affiliated withBoyan Bonev ) is therefore approximatelyEUR 17.2 million , or approximatelyEUR 16 million adjusted for the mentioned 50 apartments. The Company's share of the net value is thereby approximatelyEUR 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 approximatelyNOK 140 million (based on current EUR/ NOK exchange rates), corresponding to a NAV per share of approximatelyNOK 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 approximatelyEUR 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 approximatelyEUR 800,000 toEUR 1,400,000 , of whichBlack 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 AboutBlack Sea Property AS :Black Sea Property AS is a real estate company with holdings in a real estate project on the Black Sea coast calledSunrise 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 finalizeSunrise River Beach Resort , to realize the project's added value through the sale of residential units and hotel operations.
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