I was reading an article in Saturday's FT and it mentioned the Black Sea Property Fund as an alternative owning property directly in Bulgaria.

The shares offera projected return of 41%pa with a CapitalProtected Option (Backed by Foreign & Colonial) offering aprojected return of 12%

The shares commenced trading in mid March 2005 and have moved sideways.. I have tried to track down a copy of the originalprospectus as it would still have a lot of relevant information.

Does anyone have a link to the prospectus please?

I suspect that I won't be buying in the market but I wouldn't like to dismiss it without doing research particulary as the returns on the Capital Protected Units look quite reasonable.

M21er

Ken

Apologies for the delay in relying - I've not been on HC for some time - almost cured but not quie!

Thanks for the link there's some quite useful info there.

Have you considered the fund?

M21er

Dear M21,

If you have any questions on the Black Sea Property Fund I will try and help. i was actually involved in the fund raising ahead of the listing in March on AIM. even though there was a capital protected element - initially to attract the US investors and to attain certain rec fund status by some of the larger houses the risk:returns that were offered with the equity made the CPU unappealing. there are better longer dated products in the market that could offer better returns if you want a virtually risk free investment. The10x gearing made the shares the most logical option esp to take advantage of the predicted bulgarian tourism boom (esp since the ascession forms were signed on April 25 !!).

Rather than going into a full pitch of the upsides of eastern european property what qustions could i possibly help with?

regards .. spennyboy

SpennyBoy

Thanks for the reply.

At the moment I don't really have any indicaton of the risk / return on the shares. I suppose I would like the sort of information that is provided for Split Cap investment trusts.

Eg If Bulgarian property rises at 5% pa over 5 years, what's the likely value of the shares after costs?

What is the wipeout %? I am presuming that with the hgh gearing, any small fall in Bulgarian property prices could lead to a total wipeout of the equity but don't have any figures. Eg A 3% fall in prices would render the shares worthless.

I understand the fund life is around 5 -7 years -will the properties be rented in this period and what is the likely rental yield. Will this lead to any dividend payments?

Do you have an (Elctronic) copy of the prospectus? Finally, did you buy any yourself? I see they're still around the offer price at the moment (20.75p Uk:BKSA altough the price does vary intra day)

Many Thanks in advance

M21er

AnKovDiv

This share is now trading on Aim (uk:bksa) and you can buy through an online broker account. The current (mid market) share price is 21.25p which compares with the 20p flotation price March 2005 so it's not really that different. The last news was May 31 which confirmed options had been secured on some properties. See below.

The next expected news is the NAV as at 30 June 2005 which is due out in late July. For what it's worth, I have a limit buy on this share at 20.5p but there is not that much volatility in the share price and so it hasn't been triggered. Please do your own research and be aware of the risks - see one of the earlier links

Regards

M21er


News release from RNS pasted below:

Black Sea Prop Fund - Properties option secured
RNS Number:9371MBlack Sea Property Fund Limited31 May 2005FOR IMMEDIATE RELEASE 31 May 2005 The Black Sea Property Fund Limited (AIM:BKSA) Option secured over Byala beachfront propertiesThe Black Sea Property Fund (the 'Fund'), managed by Development CapitalManagement (Jersey) Limited, has acquired an option (the 'Option') to purchaseapproximately 1,200 upmarket holiday apartments to be built as part of a beachfront scheme near the Bulgarian town of Byala (the 'Scheme').The Scheme will comprise approximately 2,400 properties to be built on a virgin130,000 square metre site near Byala. Byala is 50km, 30 minutes' drive south ofVarna International Airport. With its long sandy beaches, proximity to theairport and leisure facilities, the Byala area is likely to become one ofBulgaria's most popular tourist destinations.The Scheme has obtained outline planning permission and conceptual designapproval, incorporating swimming pools, restaurants and other leisure facilitiestypical of an upmarket Bulgarian holiday resort. The first phase is scheduledfor completion in September 2006.Upon exercise of the Option, expected in the next 4-6 months, the Fund will paya deposit of Euro15 million, 35% of the total purchase price, to be released to thedeveloper at different stages during the construction process. The balance ofEuro28 million will be payable in phases 3 months following completion of therelevant properties, although the Fund intends to sell the portfolio prior tosuch dates.The purchase price of Euro43 million is equivalent to Euro450 per square metre(excluding VAT), representing a c55% discount to the estimated as-if-built openmarket value of the relevant properties (Euro1,000 per square metre excluding VAT)as determined by Colliers International. The Fund is entitled to the firstslice of profit on the sale of the portfolio of an amount equivalent to theinitial deposit paid (i.e. Euro15m). Any profit over and above this amount will besplit 60:40 (developer: Fund).Chairman of the Fund, Melville Trimble said, 'The Fund is delighted to be ableto announce the first substantial investment since its launch. The site is anexcellent location with great potential. This deal represents a significant steptowards us achieving our objectives'.The Board intends to announce the Fund's first net asset value as at 30 Junetowards the end of July with a further update at that time.

For further information, please contact:Development Capital Management (Bulgaria)(Investment Adviser)Roger HornettTom Pridmore020 7399 4270Collins StewartAlan Geeves020 7523 8800Buchanan CommunicationsCharles Ryland/Isabel Podda020 7466 5000Note: the Fund is an investment company, launched on 14 March 2005 raising #50million, which specialises in part-financing residential property schemes inBulgaria's developing tourist destinations through early stage, bulk propertyacquisitions.

This information is provided by RNS The company news service from the London Stock ExchangeENDMSCILFFVEAILVIE

M21er