Municipality of Balchik to Sell its 7.13% Stake in Albena

Offering Starts on August 18, 2014

• The Municipality of Balchik is offering for sale its304 570 ordinary shares, representing 7.13% of the sharecapital in holiday resort operator Albena AD [6AB].

• The price floor is set at BGN 48.94 per share.

• The public offering will start on August 18, 2014. Itwill be conducted through a mixed closed auction. The wholepackage of 304 570 shares will be available for sale from thefirst day of the auction. The final date is October 2, 2014.

• Adverse weather conditions and political tensionsbetween Russia and Ukraine are taking its toll on Albena'sperformance this year. The company's earnings are expectedto fall by between 22% and 35% in 2014 earnings, as thegradual increase in prices would not be enough to offset theeffects of cancellations.

• Longer-term outlook remains positive, given thecompany's solid business model, robust balance sheet, andkey location of properties. The strategy to invest in thedevelopment of higher-end niches, like the White Lagoon andPrimorsko club, would increase profitability upon success. Thecompany would also benefit from improving real estatemarket as it has huge potential for development of residentialreal estate projects, with a focus on family vacation houses.

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