SPFL.L Regulatory News (SPFL)

Sofia Property Fund Limited

(the "Company")

(AIM: SPFL)

The Directors announce that the Company has secured a loan for a total of GBP500,000 from the Pluto Partnership (the "Lender"). The loan will be available in two tranches of GBP250,000 subject to certain conditions.

The first tranche, which will be available immediately following the execution of a charge in favour of the Lender over the Company's property at Crystal Glade, is repayable on 28 June 2012 in a principal amount of GBP312,500 unless previously repaid at par.

The second tranche will be made available immediately following either (i) the Company entering into, or being the subject of, a pre-defined qualifying event or (ii) the Lender electing to proceed with a sale agreement under the forward sale agreement arrangements set out below. The second tranche is repayable on 28 June 2012 in a principal amount of GBP312,500 unless previously repaid at par.

As part of these arrangements, the Company has today entered into forward sales agreements with the Lender under which the Lender has the right (but not the obligation) to acquire title over the Company's properties at Crystal Glade and Dolna Banya (Lake) any time between 30 September 2011 and 28 June 2012. Should the Lender proceed with such transactions, the second tranche of the loan would become payable to the Company and the total loan would then be forgiven.

Following any such transaction, the Company has the right up to 28 June 2012 to repurchase the Company's properties at Crystal Glade and Dolna Banya (Lake) for a total of GBP625,000 and has the right of first refusal on sale thereafter. The value of the two sites at 30 December 2010 was Euro 1.78 million.

The Company has granted the Lender warrants over a total of 25 million new ordinary shares in the Company which are exercisable pro rata at 1p per share until 28 June 2013. The warrants are subject to an anti-dilution provision upon the issue of further ordinary shares in the Company.

Pluto Partnership, a private partnership formed under the laws of England and Wales. Lord Howard of Penrith, a former Chairman of the Company, is one of the partners.

The Company welcomes the opportunity afforded by the loan to identify and formalise a long term strategic solution to the benefit of all shareholders.