JUNE 2006 - ELANA AGRICULTURAL LAND OPPORTUNITY FUND RAISES EUR 25.5 MLN IN SHARE CAPITAL INCREASE

At the end of June 2006, ELANA Agricultural Land Opportunity Fund (EALOF) raised EUR 25.5 million in its third share capital increase, bringing the total funds raised by EALOF up to EUR 37.4 million. All of the offered 39,863,686 ordinary shares were subscribed at an issue price of BGN 1.25/EUR 0.64. The par value of EALOF shares is equal to BGN 1.00/EUR 0.51.

For further information on the capital increase, please refer to the information memorandum:

3RD CAPITAL INCREASE INFORMATION MEMORANDUM

EALOF’s management projects that the raised funds will be invested by February 2007.

The Fund’s next and final capital increase is planned for the beginning of 2007 (January ÷ February).

PRESENTATION OF ELANA AGRICULTURAL LAND OPPORTUNITY FUND


GENERAL INFORMATION FOR THE FUND

INVESTMENT OBJECTIVES

Pursuant to the bylaws of “ELANA Agricultural Land Opportunity Fund” REIT the main objective of the investment activity of the Fund is to direct the purchasing, leasing, and consolidation of agricultural land towards increasing the equity and market value of the Company in order to provide shareholders with as high dividends as possible. A more detailed description of the Fund’s objectives follows:

1. Maximize the value of the shareholder’s investment through properly managing, advantageously acquiring, and suitably consolidating the Company’s assets;
2. Diversify the agricultural land portfolio by investing in various types of agricultural lands located in different regions throughout Bulgaria, in order to decrease the non-systematic risk of the investment portfolio;
3. Provide a steadily increasing operating income through leasing the owned lands, which will be distributed among shareholders in the form of dividends;
4. Provide high liquidity to the shareholders of the Fund by registering the “ELANA Agricultural Land Opportunity Fund” REIT for trade on the Bulgarian Stock Exchange – Sofia.

The Fund is operating using a predominantly passive (buy-and-hold) investment strategy. The assets – plots of agricultural land – will generally be held for the entire term of the Fund. On occasion, however, it is possible that parcels will be sold for the purpose of purchasing additional agricultural land or exchanged for the purpose of consolidation.

INVESTMENT RESTRICTIONS

The Fund acquires only agricultural land and does not securitize other types of real estate.

According to the provisions laid out by law, the Fund does not acquire ownership or other limited real estate rights, located outside of the territory of the Republic of Bulgaria, nor acquires real estate rights, subject to legal dispute.

The Fund’s investment policy permits temporarily investing free funds in any manner allowed by law, which at present include:

1. securities, issued or guaranteed by the Government of Bulgaria and bank deposits in first class Bulgarian banks;
2. mortgage bonds, issued according to the terms and procedures of the Mortgage Bonds Act – up to 10% of the Fund’s assets.

SELECTION CRITERIA FOR AGRICULTURAL LAND

The Board of Directors of the Fund is guided by the following plot selection criteria:

1. Acquisition price
   The acquisition price is in the range of lower than the prevailing market price on similarly categorized lands in the same region. As mandated by Bulgarian legislation, agricultural land is classified into ten categories listed in order of descending productivity with the first category being the most productive and limited. The Fund’s strategy includes acquiring land predominantly in categories I – V, where the optimal correlation between price and quality exists.
2. Future consolidation possibility
   Due to the extremely fragmented ownership of agricultural land in Bulgaria, the price per square meter grows exponentially with the size of the lot. The Fund is seeking out and acquiring lots with the potential for future consolidation with surrounding lots whenever possible.
3. Geographic location
   The Fund’s managers have not set any preliminary restrictions with regards to the location of the land to be acquired. The Fund is aiming to acquire lots in regions with high quality soil and where there is a tradition of farming.

MAIN PARTIES IN THE PROCESS

1. Depository bank
   In accordance with the Special Investment Companies Act, the Fund has selected Bulbank JSCo (Unicredito Group) to act as the Depository Bank in charge of the escrow account. The bank's role is to guarantee the protection and interest of shareholders of the Fund by ensuring the investments of the Fund are used for their intended purpose. The Depository Bank is obliged to perform all payments on behalf of the Fund, by observing the provisions contained in the Fund's Act of Incorporation and prospectus. The bank also ensures the proper usage of the Fund's income in accordance with legislation, by observing the regulations related to managing the Fund's expenses. Bulbank JSCo is be guided by the Fund's best interest while implementing its contractual obligations.
   
2. Servicing company
   In order to optimize the Fund's activity ELANA Property Management JSCo has been contracted as the servicing company. Its obligations include operational maintenance, accounting, consulting and analyzing the management of the Fund's investments. During the implementation of its contractual obligations the servicing company is using highly specialized personnel in valuation, purchasing, and management of agricultural land. The Fund has also appointed about 30 subcontractors (regional representatives), who are acting on behalf of and at the expense of the Fund while purchasing land and receiving annual rents due. The activity of all contracted companies and/or regional representatives is in accordance with the regulations of the Fund (and its adjoining procedures) which by law provide optimal protection and maximum transparency to shareholders of the Fund.

EALOF bulletin No2 (as of 31.03.2006)

EALOF bulletin No1 (as of 28.02.2006)

We will be glad to receive your comments and suggestions regarding the Information Bulletin's content. They will be help us very much in our efforts to provide EALOF's shareholders with the most useful and updated information.

For any further questions please contact us at: 359 2 81 000 10 or via e-mail: elarg@elana.net

We inform our present and potential investors that the price of the financial instruments may decrease. Profit is not guaranteed and there is a risk that investors may not be able to recuperate the full amount of the funds invested. These investments are not guaranteed by any entity including the Guarantee Fund, created by the Government of Bulgaria.