HMS Group signs Special Investment Contract with the Russian Federation
HMS Group Plc
Moscow, October 11, 2016
HMS Hydraulic Machines & Systems Group plc
(the “Company”, and together with its subsidiaries, the “HMS Group”)
HMS Group signs a Special Investment Contract with the Russian Federation aimed at support of the oil & gas and power industry pumps localization project
Moscow, Russia – October 11, 2016 - HMS Group (LSE: HMSG) announces today that it has signed a Special Investment Contract (SIC) with the Russian Federation (the Ministry of Industry and Trade and the Government of the Orel region) as part of the XV International Investment Forum “Sochi-2016”.
A special investment contract is a new instrument to support import substitution, in the form of an agreement between an investor and the Russian Federation.
The signed SIC provides HMS Group with a package of measures of state support for realization of the second stage of the company’s localization project to develop manufacture competences for high-capacity oil refining, oil transport and nuclear pumps in Livny, the Orel region. The key advantages of concluding the contract include admission of state customers to procure products manufactured based on a SIC without holding a tendering process, if the product supplier is included in the register of single suppliers.
Mr. Artem Molchanov, CEO of HMS Group, comments:
“Gazprom neft as an anchor customer offered to localize in Russia production of equipment according to API and supported the project of HMS Group. Realization of the company’s localization project will allow our clients to reduce the reliance on import and satisfy the main needs of oil & gas, thermal and nuclear power generation, water and wastewater industries for high-tech pumping equipment, thus enabling HMS Group to enter new markets and increase its share in the existing markets.”
Mr. Dmitry Medvedev, The Prime Minister of the Russian Federation, attended the signing ceremony.
In December 2015, the company signed a loan agreement with the Fund of Industrial Development (the Ministry of Industry and Trade of the Russian Federation). The Fund provided HMS Group with a 5-year special-purpose loan worth Rub 500 million at an interest rate of 5% to invest in The Localization Project. Total investments in the project amount to Rub 2.6 bn.
HMS Group is the leading pump and compressor manufacturer, as well as provider of integrated solutions and related services to the oil and gas, petrochemistry, nuclear and thermal power generation, water and wastewater sectors in Russia and the CIS. HMS Group’s products are mission-critical elements of projects across a diverse range of industries. It has participated in a number of large-scale infrastructure projects in Russia, including providing pumps and modular equipment to the Vankor oil field and pumping stations on recent trunk pipelines projects linking Russia’s core oil producing areas to export ports on the Pacific Ocean and Baltic Sea. HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange.
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The information contained herein has been prepared using information available to HMS Hydraulic Machines & Systems Group Plc (“HMS Group” or “HMS” or “Group” or “Company”) at the time of preparation of the press release. External or other factors may have impacted on the business of HMS Group and the content of this press release, since its preparation. In addition all relevant information about HMS Group may not be included in this press release. No representation or warranty, expressed or implied, is made as to the accuracy, completeness or reliability of the information.
Any forward looking information herein has been prepared on the basis of a number of assumptions which may prove to be incorrect. Forward looking statements, by the nature, involve risk and uncertainty and HMS Group cautions that actual results may differ materially from those expressed or implied in such statements. Reference should be made to the most recent Annual Report for a description of the major risk factors. This press release should not be relied upon as a recommendation or forecast by HMS Group, which does not undertake an obligation to release any revision to these statements.
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