21.03.2011

Amendments to a JV Agreement between certain controlling shareholders

The HMS Group (LSE: HMSG), the leading pump manufacturer and provider of flow control solutions and related services in Russia and the CIS, today announces that it has been advised by its controlling shareholder, H.M.S. Technologies Limited (“HMST”), of certain amendments to the arrangements governed by a joint venture agreement dated 24 December 2010 between HMST and certain of its shareholders (the “Joint Venture Agreement”), as described in the Company’s prospectus dated 11 February 2011 (the "Prospectus") relating to the Company’s GDRs and their Admission to the Official List and to trading on the London Stock Exchange’s main market.

The amendments to the Joint Venture Agreement are intended to reflect the consensual basis upon which the shareholders in HMST (the "HMST Shareholders") manage and vote their shares in the Company, as referred to in the Prospectus, and include:

 

  • Amendment to the board composition of HMST, so that it reflects more closely the ownership interests of the HMST Shareholders in HMST.
  • Amendment to the rights of HMST Shareholders to appoint and remove directors of the Company (the “Company Directors”), so that any decision by HMST as to how to vote its shares in the Company on any appointment or removal of a Company Director must (a) prior to 1 March 2012, be approved by all but one of the directors of HMST and (b) after 1 March 2012, be approved by a simple majority of the directors of HMST. (Prior to the amendments, holders of Class A shares of HMST—principally, German Tsoy, Artem Molchanov and Kirill Molchanov—were entitled to appoint all but one of the Company Directors.)
  • Amendment to the rights of HMST Shareholders to appoint and remove members of the executive bodies, internal auditing bodies and directors of OJSC HMS Group and each of its subsidiaries, so that any such appointments or removals must be approved by a simple majority of the directors of HMST.
  • Amendment to the reserved matters listed in the Prospectus, so that (a) if a reserved matter is approved at a shareholders meeting of HMST, it requires the approval of HMST Shareholders holding 75% of the shares in HMST, and (b) if a reserved matter is approved at a board meeting of HMST, it requires the approval of all but one of the directors of HMST. 
  • Mr Tsoy will be permitted to transfer his Class A shares of HMST to Acura Global Limited, a BVI company wholly owned by him.
  • Artem Molchanov and Kirill Molchanov will be permitted to transfer their Class A shares of HMST to Orion Production Limited, a BVI company wholly owned by the Molchanovs.

Mr Tsoy is the Chairman of the Company’s Board of Directors, Artem Molchanov is a member of the Board and Chief Executive Officer and Kirill Molchanov is a member of the Board and First Deputy Chief Executive Officer of the HMS Group.

HMST and the HMST Shareholders have advised the Company that these transactions and amendments to the Joint Venture Agreement are intended to reflect more closely the consensual basis upon which the HMST Shareholders manage and vote their shares in the Company.


For further information, please contact:

HMS Group                                      

Tel+7 (495) 730-66-12                    Alexander Rybin, Extension – 1006

Cell: +7 916 708 12 21                   Nozima Karimova, Extension - 1517