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HMS Group signs a Special Investment Contract with the Russian Federation aimed at support of the oil & gas and power industry pumps localization project 11.10.2016

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 (LSE: HMSG) is the leading pump and compressor manufacturer, as well as provider of flow control solutions and related services to the oil and gas, nuclear and thermal power generation and water utilities 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, providing pumps, oil & gas equipment and compressors. HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange.

For more information, please, contact:

Inna Kelekhsaeva
Deputy Head of Capital markets
Tel: +7 (495) 730-66-01 x 1318
kelekhsaeva@hms.ru
Anna Obotnina
Head of Marketing communications
Tel: +7 (495) 730-66-01 x (600) 3304
obotnina@hms.ru

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