HMS Group signs special investment contract with the Russian Ministry of industry and trade and Oryol region Government

On September 30, 2016 under the Sochi International Investment Forum the Russian Ministry of industry and trade, represented by the Minister Denis Manturov, Oryol region Government, represented by the Chairman Vadim Potomskiy and HMS Livgidromash, represented by the CEO of HMS Group Artem Molchanov, have signed the special investment contract (SPIC) providing a number of Government support measures for the project «Establishment of the manufacture of pumps for oil processing (including Apollo pumps by API standard) and high capacity pumps for transport of oil and petroleum products». The ceremony of the special investment contract signing was attended by the Chairman of the Government of the Russian Federation Dmitry Medvedev.

The special investment contract signing is related to implementation of the second phase of the project of state-of-the-art pumping units production localization according to which new production facilities will be built and the up-to-date industrial complex will be established including mechanical processing and machine-assembly equipment for manufacture of key components and assembling of high performance industrial pumping units. The volume of investment during the SPIC term (6 years) will be 1 236 mln RUB, 500 mln RUB of which have been provided as a loan by the Industrial Development Fund (IDF). Total project investments will be 2 600 mln RUB.

Being one of the first oil companies to develop its own main process equipment import substitution program, Gazprom Neft is an anchor customer that suggested localization of API-compliant equipment and supported the HMS Group project.

HMS Group project implementation will curtail dependence on import and cover the demand of oil & gas, thermal and nuclear power companies as well as major water service companies for high-tech pumping equipment manufactured in Russia, provide new workplaces in the Oryol region, increase tax return and facilitate the economic growth of the region.

The HMS Group is one of the leading in Russia and the CIS manufacturer of pumps, compressors and skid-mounted oilfield equipment for oil & gas, nuclear and thermal energy, and water supply & sewage disposal sector, as well as provider of integrated solutions. The HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange.