Moscow, February 18, 2014
HMS Hydraulic Machines & Systems Group plc
(the “Company”, and together with its subsidiaries, the “HMS Group”)
HMS GROUP CLARIFIES THE IMPLICATIONS OF THE INTERIM COURT ORDER IN CYPRUS
Moscow, Russia. HMS Hydraulic Machines & Systems Group Plc (the “Company”) (LSE: HMSG), the leading pump and compressor manufacturer as well as provider of flow control solutions and related services in Russia and the CIS, would like to make the following statement.
As previously announced, on 12 February 2014 the Company was served in Cyprus with an interim order of the District Court of Nicosia (the “Order”). The Order was obtained on an ex parte basis by Konstantin Grigorishin, and certain other plaintiffs, against Vladimir Matveevich Lukyanenko, his son Vladimir Vladimirovich Lukyanenko, and twelve other defendants, including the Company, certain of its shareholders and directors, and BNY (Nominees) Limited. Amongst other things, on its face the Order freezes property of Vladimir Matveevich Lukyanenko and ten other defendants, including the Company, certain of its shareholders and directors, but excluding BNY (Nominees) Limited and two other defendants, for an amount up to EUR 400 million. The Company has received advice that one effect of the Order is to restrict distributions by the Company to its shareholders and holders of the GDRs, without the permission of the court or the consent of the plaintiffs. At the same time, the Order contains an exception for certain normal business activities of HMS Hydraulic Machines & Systems Group Plc (Cyprus) in the amount of up to EUR 100,000 undertaken at reasonable value. The Order does not affect the day-to-day operations of the Company’s subsidiaries.
Mr. Grigorishin’s allegations, provided in support of the Order, are the result of the ongoing corporate conflict between the co-owners of Ukraine’s Sumy Frunze NPO – Mr Grigorishin and his long-time business partner Igor Kuida, on the one hand, and Vladimir Vladimirovich Lukyanenko (who is also a non-executive member of the board of directors of the Company and one of its major shareholders), on the other hand. To read the Company’s understanding of the background to this dispute, please refer to the statement by Artem V. Molchanov, the CEO of the Company, made on February 15, 2014 (see
The Company states unequivocally, in its view and on the basis of the advice of its legal counsel, that there is no legal ground for the claims and allegations against the Company made by Mr. Grigorishin and the other plaintiffs. In particular, the Company and its management have no involvement in the conflict between Mr. Grigorishin and Mr. Vladimir Vladimirovich Lukyanenko, and any suggestion to the contrary is simply false. The Company’s management is acting in compliance with law in the best interests of the Company and its shareholders.
To protect its interests the Company has retained international and Cyprus counsel. The Company intends to contest the Order vigorously. The District Court of Nicosia has set the initial procedural session in this case for 21 February 2014, when directions will be issued regarding the course of the proceedings.
HMS Group 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, 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 presentation. External or other factors may have impacted on the business of HMS Group and the content of this presentation, since its preparation. In addition all relevant information about HMS Group may not be included in this presentation. 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 presentation 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.
This presentation does not constitute or form part of any advertisement of securities, any offer or invitation to sell or issue or any solicitation of any offer to purchase or subscribe for, any shares in HMS Group, nor shall it or any part of it nor the fact of its presentation or distribution form the basis of, or be relied on in connection with, any contract or investment decision.