HMS Group: Sale of shares in JSC HMS Group and further business of the Company

HMS Hydraulic Machines & Systems Group plc
(the Company, and together with its subsidiaries, the HMS Group)

Moscow, Russia
28 June 2022

Sale of shares in JSC HMS Group and further business of the Company

HMS HYDRAULIC MACHINES & SYSTEMS GROUP PLC (LSE: HMSG, MOEX: HMSG) (the Company) announces that, on 28 June 2022, the Company entered into and completed a sale and purchase agreement for shares in its subsidiary JSC HMS Group (the SPA). This transaction was approved at the meeting of the Companys Board of Directors held on 27 June 2022 in accordance with the Company's Articles of Association and applicable laws.
The Companys Board of Directors noted the ongoing geopolitical events in the world, the wide-ranging and harsh sanctions imposed by the European Union, the United States and certain other states against Russia, and retaliation measures of the Russian authorities.
Russia is the key market for HMS Group, and these restrictive measures have a material adverse effect on the business of the Company and its subsidiaries in Russia and may have a material adverse effect on the possibility to expand and retain the business of the Company.
Having considered the above circumstances, the Companys Board of Directors resolved that it was in the Companys best interests to accept JSC HMS Holdings offer to enter into the SPA.
Among other matters, the SPA contemplates the following key terms:

1. Parties to the SPA

Buyer: JSC HMS Holding, the majority shareholder of the Company (the Buyer).
Seller: the Company.

2. Subject matter of the SPA

2,364,961,058 ordinary and 341,178,655 preferred shares in JSC HMS Group, collectively representing almost 100% of the issued share capital of JSC HMS Group.

3. JSC HMS Group share price and payment terms

The purchase price for all JSC HMS Group shares under the SPA is 2,706,139,713 Russian rubles (the Price). The parties agreed the Price based on the market value of the shares in JSC HMS Group determined by an independent appraiser FBK.
Within two years following the SPA execution date, the Buyer must pay the Price at the Companys bank account opened in Russian rubles. The Buyer is entitled, at its sole discretion, to pay the Price in full or in any instalments prior to expiry of the specified period.
If the Price cannot be paid for any reason, including any restrictive acts issued by official bodies or officials of any state, international or foreign organization, or interstate union, the Buyer is entitled to pay the Price in any other manner permissible under the applicable law.

4. Applicable law and dispute resolution

The SPA is governed by Russian law. All disputes arising out of or in connection with the SPA shall be resolved by the Commercial (Arbitrazh) Court of the city of Moscow.
Further business of the Company
As a result of the above transaction, the Company ceased to control HMS Group.
Currently, the only asset of the Company is the receivable under the SPA due from the Buyer.
Due to regulatory, sanctions, technical and other restrictions, the Company and the Buyer are currently unable to buy-back all global depositary receipts representing the Company's shares (GDRs) by way of a public offer.
The Company itself currently does not plan to de-list the GDRs until the payments under the SPA are settled.
The Company also does not plan to pay any dividends until the payments under the SPA are settled. Thereafter, the Company plans to make the final distribution to its shareholders.

For all questions related to this announcement please email: ir@hms.ru.
Press Release Information Disclaimer
This announcement does not constitute an offer to sell or the solicitation of an offer to buy securities of HMS Group. Information published in press releases was accurate at the time of publication but may be superseded by subsequent releases or other information.