HMS Group majority shareholder buys Russian business of Cyprus holding co, no offer to minority shareholders

MOSCOW. June 29 (Interfax) - Cyprus-based HMS Hydraulic Machines & Systems Group PLC (HMS Group ) has sold 100% of shares in its Russian subsidiary JSC HMS Group to its principal shareholder JSC HMS Holding in a deal worth 2.706 billion rubles, HMS Group said in a statement.

The buyer is supposed to pay this amount over a period of two years. The sale was carried out based on JSC HMS Group's market value as determined by independent appraiser, auditing firm FBK, statement said.

"The company's board of directors took into account the ongoing geopolitical events in the world, extensive and harsh sanctions of the European Union and United States and a number of other countries against Russia, as well as the retaliatory measures of the Russian authorities. Russia is the key market for HMS Group and these restrictive measures are having a significant negative impact on the activities of the company and its subsidiaries in Russia and could have a significant negative impact on the company's ability to expand and maintain its business," the statement said.

HMS Group data show that HMS Holding owned 71.5% of the group as of December 31, 2021. The company's beneficiaries include Vladimir Lukyanenko and German Tsoi, with effective stakes in HMS Group of 27.4% and 19.8%, respectively, as well as senior executives and affiliated persons with 24.3%; the free float was 27.4%.

Global Depositary Receipts on HMS Group shares are listed on the London Stock Exchange and Moscow Exchange . Due to regulatory, sanction, technical and other restrictions, HMS Group and HMS Holding are currently unable to buy back all GDRs on the company's shares from their owners through a public offer, the statement said.

"At the moment the company does not plan to independently delist the GDRs before settlements are made on the purchase-sale contract," the statement said.