HMS Hydraulic Machines & System Grp PCL : S&P revises HMS Group outlook to Stable from Negative on successful debt refinancing

31.01.2013

Moscow, Russia - HMS Group (LSE: HMSG), 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, today announces that Standard & Poor's Ratings Services revised an outlook for HMS corporate credit rating from «Negative» to «Stable». Long-term corporate credit rating was reaffirmed at "B+" level.

According to S&P, the rating action resulted from improvement of HMS Group's liquidity position following by successful refinancing of the bank lines drawn for two acquisitions completed in 2012, thereby lengthening the company's debt maturity profile.

In its press-release, the rating agency stated: "With the refinancing of bank debt and the expected cash generation according to our forecasts we no longer see a one-in-three chance of a downgrade". Standard and Poor's views potential for further liquidity improvement stating that "further strengthening of liquidity might arise in the coming months, as we understand HMS is considering tapping the bonds market for the second time to lengthen its maturity profile".

Standard and Poor's commented: "The stable outlook reflects our expectation that HMS will maintain credit metrics comfortably in line with the current rating, and that liquidity will not deteriorate in the foreseeable future. We would view the maintaining of a ratio of adjusted debt to EBITDA comfortably below 3.0x as commensurate with the current 'B+' rating. We expect HMS to achieve this through positive FOCF generation in coming years."

S&P also underlined, that it might raise the rating if HMS improved its credit metrics to reach an adjusted debt-to-EBITDA ratio below 2x on a sustainable basis and improved its liquidity.

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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. The Group reported revenues of Rub 23.6 billion, adjusted EBITDA of Rub 4.0 billion and profit for the period of Rub 1.5 billion for the 9 months ended September 30, 2012. The HMS Group's global depositary receipts ("GDRs") are listed under the symbol "HMSG" on the London Stock Exchange.

For further information, please contact:

Sergey Klinkov Head of IR Tel: [phone], ext. 1302 [e-mail]

Nozima Karimova Head of Press Service Tel: [phone] [e-mail]

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