13th Nov 2014 13:39
HMS Hydraulic Machines & Systems Group plc
(the “Company”, and together with its subsidiaries, the “HMS Group”)
S&P REVISES HMS GROUP CORPORATE RATING
Moscow, Russia, HMS Group (LSE: HMSG), the leading pump and compressor manufacturer, supplier of turnkey process engineering packages and provider of flow control solutions and related services in Russia and the CIS, announces that Standard & Poor’s Rating Services lowered the long-term corporate rating of the company from “B” to “B-“ and placed it on CreditWatch with negative implications. Also, S&P downgraded Rub 5.1bn notes issued by HMS’ subsidiary CJSC Hydromashservice to “CCC+” and placed them on CreditWatch negative.
According to S&P, the downgrade reflects increasing refinancing risks arising from the Rub 2.1bn unsecured bond maturity in February 2015. The agency assesses HMS’ liquidity position as “weak”. It applies a formal approach: absence of signed credit agreements 3 months before debt redemption. Meanwhile, currently, the company negotiates credit issues with a number of banks and has an adequate liquidity cushion, including Rub 1bn in cash and cash equivalents and Rub 1.2bn in undrawn available credit lines, for its bonds refinancing.
The rating action also reflects HMS’ “significant working capital swings”. In 2015, the company expects an improvement in its working capital as a result of completion of some large-scale projects.
The agency states that “HMS currently faces tough operating conditions, weak economic prospects in Russia, and geopolitical tensions, which may lead to more restricted access to bank and debt capital markets”. Though HMS is not immune to challenges in Russia’s oil and gas sector and geopolitical risks, its strong fundamentals and effective business model ensure a sustainable profitability in the current weaker macroeconomic environment, and the management expects positive free operating cash flow generation in the nearest 12 months.
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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. HMS Group’s global depositary receipts (“GDRs”) are listed under the symbol “HMSG” on the London Stock Exchange.
For further information, please contact:
| Inna KelekhsaevaDeputy Head of Capital MarketsTel: +7 (495) 730-66-01 x 1318[email protected] | Nozima KarimovaHead of Press ServiceTel: +7 (495) 730-66-10[email protected] |
Disclaimer
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.
Copyright Business Wire 2014
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