Novomet

completed

Domiciled in Cyprus as a closed joint-stock company and headquartered in Perm, Novomet (“Novomet” or the “Company”) was established in 1991 by a group of six Russian engineers. The Company is the second largest Electric Submersible Pump (ESP) producer in the Russian Federation (24% market share) and fifth largest producer globally (12% market share). ESP’s are designed to pump oil from wells that are up to 4 km deep under harsh extraction conditions. Novomet‘s annual sales in 2012 reached US$290 million and EBITDA US$84 million. The project consists of providing senior debt facility of up to US$55 million to help finance a US$145 million project comprising: (i) US$80 million in capital expenditures, 30 million in working capital requirements for its expansion, including setting-up greenfield service centers in 6 countries (Turkey, Romania, Iraq, Mexico, Argentina and Indonesia); and (ii) US$30 million to re-finance part of its short-medium term debt (1-3 years of maturity) on a longer-term basis services (together, the “Project”). Complimentary financing will come from the Company’s strong cash generation (US$90 million).The expansion contemplated by Novomet will allow it to expand on its success to-date in expanding its market presence in select markets globally. Novomet has a leading position in the market, strong shareholder base and experienced management team with experience in international expansion. Novomet recorded strong operating performance with EBITDA margin of 28.8% (substantially above industry average of 16%), even though 80% of its sales are generated locally, where competition is substantial.