In a recent announcement, multinational packaging and paper group Mondi has decided to sell off its Syktyvkar mill, its biggest Russian operation, to Cyprus-based Augment Investments Limited owned by Russian billionaire Viktor Kharitonin for RUB 95 billion (€1.52 billion).
Company sources have said that the deal is conditional on approval by the Russian government and Mondi’s shareholders who will receive a dividend from the proceeds. On the news, Mondi’s London-listed shares jumped more than 7%, as it said that the proceeds from the Syktyvkar sale will be distributed among shareholders.
Located in the Komi Republic, Mondi Syktyvkar is a fully integrated pulp and paper mill which generated revenue to the tune of €821 million ($845 million) ending December 31, 2021. The largest domestic paper producer, the annual output of the mill exceeds 1.2 million tons of containerboard; dry market pulp; and office, offset, and newsprint paper.
Besides the Syktyvkar plant, Mondi has flexible packaging production sites at Aramil and Pereslavl, besides a corrugated products making plant at Lebedyan. The company also said that though its three smaller plants in Russia, not affiliated to Syktyvkar, are not part of the current deal with Augment Investments, it has plans to divest those as well after exploring all its options for its interests in Russia following the Ukraine war.
The company expects the disposal to complete by the year end but stated that it was not certain about the timeframe due to the operationally and structurally complex process being undertaken in a rapidly changing political and regulatory environment.
Mondi’s Russian operations accounted for around 12% of the €6.66 billion turnover of the group’s sales by production location.
While putting a halt to several CapEx projects in Russia, Mondi reiterated its stance on the Ukraine conflict expressing deep concern about the war and its humanitarian impact, calling for an urgent need for a peaceful resolution. The company also indicated possible disruptions to pulp and paper production in Russia.
