UK-based multinational packaging and paper group Mondi has inked a deal to sell all of its remaining operations in Russia due to the ongoing invasion of Ukraine. The loss on the disposal is expected to be in the range of €70-80 million at current exchange rate.
Prior to the war, the Russian business was substantial, accounting for about 12% of Mondi’s £5.73 billion turnover by location.
Mondi recently announced that it had agreed to sell its three remaining packaging converting operations to Moscow-based Gotek Group for RUB 1.6 billion, which includes a corrugated solutions plant and two consumer flexible plants, producing a range of packaging solutions for the domestic Russian market. Gotek Group, specializing in corrugated and flexible packaging, is one of Russia’s largest packaging groups operating from multiple sites.
Earlier, the Syktyvkar pulp and paper mill, the biggest operation, was sold to Cyprus-based Augment Investments Limited owned by Russian billionaire Viktor Kharitonin for RUB 95 billion, though the deal hasn’t come through.
Just as the Syktyvkar sale, these disposals to Gotek are conditional on approval by the Russian Government Commission on Monitoring Foreign Investment, and are expected to be complete in the first half of 2023. Mondi added that as the sale is being undertaken in an evolving political and regulatory environment, there can be no guarantees as when the deal will be completed.
Mondi’s Russian plants, now classified as discontinued operations held for sale, generated a Q3 profit after tax to the tune of €104 million.
However production in Mondi’s paper bag making plant in Ukraine’s western city of Lviv has suspended production after the Russian invasion.
