British papermaker to sell last factory in Russia

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UK paper and packaging giant Mondi has announced a deal to sell its last remaining plant in Russia, finalizing the company’s withdrawal from the country.

According to a statement on Sunday, Mondi has reached a deal for the sale of its Syktyvkar pulp and paper mill to a unit of Moscow-based real estate developer Sezar Group for 80 billion rubles ($825.7 million). The Syktyvkar factory produces uncoated fine paper and containerboard for the domestic Russian market and employs about 4,500 people. It reported revenue of roughly $1.16 billion at the end of 2022.

Mondi today announces that it has entered into an agreement to sell its last remaining facility in Russia, Joint Stock Company Mondi Syktyvkar, together with two affiliated entities, to Sezar Invest LLC for a total cash consideration of RUB 80 billion to be paid in a series of instalments,” the announcement read.

The companies have already acquired approval from Russia’s anti-monopoly agency and the government commission in charge of foreign investments, Mondi said. The sale is expected to be completed by December.

Earlier this year, Mondi sold its three Russia-based packaging conversion plants to Gotek Group for $16.5 million.

Mondi first announced its intention to sell the Syktyvkar plant in August last year. The company planned to sell the plant to Augment, an investment firm owned by Russian billionaire Viktor Kharitonin, for roughly $980 million. However, this summer Mondi scrapped the deal citing “lack of progress” in obtaining approval from the Russian authorities.

Mondi is a global packaging and paper supplier which employs 22,000 people in over 30 countries. It reported revenues of $9.5 billion for 2022.

The UK firm is the latest Western company to quit the Russian market amid sanctions imposed on Moscow since the start of its military operation in Ukraine. In order to stem the flow of divestments, Moscow last year introduced rules that Western companies must follow to exit the Russian market. All firms that wish to leave should obtain official approval for the sale of their local assets from a designated government commission, which can also make “corrections” to the prices of deals.

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