Mondi Group agreed to sell its Russian Syktyvkar plant to Augment Investments Limited owned by Russian billionaire Viktor Kharitonin for 95 billion rubles ($1.5 billion).
The assets in Russia will be transferred to Augment as part of the proposed disposal excluding a cash balance. Mondi’s London-listed shares jumped 11% on the news, as the company said it will distribute a cash balance of 16 billion rubles ($250 million) to shareholders.
In May, Mondi announced its decision to divest the group’s Russian assets. “Mondi remains profoundly concerned about the war in Ukraine and is shocked by the humanitarian impact. We express our deepest sympathy to all those affected by the ongoing hostilities, reiterating our call for an urgent cessation and a peaceful resolution”, said the company in the first quarter report.
Hundreds of Western companies have suspended operations in Russia or left the country entirely following Russia’s invasion of Ukraine. The war in Ukraine dealt an unprecedented blow to the global timber markets. Russia, one of the world’s largest suppliers of wood products, having invaded Ukraine, found itself under sanctions that cut it off from its main markets, the EU, the U.S., and Japan.
Syktyvkar is an integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar (Komi Republic). The business employs approximately 4,500 people and it is a leading provider of uncoated fine paper and containerboard to the domestic Russian market. In 2021, Syktyvkar reported revenues of Euro 821 million, EBITDA of Euro 334 million and profit before tax of Euro 271 million. According to the Lesnaya Industriya Journal, the Syktyvkar plant ranks fourth in the Russian Top-50 forest based companies.
Augment is an investment vehicle majority owned by Viktor Kharitonin, comprising assets in the pharmaceutical and other sectors across Russia, Europe and the United Kingdom.
The deal is subject to the approval of the Russian government and Mondi’s shareholders.