Mondi to finally offload its last asset in Russia to Sezar Group

RUSSIA – British paper and packaging company Mondi has agreed to sell its largest plant in Russia to a unit of Moscow-based real estate developer Sezar Group for US$825.7 million.

The total cash consideration will be paid to Mondi in ruble and six monthly installments. The first payment will be made by the end of September.

Once the first four monthly installments have been paid to Mondi, which is expected to be by the end of December, the disposal will be complete and ownership of Mondi Syktyvkar will transfer to Sezar Invest and, accordingly, Mondi will have completed its exit from Russia.

The net proceeds from the disposal will be distributed to Mondi shareholders promptly once all installments are received.

Mondi had initially planned to sell Syktyvkar to potential buyer Augment Investments Limited for around £940 million (US$1.17bn) amid efforts to divest its Russian assets, but that deal fell through earlier in the year.

The deal follows the December sale of three Russian packaging converting operations to Gotek Group for around £20 million (US$24.84m), reflecting an expected loss for Mondi in the range of around £60 million (US$74.53m) to £70 million (US$86.95m).

Companies have come under pressure to stop doing business in Russia after it launched a full-scale invasion in Ukraine in 2022 under President Vladimir Putin.

Hundreds of large firms have suspended their business in Russia while the war continues, with many others withdrawing completely.

Some companies, like consumer brands giant Unilever, have been criticized for remaining in the country.

The company previously said it had chosen not to leave Russia because it did not want its business to land in the hands of the Russian state, but more recently said it is re-examining its Russian operations.

British American Tobacco (BAT) this month said it would sell its Russian and Belarusian businesses to a consortium led by its Russian management team, ending an 18-month-long process.

The maker of Camel and Lucky Strike cigarettes committed to exiting Russia, the world’s fourth-largest cigarette market, in March 2022.

BAT, which controlled just under 25% of the Russian tobacco market, said it had now formally agreed to sell the business and expects the transaction to be completed within the next month.

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