RUSSIA – Paper and packaging company Mondi has agreed to sell its largest plant in Russia to an investment vehicle owned by Russian billionaire Viktor Kharitonin for 95 billion roubles (US$1.5 billion).
The company follows many Western companies to leave the country completely following Moscow’s invasion of Ukraine, which has complicated doing business there.
The buyer of the plant, Syktyvkar is a wholly owned integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar, the capital city of the Komi Republic, Russia
With about 4,500 employees, the business provides uncoated fine paper and containerboard to the domestic Russian market.
Syktyvkar reported profit before tax of €271 million (US$275.03 million), revenues of €821 million (US$833.20 million) and EBITDA of €334 million (US$338.96 million) for the year ended 31 December 2021. It reported an EBITDA of €225 million (US$228.34 million) for the six months ended 30 June 2022.
The company’s gross assets were €1.59 billion (US$1.61 billion), while its net asset value was €1.2 billion (US$1.22 billion) as of 30 June 2022.
The cash balance from the sale is planned to be distributed in form of a dividend to Mondi prior to the closing of the deal. The payment of the dividend requires the Russian Ministry of Finance’s approval.
The transaction, which is expected to conclude in the second half of 2022, is subject to the approval of the Russian Federation’s Government Sub-Commission for the Control of Foreign Investments and customary antitrust approvals.
It is also subject to the approval of Mondi’s shareholders at a General Meeting.
Mondi has three additional converting plants in Russia which are not affiliated with Syktyvkar and are not part of the transaction.
The packaging firm said that it will provide an update on the sale of these plants in due course. The announcement by the company has seen its London-listed shares jump more than 7%.
Mondi acquires Duino mill from Burgo for US$40M
Meanwhile, the company agreed to acquire the Duino mill from Italian paper manufacturer Burgo Group for a total of US$40.59 million.
The UK-based company said the acquisition is expected to close in the second half of 2022, subject to competition clearance and “other closing conditions” that were not specified.
Duino mill currently operates one paper machine that produces lightweight coated mechanical paper.
Following the acquisition, Mondi plans to convert this paper machine to produce around 420,000 tonnes of recycled containerboard per year through an investment of roughly US$202.97 million.
“The containerboard machine will strengthen backward integration in corrugated packaging and provide us with security of supply to better serve our customers,” said Mondi in a statement.
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