Disposals

Mondi Syktyvkar sold to Augment Investments

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Mondi entered into an agreement to sell its largest facility in Russia, Mondi Syktyvkar, to Augment InvestmentsMondi Syktyvkar, to Augment Investments for a consideration of 95 billion roubles (approximately 1.5 billion EUR), payable in cash upon completion.

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 divestment is subject to the approval of the Government Subcommittee for the Control of Foreign Investments of the Russian Federation and the usual antitrust approvals, as well as the approval of Mondi’s shareholders at the General Meeting. The date of the General Meeting will be confirmed after the approval is received from the Russian authorities.

The proposed disposal follows Mondi’s announcement on 4 May 2022 to divest its Russian assets.  Accordingly, Mondi launched a competitive auction process to find a suitable new owner for Syktyvkar.

The Syktyvkar assets to be transferred to Augment as part of the proposed transaction exclude a cash balance of 16 billion RUB (around 255 million EUR).  The cash balance is planned to be distributed by form of dividend to Mondi before completion.

The net proceeds from the disposal and the 16 billion RUB dividend will be distributed to Mondi’s shareholders as soon as reasonably practicable following receipt.

Syktyvkar is a wholly owned 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. For the year ended 31 December 2021, Syktyvkar reported sales of 821 million EUR, EBITDA of 334 million EUR and profit before tax of 271 million EUR.  For the six months ended 30 June 2022, Syktyvkar reported EBITDA of 225 million EUR and as of 30 June 2022, the gross assets of the business were 1,590 million EUR while its net asset value was 1,203 million EUR.

The Syktyvkar mill can produce 1.2 million tonnes of market pulp and paper, including 300,000 tonnes of kraftliner, 200,000 t of woodfree uncoated paper and 180,000 tonnes of newsprint.

Mondi operates three converting plants in Russia, which are much smaller in size, not affiliated with Syktyvkar and not part of the disposal. An update will be provided on the divestment of these plants in due course, Mondi announced.