12th Aug 2022 12:25
(Alliance News) - Mondi PLC announced on Friday it had entered into an agreement to sell Syktyvkar mill, its most significant facility in Russia, for around EUR1.5 billion.
Shares in Mondi gained 7.0% to ZAR325.94 in Johannesburg on Friday afternoon, and it rose by 7.4% at 1,643.50 pence in London.
The Weybridge, England-based paper and packaging firm first revealed plans to exit Russia early in May following Moscow's invasion on Ukraine late in February.
Mondi said on Friday it launched a "competitive auction process" to find a suitable new owner for Syktyvkar before opting for Augment Investments Ltd.
The disposal is conditional on the approval of the Russian government. The deal is also subject to Mondi's shareholder approval at a general meeting.
Mondi also owns three converting plants in Russia, which are not affiliated with Syktyvkar and are not part of the disposal.
The group said early this month it had classified all its Russia operations as discontinued.
The Syktyvkar assets to be transferred to Augment exclude a cash balance of around EUR255 million, which is planned to be distributed as dividend to Mondi before completion of the transaction.
Syktyvkar mill employs about 4,500 people and it provides uncoated fine paper and containerboard to the domestic Russian market.
For the year ended December 30, Syktyvkar reported revenue of EUR821 million; and earnings before interest, taxes, depreciation and amortisation of EUR334 million.
By Artwell Dlamini; [email protected]
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