British paper and packaging firm Mondi has agreed to sell its largest plant in Russia to a unit of Sezar Group, a Moscow-based real estate development firm, for RUB 80 billion (€770 million) in cash.
The announcement comes about three months after the company scrapped a RUB 95 billion (€920 billion) deal to sell Mondi Syktyvkar to an investment vehicle owned by Russian billionaire Viktor Kharitonin due to a 'lack of progress' in getting approvals.
Mondi said that the Russian Federation's Federal Anti-Monopoly Service and Government Sub-Commission for the Control of Foreign Investments have approved the deal with Sezar Invest.
It also confirmed that it has been informed that there are no further outstanding regulatory conditions in respect of the divestiture.
The Deal
Sezar will pay the total cash consideration of RUB 80 billion to Mondi in roubles in six monthly instalments.
It will pay RUB 13.5 billion (€130 million) per month in the first four months, with the first payment commencing by the end of September 2023.
After payment of the first four monthly instalments by December 2023, the ownership of Mondi Syktyvkar will transfer to Sezar Invest, thereby completing Mondi's exit from Russia.
The remaining amount of RUB 26 billion (€250 billion) will be paid in two equal instalments in each of the two months post completion. These payments will be secured by a letter of credit issued to Mondi prior to completion, the company noted.
Mondi Syktyvkar, a pulp, packaging paper and uncoated fine paper mill located in the capital of the Komi Republic in Russia employs about 4,500 people and reported revenues of roughly €1.09 billion ($1.16 billion) at the end of 2022.
Russia Exit
The British company joins a long list of Western companies to have withdrawn from Russia after sanctions against Moscow over the war in Ukraine.
British American Tobacco 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.
Other recent exits include brewer Heineken and automaker Volkswagen.
News by Reuters, additional reporting by ESM.
