On August 15, Mondi PLC announced that it had transferred two affiliated entities (collectively referred to as “Syktyvkar”) to augment Investments Limited for a consideration of 95 billion rubles (about 1.5 billion euros at the current exchange rate), which will be paid in cash upon completion.

The sale shall be subject to the approval of the foreign investment control sub committee of the government of the Russian Federation and the anti-monopoly approval. The sale also needs to be approved by Mondi shareholders at the general meeting.

As part of the proposed sale, Syktyvkar’s assets to be transferred to August do not include a cash balance of 16 billion rubles (approximately 255 million euros at the current exchange rate). The cash balance is planned to be distributed to Mondi in the form of dividends before completion.

The remittance of this dividend requires the approval of the Ministry of finance of the Russian Federation. The net proceeds of the sale and the dividend of 16 billion rubles will be distributed to Mondi’s shareholders as soon as reasonably practicable after receipt.

The proposed sale was made after Mondi decided to divest its Russian assets after it announced on May 4, 2022 that it had all the options to evaluate the group’s interests in Russia. Therefore, Mondi launched a competitive auction process to find a suitable new owner for Syktyvkar.

Syktyvkar is a wholly-owned pulp, packaging paper and cultural paper factory located in Syktyvkar. With about 4500 employees, the company is a leading supplier of uncoated cultural paper and box board paper in the domestic market of Russia.

Mondi Russia also operates three processing plants, which are much smaller in scale and are not affiliated with Syktyvkar nor part of the sale. Mondi will release the latest information on the divestment of these plants in due course.

The sale is expected to be completed in the second half of 2022. However, the divestiture process of these important assets is complex in operation and structure, and is carried out in a constantly changing political and regulatory environment. Therefore, it is impossible to determine when the sale will be completed.