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On August 15, Mondi plc announced that it had transferred two affiliated entities (collectively "Syktyvkar") to Augment Investments Limited for a consideration of 95 billion rubles (approximately 1.5 billion euros at current exchange rates), payable in cash upon completion .
The sale is subject to the approval of the Subcommittee on Foreign Investment Control of the Government of the Russian Federation and anti-monopoly approval. The sale is also subject to approval by Mondi shareholders at a general meeting.
As part of the proposed sale, the Syktyvkar assets to be transferred to Augment do not include a cash balance of 16 billion rubles (about 255 million euros at current exchange rates). The cash balance is planned to be distributed to Mondi in the form of dividends until completion.
The remittance of the dividend requires the approval of the Ministry of Finance of the Russian Federation. Net proceeds from the sale and dividends of 16 billion rubles will be distributed to Mondi's shareholders as soon as reasonably practicable after receipt.
The proposed sale follows Mondi's decision to divest its Russian assets after announcing on May 4, 2022, to evaluate all options for the group's interests in Russia. So Mondi launched a competitive auction process to find a suitable new owner for Syktyvkar.
Syktyvkar is a wholly owned pulp, packaging and cultural paper mill located in Syktyvkar. The company has around 4,500 employees and is a leading supplier of uncoated fine paper and containerboard to the Russian domestic market.
Mondi Russia also operates three processing plants, which are much smaller and not affiliated with Syktyvkar nor part of the sale. Mondi will release an update on these plant divestments in due course.
The sale is expected to close in the second half of 2022. However, the divestiture process of these important assets is operationally and structurally complex and takes place in a changing political and regulatory environment. Therefore, it is impossible to say when the sale will be completed.
