Mondi shareholders to score billions from Russian exit

Product packaging giant Mondi is set to receive around R15 billion (RUB 80 billion) after selling its last remaining and most significant facility in Russia, Mondi Syktyvkar. The company plans to distribute the net proceeds of this disposal to its shareholders.

Mondi announced today that it has agreed to sell joint stock company Mondi Syktyvkar and two affiliated entities to Sezar Invest LLC for a total cash consideration of RUB 80 billion.

The company confirmed that the Russian Federation’s Federal Anti-Monopoly Service and the Government Sub-Commission for the Control of Foreign Investments have approved the disposal on the terms agreed between Mondi and Sezar Invest. 

Mondi also confirmed that it has been informed that there are no further outstanding regulatory conditions in respect of the disposal.

The total cash consideration of RUB 80 billion will be paid to Mondi in RUB in six monthly instalments. 

The first four monthly payments will be for RUB 13.5 billion each, with the first payment made by the end of September 2023. 

Once the first four monthly instalments have been paid to Mondi, expected to be by the end of December 2023, the disposal will be complete, and ownership of Mondi Syktyvkar will transfer to Sezar Invest. Accordingly, Mondi will have completed its exit from Russia.

The final RUB 26 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 before completion.

Mondi said the net proceeds from the disposal will be distributed to Mondi shareholders once all instalments of the consideration are received.

Sezar Invest is a subsidiary of Moscow-based real estate development company Sezar Group.

Exit from Russia

At the start of 2022, Europe-based Mondi lost a third of its value due to the then-imminent Russia-Ukraine war. The manufacturer’s share price has yet to recover to levels seen before the Russian invasion.

The Russian market accounted for a fifth of the company’s profits and had solid growth prospects in the country.

However, on 15 December 2022, Mondi announced an agreement to sell its three Russian packaging converting operations to the Gotek Group for RUB 1.6 billion.

On 3 July, the manufacturer confirmed that Gotek Group received all requisite approvals, and the sale has now been completed. Mondi received net proceeds of €30.4 million (around R615 million) from this disposal.

The net proceeds from this disposal will also be distributed among shareholders.