The group said in a statement released today (18 September) that it has entered into an agreement to sell Mondi Syktyvkar, its last remaining facility in Russia, together with two affiliated entities to Sezar Invest, for a total cash consideration of RUB 80bn (approximately £667m at the current exchange rate), to be paid in a series of installments.

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

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

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

The total cash consideration of RUB 80bn will be paid to Mondi in RUB and in six monthly installments. The first four monthly payments will be for RUB 13.5bn each, with the first payment made by the end of September 2023.

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

The final RUB 26bn will be paid in two equal installments in each of the two months post completion. These payments will be secured by a letter of credit issued to Mondi prior to completion.

“It is intended that the net proceeds from the disposal will be distributed to Mondi shareholders in a timely manner once all installments of the consideration are received,” Mondi stated.

As the disposal constitutes a Class 2 transaction under the listing rules, it is not conditional on the approval of Mondi’s shareholders.

Syktyvkar is an integrated pulp, packaging paper, and uncoated fine paper mill located in Komi Republic. Employing around 4,500 people, it serves the domestic Russian market.

For the year ended 31 December 2022, Mondi Syktyvkar reported revenues of €1.085bn, EBITDA of €481m, and pre-tax profit of €453m.

Mondi had initially agreed a deal to sell Syktyvkar to Augment Investments for RUB 95bn in August 2022, after announcing three months earlier that it would divest its Russian assets due to Russia’s invasion of Ukraine. But that deal was terminated due to a lack of progress in gaining the necessary approvals to complete the transaction.

In a separate deal, Mondi completed the sale of its three Russian packaging converting operations to the Gotek Group for a total consideration of RUB 1.6bn this summer.

Mondi’s share price was up by 4.41% at the time of writing at lunchtime today (18 September), at 1,396p (52-week high: 1,604p, low: 1,173.59p).