Mondi, the paper company, said on Thursday it will divest its three Russian packaging operations to the Gotek Group for a consideration of RUB 1.6 billion (R411 million).
The disposal of the asset follows Mondi’s announcement on May 4 that, having assessed all options for the group’s interests in Russia, it had decided to divest its Russian assets following Russia's invasion in Ukraine.
The withdrawal of Western companies from Russia in the wake of the war in Ukraine has led to companies having to write down assets.
“The loss on the disposal is expected to be in the range of €70m (R1.3 billion) to €80m at current exchange rate,” Mondi said.
The three packaging converting operations comprise a corrugated solutions plant and two consumer flexibles plants, producing a range of packaging solutions for the domestic Russian market.
The Gotek Group is a leading Russian packaging producer, headquartered in Moscow, and employs around 2200 employees across its business.
“The disposal is conditional on the approval of the Russian Federation’s government Sub- Commission for the Control of Foreign Investments and customary antitrust approvals and is expected to be complete in the first half of 2023. However, as the disposal is being undertaken in an evolving political and regulatory environment, there can be no certainty as to when the disposal will be completed,” it said.
“The disposal is not affiliated with the proposed disposal of Mondi Syktyvkar for which the approval of the Russian Federation’s government Sub-Commission for the Control of Foreign Investments and customary antitrust approvals remain outstanding,” it said.
By midday trade on Thursday, Mondi’s shares were down 1.34% at R308.97.
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