RUSSIA (News release) -- Mondi plc announces that it has entered into an agreement to sell its last remaining facility in Russia, Joint Stock Company Mondi Syktyvkar, together with two affiliated entities to Sezar Invest LLC for a total cash consideration of RUB 80 billion (Euro 775 million) to be paid in a series of instalments.

Russian Federation's Federal Anti-Monopoly Service and Government Sub-Commission for the Control of Foreign Investments have approved the deal, said Mondi in a statement. Mondi also confirms that it has been informed that there are no further outstanding regulatory conditions in respect of the assets.

The total cash consideration of RUB 80 billion will be paid to Mondi in RUB and 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 sale 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 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 prior to completion.

Sezar Invest is a subsidiary of Moscow based real estate development company Sezar Group. According to registration data, Cesar-Invest LLC was registered in 2012. Its owners are Isai Zakharyaev (70%) and Ruslan Semenov (30%). The company employs one person. According to RBC Company, in 2022, the revenue of Cesar-Invest LLC was zero, and the loss amounted to RUB 37 million.

Mondi's first attempt to sell the Syktyvkar plant to an investment vehicle owned by Russian billionaire Viktor Kharitonin at the beginning of this year did not take place, since the deal was not approved by the Russian government. The refusal of approval could then be explained by the too high, in the opinion of the Russian authorities, price of the transaction. It was planned to sell the assets in Syktyvkar to Augment Investments Limited for RUB 95 billion.

Mondi Syktyvkar is a wholly owned integrated pulp, packaging paper and uncoated fine paper mill located in Syktyvkar (Komi Republic). The business employs approximately 4,500 people and is a leading provider of uncoated fine paper and containerboard to the domestic Russian market. For the year ended 31 December 2022, Mondi Syktyvkar reported revenues of Euro 1,085 million, EBITDA of Euro 481 million and profit before tax of Euro 453 million. As at 30 June 2023, the gross assets of the business were Euro 1,107 million and its net assets were Euro 856 million.

In early summer, Mondi completed the sale of three of its packaging businesses in Russia to Gotek for a total of RUB 1.6 billion ($17.6 million).