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JSE-listed packaging and paper company Mondi has withdrawn from its agreement to sell its most significant asset in Russia, paper mill Syktyvkar, to Augment Investments after the company failed to secure approvals from Russian regulatory bodies.
Mondi notified investors of its latest move in a Sens release on Monday.
Mondi first announced the deal with Augment – an investment vehicle majority owned by Russian billionaire Viktor Kharitonin – in August 2022. Syktyvkar’s sale, together with the two affiliated entities, was at the time estimated to be worth €1.5 billion.
The transfer of the integrated pulp, packaging paper and uncoated fine paper mill located in Komi Republic, was subject to approval by the Russian Federation’s Government Sub-Commission on Monitoring Foreign Investment, as well as customary antitrust approvals. But Augment seemed slow to secure the necessary green light, suppressing Mondi’s appetite to go ahead with the deal.
“As per the terms of the sale and purchase agreement, the disposal to Augment will therefore be terminated and will not complete,” Mondi said in a statement.
“The board remains committed to divest Syktyvkar and will continue to assess all alternative divestment options.”
Read: More multinational companies look to distance themselves from Russia
Mondi’s interest in exiting the country came after Russia invaded Ukraine in February 2022. Hundreds of other multi-national companies including Apple, BP, British American Tobacco (BAT), Shell and McDonald’s also announced plans to exit the country at the time.
Mondi’s share price closed 3.22% weaker after market close on Monday following its update to investors, with the stock trading at a six-month low of R302.91.
Mondi’s share price
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