British paper and packaging firm Mondi has agreed to sell its largest plant in Russia to an investment vehicle owned by Russian billionaire Viktor Kharitonin for RUB 95 billion (€1.5 billion).
Mondi's London-listed shares jumped more than 7% on the news on Friday, as it said it would distribute the proceeds from the sale of Mondi Syktyvkar to shareholders.
Mondi also has three much smaller plants in Russia that are not affiliated to Syktyvkar and not part of this deal with Augment Investments, it said.
It plans to divest those as well after it explored all options for its interests in Russia following the Ukraine war.
Many Western companies have suspended Russian operations or left the country completely following Moscow's invasion of Ukraine, which has complicated doing business there.
The deal is conditional on approval by the Russian government and Mondi shareholders, who will receive a dividend from the proceeds, the company said.
It is expected to close in the second half of 2022, Mondi said.
Mondi's Syktyvkar, a pulp, packaging paper and uncoated fine paper mill located in the capital of the Komi Republic, employs about 4,500 people and generated revenues of more than €821 million ($845 million) last year.
The packaging giant reported a ‘strong’ performance across the business in the first half of its financial year, with EBITDA up by 65%, year on year, to €1.2 billion, including its discontinued Russian operations.