Mondi Plc on Monday said it terminated a RUB 95 billion (€1.1 billion) deal to sell its largest plant in Russia to an investment vehicle owned by Russian billionaire Viktor Kharitonin due to a "lack of progress" in getting approvals.
London-listed shares in Mondi, a British paper and packaging firm, fell 2.4% in morning trade.
The company had agreed to sell Mondi Syktyvkar, a pulp, packaging paper and uncoated fine paper mill located in the capital of the Komi Republic in Russia, to Augment Investments in August last year.
While the deal with Augment Investments was off, Mondi said on Monday it "remained committed to divest the plant and will continue to assess all alternative divestment options."
Many companies suspended or halted operations in Russia last year as Western governments imposed sanctions following Moscow's invasion of Ukraine.
Some managed to negotiate swift exits, often selling at huge discounts or handing the keys to local management.
The pace of exits has now slowed substantially but the rules are even harder to navigate for those remaining.
The government in December demanded that companies leaving Russia sell their operations for at least half price and claimed 10% of the sale for the federal budget, termed an "exit tax" by the US Treasury.
Executives have also said gaining government commission approval is a lengthy and difficult process.
Danish wind turbine company Vestas left the country earlier this year, "putting a full stop to all remaining corporate activities, including terminating remaining employees and leaving stranded assets including cash idle".
Separately, Mondi had agreed to sell three of its Russian packaging converting operations to Moscow-based Gotek Group for RUB 1.6 billion (€18 million) in December.
That deal remains in progress, the firm said.
Augment and Kharitonin, who has not been sanctioned, could not be immediately reached for comment.