(Adds background on Western companies exiting Russia)
June 5 (Reuters) – Mondi Plc on Monday said it
terminated a 95 billion rouble ($1.17 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 U.S. 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
1.6 billion roubles 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.
($1 = 81.3975 roubles)
(Reporting by Eva Mathews in Bengaluru; Editing by Nivedita
Bhattacharjee and Sharon Singleton)
