Mondi has confirmed its withdrawal from an agreement to sell the Syktyvkar pulp and paper mill and its two affiliated entities in Russia to Augment Investments.
The latest decision, according to the packaging company, can be attributed to the "lack of progress" from Augment’s side in achieving the required approval for closing the sale and purchase deal.
This further signifies that the sale and purchase agreement for the disposal of Mondi’s Russian operations to Augment has now been officially “terminated” and will not be complete.
However, Mondi said that the board will continue to consider other alternatives to divest the Syktyvkar facility.
Mondi initially announced this sale and purchase deal with Augment, which is an investment vehicle that is majority owned by Russian billionaire Viktor Kharitonin, in August last year.
The transaction was valued at approximately Rbs95bn ($1.1bn).
The proposed disposal was pending certain customary antitrust approvals and associated conditional approvals from the Russian government's sub-commission regarding the control of foreign investments.
Mondi said that the latest decision to terminate the deal to sell Syktyvkar is not related to the proposed divestment of its three Russian packaging converting operations to Gotek Group.
The packaging business said that the deal with Gotek Group, which was announced in December last year, remains active.
Located in the Komi Republic of Russia, Mondi Syktyvkar is an integrated pulp and paper/uncoated fine paper mill.
It provides uncoated fine paper and containerboard for various Russian industries. At the time of its initial signing, the facility employed approximately 4,500 people.
In March 2022, the UK-based paper and packaging company said that it was "assessing options" for its business activities in Russia and Ukraine, amid the increasing tension between the two nations.
Among the impacted facilities and businesses was Mondi’s Syktyvkar facility, which the company said was facing a number of "operational constraints".
