Mondi PLC Disposal

 
TIDMMNDI 
 
Mondi plc 
 
(Incorporated in England and Wales) 
 
(Registered number: 6209386) 
 
LEI: 213800LOZA69QFDC9N34 
 
LSE share code: MNDI           ISIN: GB00B1CRLC47 
 
JSE share code: MNP 
 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART, IN, INTO OR 
FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE 
RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION. 
 
THE GROUP EXPECTS TO PUBLISH IN DUE COURSE A CIRCULAR IN CONNECTION WITH THE 
TRANSACTION, ANY VOTING DECISIONS BY SHAREHOLDERS IN CONNECTION WITH THE 
TRANSACTION SHOULD BE MADE ON THE BASIS OF THE INFORMATION CONTAINED IN THAT 
CIRCULAR. 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION. 
 
FOR IMMEDIATE RELEASE. 
 
12 August 2022 
 
Proposed disposal of Mondi Syktyvkar 
 
Mondi plc ("Mondi" or the "Group") today announces that it has entered into an 
agreement to sell its most significant facility in Russia, Joint Stock Company 
Mondi Syktyvkar, together with two affiliated entities (together "Syktyvkar" or 
the "Business") to Augment Investments Limited ("Augment") for a consideration 
of RUB 95 billion (around ?1.5 billion at current exchange rate)[1], payable in 
cash on completion (the "Disposal"). 
 
The Disposal is conditional on the approval of the Russian Federation's 
Government Sub-Commission for the Control of Foreign Investments and customary 
antitrust approvals. The Disposal is also subject to the approval of Mondi's 
shareholders at a General Meeting. 
 
The Syktyvkar assets to be transferred to Augment as part of the proposed 
Disposal exclude a cash balance of RUB 16 billion (around ?255 million at 
current exchange rate). The cash balance is planned to be distributed by form 
of dividend to Mondi before completion. Remittance of this dividend requires 
the approval of the Ministry of Finance of the Russian Federation. The net 
proceeds from the Disposal and the RUB 16 billion dividend will be distributed 
to Mondi's shareholders as soon as reasonably practicable following receipt. 
 
The proposed Disposal follows Mondi's announcement on 4 May 2022 that, having 
assessed all options for the Group's interests in Russia, it had decided to 
divest its Russian assets. Accordingly, Mondi launched a competitive auction 
process to find a suitable new owner for Syktyvkar. 
 
Syktyvkar is a wholly owned integrated pulp, packaging paper and uncoated fine 
paper mill located in Syktyvkar (Komi Republic). The Business employs 
approximately 4,500 people and it is a leading provider of uncoated fine paper 
and containerboard to the domestic Russian market. For the year ended 31 
December 2021, Syktyvkar reported revenues of ?821 million, EBITDA of ?334 
million and profit before tax of ?271 million. For the six months ended 30 June 
2022, Syktyvkar reported EBITDA of ?225 million and as of 30 June 2022, the 
gross assets of the Business were ?1,590 million while its net asset value was 
?1,203 million. Mondi operates three converting plants in Russia, which are 
much smaller in size, not affiliated with Syktyvkar and not part of the 
Disposal. An update will be provided on the divestment of these plants in due 
course. 
 
Augment is an investment vehicle majority owned by Viktor Kharitonin, 
comprising assets in the pharmaceutical and other sectors across Russia, Europe 
and the United Kingdom. 
 
The Disposal is expected to complete in the second half of 2022. However, the 
divestment process for these significant assets is operationally and 
structurally complex and is being undertaken in an evolving political and 
regulatory environment. Therefore, there can be no certainty as to when the 
proposed Disposal will be completed. 
 
Further information regarding conditions of the disposal 
 
As set out above, the Disposal is subject to the approval of the Russian 
Federation's Government Sub-Commission for the Control of Foreign Investments 
as well as customary antitrust approvals. 
 
The Disposal is a Class 1 transaction under the Listing Rules and it is 
therefore conditional upon the approval of Mondi's shareholders at a General 
Meeting. 
 
The date of the General Meeting will be confirmed in a Circular and notice of 
General Meeting to be published following receipt of approval from the Russian 
Federation's Government Sub-Commission for the Control of Foreign Investments. 
 
Enquiries 
 
Investors/analysts: 
 
Clara Valera 
                                    +44 193 282 6357 
 
Mondi Group Head of Strategy and Investor Relations 
 
Media: 
 
Kerry Cooper 
                                    +44 788 145 5806 
 
Mondi Group Communication Director 
 
Richard Mountain (FTI Consulting)                                        +44 
790 968 4466 
 
Rothschild & Co (Financial Adviser and Sponsor to Mondi): 
 
John 
Deans 
+44 207 280 5000 
 
Neil Thwaites 
 
Important Notice 
 
This announcement is for information purposes only and does not constitute a 
prospectus or prospectus equivalent document. Nothing in this announcement 
shall constitute an offer or invitation to underwrite, buy, subscribe, sell or 
issue of the solicitation of an offer to buy, sell, acquire, dispose or 
subscribe for shares of any other securities. Nothing in this announcement 
should be interpreted as a term or condition of the Disposal. 
 
A circular is expected to be published in due course in connection with the 
Disposal (the "Circular"). Copies of the Circular will, following publication, 
be available through the website of Mondi at www.mondigroup.com. Neither the 
content of Mondi's website nor any website accessible by hyperlinks on the 
Group's website is incorporated in, or forms part of, this announcement. 
 
Mondi urges its shareholders to read the Circular once published carefully as 
it contains important information in relation to the Disposal. Any vote in 
respect of resolutions to be proposed at the General Meeting to approve the 
Disposal and related matters should be made only on the basis of the 
information contained in the Circular. 
 
The information contained in this announcement is for background purposes only 
and does not purport to be full or complete. No reliance may be placed for any 
purpose on the information contained in this announcement or its accuracy or 
completeness. The information in this announcement is subject to change. 
 
N.M. Rothschild & Sons Limited ("Rothschild & Co") is authorised and regulated 
in the United Kingdom by the Financial Conduct Authority (the "FCA") and is 
acting exclusively for the Group and no one else in connection with the 
contents of this document and any other matters referred to in this document 
and will not regard any other person (whether or not a recipient of this 
document) as a client in relation to any other matters referred to in this 
document and will not be responsible to anyone other than the Group for 
providing the protections afforded to its clients, or for providing advice, in 
relation to the contents of this document or any other matter or arrangement 
referred to in this document. 
 
Rothschild & Co does not accept any responsibility whatsoever for the contents 
of this document, including its accuracy, completeness or verification, or for 
any other statement made or purported to be made by it, or on its behalf, in 
connection with the Group and/or any other transaction or arrangement referred 
to herein. Rothschild & Co accordingly disclaims, to the fullest extent 
permitted by applicable law, all and any duty, liability, or responsibility 
whatsoever whether arising in tort, contract or otherwise, which it might 
otherwise have in respect of this document or any such statement. No 
representation or warranty, express or implied, is made by Rothschild & Co or 
any of its affiliates as to the accuracy, completeness, verification or 
sufficiency of the information set out in this document, and nothing in this 
document will be relied upon as a promise or representation in this respect, 
whether or not to the past or future, provided that nothing in this paragraph 
shall seek to exclude or limit any responsibilities or liabilities which may 
arise under the FSMA or the regulatory regime established thereunder. 
 
Forward-Looking Statements 
 
This document includes forward-looking statements. All statements other than 
statements of historical facts included herein, including, without limitation, 
those regarding Mondi's financial position, business strategy, market growth 
and developments, expectations of growth and profitability and plans and 
objectives of management for future operations, are forward-looking statements. 
Forward-looking statements are sometimes identified by the use of 
forward-looking terminology such as "believe", "expects", "may", "will", 
"could", "should", "shall", "risk", "intends", "estimates", "aims", "plans", 
"predicts", "continues", "assumes", "positioned" or "anticipates" or the 
negative thereof, other variations thereon or comparable terminology. Such 
forward-looking statements involve known and unknown risks, uncertainties and 
other factors which may cause the actual results, performance or achievements 
of Mondi, or industry results, to be materially different from any future 
results, performance or achievements expressed or implied by such 
forward-looking statements. Such forward-looking statements and other 
statements contained in this document regarding matters that are not historical 
facts involve predictions and are based on numerous assumptions regarding 
Mondi's present and future business strategies and the environment in which 
Mondi will operate in the future. These forward looking statements speak only 
as of the date on which they are made. 
 
No assurance can be given that such future results will be achieved; various 
factors could cause actual future results, performance or events to differ 
materially from those described in these statements. Such factors include in 
particular but without any limitation: (1) operating factors, such as continued 
success of manufacturing activities and the achievement of efficiencies

therein, continued success of product development plans and targets, changes in 
the degree of protection created by Mondi's patents and other intellectual 
property rights and the availability of capital on acceptable terms; (2) 
industry conditions, such as strength of product demand, intensity of 
competition, prevailing and future global market prices for Mondi's products 
and raw materials and the pricing pressures thereto, financial condition of the 
customers, suppliers and the competitors of Mondi and potential introduction of 
competing products and technologies by competitors; and (3) general economic 
conditions, such as rates of economic growth in Mondi's principal geographical 
markets or fluctuations of exchange rates and interest rates. 
 
Mondi expressly disclaims a) any warranty or liability as to accuracy or 
completeness of the information provided herein; and b) any obligation or 
undertaking to review or confirm analysts' expectations or estimates or to 
update any forward-looking statements to reflect any change in Mondi's 
expectations or any events that occur or circumstances that arise after the 
date of making any forward-looking statements, unless required to do so by the 
Disclosure Guidance and Transparency Rules, the UK Market Abuse Regulation or 
applicable law or any regulatory body applicable to Mondi, including the JSE 
Limited, the FCA and the LSE. 
 
Any reference to future financial performance included in this announcement has 
not been reviewed or reported on by the Group's auditors. 
 
Editor's notes 
 
Mondi is a global leader in packaging and paper, contributing to a better world 
by making innovative solutions that are sustainable by design. Our business is 
integrated across the value chain - from managing forests and producing pulp, 
paper and films, to developing and manufacturing sustainable consumer and 
industrial packaging solutions using paper where possible, plastic when useful. 
Sustainability is at the centre of our strategy, with our ambitious commitments 
to 2030 focused on circular driven solutions, created by empowered people, 
taking action on climate. 
 
In 2021, Mondi had revenues of ?7.0 billion and underlying EBITDA of ?1.2 
billion from continuing operations, and employed 21,000 people worldwide. Mondi 
has a premium listing on the London Stock Exchange (MNDI), where the Group is a 
FTSE100 constituent, and also has a secondary listing on the JSE Limited (MNP). 
 
[1] Converted at FX rate of 61.7 RUB/EUR 
 
 
 
END

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August 12, 2022 06:46 ET (10:46 GMT)

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