- Sells Russian assets for €775 million
- Cash proceeds to be returned to shareholders
- Return represents around 10% of Mondi’s market cap
Paper and packaging group Mondi (MNDI) topped the FTSE 100 leaderboard on Monday after agreeing to sell its Russian assets for 80 billion roubles (€775 million) in cash to a subsidiary of Sezar Invest Group.
The shares rose 4% to £13.9 on relief that a disposal has finally been agreed following prior delays to get a deal over the line and prospects of a cash return to shareholders.
The sale comes three months after the company scrapped a deal to sell Mondi Syktyvkar to an investment vehicle owned by Russian billionaire Viktor Kharitonin after it failed to get approvals from the authorities.
Mondi confirmed that the Russian Federation’s Federal Anti-Monopoly Service and Government Sub-Commission for the Control of Foreign Investments has approved the terms of the deal and there are no further outstanding regulatory conditions.
Mondi Syktyvkar is a wholly owned integrated pulp, packaging paper and uncoated fine paper mill employing 4,500 people which generated revenue of €1.01 billion and pre-tax profit of €453 million in 2022.
RETURN OF CASH TO SHAREHOLDERS
The cash consideration will be paid in six monthly installments with ownership expected to be transferred by the end the 2023. The company said it intends to distribute net proceeds to shareholders in a ‘timely’ manner once all installments have been received.
Investors cheer Mondi’s €775 million Russian sale and cash return
At the current share price, the cash return represents roughly 10% of Mondi’s market capitalisation.
Based on 2023 consensus analyst dividend forecasts of €0.64 per share the shares offer a dividend yield of around 4%.
FIRMS SELL RUSSIAN ASSETS
Mondi is the latest in a growing list of companies selling Russian assets in line with international sanctions following Russia’s invasion of Ukraine.
German automaker Volkswagen (VOW:XETRA) completed the sale of its Russian Kuga production facility in May 2023 and Dutch brewer Heineken (HEIA:EURONEXT) exited Russia by selling its operations for a symbolic one euro on 25 August.
Last year, fellow brewer Anheuser-Busch Inbev (BUD:NYSE) said it would sell its Russian joint-venture, booking a $1.1 billion impairment charge in the process.
US fast-food chain McDonald’s (MCD:NYSE) sold its Russian business after operating in the country for more than 30 years, booking an impairment charge of $1.28 billion.
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