The net asset value of Mondi’s Russian businesses was €687m as of 31 December 2021, and the company had stopped all further capital expenditure projects in the country
Mondi Group has decided to divest its Russian assets and close all operations. (Credit: Mondi)
UK-based paper and packaging company Mondi Group has decided to divest its Russian assets and close all operations due to Russia’s invasion of Ukraine.
The net asset value of Mondi’s Russian businesses was €687m as of 31 December 2021, and the company had stopped all further capital expenditure projects in the country.
According to Mondi, the divestment process for these assets is both operationally and structurally challenging, and it is taking place in a changing political and regulatory climate.
The firm did not mention the date upon which the transaction will be completed or the structure of any potential deal.
Mondi said: “Having assessed all options for the group’s interests in Russia and recognising its corporate values and stakeholder responsibilities, the board has decided to divest the group’s Russian assets.”
Due to persistent cost challenges, the packaging company said it is in talks with its customers about raising prices across the business.
The firm also highlighted the update on trading and strong delivery for the three months to 31 March 2022.
Mondi reported an underlying EBITDA of €574m for the first quarter of 2022, up 63% compared to €353m in the same period the last year.
In light of the present situation, the group considers it is fair to declare that, excluding Russian businesses, underlying EBITDA for the first quarter was over €460m, up around 70% year on year compared to the prior-year period.
Last month, Mondi Paper Bags, part of Mondi Group acquired the paper bag converting lines from National Bag and Egypt Sack, two subsidiaries of Lafarge Cement Egypt, a major cement producer in the country.
Mondi is a provider of packaging and paper via sustainable packaging and paper solutions. The firm manages forests and produces pulp, paper, and films to design and manufacture effective industrial and consumer packaging solutions.