MOSCOW (MRC) -- Multinational packaging and paper company Mondi has agreed to sell its packaging converting operations in Russia to conversion manufacturer Gotek, said Packaging-gateway.
Gotek will buy three of Mondi‘s packaging converting operations in Russia for Rb1.6bn (USD24.2m) in cash. The deal includes a corrugated packaging facility and two consumer flexibles plants, which supplies a range of packaging solutions to customers on the Russian market.
Mondi expects a loss of between EUR70m (USD74.5m) and EUR80m (USD85.1m) at current exchange rates due to the sale. The deal is expected to close in the first half of next year.
Its completion is subject to approval from Russia’s Government SubCommission for the Control of Foreign Investments and other customary antitrust approvals. Mondi said that the sale ‘is being undertaken in an evolving political and regulatory environment’ and that there can be ‘no certainty’ as to when it will be completed.
The agreement comes after Mondi decided to sell its assets in Russia as the ongoing conflict in Ukraine continues to impact their operations. The company said its sale of the packaging converting operations is not affiliated with the proposed sale of Mondi Syktyvkar, which is still pending Russian government approval.
Based in Moscow, Gotek has around 2,200 employees across its business. Mondi has become the latest packaging company to sell its operations in Russia amid the Ukraine conflict.
In September this year, Huhtamaki divested its Russian business to Espetina, a holding company owned by Alexander Govor and Iury Kushnerov.
Later that month, US-based aluminium packaging provider Ball Corporation sold its beverage packaging business in Russia to ARNEST Group.
Earlier this year, Finnish pulp and paper manufacturer Stora Enso divested its corrugated packaging plants in the country.
Mondi has around 100 production sites across more than 30 countries, employing roughly 26,000 people worldwide. The company registered total revenues of EUR7bn last year.