Sveza might buy Kama Pulp and Paper from Kharitonin for 47 bln rubles - paper

MOSCOW. July 29 (Interfax) - Sveza Group, the largest producer of plywood in Russia and the world, might soon diversify its business with the acquisition of Kama LLC (Kama Pulp and Paper Mill), a major producer of coated paper and cardboard in Perm.

Augment Investments Limited, an international company (ILLC) with ties to billionaire Viktor Kharitonin's Pharmstandard , intends to sell Kama to Sveza for 47 billion rubles and the deal could be closed in early August, national daily Kommersant reported on Monday, citing sources. All 100% of Kama shares are now held as collateral by Sberbank under a contract signed in May 2023, the SPARK-Interfax system showed.

Augment Investments acquired 100% of Kama in February 2023 from Trust Bank, which in turn received the mill from Otkritie Bank. Kommersant reported at the time that the deal was worth 36 billion rubles, including 15 billion rubles for the assets and 21 billion rubles for the company's debt to Otkritie Bank on loans raised to develop the business.

Sveza, which was controlled by billionaire Alexei Mordashov's Severgroup until October 2022 but is now owned by management, told the paper that it has not made a purchase yet, but that it "historically pursues a policy of diversifying the product portfolio."

Sezar Invest, a division of developer Sezar Group that acquired the Syktyvkar LPK pulp and paper mill (formerly Mondi Syktyvkar) in 2023, was also interested in buying the Kama mill, Kommersant said. Kharitonin tried to buy Syktyvkar LPK before Sezar Invest, but he could not get regulatory approval for the deal.

Kama produces light weight coated (LWC) paper and folding boxboard (FBB), which is used, among other things, to make packaging for drugs. The mill has capacity to produce 85,000 tonnes of LWC paper and 220,000 tonnes of FBB per year using deciduous timber as raw material. Kama closed 2023 with a net loss of 0.29 billion rubles on revenue of 23.6 billion rubles, compared to a profit of 6 billion rubles on revenue of 25.5 billion rubles in 2022.

Sveza, which specializes in manufacturing plywood, particle board and laminated particle board, has seven mills in Tyumen, St. Petersburg, Kostroma, Vologda and Sverdlovsk regions and Perm Territory. The group also includes several other companies, such as logging division Sveza Resources, Sveza Bioproducts and AI technology developer Sveza Smartline. The controlling stake in Sveza was transferred from Severgroup to management as represented by For Invest LLC in October 2022, with Severgroup retaining 49% as of the beginning of 2023.