Business News

Sappi Announces Completion of Refinancing Transactions

Monday 31. August 2009 - Sappi Limited (NYSE:SPP) today announced the completion of a series of refinancing transactions that Sappi undertook in order to improve its debt maturity profile and strengthen its balance sheet.

As part of the refinancing, Sappi entered into a new revolving credit facility in an amount of euro 209 million, which remains undrawn. In addition, the proceeds of euro 350 million and US$300 million senior secured notes (the “notes”), which were issued on 29 July 2009 by a special purpose vehicle in an offering exempt from the registration requirements of the U.S. Securities Act of 1933, as amended, were released and made available to the Sappi group.

Sappi used the proceeds from the offering of the notes and a portion of its available cash on hand to repay certain short-term indebtedness, including all amounts outstanding (euro 400 million) under its previous revolving credit facility and to repurchase all its outstanding euro 220 million vendor loan notes issued to M-real. The vendor loan notes have been repurchased at a price of 86.5% of their principal amount.

Sappi also refinanced the OeKB term loan (previously due 2010) in an amount of euro 400 million with a new 5-year amortising maturity profile.

Ralph Boettger, CEO of Sappi Limited, said: “The successful completion of our refinancing will take care of our liquidity and significant debt maturities for at least the next three years. Sappi has a strong cash position of approximately US$600 million and has approximately US$300 million of undrawn availability under our new revolving credit facility. However, as a result of interest rates available in current financial market conditions, we will have a substantial increase in finance costs. We are committed to reducing our net debt by approximately 25% to 30% over the next three years thus also reducing our finance costs.”