South African paper and pulp producer Sappi has closed the offering of €450-million senior secured notes, due 2022, by its subsidiary Sappi Papier Holding (SPH).
The net proceeds from this offering, which held a coupon of 3.375% a year – together with cash on hand and drawings under Sappi’s recently amended and restated €465-million revolving credit facility maturing in 2020 – would be used to redeem all of SPH’s outstanding €250-million senior secured notes, due 2018, and $300-million senior secured notes, due 2019.
“A strong balance sheet is integral to Sappi’s long-term strategy of refocusing the group to take advantage of high-growth business opportunities,” Sappi CEO Steve Binnie noted.
He added that the group had reduced its debt by more than $340-million from a year ago. “We have also increased and renewed our revolving credit facility and, with this debt refinancing, reduced yearly interest charges by $25-million.
“We will continue to focus on reducing our debt, while we implement various projects across the group to help drive increased revenue generation,” Binnie said.
With the completion of these refinancing transactions, Sappi has now raised sufficient funds to pay the redemption price of, and accrued interest and any additional amounts payable on, SPH’s outstanding 2018 notes and 2019 notes.