As you are aware, Sappi’s business strategy is built on four pillars, namely fixing the underperforming businesses; maintaining the good performance of the other businesses; investing in areas of high growth; as well as careful balance sheet, debt and cash-flow management.
Overall I am pleased with the progress we are making across all four our strategic pillars, and I will be providing a more detailed update for the business once we announced our
financial results for the third quarter.
While Sappi’s long-term debt profile is healthy, we recently identified an opportunity to replace some expensive debt coming due in 2014. To this end, yesterday we undertook a bond placement, initially for US$300-million 5-year bonds. However, market demand was so positive towards Sappi that we agreed to increase our bond placement to US$400-million 5-year bonds and US$300-million 7-year bonds. The reduction in interest rate charges compared to the 2014 bonds will mean a significant saving of approximately US$27-million per year on our cash finance costs.
This transaction represents a further step in the execution of our strategy, not only reducing our cost of debt, but also extending and improving our debt maturity profile.
I would like to thank everyone who worked so hard to make this re-financing a great success.
I would also like to encourage each and every one of you to do whatever you can to help us implement our strategy and generate shareholder wealth and growth for the company.
Chief Executive Officer