SAPPI LTD (SAP) 6-K

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(2) Adjustments to the equity balance consist of the following: EUR’m US$’m - Elimination of the Acquired Business historical equity (626) (989) - Newly issued equity (a) 50 79 - Estimated additional equity in terms of the rights offering (b) 432 682 (144) (228) (a) (b) As described in the introduction, a portion of the consideration to purchase the Acquired Business will be funded through the issuance of shares valued at EUR50 million (US$79 million). The number of shares issued will vary based on the purchase agreement. The purchase agreement states that the price of each share issued for the portion paid in shares will be determined by reference to the volume weighted average share price of Sappi on the JSE during a period of 30 trading days prior to the announcement of the signing of the Master Agreement based on the average EUR / ZAR daily closing exchange rate for the same period and such price per share is adjusted for issuances of shares by Sappi at a discount to market value and other specified actions taken by Sappi in respect of its capital prior to the Completion Date. In accordance with International Financial Reporting Standards, in determining the cost of the Acquired Business, the cost of the Settlement Shares issued by Sappi will be measured at their fair value at the date of exchange, which may differ from the market price on such date due to, among other things, the Lock- Up Deed. To the extent that the price of the Settlement Shares as determined in accordance with the Master Agreement, differs from the fair value of the Settlement Shares on the date of the exchange, the cost of acquisition will vary. Any such difference could have a material impact on the cost of the Acquired Business. In the preparation of this pro forma financial information, Sappi have assumed that the fair value of the Settlement Shares equates to the market price, and that the date of exchange is 30 June 2008. The rights offering is for up to EUR450 million (US$711 million), and the estimated cost are expected to be EUR18 million (US$28million). This represents the net proceeds for the issuance of these shares. The number of shares will vary based on the offer price. 131
(3) This pro forma adjustment reflects the changes in the interest bearing borrowings. A reconciliation is as follows: EUR’m US$’m Interest bearing vendor loan note 250 395 Variation in respect of third party debt and working capital (38) (60) 212 335 Less: Intercompany debt per note 1 above (87) (137) Pro forma adjustment 125 198 A portion of the Transaction Consideration will be funded by the issue of a vendor note payable to M-real amounting to EUR250 million (US$395 million). The amount of this note will vary according to the variation from EUR50 million in respect of third party debt and EUR235 million in respect of the target working capital. At 30 June 2008 these variations amounted to EUR38 million (US$60 million). The loan has a 48 month term, repayable in tranches of EUR10 million, before expiry date and ranks pari passu with existing long term debt. Notes to the unaudited pro-forma balance sheet as at June 2008 (1) The Acquired Business carve-out graphic paper business balance sheet presentation format differs in certain respects from that of Sappi. The table below conforms the Acquired Business carve-out graphic paper business information as at June 2008, appearing elsewhere in this document, into Sappi's reporting format. 132
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SAPPI LTD (SAP) 6-K Current report
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INCORPORATION BY REFERENCE Sappi Li
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CERTAIN FORWARD-LOOKING STATEMENTS
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South African legal advisor to Sapp
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TABLE OF CONTENTS Page CORPORATE IN
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ACTION REQUIRED BY SAPPI SHAREHOLDE
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IMPORTANT DATES/TIMES SALIENT DATES
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“CSDP” “CWF” “Deloitte So
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“Sappi Papier Holding” “Sappi
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CURRENCY TRANSLATION This Circular
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The tables below highlight certain
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Reconciliation from profit for the
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3. PRINCIPAL TERMS AND CONDITIONS O
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• dispose of any of the Settlemen
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There is no accrued taxation, which
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(d) all of the know-how, brands, or
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The map below sets out the location
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Name Age Position Experience Martti
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5. FINANCIAL INFORMATION ON THE ACQ
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The registered address of Metsälii
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Pro forma financial effects for the
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G. Financial information for Sappi
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13.3. Major Shareholders prior to t
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Dr D.C Cronje was appointed in Janu
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Executive Directors RJ Boëttger (3
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14.2.2. Changes in executive direct
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2007 2006 Direct Interests Indirect
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Other than described above, there a
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21. DIRECTORS’ RESPONSIBILITY STA
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25. EXCHANGE CONTROL AUTHORITY Subj
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• Audited Annual Financial Statem
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HISTORIC FINANCIAL INFORMATION RELA
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COMBINED STATEMENTS OF CASH FLOWS F
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Note 1• Background and basis of p
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The translation of foreign currency
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Goodwill that arose prior to 1 Janu
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Revenue recognition Revenue compris
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Application of new and amended IFRS
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Liquidity risk is defined as the ri
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Other operating expenses include al
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Note 7•Personnel data The Company
Page 84 and 85: Note 9•Financial income and expen
Page 86 and 87: The Company has offset deferred tax
Page 88 and 89: Note 12•Property, plant and equip
Page 90 and 91: Property, plant and equipment inclu
Page 92 and 93: Note 16•Cash and cash equivalents
Page 94 and 95: The Company expects to contribute E
Page 96 and 97: Note 20•Maturity of repayment and
Page 98 and 99: Maturity of repayment and interest
Page 100 and 101: Note 22•Other non-current liabili
Page 102 and 103: 2. Interim Condensed Combined Finan
Page 104 and 105: INTERIM CONDENSED COMBINED CASH FLO
Page 106 and 107: NOTES TO THE INTERIM CONDENSED COMB
Page 108 and 109: A reconciliation of income tax expe
Page 110 and 111: Sales of goods to related parties d
Page 112 and 113: 3. Interim condensed combined finan
Page 114 and 115: INTERIM CONDENSED COMBINED CASH FLO
Page 116 and 117: NOTES TO THE INTERIM CONDENSED COMB
Page 118 and 119: Depreciation of buildings and machi
Page 120 and 121: As of 31 December 2007 and 2006, cu
Page 122 and 123: ANNEXURE 2 INDEPENDENT REPORTING AC
Page 124 and 125: Opinion In our opinion, the combine
Page 126 and 127: Yours sincerely PRICEWATERHOUSECOOP
Page 128 and 129: The pro forma adjustments reflect t
Page 130 and 131: • anticipated synergies and effic
Page 132 and 133: (A) (B) Financial information for t
Page 136 and 137: ASSETS EUR’000 US$’000 Acquired
Page 138 and 139: UNAUDITED PRO FORMA INCOME STATEMEN
Page 140 and 141: Pro forma notes (1) Reflects the el
Page 142 and 143: * The number of shares in issue at
Page 144 and 145: Notes to the unaudited pro forma co
Page 150 and 151: (2) (EUR54,970) has been reallocate
Page 152 and 153: We do not accept any responsibility
Page 154 and 155: ANNEXURE 5 MATERIAL LOANS RELATING
Page 156 and 157: (4) The financial covenant relates
Page 158 and 159: The fair value of non-current borro
Page 160 and 161: ADDITIONAL MATERIAL LOANS OF THE GR
Page 162 and 163: Directorships in the last five year
Page 164 and 165: David Charles Brink Age 69 Business
Page 166 and 167: Directorships in last five years Cu
Page 168 and 169: Directorships in last five years Fo
Page 170 and 171: Directorships in last five years Cu
Page 172 and 173: Experience Jan joined Sappi in 1992
Page 174 and 175: Experience Berry Wiersum joined Sap
Page 176 and 177: ANNEXURE 7 DETAILS ON THE SAPPI SHA
Page 178 and 179: SPECIAL RESOLUTION NUMBER 1 Increas
Page 180 and 181: Explanatory Note to Ordinary Resolu
Page 182 and 183: This Page Printed On Pink Paper Sap
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FORM OF DIRECTION FOR HOLDERS OF DE
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(Incorporated in the Republic of So
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TABLE OF CONTENTS Page REVISED LIST
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2.2 Background Sappi Limited was fo
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Where shareholders are required to
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6. INFORMATION RELATING TO THE DIRE
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6.4 Additional information pertaini
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No commissions are payable or have
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15. MATERIAL VENDORS There have not
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ANNEXURE A TRADING HISTORY OF SAPPI
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ANNEXURE B PRINCIPAL IMMOVABLE PROP
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ANNEXURE C APPOINTMENT, QUALIFICATI
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If any question arises at any meeti
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As at the termination of each annua
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At every annual general meeting of
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Human Resources committee The respo
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Risk management The Sappi Board rec
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Interest in contracts The Sappi Gro
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ANNEXURE E CAPITAL COMMITMENTS AND
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Westbrook Cogeneration Agreement: I
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SIGNATURE Pursuant to the requireme
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