SAPPI LTD (SAP) 6-K

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3. PRINCIPAL TERMS AND CONDITIONS OF THE TRANSACTION 3.1. Transaction Consideration and Funding The proposed Transaction Consideration is based on a cash and debt free Enterprise Value of the Acquired Business of €750 million (USD1.1 billion). The Transaction Consideration will be adjusted by the deduction of net debt and an adjustment for the difference between the target working capital and the actual working capital at closing. The Transaction Consideration will be settled as follows: • €400 million of cash paid out of the proceeds of the Rights Offering; • €50 million of newly issued Sappi Shares, being the Settlement Shares; and • the balance by the Vendor Loan Note of a maximum of €250 million. 3.1.1 Cash The Company will pay €400 million of the Transaction Consideration on the Completion Date out of the proceeds of the Rights Offering. The Transaction is conditional upon the Rights Offering having closed and settled in accordance with its terms. Details on the Rights Offering will be contained in a rights offer circular that will be released when the terms and conditions of the Rights Offering are finalised. 3.1.2 Settlement Shares The Settlement Shares will be listed on the JSE. The price at which each Settlement Share will be issued is Euro 7.16 (R82.39) per share, which was determined based on the volume weighted average price of Sappi Shares on the JSE over 30 trading days prior to the announcement of signing of the Master Agreement and the average EUR / ZAR daily exchange rate for the same period. At this price, the total number of Settlement Shares will be 6,982,105. This number of shares will be adjusted if the subscription price for the Rights Offering is below Sappi’s share price on the day before announcement of the terms of the Rights Offering. In such circumstances, the adjustment to the number of Settlement Shares will be based on the number of shares issued in the rights offering and the net proceeds of the Rights Offering. An adjustment to the number of Settlement Shares will also be made if Sappi were to take any other action with the effect of diluting the value of its shares, or otherwise disadvantaging M-real in respect of the Settlement Shares, prior to the date it is required to deliver the Settlement Shares. Such dilutive actions include announcement and completion of the payment of special dividends (but not ordinary dividends), capital distributions or capital reorganisations. Any such adjustment is to be determined by an international investment bank appointed by Sappi. 23
Sappi and M-real have entered into a Lock-up Deed under which M-real undertakes, subject to exceptions, not to dispose of the Settlement Shares for a period of 9 months from the Completion Date. Under the exceptions, M-real may: • accept a general offer made to all holders of Sappi Shares made in accordance with the South African Securities Regulation Code on Takeovers and Mergers on terms which treat all such holders alike (whether by way of takeover, scheme of arrangement or otherwise); • execute and deliver an irrevocable commitment or undertaking to accept such a general offer as recommended by the Board; • transfer or dispose of any Settlement Shares pursuant to a compromise or arrangement between Sappi and its creditors or any class of them which is agreed to by the creditors or members and sanctioned by the court under the Companies Act; • sell or otherwise dispose of any Settlement Shares pursuant to any offer by Sappi to purchase its own shares which is made on identical terms to all holders of Sappi Shares; • place any of the Settlement Shares with a third party (subject to Sappi's prior written consent which may not to be unreasonably withheld or delayed) provided that prior to the making of any disposal pursuant to this exception the transferee shall have agreed to be bound by the restrictions of the Lock-up Deed as if it were the transferor, by executing and delivering to Sappi a deed of adherence; • dispose of any of the Settlement Shares in accordance with any order made by a court of competent jurisdiction or as required by law, regulation or a competent authority to which M-real is subject; • subject to Sappi's prior written consent (which may not be unreasonably withheld or delayed), dispose of any of the Settlement Shares to the extent the sale proceeds (net of costs) are required by M-real to avoid M-real or a company in its group triggering a default of a financial covenant to which it is subject; 24
Page 1 and 2: SAPPI LTD (SAP) 6-K Current report
Page 3 and 4: INCORPORATION BY REFERENCE Sappi Li
Page 6 and 7: CERTAIN FORWARD-LOOKING STATEMENTS
Page 8 and 9: South African legal advisor to Sapp
Page 10 and 11: TABLE OF CONTENTS Page CORPORATE IN
Page 12 and 13: ACTION REQUIRED BY SAPPI SHAREHOLDE
Page 14 and 15: IMPORTANT DATES/TIMES SALIENT DATES
Page 16 and 17: “CSDP” “CWF” “Deloitte So
Page 18 and 19: “Sappi Papier Holding” “Sappi
Page 20 and 21: CURRENCY TRANSLATION This Circular
Page 22 and 23: The tables below highlight certain
Page 24 and 25: Reconciliation from profit for the
Page 28 and 29: • dispose of any of the Settlemen
Page 30 and 31: There is no accrued taxation, which
Page 32 and 33: (d) all of the know-how, brands, or
Page 34 and 35: The map below sets out the location
Page 36 and 37: Name Age Position Experience Martti
Page 38 and 39: 5. FINANCIAL INFORMATION ON THE ACQ
Page 40 and 41: The registered address of Metsälii
Page 42 and 43: Pro forma financial effects for the
Page 44 and 45: G. Financial information for Sappi
Page 46 and 47: 13.3. Major Shareholders prior to t
Page 48 and 49: Dr D.C Cronje was appointed in Janu
Page 50 and 51: Executive Directors RJ Boëttger (3
Page 52 and 53: 14.2.2. Changes in executive direct
Page 54 and 55: 2007 2006 Direct Interests Indirect
Page 56 and 57: Other than described above, there a
Page 58 and 59: 21. DIRECTORS’ RESPONSIBILITY STA
Page 60 and 61: 25. EXCHANGE CONTROL AUTHORITY Subj
Page 62 and 63: • Audited Annual Financial Statem
Page 64 and 65: HISTORIC FINANCIAL INFORMATION RELA
Page 66 and 67: COMBINED STATEMENTS OF CASH FLOWS F
Page 68 and 69: Note 1• Background and basis of p
Page 70 and 71: The translation of foreign currency
Page 72 and 73: Goodwill that arose prior to 1 Janu
Page 74 and 75: Revenue recognition Revenue compris
Page 76 and 77:
Application of new and amended IFRS
Page 78 and 79:
Liquidity risk is defined as the ri
Page 80 and 81:
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
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The Company has offset deferred tax
Page 88 and 89:
Note 12•Property, plant and equip
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Property, plant and equipment inclu
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Note 16•Cash and cash equivalents
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The Company expects to contribute E
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Note 20•Maturity of repayment and
Page 98 and 99:
Maturity of repayment and interest
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Note 22•Other non-current liabili
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2. Interim Condensed Combined Finan
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INTERIM CONDENSED COMBINED CASH FLO
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NOTES TO THE INTERIM CONDENSED COMB
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A reconciliation of income tax expe
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Sales of goods to related parties d
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3. Interim condensed combined finan
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INTERIM CONDENSED COMBINED CASH FLO
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NOTES TO THE INTERIM CONDENSED COMB
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Depreciation of buildings and machi
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As of 31 December 2007 and 2006, cu
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ANNEXURE 2 INDEPENDENT REPORTING AC
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Opinion In our opinion, the combine
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Yours sincerely PRICEWATERHOUSECOOP
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The pro forma adjustments reflect t
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• anticipated synergies and effic
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(A) (B) Financial information for t
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(2) Adjustments to the equity balan
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ASSETS EUR’000 US$’000 Acquired
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UNAUDITED PRO FORMA INCOME STATEMEN
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Pro forma notes (1) Reflects the el
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* The number of shares in issue at
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Notes to the unaudited pro forma co
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Page 148 and 149:
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(2) (EUR54,970) has been reallocate
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We do not accept any responsibility
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ANNEXURE 5 MATERIAL LOANS RELATING
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(4) The financial covenant relates
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The fair value of non-current borro
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ADDITIONAL MATERIAL LOANS OF THE GR
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Directorships in the last five year
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David Charles Brink Age 69 Business
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Directorships in last five years Cu
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Directorships in last five years Fo
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Directorships in last five years Cu
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Experience Jan joined Sappi in 1992
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Experience Berry Wiersum joined Sap
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ANNEXURE 7 DETAILS ON THE SAPPI SHA
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SPECIAL RESOLUTION NUMBER 1 Increas
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Explanatory Note to Ordinary Resolu
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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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