Our performance in 2009 - Sappi

2009 annual report
US$ million 2009 2008
24. Encumbered assets
The book values of assets which are mortgaged, hypothecated or subject to a pledge
as security for borrowings, subject to third-party ownership in terms of capitalised
leases or suspensive sale agreements are as follows:
Land and buildings 322 17
Plant and equipment 1,385 4
Inventory 164 –
Trade receivables 460 415
2,331 436
Suspensive sale agreements are instalment sale agreements which the group has entered into in respect of certain property,
plant and equipment and the assets purchased are encumbered as security for the outstanding liability until such time as
the liability is discharged.
The increase in encumbered assets in 2009 relates to the security provided under the facilities entered into in July and
August 2009 (Public High Yield Bonds of US$300 million and EUR350 million; Österreichische Kontrollbank term loans of
EUR400 million and US$38 million, respectively, and the committed revolving credit facility of EUR209 million). The security
consists substantially of (i) the land, plant and equipment located at Sappi’s production facilities in Gratkorn, Austria;
Kirkniemi, Finland; Maastricht, The Netherlands; Nijmegen, The Netherlands; Skowhegan/Somerset, Maine, USA, and
Cloquet, Minnesota, USA and (ii) certain inventory owned by SD Warren Company and Sappi Cloquet LLC. The security also
includes certain shares in subsidiaries and certain intercompany receivables which are not reflected in the total above.
Refer to note 9 for details on property, plant and equipment.
149
financials