SAPPI LIMITED

SAPPI
NOTES TO THE GROUP ANNUAL FINANCIAL STATEMENTS (Continued)
for the year ended September 2010
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 capitalized leases or suspensive sale
agreements, are as follows:
2010 2009
(US$ million)
2008
Land and buildings ............................. 309 322 17
Plant and equipment* ........................... 1,295 1,542 176
Inventory .................................... 186 164 —
Trade receivables .............................. 486 460 415
2,276 2,488 608
* Plant and equipment was previously disclosed as US$1,385 million in 2009 (2008: US$4 million). This has been
increased by US$157 million (2008: US$172 million) to reflect certain assets that were also encumbered.
As
previously
reported Adjustment Adjusted
Plant and equipment
2009 ................................ 1,385 157 1,542
2008 ................................ 4 172 176
Suspensive sale agreements are instalment sale agreements which the group has entered into in
respect of certain property, plant and equipment where the assets purchased are encumbered as
security for the outstanding liability until such time that the liability is discharged.
The encumbered assets relate mainly to the security provided under the following facilities:
– Public High Yield Bonds of US$300 million and EUR350 million respectively, both due 2014;
– Österreichische Kontrollbank loans of EUR400 million (current outstanding balance of
EUR320 million) and EUR25 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, U.S.A. and Cloquet, Minnesota, U.S.A and (ii) certain
inventory owned by S.D. 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.
F-62