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Management Side
Sappi Limited
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Johannesburg, South Africa, 15 December 2008 -- Sappi announced today that the rights offer to facilitate the funding of the acquisition of the coated graphic paper business of M-real, as announced on 29 September 2008, has been fully subscribed. This follows receipt of shareholder approval for the acquisition on 03 November 2008, and competition clearance from the European Commission on 31 October 2008.

The fully-subscribed rights offer will result in Sappi issuing 286,886,270 new ordinary shares of ZAR 1.00 each. Of these new shares to be issued, 285,621,333 will be issued pursuant to initial subscriptions and 1,264,937 will be issued pursuant to excess allocations. As all 286,886,270 offered shares were subscribed for pursuant to the exercise of the rights and pursuant to excess applications, no offered shares were placed or purchased by any underwriters pursuant to the underwriting agreement. The gross proceeds to Sappi from the rights offer will be approximately ZAR 5815 million (EUR 450 million based on an exchange rate of ZAR 12.925/EUR 1.0). Sappi will use the net proceeds to pay for a portion of the acquisition consideration payable to M-real.

The transaction to acquire M-real’s coated graphic paper business meets Sappi’s strategic and financial criteria for acquisitions as it enhances Sappi’s global presence, provides an opportunity to increase Sappi’s customer base, improves Sappi’s strategic flexibility in regards to capacity utilization, increases the range of products offered, and provides anticipated growth and cost synergies. Sappi also expects benefits from increased profitability and returns and improved cash flows for the Sappi group. The acquisition allows Sappi to strengthen its competitive position in the coated graphic paper industry in Europe and globally.
 


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