SAPPI’S share price fell more than 4% on the JSE on Friday morning after it announced that the sale of three European mills to Aurelius, for about R5.4 billion, had fallen through.
Sappi said in a statement yesterday the date for completion of the suspensive conditions contained in the agreement to sell the graphic paper mills had lapsed and the transaction would not proceed.
The share price traded at R45.26 Friday morning, compared with R56.46 a year earlier.
Sappi had announced on September 29 that it had reached an agreement with Aurelius Investment Lux One S.à.r.l, to divest its Maastricht Mill in the Netherlands, its Stockstadt Mill in Germany and its Kirkniemi Mill in Finland.
The deal was subject to the fulfilment of various conditions precedent including the conclusion of a separation and transitional services plan between Sappi and Aurelius to the satisfaction of both parties to be fulfilled by a long stop date.
“Regretfully, and notwithstanding extensive efforts by Sappi to structure a reasonable deal, the parties could not conclude the suspensive conditions and therefore the transaction has lapsed,” Sappi said.
“Sappi will continue to execute its strategy to reduce its exposure to graphic paper and will review its strategic options regarding these mills,” the group said.
The income from the deal would have helped offset a large capital expenditure programme the group was undertaking in the US. The group’s debt is about $1.24bn.
* Sappi was, according to reports over the weekend, fined R8m by the Scottburgh Regional Court after pleading guilty to exceeding sulphur dioxide emission standards at its Saiccor Mill in Umkomaas in KwaZulu-Natal between 2012 and 2014.
BUSINESS REPORT