SAPPI - ANNOUNCES PAYMENT DETAILS

SAPPI ANNOUNCES PAYMENT DETAILS FOR IDC'S SAICCOR INVESTMENT

IN MAY 1993 THE INDUSTRIAL DEVELOPMENT CORPORATION (IDC) FINANCED PART OF THE
SAICCOR EXPANSION PROJECT AT UMKOMAAS BY MAKING AN EQUITY INVESTMENT IN
SAICCOR, A SAPPI SUBSIDIARY COMPANY. IN TERMS OF THE AGREEMENT SAPPI UNDERTOOK
TO PURCHASE THE IDC'S INVESTMENT AFTER 5 YEARS IN SAPPI LIMITED SHARES OR IN
CASH, SUBJECT TO THE IDC'S OPTION TO LIMIT THE CASH PORTION TO 50%.

SINCE 1993 SAPPI'S EARNINGS PER SHARE HAVE BEEN CALCULATED ON A FULLY DILUTED
BASIS ASSUMING THAT 100% OF THE PURCHASE PRICE, INCLUDING GROWTH ACCORDING TO
THE AGREED FORMULA, WOULD BE PAID IN SAPPI SHARES BASED ON THE PRICE RULING IN
THE PRECEDING PERIOD.

THE IDC HAS EXERCISED ITS OPTION TO LIMIT THE CASH PORTION TO 50%.

THE TRANSACTION WAS COMPLETED ON 5 MAY 1998. THE VALUE PAID FOR THE IDC'S
INVESTMENT WAS R1 005,7 MILLION OF WHICH R502,8 MILLION WAS PAID IN CASH AND
THE BALANCE BY THE ISSUE OF 19,8 MILLION SAPPI LIMITED SHARES AT A PRICE OF
R25,39 PER SHARE - BEING THE AVERAGE CLOSING PRICE OVER THE PRECEDING 60
TRADING DAYS IN ACCORDANCE WITH THE AGREEMENT WITH THE IDC.

THE COST OF FINANCING THE CASH PORTION WILL BE MATERIALLY BELOW SAPPI'S AVERAGE
COST OF CAPITAL, WHICH WILL HAVE A FAVOURABLE EFFECT ON FUTURE EARNINGS PER
SHARE.