Wrap Text
SAP SSAI - Sappi Southern Africa Limited Senior Unsecured Convertible Registered Bond Offering
Sappi Limited
(Incorporated in the Republic of South Africa)
(Registration number 1936/008963/06)
ISIN: ZAE000006284
JSE Share code: SAP
Bloomberg: SAP SJ EQUITY
Reuters: SAPJ.J
(“Sappi Limited”)
Sappi Southern Africa Limited
(Incorporated in the Republic of South Africa)
(Registration number 1951/003180/06)
Bond company code: SSAI
(“SSA” or the “Issuer”)
NOT FOR DISTRIBUTION IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, JAPAN OR
ANY OTHER JURISDICTION IN WHICH SUCH DISTRIBUTION WOULD BE PROHIBITED BY
APPLICABLE LAW
SAPPI SOUTHERN AFRICA LIMITED SENIOR UNSECURED CONVERTIBLE REGISTERED
BOND OFFERING
1. Introduction
Sappi Limited hereby announces the launch of an offering (the “Offering”) of senior, unsecured,
convertible registered bonds due in 2025 with an aggregate principal amount of approximately
ZAR1,750,000,000 (the “Bonds”). The ZAR denominated Bonds are to be issued by SSA and will,
subject to certain conditions including the passing of the Shareholder Resolutions (as defined below),
be convertible into ordinary shares of Sappi Limited (the “Ordinary Shares”).
The Issuer is rated AA (Stable Outlook, National Scale Long Term) by GCR Ratings. Sappi Limited is
rated BB- (Stable outlook, International Scale Long Term) by S&P Global Ratings and Ba2 (Stable
outlook, International Scale Long Term) by Moody’s Investors Service.
2. Rationale and use of proceeds
SSA intends to use the net proceeds from the Bonds to fund the remaining capital expenditure required
to expand the Saiccor mill (“Saiccor”) in South Africa. The Saiccor expansion project is currently
approximately 80% complete and is expected to contribute an additional capacity of 110,000 tons. This
additional capacity is fully committed to existing customers and is the project is expected to be completed
by mid-2021.
3. Terms of the Offering
The Bonds, which are expected to mature on 26 November 2025, will be issued at par and are expected
to carry a fixed rate coupon of between 5.00% and 5.50% per annum payable semi-annually in arrears
on 26 May and 26 November of each year, commencing on 26 May 2021.
The initial conversion price is expected to be set at a premium of between 30% and 35% to the volume
weighted average price (“VWAP”) of the Ordinary Shares of Sappi Limited listed on the Main Board of
the JSE Limited (“JSE”) from market open to the pricing of the offer today. The conversion price will be
subject to customary adjustments (as described in the terms and conditions of the Bonds). The expected
Ordinary Shares underlying the Bonds represent approximately 9.0% of Sappi Limited’s issued and
outstanding ordinary share capital immediately prior to the Offering.
The Issuer may redeem all but not some of the Bonds at their principal amount together with accrued
interest to but excluding the date of redemption: (i) on or at any time after the twenty-first day following
the third (3rd) anniversary of the Settlement Date (as defined below), if the VWAP of an Ordinary Share
exceeds 130% of the conversion price on no less than 20 out of any 30 consecutive dealing days; or (ii)
at any time, if more than 85% of the Bonds originally issued have been converted and/or redeemed
and/or purchased and cancelled.
The Issuer will undertake to use all reasonable endeavours to procure that Sappi Limited convenes a
meeting of its shareholders by 28 February 2021 for the purpose of considering, and if deemed fit,
passing such resolutions (the “Shareholder Resolutions”) as are required to enable the issue of, or
transfer and delivery of, such number of the Ordinary Shares as may be required to be issued or, as the
case may be, transferred and delivered from time to time upon the exercise of conversion rights. Absent
such approval, holders of the Bonds will on conversion receive a cash amount as described in the terms
and conditions of the Bonds. For so long as the Shareholder Resolutions have not been passed, the
Issuer may, at any time, by giving notice not later than 10 dealing days prior to the long stop date of 31
March 2021 elect to redeem all but not some of the Bonds at the greater of (i) 102% of the principal
amount of the Bonds, together with accrued interest to (but excluding) the date fixed for redemption or
(ii) 102% of the fair bond value of the Bonds together with accrued interest to (but excluding) the date
fixed for redemption.
Bondholders may at their option require the Bonds to be redeemed, in the event of a change of control
or a de-listing of the Ordinary Shares, in each case, at their principal amount plus accrued interest.
The Offering is being conducted by way of an accelerated bookbuild solely on a private placement basis
with South African and international institutional investors outside the United States of America in
accordance with Regulation S under the Securities Act (as defined below) and outside Canada, Australia
and Japan. The Offering is open with immediate effect and will close as soon as is practicable today,
Wednesday, 18 November 2020.
4. Settlement and listing
The final terms of the Bonds are expected to be announced today and settlement is expected to take
place on or around 25 November 2020 (the “Settlement Date”).
The Bonds will be unlisted on issue. An application to list the Bonds on the Main Board of the JSE will
be submitted within 4 months following the Settlement Date.
5. Lock-ups
The Issuer, together with Sappi Limited and its other material subsidiaries, have agreed not to issue or
dispose of any of the Ordinary Shares, or securities convertible or exchangeable into Ordinary Shares,
held by or on their behalf, for a period of 90 days from the pricing date, subject to customary exceptions.
For additional information on the Offering, refer to https://www.sappi.com/investors.
Johannesburg
18 November 2020
Global Coordinator and Transaction Sponsor
Rand Merchant Bank, a division of FirstRand Bank Limited
Bookrunners
Rand Merchant Bank, a division of FirstRand Bank Limited
Morgan Stanley & Co. International plc (non-South African book)
Legal adviser to Sappi Limited and SSA
Bowman Gilfillan Inc.
Legal adviser to Bookrunners
Webber Wentzel
DISCLAIMER
NO ACTION HAS BEEN TAKEN BY THE ISSUER, THE GLOBAL COORDINATOR/BOOKRUNNERS OR ANY OF THEIR
RESPECTIVE AFFILIATES THAT WOULD PERMIT AN OFFERING OF THE BONDS OR THE POSSESSION OR
DISTRIBUTION OF THIS ANNOUNCEMENT OR ANY OFFERING OR PUBLICITY MATERIAL RELATING TO THE BONDS IN
ANY JURISDICTION WHERE ACTION FOR THAT PURPOSE IS REQUIRED. PERSONS INTO WHOSE POSSESSION THIS
ANNOUNCEMENT COMES ARE REQUIRED BY THE ISSUER AND THE GLOBAL COORDINATOR/BOOKRUNNERS TO
INFORM THEMSELVES ABOUT, AND TO OBSERVE, ANY SUCH RESTRICTIONS.
THIS ANNOUNCEMENT IS DIRECTED EXCLUSIVELY AT MARKET PROFESSIONALS AND INSTITUTIONAL INVESTORS.
IT IS FOR INFORMATION PURPOSES ONLY AND IS NOT TO BE RELIED UPON IN SUBSTITUTION FOR THE EXERCISE
OF INDEPENDENT JUDGEMENT. IT IS NOT INTENDED AS INVESTMENT ADVICE AND UNDER NO CIRCUMSTANCES IS
IT TO BE USED OR CONSIDERED AS AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY
NOR IS IT A RECOMMENDATION TO BUY OR SELL ANY SECURITY. HOWEVER, THE ISSUER HAS TAKEN ALL
REASONABLE CARE TO ENSURE THAT THE FACTS STATED IN THIS ANNOUNCEMENT ARE TRUE AND ACCURATE IN
ALL MATERIAL RESPECTS AND ACCEPTS RESPONSIBILITY FOR SUCH STATEMENTS.
ANY DECISION TO PURCHASE ANY OF THE BONDS SHOULD ONLY BE MADE ON THE BASIS OF AN INDEPENDENT
REVIEW BY A PROSPECTIVE INVESTOR OF THE ISSUER’S PUBLICLY AVAILABLE INFORMATION. NEITHER THE
GLOBAL COORDINATOR/BOOKRUNNERS NOR ANY OF THEIR RESPECTIVE AFFILIATES ACCEPT ANY LIABILITY
ARISING FROM THE USE OF, OR MAKE ANY REPRESENTATION AS TO THE ACCURACY OR COMPLETENESS OF, THIS
ANNOUNCEMENT OR THE ISSUER’S PUBLICLY AVAILABLE INFORMATION. THE INFORMATION CONTAINED IN THIS
ANNOUNCEMENT IS SUBJECT TO CHANGE IN ITS ENTIRETY WITHOUT NOTICE UP TO THE SETTLEMENT DATE.
THIS ANNOUNCEMENT IS NOT FOR DISTRIBUTION, DIRECTLY OR INDIRECTLY IN OR INTO THE UNITED STATES. THIS
ANNOUNCEMENT IS NOT AN OFFER TO SELL SECURITIES OR THE SOLICITATION OF ANY OFFER TO BUY SECURITIES,
NOR SHALL THERE BE ANY OFFER OF SECURITIES IN ANY JURISDICTION IN WHICH SUCH OFFER OR SALE WOULD
BE UNLAWFUL.
THE SECURITIES MENTIONED IN THIS ANNOUNCEMENT HAVE NOT BEEN AND WILL NOT BE REGISTERED IN THE
UNITED STATES UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT
BE OFFERED OR SOLD IN THE UNITED STATES, ABSENT REGISTRATION OR EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT. THERE WILL BE NO PUBLIC OFFER OF THE SECURITIES IN THE UNITED STATES OR IN
ANY OTHER JURISDICTION.
COPIES OF THIS ANNOUNCEMENT ARE NOT BEING, AND MUST NOT BE, MAILED, OR OTHERWISE FORWARDED,
DISTRIBUTED OR SENT IN, INTO OR FROM THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH
MAILING WOULD BE ILLEGAL, OR TO PUBLICATIONS WITH A GENERAL CIRCULATION IN THOSE JURISDICTIONS, AND
PERSONS RECEIVING THIS ANNOUNCEMENT (INCLUDING CUSTODIANS, NOMINEES AND TRUSTEES) MUST NOT MAIL
OR OTHERWISE FORWARD, DISTRIBUTE OR SEND IT IN, INTO OR FROM THE UNITED STATES OR ANY OTHER
JURISDICTION IN WHICH SUCH MAILING WOULD BE ILLEGAL OR TO PUBLICATIONS WITH A GENERAL CIRCULATION
IN THOSE JURISDICTIONS.
EACH PROSPECTIVE INVESTOR SHOULD PROCEED ON THE ASSUMPTION THAT IT MUST BEAR THE ECONOMIC RISK
OF AN INVESTMENT IN THE BONDS. NONE OF THE ISSUER OR THE GLOBAL COORDINATOR/BOOKRUNNERS MAKE
ANY REPRESENTATION AS TO (I) THE SUITABILITY OF THE BONDS FOR ANY PARTICULAR INVESTOR, (II) THE
APPROPRIATE ACCOUNTING TREATMENT AND POTENTIAL TAX CONSEQUENCES OF INVESTING IN THE BONDS OR
(III) THE FUTURE PERFORMANCE OF THE BONDS EITHER IN ABSOLUTE TERMS OR RELATIVE TO COMPETING
INVESTMENTS.
THE GLOBAL COORDINATOR/BOOKRUNNERS ARE ACTING ON BEHALF OF THE ISSUER AND NO ONE ELSE IN
CONNECTION WITH THE BONDS AND WILL NOT BE RESPONSIBLE TO ANY OTHER PERSON FOR PROVIDING THE
PROTECTIONS AFFORDED TO CLIENTS OF THE GLOBAL COORDINATOR/BOOKRUNNERS OR FOR PROVIDING ADVICE
IN RELATION TO THE BONDS.
POTENTIAL INVESTORS WHO ARE IN ANY DOUBT ABOUT THE CONTENTS OF THIS ANNOUNCEMENT SHOULD
CONSULT THEIR STOCKBROKER, BANK MANAGER, SOLICITOR, ACCOUNTANT OR OTHER FINANCIAL ADVISER. IT
SHOULD BE REMEMBERED THAT THE PRICE OF THE BONDS AND THE INCOME FROM THEM CAN GO DOWN AS WELL
AS UP.
THE BONDS ARE NOT INTENDED TO BE OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO AND SHOULD NOT BE
OFFERED, SOLD OR OTHERWISE MADE AVAILABLE TO ANY RETAIL INVESTOR IN THE EUROPEAN ECONOMIC AREA
(“EEA”) OR THE UNITED KINGDOM. FOR THESE PURPOSES, A RETAIL INVESTOR MEANS A PERSON WHO IS ONE (OR
MORE) OF: (I) A RETAIL CLIENT AS DEFINED IN POINT (11) OF ARTICLE 4(1) OF DIRECTIVE 2014/65/EU (AS AMENDED,
“MIFID II”); OR (II) A CUSTOMER WITHIN THE MEANING OF DIRECTIVE 2016/97/EU (AS AMENDED, THE “INSURANCE
DISTRIBUTION DIRECTIVE”), WHERE THAT CUSTOMER WOULD NOT QUALIFY AS A PROFESSIONAL CLIENT AS
DEFINED IN POINT (10) OF ARTICLE 4(1) OF MIFID II. CONSEQUENTLY, NO KEY INFORMATION ANNOUNCEMENT
REQUIRED BY REGULATION (EU) NO 1286/2014 (AS AMENDED, THE “PRIIPS REGULATION”) FOR OFFERING OR
SELLING THE BONDS OR OTHERWISE MAKING THEM AVAILABLE TO RETAIL INVESTORS IN THE EEA OR IN THE
UNITED KINGDOM HAS BEEN PREPARED AND THEREFORE OFFERING OR SELLING THE BONDS OR OTHERWISE
MAKING THEM AVAILABLE TO ANY RETAIL INVESTOR IN THE EEA OR IN THE UNITED KINGDOM MAY BE UNLAWFUL
UNDER THE PRIIPS REGULATION. THIS ANNOUNCEMENT HAS BEEN PREPARED ON THE BASIS THAT ANY OFFER OF
BONDS IN ANY MEMBER STATE OF THE EEA OR IN THE UNITED KINGDOM WILL BE MADE PURSUANT TO AN
EXEMPTION UNDER REGULATION (EU) 2017/1129 (THE “PROSPECTUS REGULATION”) FROM THE REQUIREMENT TO
PUBLISH A PROSPECTUS FOR OFFERS OF BONDS. THIS ANNOUNCEMENT IS NOT A PROSPECTUS FOR THE
PURPOSES OF THE PROSPECTUS REGULATION.
REFERENCES TO REGULATIONS OR DIRECTIVES INCLUDE, IN RELATION TO THE UNITED KINGDOM, THOSE
REGULATIONS OR DIRECTIVES AS THEY FORM PART OF UK DOMESTIC LAW BY VIRTUE OF THE EUROPEAN UNION
(WITHDRAWAL) ACT 2018 OR HAVE BEEN IMPLEMENTED IN UK DOMESTIC LAW, AS APPROPRIATE.
ADDITIONALLY, IN THE UNITED KINGDOM THIS ANNOUNCEMENT IS FOR DISTRIBUTION ONLY TO PERSONS WHO
(I) ARE OUTSIDE THE UNITED KINGDOM; (II) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO
INVESTMENTS AND WHO QUALIFY AS INVESTMENT PROFESSIONALS WITHIN THE MEANING OF ARTICLE 19(5) OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005, AS AMENDED (THE
“FINANCIAL PROMOTION ORDER”)); (III) FALL WITHIN ARTICLE 49(2)(A) TO (D) (HIGH NET WORTH COMPANIES,
UNINCORPORATED ASSOCIATIONS, ETC.) OF THE FINANCIAL PROMOTION ORDER; OR (IV) ARE PERSONS TO WHOM
AN INVITATION OR INDUCEMENT TO ENGAGE IN INVESTMENT ACTIVITY (WITHIN THE MEANING OF SECTION 21 OF
THE FINANCIAL SERVICES AND MARKETS ACT 2000, AS AMENDED (“FSMA”)) IN CONNECTION WITH THE ISSUE OR
SALE OF ANY SECURITIES MAY OTHERWISE LAWFULLY BE COMMUNICATED OR CAUSED TO BE COMMUNICATED
(ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS ANNOUNCEMENT IS
DIRECTED ONLY AT RELEVANT PERSONS AND MUST NOT BE ACTED OR RELIED UPON BY PERSONS WHO ARE NOT
RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS ANNOUNCEMENT RELATES IS
AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS.
NO “OFFER TO THE PUBLIC” (AS SUCH TERM IS DEFINED IN THE SOUTH AFRICAN COMPANIES ACT, 2008 (THE “SA
COMPANIES ACT")) IN SOUTH AFRICA IS BEING MADE IN CONNECTION WITH THE ISSUE OF THE BONDS OR ANY
SECURITIES AND ACCORDINGLY THIS ANNOUNCEMENT DOES NOT, NOR DOES IT INTEND TO, CONSTITUTE A
‘‘REGISTERED PROSPECTUS’’, AS CONTEMPLATED IN CHAPTER 4 OF THE SA COMPANIES ACT. ACCORDINGLY, NO
PROSPECTUS HAS BEEN FILED WITH THE SOUTH AFRICAN COMPANIES AND INTELLECTUAL PROPERTY
COMMISSION IN RESPECT OF THE ISSUE OR OFFERING OF THE BONDS. ANY ISSUE OR OFFERING OF THE BONDS
IN SOUTH AFRICA CONSTITUTES AN OFFER FOR THE SUBSCRIPTION AND SALE OF THE BONDS IN SOUTH AFRICA
ONLY TO SELECTED INVESTORS WHO FALL WITHIN THE EXEMPTIONS SET OUT IN SECTION 96(1)(a) OR (b) OF THE
SA COMPANIES ACT AND, ACCORDINGLY, SUCH OFFER WOULD NOT BE CONSIDERED TO BE AN “OFFER TO THE
PUBLIC” FOR THE PURPOSES OF THE SA COMPANIES ACT.
EACH OF THE ISSUER, THE GLOBAL COORDINDATOR/BOOKRUNNERS AND THEIR RESPECTIVE AFFILIATES
EXPRESSLY DISCLAIMS ANY OBLIGATION OR UNDERTAKING TO UPDATE, REVIEW OR REVISE ANY STATEMENT
CONTAINED IN THIS ANNOUNCEMENT WHETHER AS A RESULT OF NEW INFORMATION, FUTURE DEVELOPMENTS OR
OTHERWISE.
Date: 18-11-2020 08:45:00
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