Sappi Ltd., a global paper producer based in South Africa, said Friday it completed a series of refinancing moves aimed at cutting debt, though the transactions entailed higher financing costs.
The company acquired a $298 million line of credit, which it has not used. Also, proceeds of a $499 million and a $300 million issuance of notes have been released to Sappi, which used the proceeds plus cash on hand to pay off debts.
In addition, Sappi refinanced a debt due next year with a $571 million loan due in five years.
"As a result of interest rates available in current financial market conditions, we will have a substantial increase in finance costs," CEO Ralph Boettger said.
"The successful completion of our refinancing will take care of our liquidity and significant debt maturities for at least the next three years."
Sappi has about $600 million in cash and expects to reduce its net debt by some 25 percent to 30 percent over the next three years, he said.
In midday trading, shares rose 9 cents to $3.96.
