JOHANNESBURG, South Africa--July 12, 2001--Sappi Limited, the world's largest producer of coated fine paper, announced today that it had successfully concluded a EURO 900 million syndicated loan facility arranged and underwritten by three global banks, ABN AMRO, Citigroup and JP Morgan. The facility was raised through a wholly-owned European subsidiary of the group and had originally been launched at EURO 800 million, but was strongly supported by Sappi's relationship banks and subsequently increased to EURO 900 million. Sappi Finance Director, Don Wilson, said today that the facility comprised two tranches. The first tranch is a EURO 562.5 million five-year revolving credit facility for general corporate purposes, and the second a EURO 337.5 million term loan, which will be used to refinance existing high cost debt in the United States. Both tranches carry interest rates at Libor plus a margin of 0.55%, the first tranch carries a floating utilization fee of up to 0.15% depending on usage. Mr. Wilson said that Sappi had some expensive debentures in its North American subsidiary and had the opportunity to call these debentures in December this year, which the group plans to do. This new facility will significantly reduce Sappi's borrowing cost in the USA and should have a pre-tax cost reduction of approximately $13 million in a full year. The cash cost of calling the debentures will be approximately $6 million as a one off premium. Mr. Wilson said that the rate was very competitive and a reflection of Sappi's credit standing in the international banking market. The facility could be drawn down in any currency of the Group's choice, and, therefore, there will be great funding flexibility for its future needs. Mr. Wilson said the 0.25% commitment fee payable on the unutilized portion of the facility was a reasonable price to pay for access to low cost funds in the future to meet whatever needs the Group might have. He also added that there were no immediate prospects for utilizing the EURO 562.5 million tranch. Sappi Limited is the largest producer of coated free sheet paper in the world and produces fine papers in South Africa, the United Kingdom, Austria, Belgium, The Netherlands, Germany and in the United States. Sappi's net operating assets of approximately R29 billion are located mainly in Europe (41%), North America (27%) and Southern Africa (29%). Sappi ordinary shares trade on the Johannesburg Stock Exchange and may be accessed on Bloomberg under the symbol SAP SJ, and on the Reuters Equities 2000 Service under SAPJ.J. In the US its ADRs trade on the New York Stock Exchange under the ticker symbol SPP (each ADR is equal to one ordinary share). Sappi shares are also traded in London and Frankfurt.