Ratings upgrade after repositioning
THE GLOBAL Credit Ratings has upgraded Sappi Southern Africa to A+(ZA) long-term and A1+(ZA) in the short term, with a stable outlook. The last rating for Sappi was conducted in August 2016, when its long-term was on A(ZA) and short term at A1(ZA), with a stable outlook. Sappi’s upgrade comes after ratings agencies downgraded five South African banks, FNB, Absa, Standard Bank, Nedbank and Investec, on Monday. Sappi chief executive Steve Binnie said the upgrade proved that Sappi was on the right path, having been able to reduce its debt. “This ratings upgrade for Sappi Southern Africa is further confirmation of Sappi’s success in implementing its business strategy. We have now achieved our debt reduction and leverage targets, and our finance costs have materially been reduced,” said Binnie. The company’s efforts to reposition the Sappi group were progressing well. “Our dissolving wood pulp business continues to deliver excellent results, and our speciality and packaging papers segment is growing ahead of forecasts,” he added. Sappi shares were 0.23 percent up yesterday to close at R88.20 on the JSE.