Sappi Limited recently announced its intention to voluntarily delist its American Depositary Shares from the New York Stock Exchange. Sappi will convert its current ADR programme into a Level I ADR programme to give current ADR holders the option to continue to hold ADRs. Level I ADRs are traded in the United States over-the-counter market as opposed to on a U S national securities exchange.
Sappi’s decision to delist from the NYSE is based on the low trading volume of its ADSs on the NYSE as well as the high costs and administrative complexity associated with maintaining its listing and registration in the U S. As of today, less than 1% of Sappi's shares are held through its ADR programme, and for the twelve months ended 28 August 2013, less than 1% of Sappi's average daily trading volume occurred on the NYSE, where the Company has been listed since 1998.
Sappi believes that the resulting savings in costs and management time will benefit the Company and its shareholders. Sappi is fully committed to its U S shareholders and believes that the continued trading of the Company's ordinary shares on the JSE Limited (the "JSE"), previously known as the Johannesburg Stock Exchange, will provide sufficient liquidity to its shareholders, including its U S shareholders, and access to capital for the Company.
"Delisting from the NYSE is in line with Sappi's strategy to reduce costs and improve efficiency. As a South Africa-headquartered company, our primary listing will remain the JSE, as it has been since 1937," commented Sappi Limited Chief Executive Officer Ralph Boettger. "Sappi remains committed to high standards of corporate governance and transparency in financial reporting."
