Sappi

The European Commission has opened an in-depth review of the planned paper joint venture between UPM and Sappi and expressed competition concerns. The $1.7 billion deal would combine UPM’s communication paper division and Sappi’s graphic paper business in Europe; the Commission sees risks of reduced competition, higher prices and lower quality for coated paper. The EU says rivals could not effectively counter price increases; UPM said it will cooperate constructively. Companies are expected to offer concessions such as asset sales to allay concerns. » More on de.investing.com

Fitch has cut Sappi’s long‑term issuer default rating from BB+ to BB and left the outlook at "Stable." The downgrade is justified by persistently high leverage (gross debt 4.5x and net debt 4.3x in fiscal 2025 versus 2.7x/2.3x in 2024), negative free cash flow and high capital expenditure; Fitch expects only a partial reduction in debt to 2.6x by 2029. A further downgrade could occur if Sappi does not reduce gross debt/EBITDA below 3.5x by 2027, if the EBITDA margin remains below 9%, or if free cash flow stays sustainably negative; a planned JV with UPM has not yet been included in the analysis. » More on de.investing.com

Moody’s affirmed Sappi’s long‑term rating at Ba2 but changed the outlook from stable to negative due to a marked deterioration in credit metrics. Adjusted gross debt to EBITDA rose to about 5.6x after Sappi drew on its revolving credit facility to fund the Somerset rebuild and prices fell across all segments. Moody’s confirmed the bond ratings (including €400m 2028, €300m 2032 and $250m 2032) and warned that leverage could peak in mid‑FY2026 but should fall back below 4x by September 2027. Sappi has suspended the 2025 dividend, plans to cut capex to $290m in 2026 and aims to materially reduce net debt over three to four years; the planned JV with UPM is likely to provide only limited relief to the credit profile. » More on de.investing.com