Proposed Demerger of MPSA

Mondi Limited
(Incorporated in the Republic of South Africa)
(Registration number: 1967/013038/06)
JSE share code: MND ISIN: ZAE000097051

Mondi plc
(Incorporated in England and Wales)
(Registration number: 6209386)
JSE share code: MNP ISIN: GB00B1CRLC47
LSE share code: MNDI

As part of the dual listed company structure, Mondi Limited and Mondi plc
(together `Mondi Group') notify both the JSE Limited and the London Stock
Exchange of matters required to be disclosed under the JSE Listings
Requirements and/or the Disclosure and Transparency and Listing Rules of the
United Kingdom Listing Authority.

7 April 2011

Mondi Group announces the proposed demerger of Mondi Packaging South Africa

Mondi Group today announced its intention to separate its interest in Mondi
Packaging South Africa (MPSA) via a demerger whereby all the ordinary shares in
MPSA held by Mondi Limited will be distributed to the Mondi Limited ordinary
shareholders. MPSA would be listed under a new name on the securities exchange
operated by the JSE Limited (JSE).

MPSA's future growth plans, particularly with respect to its rigid plastics
business, are constrained by the Mondi Group's differing strategic focus. The
demerger endorses MPSA's own strategy and provides shareholders with a clear
benefit as both businesses would be able to take better advantage of their
respective growth opportunities.

David Hathorn, CEO of Mondi Group, said:

"This is the right time to demerge MPSA, for both Mondi Group and MPSA. Whilst
Mondi Group has been a very supportive owner, this move will give MPSA the
flexibility it needs to develop its core growth areas. MPSA is unique within
the Group as no other part of Mondi produces rigid plastics or cartonboard and
therefore the Board felt that MPSA would be best placed to take advantage of
the considerable opportunities available to it as an independent entity."

MPSA's revenue in 2010 from continuing operations was R5.7 billion (€591
million), of which R4.4 billion (€455 million) was related to paper (including
recovered paper collection; packaging and industrial papers such as cartonboard
and containerboard; and corrugated packaging operations) and R1.3 billion (€136
million) was related to plastics (including PET bottles and closures; large
injection moulded containers; styrene trays, fast food containers and clear
plastic films; and other rigid plastic containers). Currently, Mondi owns 70%
of MPSA, the Shanduka Group owns 25% and Mondi Employee Investment Company
Limited (a Mondi Employee Share Option Plan) owns 5%. The shareholders have
agreed to a recapitalisation of MPSA ahead of its listing, with a view to
creating a long term capital structure for the business based on net debt of
around 2 times current earnings before interest, tax, depreciation and
amortisation. The recapitalization would result in Mondi's equity interest in
the business increasing to around 90%. Shanduka Group would reduce its interest
in MPSA to around 10% just before the demerger and has committed to stay
invested in MPSA for at least 180 days following its listing.

As part of the proposed demerger, Mondi Group intends to undertake a "matching
action" (for the purposes of the Mondi Group's DLC structure agreements) by way
of a share consolidation of Mondi Limited ordinary shares. The matching action
is intended to have, as far as practicable, an equivalent but not necessarily
identical economic effect on Mondi plc ordinary shareholders to the economic
effect of demerging MPSA ordinary shares to Mondi Limited ordinary
shareholders. The size of the Mondi Limited share consolidation would be based
on the volume weighted average share prices of MPSA and the Mondi Group (Mondi
plc and Mondi Limited) traded during a period, to be determined, following the
demerger and listing of MPSA.

The demerger and the matching action require various third party approvals and
are also subject to the approval of both Mondi plc and Mondi Limited
shareholders. Mondi intends to announce further details of the proposed
demerger and matching action during May 2011, at which time all relevant
documents, including MPSA's pre-listing statement, would be made available.

The outcome of the proposed demerger may have a material effect on the price of
Mondi Group's securities. Accordingly, shareholders are advised to exercise
caution when dealing in their Mondi Group shares until a further announcement
is made.

Rothschild is acting as financial adviser to Mondi Group and Rand Merchant Bank
is acting as financial adviser to MPSA.

/ends

Contact:

Mondi Group

Lora Rossler

Group Corporate Affairs Manager

Tel: [phone] or [phone]

E-mail: [e-mail]

Kerry Crandon

Group Communications Manager

Tel: [phone] or [phone]

E-mail: [e-mail]

Andrew King

Group CFO

Tel: [phone] or [phone]

E-mail: [e-mail]

Editors' notes

About Mondi:

Mondi is an international paper and packaging Group, with production operations
across 31 countries and revenues of €6.2 billion in 2010. The Group's key
operations are located in central Europe, Russia and South Africa and as at the
end of 2010, Mondi employed 29,000 people.

Mondi is fully integrated across the paper and packaging process, from the
growing of wood and the manufacture of pulp and paper (including recycled
paper), to the conversion of packaging papers into corrugated packaging,
industrial bags and coatings.

The Group is principally involved in the manufacture of packaging paper,
converted packaging products and uncoated fine paper (UFP).

Mondi has a dual listed company structure, with a primary listing on the JSE
Limited for Mondi Limited under the ticker code MND and a premium listing on
the London Stock Exchange for Mondi plc, under the ticker code MNDI. The Group
has been recognised for its sustainability through its inclusion in the
FTSE4Good UK, Europe and Global indices in 2008, 2009 and 2010 and the JSE's
Socially Responsible Investment (SRI) Index in 2007, 2008, 2009 and 2010.

About Mondi Packaging SA:

Turnover: R5.7 billion in 2010 from continuing operations

EBITDA: R794 million in 2010 from continuing operations

Employees: 3400

Operations: 22 manufacturing operations, 29 operating sites

Revenue mix: Plastics 23%, Paper 77%

About the demerger and share consolidation:

Under the proposed demerger and matching action, shareholders in Mondi plc, the
London Stock Exchange (LSE) and JSE listed entity and shareholders in Mondi
Limited, the JSE listed entity, would be treated equally but not identically.

Firstly, Mondi Limited shareholders would receive shares in MPSA through a
dividend in specie pro rata to their shareholdings in Mondi Limited. Secondly,
a number of Mondi Limited shares equivalent in value to the MPSA equity value
distributed to Mondi Limited shareholders, would be consolidated. As a result,
the proportional interest of Mondi Limited shareholders in the Mondi Group
would be reduced.

Post the demerger and consolidation, Mondi Limited shareholders would have an
interest in MPSA and a proportionately smaller interest in the remaining Mondi
Group, while the Mondi plc shareholders would have no interest in MPSA but a
larger proportionate share of the remaining Mondi Group.

The size of the Mondi Limited share consolidation would be based on the volume
weighted average share prices of MPSA and the Mondi Group (Mondi plc and Mondi
Limited) traded during a period, to be determined, following the demerger and
listing of MPSA.