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EMPLOYEE BUYOUT AGREEMENT REACHED ON PROVINCIAL PAPERS

 TORONTO, Feb. 4 /PRNewswire/ -- After months of negotiations a preliminary agreement was reached today to transfer ownership of Abitibi-Price's (NYSE: ABY) coated paper mill in Thunder Bay to a new company to be formed by the mill's employees.
 The agreement involves: the unions, represented by two locals of the Communications, Energy and Paperworkers Union of Canada (CEP) and one local of each of the International Brotherhood of Electrical Workers (IBEW), International Union of Operating Engineers (IUOE), and Office and Professional Employees International Union (OPEIU); the mill management; Abitibi-Price Inc.; and the Government of Ontario.
 Abitibi-Price will transfer all of the assets and liabilities of its Provincial Papers business to the employees of the mill and has also agreed to provide up to $20 million of cash to fund operations and certain other expenses. The Government of Ontario will participate by providing additional funding through a combination of a direct loan and a loan guarantee.
 "This agreement will place the future of the mill in the hands of its employees," said John V. Olsen, president of Provincial Papers. "I am excited by the challenge of leading this new company and pleased to be working with employees who are committed to making the mill more competitive and ensuring Provincial continues to play an important role in the economy of the City of Thunder Bay."
 Mr. John McInnes, vice-president of the newly formed CEP, said, "This marks a progressive step in relations among industry, labor and government. With the contributions to be made by the employees of the mill, the cooperation of the Ontario Government, the mill management and Abitibi-Price Inc., jobs will be preserved at Provincial Papers."
 "This has been a significant achievement and each of the parties are to be congratulated," said Ron Oberlander, president and CEO of Abitibi-Price. "We were committed to finding alternative ownership for Provincial Papers. This agreement could not have been consummated without the dedication and active support of all parties. To all those associated with the new venture I wish them every success."
 Commenting on behalf of the Government of Ontario were the Hon. Frances Lankin, Minister of Economic Development and Trade, and Hon. Howard Hampton, Minister of Natural Resources. "These were tough and complex negotiations for all and this milestone represents completion of a monumental effort by the employee representatives of New Provincial Papers, and the management of Abitibi-Price Inc. I congratulate and thank them for their efforts," said Mr. Hampton.
 "I am extremely encouraged by the spirit of cooperation that the acquiring employee group has shown. This is clearly an important step for a facility which is such an integral part of the northern economy," said Ms. Lankin.
 The agreement is subject to, among other things, ratification by each of the union locals and management of the mill, the necessary approvals of the Government of Ontario and the board of directors of Abitibi-Price, and the entering into of definitive agreements. It is expected that the transfer will take place in March.
 Provincial Papers, a coated paper mill located in Thunder Bay, Ontario, employs approximately 800. Sales in 1992 were $110 million.
 -0- 2/04/93
 /CONTACT: Barry Ferguson, director-employee relations of Provincial Papers, 807-683-2110; or Robert J. Tait, manager-investor relations of Abitibi-Price Inc., 416-369-6789; or Rosemary Hnatiuk, special assistant communications, Minister's Office, Ministry of Natural Resources, 416-326-4000; or Alexis Larson, manager-corporate media relations of the Ministry of Economic Development and Trade, 416-325-6685, or 416-464-1607/
 (ABY)


CO: Abitibi-Price Inc. ST: Ontario IN: PAP SU:

TS -- NY128 -- 3231 02/04/93 17:25 EST
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Publication:PR Newswire
Date:Feb 4, 1993
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