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KIMBERLY-CLARK AND THE NEW YORK TIMES COMPLETE SPRUCE FALLS TRANSACTION

KIMBERLY-CLARK AND THE NEW YORK TIMES COMPLETE SPRUCE FALLS TRANSACTION
 DALLAS, Dec. 3 /PRNewswire/ -- Kimberly-Clark Corporation (NYSE: KMB) and The New York Times Company (AMEX: NYT) today announced completion of a unique set of transactions which resulted in the divestiture of their jointly-owned affiliate, Spruce Falls Power and Paper Company, Limited. Spruce Falls is a producer of newsprint at Kapuskasing, Ontario, and of hydroelectric power at a dam on the Mattagami River at Smoky Falls, Ontario.
 Speaking for the Spruce Falls shareholders, Darwin E. Smith, chairman of the board and chief executive officer of Kimberly-Clark, said the transactions involved a complex set of agreements worked out over the past year with the Spruce Falls employees, their unions, several Ministries of the Ontario government, residents of Kapuskasing and surrounding communities, Ontario Hydro, Spruce Falls shareholders, and Tembec Inc., a producer of lumber, pulp and paper products at Temiscaming, Quebec.
 Smith said that when the various parts of the deal were completed:
 -- The Smoky Falls hydroelectric facility had been sold to Ontario Hydro for C$142 million according to a pre-existing agreement and, in return for amendments to the agreement regarding the supply of replacement power, Ontario Hydro had advanced an additional C$34 million to Spruce Falls.
 -- The proceeds of the Smoky Falls sale, approximately C$106 million after income and withholding taxes, had been paid as dividends to the Spruce Falls shareholders.
 -- The outstanding Spruce Falls common shares had, in effect, been given to the company's employees.
 -- The Spruce Falls employees and other residents of the Kapuskasing area had subscribed for C$12.5 million of Spruce Falls shares and had loaned Spruce Falls an additional C$2.5 million.
 -- Tembec Inc. had subscribed for C$12.5 million of Spruce Falls shares and had loaned Spruce Falls an additional C$12.5 million.
 -- The Spruce Falls employees, through their unions, had entered into a new three-year coalition bargaining agreement with Spruce Falls.
 -- Kimberly-Clark and The New York Times each had agreed to loan up to C$30 million to Spruce Falls over the next five years to be used for a capital spending program or in settlement of the statutory costs involved in reducing the Spruce Falls payroll from approximately 1,400 to 800 employees.
 Various agreements had been made regarding environmental costs. Smith said that the arrangements result in employee ownership of 52 percent of Spruce Falls. Of the balance, 41 percent is owned by Tembec and its affiliates and 7 percent by others, most of whom reside or do business in the Kapuskasing area.
 The arrangements were the outgrowth of a suggestion for possible employee ownership made by representatives of the Office of Mediation of the Ontario Ministry of Labor when collective bargaining with one of the Spruce Falls unions had come to an impasse at the end of 1990.
 Smith said the shareholders were particularly pleased that a way had been found to transfer ownership control of Spruce Falls to its employees thus avoiding a more severe downsizing of Spruce Falls. He said that without the intervention of Ontario Premier Bob Rae and his representatives, the present arrangements would have been impossible.
 -0- 12/3/91
 /CONTACT: Tina Barry of Kimberly-Clark, 214-830-1484/
 (KMB NYT) CO: Kimberly-Clark Corporation; The New York Times Company ST: Texas, New York IN: PAP SU: FC -- NY059 -- 8806 12/03/91 13:43 EST
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:PR Newswire
Date:Dec 3, 1991
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