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PaperlinX Cuts Spicers Staff

February 19, 2013

Spicers Canada Limited, an operating unit of Australia-based PaperlinX Limited, executed several staff layoffs last week. The layoffs are significant and reach across various geographical regions and employment levels.

When contacted by telephone, Cory Turner, President of Spicers Canada and a member of PaperlinX Limited's senior management team, refused to comment about the layoffs or acknowledge any actions had taken place.

PaperlinX Limited began to aggressively restructure its global operations in 2011. The distribution company itself was first listed on the Australian stock exchange in 2000 and expanded rapidly over the next few years.

In 2012, as part of a massive restructuring program, PaperlinX sold its United States operations, listed as Spicers Paper Inc. and Kelly Paper Company, to Central National-Gottesman (CNG) for US$76 million. Soon after, PaperlinX then sold its Italian entity to Lecta for €45 million.

After completing the sale of both its United States and Italian operations, and rebranding its Canadian operations as Spicers Canada, PaperlinX then reached agreements to sell its operations in Slovakia, Hungary, Slovenia, Croatia and Serbia to the Heinzel Group for €19.6 million. PaperlinX then signed an agreement to sell its South African operation to local management for net proceeds of around €5 million.

In November 2012, as it announced additional restructuring for its United Kingdom operation, from where the company operates its global business, PaperlinX stated its ongoing European restructuring in the 2013 financial year would see 370 employees leave the business.

During this 2012 restructuring process, PaperlinX Limited also went through a series of high-level executive resignations and appointments on its board.

In August 2012, PaperlinX Limited reported its year-end results, which included a statutory loss of $266.7 million (after tax) for its most recent year, compared to a loss of $108 million for the prior year. PaperlinX also reported a net debt of $148 million for the year ended versus the prior year’s net debt of $172 million.

This Thursday, on February 21, PaperlinX Limited is scheduled to release its 2013 interim financial results.

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