Superior Plus Announces Conversion to a Corporation with a 13.5 cent per share Monthly Dividend



    TSX: SPF.UN

    CALGARY, Oct. 30 /CNW/ - Superior Plus Income Fund ("Superior")
(www.superiorplus.com) (TSX: SPF.UN) is pleased to announce that it has
entered into an agreement pursuant to which it will convert from an income
trust structure to a corporation pursuant to a Plan of Arrangement (the
"Conversion").

    Strategic Rationale for the Decision to Convert to a Corporation

    Superior's vision is to operate and build businesses that will provide
long-term stability of distributions and premium returns to our unitholders
through value-based growth in our core businesses. The announcement of the
Specified Investment Flow-Through Trust income and distribution tax (the "SIFT
Tax") on October 31, 2006 and the subsequent limitations placed on trusts made
it clear that the intention of the Department of Finance was to close and
subsequently dissolve the public income trust market. Further, the proposed
legislation on tax-free conversions announced in July 2008 requires
conversions to be completed under the new rules before December 2013. Superior
believes the uncertainty relating to the future of the public income trust
market has had a negative impact resulting in discounted unit prices,
decreased access to capital, lower liquidity and limited growth prospects.
    Superior has been proactively assessing several options available to
provide long-term stability of distributions for our unitholders while
minimizing the impact of the Federal trust taxation legislated by the Federal
Government in June 2007. Superior believes the early conversion to a
corporation through the proposed Plan of Arrangement with Ballard Power
Systems Inc. ("Ballard") accomplishes both of these objectives.
    Grant Billing, Chairman and Chief Executive Officer, stated that, "We are
pleased to announce this Conversion as it allows us to continue to create
long-term value for our unitholders by converting from a trust to a
corporation while continuing our monthly distribution. As part of the
transaction, we will be assessing the potential for a United States stock
exchange listing to create additional opportunities to access the United
States debt and equity markets. In addition, this transaction provides us the
opportunity to work with Ballard to enhance the value of our off-take hydrogen
as part of their hydrogen technology development plans."

    
    Benefits of the Transaction to our Unitholders

    -  The Plan of Arrangement provides for an effective and efficient method
       of converting from a Specified Investment Flow-through Trust ("SIFT")
       to a corporation consistent with the proposed legislation announced by
       the Minister of Finance.

    -  Superior expects to continue the current monthly payments of $0.135
       per unit ($1.62 per year) which will be paid as a dividend to its
       shareholders.

    -  Canadian taxable shareholders will receive a dividend tax credit
       compared to current unitholders tax treatment as other income.

    -  The transaction is tax free for our unitholders based on the recently
       proposed rules for SIFT conversions.

    -  Superior's conversion to a corporation may result in greater access to
       capital and the removal of the "normal growth" and "undue expansion
       restrictions" in the SIFT legislation that limited Superior's ability
       to consider strategic acquisitions.

    -  The planned termination of the public income trust market would have
       diminished Superior's ability to raise capital in the future making
       the conversion to a corporation inevitable.

    -  Superior may have greater access to capital in Canada, the United
       States and other international markets on a more timely and cost
       efficient basis.

    -  Superior may be able to attract new investors, including non-resident
       investors, which is limited as a mutual fund trust.

    -  Superior is expected to have improved liquidity resulting in higher
       trading volumes.

    -  Superior will consider listing on a United States stock exchange,
       which will allow for broader access to capital to fund the growth of
       our businesses.

    -  Superior will have an estimated tax basis of over $1.3 billion
       following the transaction.

    -  Superior is considering a strategic alliance with Ballard to more
       fully develop the off-take hydrogen from our specialty chemical
       facilities.

    -  The total cost of the transaction is expected to be approximately $50
       million of which approximately $46 million will be paid to Ballard.

    Superior Plus after Conversion to a Corporation

    -  Superior will become a high-yield corporation, and currently expects
       to continue to pay monthly dividends of $0.135 per share, unchanged
       from Superior's previous monthly distribution.

    -  Canadian taxable shareholders should benefit from lower income taxes
       paid on dividends compared to taxes previously paid on Superior's
       distributions.

    -  Superior's Convertible Debentures and US Notes will be assumed by the
       new corporation preserving Superior's attractive long-term borrowing
       rates.

    -  After the completion of the transaction, Superior will continue to
       operate its existing businesses and the number of units/shares
       outstanding will remain at 88.4 million.

    -  The existing businesses of Ballard will be carried on by a new
       corporation owned by Ballard's existing shareholders.
    

    The Conversion is subject to various commercial conditions, including
lender consent to the Plan of Arrangement and the receipt of regulatory
approvals which include the approval of The Toronto Stock Exchange. The
Conversion is also subject to the approval of the court and of 66 2/3% of the
votes cast by unitholders of the Fund and the shareholders of Ballard at the
respective securityholder meetings called to approve the transaction. The
mailing of the information circular to the holders of trust units of Superior
is expected to occur late November with the meeting to be held on or about
December 18, 2008. The closing of the Conversion is expected to occur on or
about December 31, 2008.
    Complete details of the terms of the Plan of Arrangement are set out in
the Arrangement Agreement that will be filed by Superior on SEDAR.
(www.sedar.com)

    Third quarter results and conference call

    Superior will be releasing its third quarter results on November 5, 2008
and conducting a conference call and webcast for investors, analysts, brokers
and media representatives to discuss the Corporate Conversion and the 2008
Third Quarter Results at 10:30 a.m. EST (8:30 a.m. MST) on Thursday, November
6, 2008. To participate in the call, dial: 1-800-731-6941. An archived
recording of the call will be available for replay until midnight, December 6,
2008. To access the recording, dial: 1-877-289-8525 and enter pass code
21285348 followed by the No. key. Internet users can listen to the call live,
or as an archived call, on Superior's website at: www.superiorplus.com under
the Events and Presentations section.

    Forward Looking Information

    This press release contains certain forward-looking statements and
forward-looking information ("forward-looking information") within the meaning
of applicable Canadian securities laws. Forward-looking information is often,
but not always, identified by the use of words such as "anticipate",
"believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate",
"expect", "may", "will", "project", "should" or similar words suggesting
future outcomes. In particular, this press release includes forward-looking
information relating to results of operations, dividends, taxes, plans and
objectives, access to capital, liquidity and trading volumes, projected costs,
business strategy and anticipated benefits of the Conversion. Superior
believes the expectations reflected in such forward-looking information are
reasonable but no assurance can be given that these expectations will prove to
be correct and such forward-looking information should not be unduly relied
upon.
    Forward-looking information is based on various assumptions. Those
assumptions are based on information currently available to Superior,
including information obtained from third party industry analysts and other
third party sources and include the historic performance of Superior's
businesses, current business and economic trends, completion of the Conversion
and utilization of the tax basis, currency, exchange and interest rates,
trading data and cost estimates. You are cautioned that the preceding list of
assumptions is not exhaustive.
    Forward-looking information is not a guarantee of future performance and
involves a number of risks and uncertainties some of which are described
herein. Such forward-looking information necessarily involves known and
unknown risks and uncertainties, which may cause Superior's actual performance
and financial results in future periods to differ materially from any
projections of future performance or results expressed or implied by such
forward-looking information. These risks and uncertainties include but are not
limited to the risks identified in Superior's 2007 Annual Information Form
under the heading "Risk Factors" and the risks associated with the
availability and amount of the tax basis. Any forward-looking information is
made as of the date hereof and, except as required by law, Superior assumes no
obligation to publicly update or revise such information to reflect new
information, subsequent or otherwise.

    Non-GAAP Financial Measures

    Distributable Cash Flow

    Distributable cash flow of Superior available for distribution to
Unitholders is equal to cash generated from operations, adjusted for changes
in non-cash working capital and natural gas and electricity customer
acquisition costs, less maintenance capital expenditures. Maintenance capital
expenditures are equal to capital expenditures incurred to maintain the
capacity of Superior's operations and are deducted from the calculation of
distributable cash flow. Acquisitions and other capital expenditures incurred
to expand the capacity of Superior's operations or to increase its
profitability (growth capital), are excluded from the calculation of
distributable cash flow. Superior may deduct or include additional items to
its calculation of distributable cash flow; these items would generally, but
not necessarily, be items of a non-recurring nature. Distributable cash flow
is the main performance measure used by management and investors to evaluate
the performance of Superior and its businesses. Readers are cautioned that
distributable cash flow is not a defined performance measure under Canadian
generally accepted accounting principles (GAAP), and that distributable cash
flow cannot be assured. Superior's calculation of distributable cash flow,
maintenance capital and growth capital may differ from similar calculations
used by comparable entities. Operating distributable cash flow is
distributable cash flow before corporate and interest expenses. It is also a
non-GAAP measure and is used by management to assess the performance of the
operating divisions.

    Standardized Distributable Cash Flow

    During 2007, the CICA published an interpretive release, Standardized
Distributable Cash in Income Trusts and Other Flow-Through Entities: Guidance
on Preparation and Disclosure, in order to provide its recommendations related
to the measurement and disclosure of cash available for distributions. The
guidance was issued in an effort to improve the consistency, comparability,
and transparency of the reporting of the measure commonly referred to as
distributable cash flow. Superior's calculation of standardized distributable
cash flow is, in all material respects, in accordance with the recommendations
provided by the CICA.
    Superior views the CICA recommendations as a positive step in providing
stakeholders with meaningful information, but consistent with the guidance
provided by the CICA, Superior has determined that due to the nature of
Superior's businesses, certain adjustments to standardized distributable cash
flow are required to better reflect the cash flow available to be distributed
to Unitholders. Superior's adjusted standardized distributable cash flow is
referred to as distributable cash flow, and is unchanged from Superior's
previous definition or measurement of distributable cash flow. Superior's
distribution policy is based on distributable cash flow on an annualized
basis, accordingly, the seasonality of Superior's individual quarterly results
must be assessed in the context of annualized distributable cash flow.
Adjustments recorded by Superior as part of its calculation of distributable
cash flow include, but are not limited to, the impact of the seasonality of
Superior's businesses, principally Superior Propane, by adjusting for non-cash
working capital items, thereby eliminating the impact of the timing between
the recognition and collection/payment of Superior's revenues and expense,
which can from quarter to quarter differ significantly. Superior's calculation
also distinguishes between capital expenditures that are maintenance related
and those that are growth related, in addition to allowing for the proceeds
received on the sale of certain capital items. Adjustments are also made to
reclassify the cash flows related to natural gas and electricity customer
acquisition costs in a manner consistent with the income statement recognition
of these costs.





For further information:

For further information: about Superior, visit our website at:
www.superiorplus.com or contact: Wayne Bingham, Executive Vice-President and
Chief Financial Officer, E-mail: wbingham@superiorplus.com, Phone: (403)
218-2951, Fax: (403) 218-2973, Toll Free: 1-866-490-PLUS (7587); Scott Daniel,
Vice-President, Treasurer and Investor Relations, E-mail:
sdaniel@superiorplus.com, Phone: (403) 218-2953, Fax: (403) 218-2973, Toll
Free: 1-866-490-PLUS (7587)

Organization Profile

SUPERIOR PLUS CORP.

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