Superior Plus Initiates Comprehensive Strategic Review - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Superior Plus Income Fund analyst conference call. At this time, all participants are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. Instructions will be provided at that time for you to queue up for questions. (OPERATOR INSTRUCTIONS).

I would like to remind everyone that this conference call is being recorded today, Monday, April 24, 2006 at 10:30 AM Eastern Time. I will now turn the conference over to Mr. Geoff Mackey, President and Chief Executive Officer. Please go ahead, sir.

GEOFF MACKEY, PRESIDENT, CEO, SUPERIOR PLUS INCOME FUND: Thank you very much. Good morning, and thank you for participating in the Superior Plus conference call to discuss the initiation of a strategic review to maximize unitholder value which was announced this morning. I am Geoff Mackey, President and CEO of Superior Plus. And with me are Mark Schweitzer Executive Vice President and Chief financial Officer; Teresia Reisch, Vice President, Investor Relations and Corporate Secretary; and Clint Warkentin, Vice President and Treasurer. This conference call is being webcast and can be accessed through our website at www.SuperiorPlus.com.

As a reminder, our statements on forward-looking disclosure and on non-GAAP measures in our news release apply likewise to any comments we may make during this call.

First, I would like to lay out the agenda for this morning's conversation. I will first provide you with an overview of the rationale for initiating a strategic review process and discuss our financial strength. Next, I will be reviewing the decrease in cash distributions announced in the press release. And then I will talk about the formation and mandate of the strategic review committee of the Board. After that, I will address the reasons for adopting a unitholder rate plan. And finally, I will provide you with an overview of each of our businesses.

The rationale for the strategic review process -- with the continuing instability in the North American bleached pulp market, we have recently completed a review of ERCO's sodium chloride business, and anticipate that this combined with the anticipated increased power costs at ERCO's Valdosta, Georgia sodium chloride plant in 2007 will place pressure on ERCO's profitability over the medium term. ERCO is a principal business of Superior Plus, and contributed approximately 35% to the fund's 2005 distributable cash flow.

As a result, the Board has approved a reduction of the monthly distributions from $0.185 cents per trust unit to $0.13, which is considered to be a prudent level based on our current outlook and profile. This combined with the recent weakness in the fund's unit price has caused the Board to initiate a comprehensive strategic review process, intending to maximize shareholder value.

This strategic review is not being initiated due to concerns over financial leverage or liquidity. In other words, this is not a financial restructuring. Rather, we are unhappy with the fund's unit price, a concern many of you without doubt share as well, and believe it is a prudent and beneficial to explore all alternative strategies for the fund and its businesses in order to improve unitholder value.

In terms of our financial strength, our financial position remains strong. As of March 31, 2006, senior debt, which includes the off-balance sheet accounts, the receivable securitization program, to EBITDA was 2.6 times. Under our senior debt covenants, Superior is restricted from making distributions and from incurring additional long-term debt if senior debt to EBITDA exceed 3 times. The default is not triggered unless total debt, which for purposes of this calculation excludes convertible debentures, to EBITDA exceed 5.5 times. And again, this ratio is currently at 2.6 times, leaving us ample room and putting us in a strong financial position.

Superior has adequate liquidity to meet its net working capital requirements and its planned growth capital expenditures while we conduct the strategic review process. Currently, we have $150 million of our $425 million committed revolving bank facility undrawn and available.

As a result of these developments and to provide sufficient operating flexibility during the strategic review process, the Board considered it prudent to reduce cash distributions to $0.13 from the current level of $0.185 cents a month. The reduction to the …