THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
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OFFER TO PURCHASE FOR CASH UP TO 5,587,978 OF ITS ISSUED
AND OUTSTANDING SHARES AT 95% OF NET ASSET VALUE PER SHARE
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THE OFFER WILL EXPIRE AT 5:00 P.M. EASTERN TIME ON OCTOBER 20, 2000, UNLESS
THE OFFER IS EXTENDED.
TO THE SHAREHOLDERS OF THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.:
The Emerging Markets Infrastructure Fund, Inc., a non-diversified,
closed-end management investment company incorporated in Maryland (the "Fund"),
is offering to purchase up to 5,587,978 of its issued and outstanding shares of
Common Stock, par value $0.001 per share (the "Shares") prior to the merger
transaction in which The Emerging Markets Telecommunications Fund, Inc. ("ETF")
will merge with and into the Fund. After the merger, the Fund, which technically
will be the surviving corporation in the merger, will change its name to "The
Emerging Markets Telecommunications Fund, Inc." and will adopt ETF's investment
objective and policies. The offer is conditioned upon the approval of the merger
by shareholders of both funds and the satisfaction or waiver of all conditions
to the consummation of the merger. The offer is for cash at a price equal to 95%
of the net asset value ("NAV") per Share determined as of the close of the
regular trading session of the New York Stock Exchange, the principal market in
which the Shares are traded (the "NYSE"), on the date the offer expires, and is
upon the terms and subject to the conditions set forth in this Offer to Purchase
and the related Letter of Transmittal (which together with any amendments or
supplements thereto collectively constitute the "Offer"). The Offer will expire
at 5:00 P.M. Midnight Eastern Time on October 20, 2000, unless extended. The
Shares are traded on the NYSE under the symbol "EMG". The NAV as of the close of
the regular trading session of the NYSE on September 5, 2000 was $12.99 per
Share. During the pendency of the Offer, current NAV quotations can be obtained
from Credit Suisse Asset Management, LLC ("CSAM")--Investor Relations, by
calling (000) 000-0000, or at xxx.xxxxxxxxx.xxx, a website providing information
for closed end funds managed by CSAM. Tendering shareholders will not be obliged
to pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, stock transfer taxes on the purchase of Shares by the
Fund pursuant to the Offer. The Fund will pay all charges and expenses of
EquiServe Trust Company, N.A. (the "Depositary") and Shareholders Communication
Corporation (the "Information Agent"). The Fund has mailed materials for the
Offer to record holders on or about September 8, 2000.
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 4.
IMPORTANT INFORMATION
Shareholders who desire to tender their Shares should either: (1) properly
complete and sign the Letter of Transmittal (or a copy or facsimile thereof),
provide thereon the original of any required signature guarantee(s) and mail or
deliver it together with the Shares (in proper certificated or uncertificated
form) and any other documents required by the Letter of Transmittal; or
(2) request their broker, dealer, commercial bank, trust company or other
nominee to effect the transaction on their behalf. Shareholders who desire to
tender Shares registered in the name of such a firm must contact that firm to
effect a tender on their behalf. Tendering shareholders will not be obligated to
pay brokerage commissions in connection with their tender of Shares, but they
may be charged a fee by such a firm for processing the tender(s). The Fund
reserves the absolute right to reject tenders determined not to be in
appropriate form.
If you do not wish to tender your Shares, you need not take any action.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS NOR CREDIT SUISSE ASSET
MANAGEMENT, LLC, THE FUND'S INVESTMENT ADVISOR ("CSAM"), MAKES ANY
RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO TENDER OR REFRAIN FROM
TENDERING SHARES. NO PERSON HAS BEEN AUTHORIZED TO MAKE ANY RECOMMENDATION ON
BEHALF OF THE FUND, ITS BOARD OF DIRECTORS OR CSAM AS TO WHETHER SHAREHOLDERS
SHOULD TENDER OR REFRAIN FROM TENDERING SHARES PURSUANT TO THE OFFER OR TO MAKE
ANY REPRESENTATION OR TO GIVE ANY INFORMATION IN CONNECTION WITH THE OFFER OTHER
THAN AS CONTAINED HEREIN OR IN THE LETTER OF TRANSMITTAL. IF MADE OR GIVEN, ANY
SUCH RECOMMENDATION, REPRESENTATION OR INFORMATION MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE FUND, ITS BOARD OF DIRECTORS OR CSAM. SHAREHOLDERS
ARE URGED TO EVALUATE CAREFULLY ALL INFORMATION IN THE OFFER, CONSULT THEIR OWN
INVESTMENT AND TAX ADVISERS AND MAKE THEIR OWN DECISIONS WHETHER TO TENDER OR
REFRAIN FROM TENDERING THEIR SHARES.
EQUISERVE TRUST COMPANY, N.A., DEPOSITARY
TELEPHONE NUMBER: (000) 000-0000
BY REGISTERED, CERTIFIED OR
EXPRESS MAIL OR OVERNIGHT
COURIER:
EquiServe Trust Company, N.A.
Attn: Corporate Actions
00 Xxxxxxxxxx Xxxxx
BY FIRST CLASS MAIL: Braintree, MA 02184 BY HAND:
EquiServe Trust Company, N.A. Securities Transfer &
Attn: Corporate Actions Reporting Services, Inc.
P.O. Box 9573 c/o EquiServe Trust Company, N.A.
Boston, MA 02205-9573 000 Xxxxxxx Xxxxxx, Xxxxxxxx
Xxx Xxxx, XX 00000
SHAREHOLDER COMMUNICATIONS CORPORATION,
INFORMATION AGENT
TELEPHONE NUMBER: (000) 000-0000
2
TABLE OF CONTENTS
PAGE
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SUMMARY TERM SHEET......................................... 4
1. Price; Number of Shares........................... 8
2. Background to the Offer........................... 8
3. Purpose of the Offer; Plans or Proposals of the
Fund............................................. 9
4. Certain Conditions of the Offer................... 10
5. Procedures for Tendering Shares................... 11
a. Proper Tender of Shares........................ 11
b. Signature Guarantees and Method of Delivery.... 11
c. Book-Entry Delivery............................ 12
d. Guaranteed Delivery............................ 12
e. Determinations of Validity..................... 13
f. United States Federal Income Tax Withholding... 14
6. Withdrawal Rights................................. 14
7. Payment for Shares................................ 15
8. Source and Amount of Funds........................ 15
9. Price Range of Shares; Dividends/Distributions.... 16
10. Selected Financial Information.................... 17
11. Interest of Directors, Executive Officers and
Certain Related Persons.......................... 20
12. Certain Effects of the Offer and the Merger....... 20
13. Certain Information about the Fund................ 21
14. Additional Information............................ 21
15. Certain United States Federal Income Tax
Consequences..................................... 21
16. Amendments; Extension of Tender Period;
Termination...................................... 23
17. Miscellaneous..................................... 23
3
SUMMARY TERM SHEET
(Section references are to the Offer to Purchase)
This Summary Term Sheet highlights certain information concerning this
tender offer. To understand the offer fully and for a more complete discussion
of the terms and conditions of the offer, you should read carefully the entire
Offer to Purchase and the related Letter of Transmittal.
WHAT IS THE TENDER OFFER?
- The Emerging Markets Infrastructure Fund, Inc. is offering to purchase up
to 5,587,978 of its shares of Common Stock for cash at a price per share
equal to 95% of the per share net asset value as of the close of the
regular trading session of the NYSE on October 20, 2000 (or, if the offer
is extended, on the date to which the offer is extended) upon specified
terms and subject to conditions as set forth in the tender offer
documents.
WHY IS THE FUND MAKING THIS TENDER OFFER?
- In May 2000, the Board of Directors of the Fund, in recognition of the
fact that the Fund's shares have traded at a discount to their net asset
value and after considering analyses and advice from PaineWebber
Incorporated, its financial advisor, determined that it was in the best
interests of the Fund to initiate this tender offer prior to a merger
transaction in which ETF will merge with and into the Fund. After the
merger, the Fund, which technically will be the surviving corporation in
the merger, will change its name to "The Emerging Markets
Telecommunications Fund, Inc." and will adopt ETF's investment objective
and policies. The merger must be approved by the shareholders of both
funds and all conditions to the consummation of the merger must be
satisfied or waived; in the event that the merger is not so approved and
those conditions are not satisfied or waived, the Fund will not consummate
this tender offer. See Section 3.
WHEN WILL THE TENDER OFFER EXPIRE, AND MAY THE OFFER BE EXTENDED?
- The tender offer will expire at 5:00 P.M. Eastern Time on October 20,
2000, unless extended. The Fund may extend the period of time the offer
will be open by issuing a press release or making some other public
announcement by no later than the next business day after the offer
otherwise would have expired. See Section 16.
WHAT IS THE NET ASSET VALUE PER FUND SHARE AS OF A RECENT DATE?
- As of September 5, 2000, the net asset value per share was $12.99. See
Section 9 of the Offer to Purchase for details. During the pendency of the
tender offer, current net asset value quotations can be obtained from
Credit Suisse Asset Management--Investor Relations, by calling (800)
000-0000, or at xxx.xxxxxxxxx.xxx.
WILL THE NET ASSET VALUE BE HIGHER OR LOWER ON THE DATE THAT THE PRICE TO BE
PAID FOR TENDERED SHARES IS TO BE DETERMINED?
- No one can accurately predict the net asset value at a future date.
4
HOW DO I TENDER MY SHARES?
- If your shares are registered in your name, you should obtain the tender
offer materials, including the Offer to Purchase and the related Letter of
Transmittal, read them, and if you should decide to tender, complete a
Letter of Transmittal and submit any other documents required by the
Letter of Transmittal. These materials must be received by EquiServe Trust
Company, N.A., the Depositary, in proper form before 5:00 P.M. Eastern
Time on October 20, 2000 (unless the tender offer is extended by the Fund
in which case the new deadline will be as stated in the public
announcement of the extension). If your shares are held by a broker,
dealer, commercial bank, trust company or other nominee (E.G., in "street
name"), you should contact that firm to obtain the package of information
necessary to make your decision, and you can only tender your shares by
directing that firm to complete, compile and deliver the necessary
documents for submission to the Depositary. See Section 5.
MAY I WITHDRAW MY SHARES AFTER I HAVE TENDERED THEM AND, IF SO, BY WHEN?
- Yes, you may withdraw your shares at any time prior to 5:00 P.M. Eastern
Time on October 20, 2000 (or if the offer is extended, at any time prior
to 5:00 P.M. Eastern Time on the new expiration date). Withdrawn shares
may be re-tendered by following the tender procedures before the offer
expires (including any extension period). In addition, if shares tendered
have not by then been accepted for payment, you may withdraw your tendered
shares at any time after November 2, 2000. See Section 6.
HOW DO I WITHDRAW TENDERED SHARES?
- A written notice of withdrawal of tendered shares must be timely received
by EquiServe Trust Company, N.A., which specifies the name of the
shareholder who tendered the shares, the number of shares being withdrawn
(which must be all of the shares tendered) and, as regards share
certificates which represent tendered shares that have been delivered or
otherwise identified to EquiServe Trust Company, N.A., the name of the
registered owner of such shares if different than the person who tendered
the shares. See Section 6.
MAY I PLACE ANY CONDITIONS ON MY TENDER OF SHARES?
- No.
WHAT IF MORE THAN 5,587,978 SHARES ARE TENDERED (AND NOT TIMELY WITHDRAWN)?
- The Fund will purchase duly tendered shares from tendering shareholders
pursuant to the terms and conditions of the tender offer on a pro rata
basis (disregarding fractions) in accordance with the number of shares
tendered by each shareholder (and not timely withdrawn), unless the Fund
determines not to purchase any shares. The Fund's present intention, if
the tender offer is oversubscribed, is not to purchase more than 5,587,978
shares. See Section 1.
IF I DECIDE NOT TO TENDER, HOW WILL THE TENDER OFFER AFFECT THE FUND SHARES I
HOLD?
- Immediately following the tender offer, ETF will be merged with and into
the Fund. After the merger, the Fund, which technically will be the
surviving corporation in the merger, will change its name to "The Emerging
Markets Telecommunications Fund, Inc." and will adopt ETF's investment
objective and policies.
5
DOES THE FUND INTEND TO CONDUCT ANOTHER SELF-TENDER OFFER?
- The Board of Directors of the Fund has approved the overall terms of a
self-tender program that the Fund intends to launch in the calendar year
2001, which terms include the following: (i) the Fund will make a tender
offer to acquire at least 15% of its outstanding shares during each
calendar year of the program; and (ii) the per share purchase price will
be at least 95% of the Fund's net asset value per share. The
implementation of this program is conditioned on approval of the merger.
DOES THE FUND HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
- Yes. To finance the purchase of any tendered shares, the Fund anticipates
that funds will first be derived from any cash on hand and then from the
proceeds from the sale of portfolio securities held by the Fund. The Fund
is authorized to borrow money for temporary or emergency purposes, and to
the extent the Fund does not have sufficient resources through cash on
hand and the disposition of assets to purchase shares in the tender offer,
it intends to finance a portion of the offer through temporary borrowing.
See Section 8.
IF SHARES I TENDER ARE ACCEPTED BY THE FUND, WHEN WILL PAYMENT BE MADE?
- It is contemplated, subject to change, that payment for tendered shares,
if accepted, will be made on or about October 25, 2000. See Section 7.
IS MY SALE OF SHARES IN THE TENDER OFFER A TAXABLE TRANSACTION?
- For most shareholders, yes. All U.S. shareholders (other than tax-exempt
shareholders) who sell shares in the tender offer are expected to
recognize gain or loss for U.S. federal income tax purposes equal to the
difference between the cash they receive for the shares sold and their
adjusted basis in the shares. The sale date for tax purposes will be the
date the Fund accepts shares for purchase. See Section 15 for details,
including the nature of the income or loss and the differing rules for
U.S. and non-U.S. shareholders. Please consult your tax advisor as well.
IS THE FUND REQUIRED TO COMPLETE THE TENDER OFFER AND PURCHASE ALL SHARES
TENDERED UP TO THE NUMBER OF SHARES TENDERED FOR?
- Yes, unless the merger between the Fund and ETF is not approved by the
shareholders of both funds and all of the conditions to the merger are
satisfied or waived, or unless certain other conditions described in
Section 4 are not satisfied.
IS THERE ANY REASON SHARES TENDERED WOULD NOT BE ACCEPTED?
- In addition to those circumstances described in Section 4 in which the
Fund is not required to accept tendered shares, the Fund has reserved the
right to reject any and all tenders determined by it not to be in
appropriate form. Tenders will be rejected if they do not include original
signature(s) or the original of any required signature guarantee(s).
HOW WILL TENDERED SHARES BE ACCEPTED FOR PAYMENT?
- Properly tendered shares, up to the number tendered for, will be accepted
for payment by a determination of the Fund's Board of Directors followed
by notice of acceptance to EquiServe
6
Trust Company, N.A. which is thereafter to make payment as directed by the
Fund with funds to be deposited with it by the Fund. See Section 7.
WHAT ACTION NEED I TAKE IF I DECIDE NOT TO TENDER MY SHARES?
- None.
DOES MANAGEMENT ENCOURAGE SHAREHOLDERS TO PARTICIPATE IN THE TENDER OFFER, AND
WILL THEY PARTICIPATE IN THE TENDER OFFER?
- No. Neither the Fund, its Board of Directors nor the Fund's investment
advisor is making any recommendation to tender or not to tender shares in
the tender offer. No director or officer of the Fund intends to tender
shares. See Section 11.
HOW DO I OBTAIN INFORMATION?
- Questions and requests for assistance should be directed to Credit Suisse
Asset Management, LLC--Investor Relations by calling (000) 000-0000, or at
xxx.xxxxxxxxx.xxx. Requests for additional copies of the Offer to
Purchase, the Letter of Transmittal and all other tender offer documents
should be directed to Shareholder Communications Corporation, the
Information Agent for the tender offer, toll free at (000) 000-0000. If
you do not own shares directly, you should obtain this information and the
documents from your broker, dealer, commercial bank, trust company or
other nominee, as appropriate.
7
1. PRICE; NUMBER OF SHARES. Upon the terms and subject to the conditions
of the Offer, the Fund will accept for payment and purchase for cash up to
5,587,978 of its issued and outstanding Shares that are properly tendered prior
to 5:00 P.M. Eastern Time on October 20, 2000 (and not withdrawn in accordance
with Section 6). The Fund reserves the right to amend, extend or terminate the
Offer. See Sections 4 and 16. The Fund will not be obligated to purchase Shares
pursuant to the Offer under certain circumstances. See Section 4. The later of
October 20, 2000 or the latest date to which the Offer is extended is
hereinafter called the "Expiration Date." The purchase price of the Shares will
be 95% of their NAV per Share determined as of the close of the regular trading
session of the NYSE on the Expiration Date. The Fund will not pay interest on
the purchase price under any circumstances. The NAV as of the close of the
regular trading session of the NYSE on September 5, 2000 was $12.99 per Share.
During the pendency of the Offer, current NAV quotations can be obtained from
Credit Suisse Asset Management--Investor Relations, by calling (000) 000-0000 or
at xxx.xxxxxxxxx.xxx.
The Offer is being made to all shareholders and is not conditioned upon
shareholders tendering in the aggregate any minimum number of Shares.
If more than 5,587,978 Shares are duly tendered pursuant to the Offer (and
not withdrawn as provided in Section 6), unless the Fund determines not to
purchase any Shares, the Fund will purchase Shares from tendering shareholders,
in accordance with the terms and conditions specified in the Offer, on a pro
rata basis (disregarding fractions), in accordance with the number of Shares
duly tendered by or on behalf of each shareholder (and not so withdrawn). The
Fund does not contemplate extending the Offer and increasing the number of
Shares covered thereby by reason of more than 5,587,978 Shares having been
tendered.
On September 5, 2000, there were 11,175,955 Shares issued and outstanding,
and there were 234 holders of record of Xxxxxx. Certain of these holders of
record were brokers, dealers, commercial banks, trust companies and other
institutions that held Shares in nominee name on behalf of multiple beneficial
owners.
2. BACKGROUND TO THE OFFER. The Fund's shares have generally traded at a
discount to their net asset value per share since shortly after its commencement
of operations. The Board of Directors of the Fund (the "Board") has, over the
years, discussed the significance of the existence of the discount to net asset
value at which the Fund's shares have traded on the NYSE and the impact on
shareholders of the discount. The Board has discussed and considered various
alternative strategies to address the discount, including instituting share
repurchases, combining with other funds, converting to an open-end format, or
liquidating. The Board has, however, consistently concluded that it was in the
best interests of the Fund and its shareholders to maintain the current
closed-end format, because, in the view of the Board and of CSAM, the closed-end
format is the most appropriate investment vehicle for participating in the
equities markets of emerging countries. In CSAM's view, many attractive equity
investment opportunities in emerging countries have been and continue to be
found in the small-capitalization and less liquid sectors of those markets. The
Board believes that the long-term performance of the Fund supports this view.
In October 1998, the Board engaged in a share repurchase program of up to
15% of the Fund's outstanding common stock. In February 1999, the Board
authorized another share repurchase program for up to an additional 10% of the
Fund's outstanding common stock on a rolling 12-month basis (rather than an
annual basis) and permitting repurchases of the Fund's outstanding shares
(subject to the 15% annual limit) whenever the discount to net asset value is
15% or more. The Board authorized another share repurchase program for not less
than 10% nor more than 15% of the Fund's outstanding common stock in October
1999 after repurchasing the full amount of shares authorized under the first
share repurchase program. Both share repurchase programs were intended to
provide additional liquidity to those shareholders who elected to sell their
shares and to enhance the net asset value of the shares held by shareholders who
maintained their investment.
8
In May 1999, the Board of Directors approved a self tender. Pursuant to this
self tender, the Fund acquired 3,011,714 shares of its common stock,
representing approximately 20% of its then outstanding shares for a cash
purchase price equal to 95% of the Fund's net asset value per share on June 25,
1999, the date of the closing of the tender offer.
The Board believes that the combination of the Fund with The Emerging
Markets Telecommunications Fund pursuant to the proposed Merger and the
implementation by the Fund of a self-tender program (as further discussed in
Item 3 below) following the Merger achieves a proper balance between the ability
of the Fund to pursue its revised investment objective and the desire of certain
shareholders to sell their shares at a price approximating net asset value.
3. PURPOSE OF THE OFFER; PLANS OR PROPOSALS OF THE FUND. In the context of
the Board's ongoing consideration of the impact of the market price discount on
the Fund and its shareholders, the non-interested members of the Board retained
PaineWebber Incorporated ("PaineWebber"), as financial adviser, to assist in
this process and requested that PaineWebber evaluate possible alternatives that
would address these concerns and otherwise enhance shareholder value. The Board
further requested that, in evaluating the possible alternatives, PaineWebber
take into consideration the interests of all shareholders.
The alternatives available to the Fund, including the full range of
alternatives that has been reviewed in the past discussions of the discount
issue, were considered at meetings of the Board held on February 8, 2000,
April 6, 2000, May 8, 2000 and July 24, 2000. After consideration of these
alternatives, PaineWebber proposed, and the Board has approved, a two-step
transaction pursuant to which the Fund would first make a tender offer for up to
50% of its common stock and then, immediately following the tender offer, would
consummate the Merger. The full Board, after consideration of the potential
benefits of the Merger to the shareholders of the Fund and the expenses expected
to be incurred by the Fund in connection with the Merger, has unanimously
determined that:
- the interests of the existing shareholders of the Fund will not be diluted
as a result of the proposed Merger, and
- the proposed Merger is in the best interests of the Fund.
Following consummation of the Merger, the Fund, which technically will be
the surviving corporation in the merger, will change its name to "The Emerging
Markets Telecommunications Fund, Inc." and will adopt ETF's investment objective
and policies. The Fund then intends to launch a self-tender program in the
calendar year 2001 under the following terms: (i) the Fund will make a tender
offer to acquire at least 15% of its outstanding shares during each calendar
year of the program; and (ii) the per share purchase price will be at least 95%
of the Fund's net asset value per share. While the precise terms of any
self-tender following the Merger have not been fixed, the current expectation is
that the self-tenders would not substantially exceed 15% of the Fund's
outstanding shares on an annual basis. Implementation of the program is
conditioned on approval and consummation of the Merger. The Board of Directors
of the Fund has reserved the right to decide on the timing and the terms of
specific tenders, subject to adherence to the terms described in the preceding
sentence, and intends to continue the self-tender program indefinitely, subject
to changes in economic or market conditions or other factors. For example, a
sustained reduction in the market discount at which the Fund's shares are
trading, a risk of material adverse tax consequences or a risk of the Fund
becoming subject to delisting may lead the Fund's Board of Directors to conclude
in the future that it is appropriate to suspend the self-tender program. In
addition, the self-tender program is likely to reduce the Fund's asset levels
over time. Absent substantial appreciation in the Fund's portfolio or
opportunities to raise additional funds, this could lead to higher expense
ratios, the absence of reasonable diversification of investment opportunities,
or other factors that adversely affect the Fund and, possibly, the continued
viability of the Fund as a closed-end fund. the Fund's Board of Directors will
re-evaluate the program from time to time in light of its effects on the Fund.
Except as set forth above and except as a consequence of the Merger with The
Emerging Markets Telecommunications Fund, the Fund does not have any present
plans or proposals and is not engaged
9
in any negotiations that relate to or would result in (a) any extraordinary
transaction, such as a merger, reorganization or liquidation, involving the Fund
or any of its subsidiaries; (b) other than in connection with transactions in
the ordinary course of the Fund's operations and for purposes of funding the
Offer, any purchase, sale or transfer of a material amount of assets of the Fund
or any of its subsidiaries; (c) any material change in the Fund's present
dividend rate or policy, or indebtedness or capitalization of the Fund; (d) any
change in the composition of the Board or management of the Fund, including, but
not limited to, any plans or proposals to change the number or the term of
members of the Board, to fill any existing vacancies on the Board or to change
any material term of the employment contract of any executive officer; (e) any
other material change in the Fund's corporate structure or business, including
any plans or proposals to make any changes in the Fund's investment policy for
which a vote would be required by Section 13 of the Investment Company Act of
1940, as amended (the "1940 Act"); (f) any class of equity securities of the
Fund to be delisted from a national securities exchange or to cease to be
authorized to be quoted in an automated quotations system operated by a national
securities association; (g) any class of equity securities of the Fund becoming
eligible for termination of registration pursuant to Section 12(g)(4) of the
Exchange Act; (h) the suspension of the Fund's obligation to file reports
pursuant to Section 15(d) of the Exchange Act; (i) the acquisition by any person
of additional securities of the Fund, or the disposition of securities of the
Fund; or (j) any changes in the Fund's charter, bylaws or other governing
instruments or other actions that could impede the acquisition of control of the
Fund.
4. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision of
the Offer, the Fund will not purchase shares pursuant to the Offer if (a) the
Merger is not approved by the shareholders of both the Fund and The Emerging
Markets Telecommunications Fund; (b) any other condition to consummation of the
Merger is not satisfied or waived; (c) the Fund would not be able to liquidate
portfolio securities in an orderly manner and consistent with the Fund's
investment objective and policies in order to purchase Shares tendered pursuant
to the Offer; (d) there is any (i) material legal action or proceeding
instituted or threatened which challenges, in the Board's judgment, the Offer or
otherwise materially adversely affects the Fund, (ii) suspension of or
limitation on prices for trading securities generally on the NYSE or any foreign
exchange on which portfolio securities of the Fund are traded,
(iii) declaration of a banking moratorium by Federal, state or foreign
authorities or any suspension of payment by banks in the United States, New York
State or in a foreign country which is material to the Fund, (iv) limitation
which affects the Fund or the issuers of its portfolio securities imposed by
Federal, state or foreign authorities on the extension of credit by lending
institutions or on the exchange of foreign currencies, (v) commencement of war,
armed hostilities or other international or national calamity directly or
indirectly involving the United States or any foreign country that is material
to the Fund, or (vi) other event or condition which, in the Board's judgment,
would have a material adverse effect on the Fund or its shareholders if Shares
tendered pursuant to the Offer were purchased; or (e) the Board determines that
effecting the transaction would constitute a breach of their fiduciary duty owed
the Fund or its shareholders. The Board may modify these conditions in light of
experience.
The foregoing conditions are for the Fund's sole benefit and may be asserted
by the Fund regardless of the circumstances giving rise to any such condition
(including any action or inaction of the Fund), and any such condition may be
waived by the Fund, in whole or in part, at any time and from time to time in
its reasonable judgment. The Fund's failure at any time to exercise any of the
foregoing rights shall not be deemed a waiver of any such right; the waiver of
any such right with respect to particular facts and circumstances shall not be
deemed a waiver with respect to any other facts or circumstances; and each such
right shall be deemed an ongoing right which may be asserted at any time and
from time to time. Any determination by the Fund concerning the events described
in this Section 4 shall be final and binding.
The Fund reserves the right, at any time during the pendency of the Offer,
to amend, extend or terminate the Offer in any respect. See Section 16.
10
5. PROCEDURES FOR TENDERING SHARES.
a. PROPER TENDER OF SHARES. For Shares to be properly tendered pursuant
to the Offer, a shareholder must cause a properly completed and duly
executed Letter of Transmittal (or a copy or facsimile thereof) bearing
original signature(s) and the original of any required signature
guarantee(s), and any other documents required by the Letter of Transmittal,
to be received by the Depositary at the appropriate address set forth on the
cover page of the Letter of Transmittal and must either cause certificates
for tendered Shares to be received by the Depositary at such address or
cause such Shares to be delivered pursuant to the procedures for book-entry
delivery set forth below (and confirmation of receipt of such delivery to be
received by the Depositary), in each case before 5:00 P.M. Eastern Time on
the Expiration Date, or (in lieu of the foregoing) such shareholder must
comply with the guaranteed delivery procedures set forth below. Letters of
Transmittal and certificates representing tendered Shares should not be sent
or delivered to the Fund. Shareholders who desire to tender Shares
registered in the name of a broker, dealer, commercial bank, trust company
or other nominee must contact that firm to effect a tender on their behalf.
Section 14(e) of the Exchange Act and Rule 14e-4 promulgated thereunder make
it unlawful for any person, acting alone or in concert with others, directly
or indirectly, to tender Shares in a partial tender offer for such person's
own account unless at the time of tender, and at the time the Shares are
accepted for payment, the person tendering has a net long position equal to
or greater than the amount tendered in (a) Shares, and will deliver or cause
to be delivered such Shares for the purpose of tender to the Fund within the
period specified in the Offer, or (b) an equivalent security and, upon the
acceptance of his or her tender, will acquire Shares by conversion, exchange
or exercise of such equivalent security to the extent required by the terms
of the Offer, and will deliver or cause to be delivered the Shares so
acquired for the purpose of tender to the Fund prior to or on the Expiration
Date. Section 14(e) and Rule 14e-4 provide a similar restriction applicable
to the tender or guarantee of a tender on behalf of another person.
The acceptance of Shares by the Fund for payment will constitute a binding
agreement between the tendering shareholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering
shareholder's representation that the shareholder has a net long position in
the Shares being tendered within the meaning of Rule 14e-4 and that the
tender of such Shares complies with Rule 14e-4.
B. SIGNATURE GUARANTEES AND METHOD OF DELIVERY. No signature guarantee
is required if (a) the Letter of Transmittal is signed by the registered
holder(s) (including, for purposes of this document, any participant in The
Depository Trust Company ("DTC") book-entry transfer facility whose name
appears on DTC's security position listing as the owner of Shares) of the
Shares tendered thereby, unless such holder(s) has completed either the box
entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" in the Letter of Transmittal or (b) the Shares
tendered are tendered for the account of a firm (an "Eligible Institution")
which is a broker, dealer, commercial bank, credit union, savings
association or other entity and which is a member in good standing of a
stock transfer association's approved medallion program (such as STAMP, SEMP
or MSP). In all other cases, all signatures on the Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5 of the
Letter of Transmittal.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered thereby, the signature(s) must correspond with the
name(s) as written on the face of the certificate(s) for the Shares tendered
without alteration, enlargement or any change whatsoever.
If any of the Shares tendered thereby are owned of record by two or more
joint owners, all such owners must sign the Letter of Transmittal.
If any of the tendered Shares are registered in different names, it is
necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
11
If the Letter of Transmittal or any certificates for Shares tendered or
stock powers relating to Shares tendered are signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations or
others acting in a fiduciary or representative capacity, such persons should
so indicate when signing, and proper evidence satisfactory to the Fund of
their authority so to act must be submitted.
If the Letter of Transmittal is signed by the registered holder(s) of the
Shares transmitted therewith, no endorsements of certificates or separate
stock powers with respect to such Shares are required unless payment is to
be made to, or certificates for Shares not purchased are to be issued in the
name of, a person other than the registered holder(s). Signatures on such
certificates or stock powers must be guaranteed by an Eligible Institution.
If the Letter of Transmittal is signed by a person other than the registered
holder(s) of the certificate(s) listed thereon, the certificate(s) must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name(s) of the registered holder(s) appear(s) on the
certificate(s) for the Shares involved. Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution. See Section 7.
C. BOOK-ENTRY DELIVERY. The Depositary has established an account with
respect to the Shares at DTC for purposes of the Offer. Any financial
institution that is a participant in the DTC system may make book-entry
delivery of tendered Shares by causing DTC to transfer such Shares into the
Depositary's account at DTC in accordance with DTC's procedures for such
transfers. However, although delivery of Shares may be effected through
book-entry transfer into the Depositary's account at DTC, a Letter of
Transmittal (or a copy or facsimile thereof) properly completed and bearing
original signature(s) and the original of any required signature
guarantee(s), or an Agent's Message (as defined below) in connection with a
book-entry transfer and any other documents required by the Letter of
Transmittal, must in any case be received by the Depositary prior to
5:00 P.M. Eastern Time on the Expiration Date at one of its addresses set
forth on page 2 of this Offer, or the tendering shareholder must comply with
the guaranteed delivery procedures described below.
The term "Agent's Message" means a message from DTC transmitted to, and
received by, the Depositary forming a part of a timely confirmation of a
book-entry transfer of Shares (a "Book-Entry Confirmation") which states
that (a) DTC has received an express acknowledgment from the DTC participant
tendering the Shares that are the subject of the Book-Entry Confirmation,
(b) the DTC participant has received and agrees to be bound by the terms of
the Letter of Transmittal, and (c) the Fund may enforce such agreement
against the DTC participant.
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the Depositary.
D. GUARANTEED DELIVERY. Notwithstanding the foregoing, if a shareholder
desires to tender Shares pursuant to the Offer and the certificates for the
Shares to be tendered are not immediately available, or time will not permit
the Letter of Transmittal and all documents required by the Letter of
Transmittal to reach the Depositary prior to 5:00 P.M. Eastern Time on the
Expiration Date, or a shareholder cannot complete the procedures for
delivery by book-entry transfer on a timely basis, then such shareholder's
Shares may nevertheless be tendered, provided that all of the following
conditions are satisfied:
(i) the tender is made by or through an Eligible Institution; and
(ii) a properly completed and duly executed Notice of Guaranteed
Delivery in the form provided by the Fund is received by the Depositary
prior to 5:00 P.M. Eastern Time on the Expiration Date; and
(iii) the certificates for all such tendered Shares, in proper form
for transfer, or a Book-Entry Confirmation with respect to such Shares,
as the case may be, together with a Letter of
12
Transmittal (or a copy or facsimile thereof) properly completed and
bearing original signature(s) and the original of any required signature
guarantee(s) (or, in the case of a book-entry transfer, an Agent's
Message) and any documents required by the Letter of Transmittal, are
received by the Depositary prior to 5:00 P.M. Eastern Time on the second
NYSE trading day after the date of execution of the Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
facsimile transmission to (000) 000-0000 or mail to the Depositary and must
include a guarantee by an Eligible Institution and a representation that the
shareholder owns the Shares tendered within the meaning of, and that the
tender of the Shares effected thereby complies with, Rule 14e-4 under the
Exchange Act, each in the form set forth in the Notice of Guaranteed
Delivery.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THE
LETTER OF TRANSMITTAL AND ANY OTHER REQUIRED DOCUMENTS, IS AT THE OPTION AND
SOLE RISK OF THE TENDERING SHAREHOLDER. IF DOCUMENTS ARE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. Shareholders have the responsibility to cause their Shares
tendered (in proper certificated or uncertificated form), the Letter of
Transmittal (or a copy or facsimile thereof) properly completed and bearing
original signature(s) and the original of any required signature
guarantee(s) and any other documents required by the Letter of Transmittal,
to be timely delivered. Timely delivery is a condition precedent to
acceptance of Shares for purchase pursuant to the Offer and to payment of the
purchase amount.
Notwithstanding any other provision hereof, payment for Shares accepted for
payment pursuant to the Offer will in all cases be made only after timely
receipt by the Depositary of Share certificates evidencing such Shares or a
Book-Entry Confirmation of the delivery of such Shares (if available), a
Letter of Transmittal (or a copy or facsimile thereof) properly completed
and bearing original signature(s) and the original of any required signature
guarantee(s) or, in the case of a book-entry transfer, an Agent's Message
and any other documents required by the Letter of Transmittal.
E. DETERMINATIONS OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of tenders will be
determined by the Fund, in its sole discretion, which determination shall be
final and binding. The Fund reserves the absolute right to reject any or all
tenders determined not to be in appropriate form or to refuse to accept for
payment, purchase, or pay for, any Shares if, in the opinion of the Fund's
counsel, accepting, purchasing or paying for such Shares would be unlawful.
The Fund also reserves the absolute right to waive any of the conditions of
the Offer or any defect in any tender, whether generally or with respect to
any particular Share(s) or shareholder(s). The Fund's interpretations of the
terms and conditions of the Offer shall be final and binding.
NEITHER THE FUND, ITS BOARD OF DIRECTORS, CSAM, THE DEPOSITARY NOR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR
IRREGULARITY IN ANY TENDER, AND NONE OF THEM WILL INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTICE.
13
F. UNITED STATES FEDERAL INCOME TAX WITHHOLDING. To prevent the
imposition of a U.S. federal backup withholding tax equal to 31% of the
gross payments made pursuant to the Offer, prior to such payments each
shareholder accepting the Offer who has not previously submitted to the Fund
a correct, completed and signed Form W-9 (for U.S. shareholders) or Form W-8
(for non-U.S. shareholders), or otherwise established an exemption from such
withholding, must submit the appropriate form to the Depositary. See
Section 15.
Under certain circumstances (see Section 15), the Depositary will
withhold a tax equal to 30% of the gross payments payable to a non-U.S.
shareholder unless the Depositary determines that a reduced rate of
withholding or an exemption from withholding is applicable. (Exemption from
backup withholding tax does not exempt a non-U.S. shareholder from the 30%
withholding tax.) For this purpose, a non-U.S. shareholder, is, in general,
a shareholder that is not (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity created or organized in or
under the laws of the United States, any State thereof or the District of
Columbia, (iii) an estate the income of which is subject to United States
federal income taxation regardless of the source of such income, or (iv) a
trust if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust
(a "non-U.S. shareholder"). The Depositary will determine a shareholder's
status as a non-U.S. shareholder and the shareholder's eligibility for a
reduced rate of, or an exemption from, withholding by reference to any
outstanding certificates or statements concerning such eligibility, unless
facts and circumstances indicate that such reliance is not warranted. A
non-U.S. shareholder that has not previously submitted the appropriate
certificates or statements with respect to a reduced rate of, or exemption
from, withholding for which such shareholder may be eligible should consider
doing so in order to avoid over-withholding. See Section 15.
6. WITHDRAWAL RIGHTS. At any time prior to 5:00 P.M. Eastern Time on
October 20, 2000 (or if the offer is extended, at any time prior to 5:00 P.M.
Eastern Time on the new expiration date), and, if the Shares have not by then
been accepted for payment by the Fund, at any time after November 2, 2000, any
shareholder may withdraw all, but not less than all, of the Shares that the
shareholder has tendered.
To be effective, a written notice of withdrawal of Shares tendered must be
timely received by the Depositary at the appropriate address set forth on
page 2 of this Offer. Shareholders may also send a facsimile transmission notice
of withdrawal, which must be timely received by the Depositary at (800)
730-6001, and the original notice of withdrawal must be delivered to the
Depositary by overnight courier or by hand the next day. Any notice of
withdrawal must specify the name(s) of the person having tendered the Shares to
be withdrawn, the number of Shares to be withdrawn (which may not be less than
all of the Shares tendered by the shareholder) and, if one or more certificates
representing such Shares have been delivered or otherwise identified to the
Depositary, the name(s) of the registered owner(s) of such Shares as set forth
in such certificate(s) if different from the name(s) of the person tendering the
Shares. If one or more certificates have been delivered to the Depositary, then,
prior to the release of such certificate(s), the certificate number(s) shown on
the particular certificate(s) evidencing such Shares must also be submitted and
the signature on the notice of withdrawal must be guaranteed by an Eligible
Institution.
All questions as to the validity, form and eligibility (including time of
receipt) of notices of withdrawal will be determined by the Fund in its sole
discretion, which determination shall be final and binding. Shares properly
withdrawn will not thereafter be deemed to be tendered for purposes of the
Offer. Withdrawn Shares, however, may be re-tendered by following the procedures
described in Section 5 prior to 5:00 P.M. Eastern Time on the Expiration Date.
Except as otherwise provided in this Section 6, tenders of Shares made pursuant
to the Offer will be irrevocable.
14
NEITHER THE FUND, ITS BOARD OF DIRECTORS, CSAM, THE DEPOSITARY NOR ANY OTHER
PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE OF ANY DEFECT OR IRREGULARITY
IN ANY NOTICE OF WITHDRAWAL, NOR SHALL ANY OF THEM INCUR ANY LIABILITY FOR
FAILURE TO GIVE ANY SUCH NOTICE.
7. PAYMENT FOR SHARES. For purposes of the Offer, the Fund will be deemed
to have accepted for payment and purchased Shares that are tendered (and not
withdrawn in accordance with Section 6 pursuant to the Offer) when, as and if it
gives oral or written notice to the Depositary of its acceptance of such Shares
for payment pursuant to the Offer. Under the Exchange Act, the Fund is obligated
to pay for or return tendered Shares promptly after the termination, expiration
or withdrawal of the Offer. Upon the terms and subject to the conditions of the
Offer, the Fund will pay for Shares properly tendered as soon as practicable
after the Expiration Date. The Fund will make payment for Shares purchased
pursuant to the Offer by depositing the aggregate purchase price therefor with
the Depositary, which will make payment to shareholders promptly as directed by
the Fund. The Fund will not pay interest on the purchase price under any
circumstances. Xxxxxx purchased in the Offer will be retired.
In all cases, payment for Shares purchased pursuant to the Offer will be
made only after timely receipt by the Depositary of: (a) a Letter of Transmittal
(or a copy thereof) properly completed and bearing original signature(s) and any
required signature guarantee(s), (b) such Shares (in proper certificated or
uncertificated form) and (c) any other documents required by the Letter of
Transmittal. Shareholders may be charged a fee by a broker, dealer or other
institution for processing the tender requested. Certificates representing
Shares tendered but not purchased will be returned promptly following the
termination, expiration or withdrawal of the Offer, without further expense to
the tendering shareholder. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, tendered
Shares are registered in the name of any person other than the person signing
the Letter of Transmittal, the amount of any such transfer taxes (whether
imposed on the registered owner or such other person) payable on account of the
transfer to such person of such Shares will be deducted from the purchase price
unless satisfactory evidence of the payment of such taxes, or exemption
therefrom, is submitted. The Fund may not be obligated to purchase Shares
pursuant to the Offer under certain conditions. See Section 4.
Any tendering shareholder or other payee who has not previously submitted a
correct, completed and signed Form W-8 or Form W-9, as necessary, and who fails
to complete fully and sign either the Form W-8 or Substitute Form W-9 in the
Letter of Transmittal and provide that form to the Depositary, may be subject to
federal backup withholding tax of 31% of the gross proceeds paid to such
shareholder or other payee pursuant to the Offer. See Section 15 regarding this
tax as well as possible withholding at the rate of 30% (or lower applicable
treaty rate) on the gross proceeds payable to tendering non-U.S. shareholders.
8. SOURCE AND AMOUNT OF FUNDS. The total cost to the Fund of purchasing
5,587,978 of its issued and outstanding Shares pursuant to the Offer would be
$68,955,648 (based on a price per Share of $12.34, 95% of the NAV as of the
close of the regular trading session of the NYSE on September 5, 2000). On
September 5, 2000, the aggregate value of the Fund's net assets was
$145,198,594.
To pay the aggregate purchase price of Shares accepted for payment pursuant
to the Offer, the Fund anticipates that funds will first be derived from any
cash on hand and then from the proceeds from the sale of portfolio securities
held by the Fund. The selection of which portfolio securities to sell, if any,
will be made by CSAM, taking into account investment merit, relative liquidity
and applicable investment restrictions and legal requirements (including those
applicable to the Fund upon consummation of the Merger with ETF and ETF's
investment objective and policies). The Fund is authorized to borrow money for
temporary or emergency purposes, and to the extent the Fund does not have
sufficient resources through cash on hand and the disposition of assets to
purchase Shares in the Offer, it intends to finance a portion of the Offer
through temporary borrowing. The Fund and other investment companies or
portfolios thereof advised by CSAM are parties to a $350 million committed,
15
unsecured line of credit (the "Facility") with a syndicate of banks for which
Deutsche Bank AG, New York Branch acts as the administrative agent, The Bank of
Nova Scotia acts as syndication agent, BNP Paribas acts as documentation agent
and State Street Bank and Trust Company acts as operations agent. The Facility
is intended primarily to cover temporary or emergency needs of the Funds.
Amounts drawn under the Facility bear interest at the overnight Federal Funds
rate plus 50 basis points per annum. Any amounts drawn under the Facility will
be repaid from the sale of the Fund's portfolio securities. The Fund may specify
the term of the borrowing, up to 60 days, at the time the loan is drawn down.
The amounts available to be drawn down by the Fund under the Facility will
depend upon the level of borrowings by other funds that are parties to the
Facility, and accordingly it is possible that the Fund may not be able to borrow
under the Facility the amounts desired.
Because the Fund may sell portfolio securities to raise cash for the
purchase of Shares, during the pendency of the Offer, and possibly for a short
time thereafter, the Fund may hold a greater than normal percentage of its
assets in cash and cash equivalents. As of September 5, 2000, cash and cash
equivalents constituted approximately 8.17% of the Fund's total assets.
Under some market circumstances, it may be necessary for the Fund to raise
cash by liquidating portfolio securities in a manner that could reduce the
market value of such securities and, thus, reduce both the NAV of the Shares and
the proceeds from the sale of such securities. Liquidating portfolio securities,
if necessary, may also lead to the premature disposition of portfolio
investments and additional transaction costs. Depending upon the timing of such
sales, any such decline in NAV may adversely affect any tendering shareholders
whose Shares are accepted for purchase by the Fund, as well as those
shareholders who do not sell Shares pursuant to the Offer. Shareholders who
retain their Shares may be subject to certain other effects of the Offer. See
Section 12.
9. PRICE RANGE OF SHARES; DIVIDENDS/DISTRIBUTIONS. The following table
sets forth, for the periods indicated, the high and low NAVs per Share and the
high and low closing sale prices per Share as reported on the NYSE Composite
Tape, and the amounts of cash dividends/distributions per Share paid during such
periods.
NET ASSET VALUE MARKET PRICE
-------------------- --------------------
DIVIDENDS/
HIGH LOW HIGH LOW DISTRIBUTIONS
--------- --------- --------- --------- ---------
CALENDAR YEAR (ENDING DECEMBER 31)
-----------------------------------------
1998
1st Quarter............................ $ 15.28 $ 13.19 $ 12.44 $ 10.63 --
2nd Quarter............................ 15.06 12.05 12.25 9.13 --
3rd Quarter............................ 13.44 8.23 10.56 5.50 $ 0.31
4th Quarter............................ 9.77 8.00 7.88 5.75 --
1999
1st Quarter............................ 9.97 9.03 8.13 6.94 --
2nd Quarter............................ 11.48 9.77 9.63 8.000 --
3rd Quarter............................ 11.97 11.02 9.44 8.44 0.16
4th Quarter............................ 15.07 10.85 11.25 8.25 --
2000
1st Quarter............................ 17.31 14.63 13.56 11.06 --
2nd Quarter............................ 16.57 13.00 13.00 10.81 --
3rd Quarter (through September 5,
2000)................................. 14.58 12.79 12.44 10.94 0.25
As of the close of business on September 5, 2000, the Fund's NAV was $12.99
per Share, and the high, low and closing prices per Share on the NYSE on that
date were $11.25, $11.25 and $11.25, respectively. During the pendency of the
Offer, current NAV quotations can be obtained by contacting Credit Suisse Asset
Management--Investor Relations at (000) 000-0000, or at xxx.xxxxxxxxx.xxx.
16
The tendering of Shares, unless and until shares tendered are accepted for
payment and purchase, will not affect the record ownership of any such tendered
Shares for purposes of entitlement to any dividends payable by the Fund. The
Fund did not have distribution requirements for 1999 earnings. Prior to the
consummation of the merger with The Emerging Markets Telecommunications Fund,
the Fund intends to declare and pay a dividend equal to the Fund's undistributed
net investment income earned in 2000, unless such amounts are immaterial.
10. SELECTED FINANCIAL INFORMATION. The table below is intended to help
you understand the financial performance of the Fund. This information is
derived from financial and accounting records of the Fund.
This information has been audited by PricewaterhouseCoopers LLP, the Fund's
independent auditors, whose reports, along with the Fund's financial statements,
are incorporated herein by reference and included in the Fund's Annual Reports
to Shareholders. The Annual Reports may be obtained without charge, by writing
to Shareholder Communications Corporation, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, or by calling (000) 000.0000.
17
--------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
--------------------------------------------------------------------------------
The following table includes per share operating performance data for a share of
common stock outstanding, total investment return, ratios to average net assets
and other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
--------------------------------------------------------------------------------
For the Six
Months Ended For the Fiscal Years Ended For the Period
May 31, November 30, December 29, 1993*
2000 ------------------------------------------------------- through
(UNAUDITED) 1999 1998 1997 1996 1995 November 30, 1994
------------- -------- -------- -------- -------- -------- ------------------
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period................ $12.67 $9.60 $14.69 $13.39 $11.60 $14.17 $13.89**
-------- -------- -------- -------- -------- -------- --------
Net investment
income/(loss)............ (0.04)+ (0.05)+ 0.08 0.07 0.12 0.07 (0.01)
Net realized and unrealized
gain/(loss) on
investments and foreign
currency related
transactions............. 0.79 2.97 (4.71) 1.32 1.76 (2.59) 0.29
-------- -------- -------- -------- -------- -------- --------
Net increase/(decrease) in
net assets resulting from
operations............... 0.75 2.92 (4.63) 1.39 1.88 (2.52) 0.28
-------- -------- -------- -------- -------- -------- --------
Dividends and distributions
to shareholders:
Net investment income.... -- (0.16) (0.03) (0.09) (0.09) (0.03) --
Net realized gain on
investments and foreign
currency related
transactions........... -- -- (0.43) -- -- (0.02) --
-------- -------- -------- -------- -------- -------- --------
Total dividends and
distributions to
shareholders............. -- (0.16) (0.46) (0.09) (0.09) (0.05) --
-------- -------- -------- -------- -------- -------- --------
Anti-dilutive effect of
Tender Offer............. -- 0.14 -- -- -- -- --
Anti-dilutive effect of the
Share Repurchase
Program.................. 0.21 0.17 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Total anti-dilutive effect
of Tender Offer and the
Share Repurchase
Program.................. 0.21 0.31 -- -- -- -- --
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period................... $13.63 $12.67 $9.60 $14.69 $13.39 $11.60 $14.17
======== ======== ======== ======== ======== ======== ========
Market value, end of
period................... $ 11.00 $ 9.563 $ 7.440 $ 11.250 $ 10.750 $ 9.750 $ 11.88
======== ======== ======== ======== ======== ======== ========
Total investment return
(a) ..................... 15.03% 30.93% (29.60)% 5.46% 11.11% (17.49)% (14.87)%
======== ======== ======== ======== ======== ======== ========
--------------------------------------------------------------------------------------------------------------------------
18
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL
DATA
Net assets, end of period
(000 omitted)............ $152,360 $150,362 $154,670 $236,536 $215,735 $186,921 $228,171
Ratio of expenses to
average net assets#...... 2.45%(b) 2.33% 2.07% 2.02% 1.81% 1.83% 2.02%(b)
Ratio of expenses to
average net assets,
excluding taxes.......... 2.22%(b) 2.31% 1.91% 1.83% -- -- 1.96%(b)
Ratio of net investment
income/ (loss) to average
net assets............... (0.56)%(b) (0.40)% 0.72% 0.46% 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate.... 68.82% 109.09% 169.85% 108.68% 23.89% 13.73% 24.63%
--------------------------------------------------------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less
underwriting discount of $1.05 per share and offering
expenses of $0.06 per share.
+ Based on average shares outstanding.
# Ratios shown are inclusive of Brazilian transaction and
Chilean repatriation taxes, if any.
(a) Total investment return at market value is based on the
changes in market price of a share during the period and
assumes reinvestment of dividends and distributions, if any,
at actual prices pursuant to the Fund's dividend
reinvestment program. Total investment return does not
reflect brokerage commissions or initial underwriting
discounts and has not been annualized.
(b) Annualized.
--------------------------------------------------------------------------------
19
11. INTEREST OF DIRECTORS, EXECUTIVE OFFICERS AND CERTAIN RELATED
PERSONS. Information, as of particular dates, concerning the Fund's directors
and executive officers, their remuneration, any material interest of such
persons in transactions with the Fund and other matters is required to be
disclosed in proxy statements distributed to the Fund's shareholders in proxy
statements distributed to the Fund's shareholders and filed with the Securities
and Exchange Commission (the "SEC"). Neither the Fund nor, to the best of the
Fund's knowledge, any of the Fund's directors or executive officers, has
effected any transaction in Shares during the 60 days before the date hereof.
On May 8, 2000, the Board unanimously approved a proposal by the directors
who are not "interested persons" (as defined in the Investment Company Act of
1940) ("Non-interested Directors") to partially compensate Non-interested
Directors in shares of the Fund. Under this new policy, the Non-interested
Directors will receive 50% of their annual retainer in the form of shares
purchased by the Fund in the open market. Paying directors' fees in shares is
intended to align the interests of the Non-interested Directors with those of
the Fund's shareholders.
Except as set forth in this Offer, neither the Fund, nor, to the best of the
Fund's knowledge, any of the Fund's directors or executive officers, is a party
to any contract, arrangement, understanding or relationship with any other
person relating, directly or indirectly to the Offer with respect to any
securities of the Fund, including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or the voting
of any such securities, joint ventures, loan or option arrangements, puts or
calls, guaranties of loans, guaranties against loss or the giving or withholding
of proxies, consents or authorizations. Based upon information provided or
available to the Fund, no director or officer of the Fund intends to tender
Shares pursuant to the Offer. The Offer does not, however, restrict the purchase
of shares pursuant to the Offer from any such person.
12. CERTAIN EFFECTS OF THE OFFER AND THE MERGER. As a result of the
consummation of the Offer and the Merger:
- each share of common stock of ETF will convert into an equivalent dollar
amount (to the nearest one ten-thousandth of one cent) of full shares of
common stock of the Fund, based on the net asset value per share of each
Fund calculated at 4:00 pm on the Business Day (defined as any day on
which the NYSE is open for trading) preceding the Effective Date,
- each shareholder of ETF will become a shareholder of the Fund and will
receive, on the Effective Date, that number of full shares of common stock
of the Fund having an aggregate net asset value (disregarding fractional
shares) equal to the aggregate net asset value of such shareholder's
shares held in ETF as of the close of business on the Business Day
preceding the Effective Date,
- the Fund will not issue any fractional shares to ETF shareholders. The
Fund will purchase all fractional shares at the current net asset value of
the shares and remit the cash proceeds to former ETF shareholders, and
- the Fund will change its name to "The Emerging Markets Telecommunications
Fund, Inc." and, as described in greater detail below, will adopt ETF's
investment objective and policies.
Each Fund seeks long-term capital appreciation as its objective. The Funds
seek their objectives by investing primarily in equity securities of companies
in emerging markets. Under normal conditions, ETF invests at least 65% of its
total assets in equity securities of telecommunications companies in emerging
countries, while the Fund invests at least 70% of its total assets in equity
securities of infrastructure companies in emerging countries. Each of the
foregoing investment objectives and policies is fundamental, and can only be
changed with the approval of the holders of a majority of each Fund's
outstanding voting securities as defined under the Investment Company Act.
Although both Funds intend to focus their investments in marketable securities,
ETF may invest up to 25% of its assets in, and the Fund may invest up to 30% of
its assets in, unlisted equity securities, including
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investments in new and early stage companies. To the extent not invested as
indicated above, ETF may also invest its assets in corporate or government debt
securities of emerging market issuers. Both Funds may also invest in certain
high quality short- and medium-term debt instruments deemed to be Temporary
Investments.
On July 24, 2000, the Fund's Board of Directors approved the adoption of
ETF's investment policies, subject to the consummation of the Merger and
approval by the Fund's shareholders. The Merger is conditional on shareholder
approval of this proposal.
13. CERTAIN INFORMATION ABOUT THE FUND. The Fund is a Maryland corporation
with its principal executive offices located at 000 Xxxxxxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 (telephone number (000) 000-0000). The Fund is a
closed-end, non-diversified, management investment company organized as a
Maryland corporation. As a closed-end investment company the Fund differs from
an open-end investment company (I.E., a mutual fund) in that it does not redeem
its Shares at the election of a shareholder and does not continuously offer its
Shares for sale to the public. The Fund's investment objective is long-term
capital appreciation through investments in equity securities of infrastructure
companies in emerging countries The Fund has been managed since its inception by
CSAM, which was formerly known as BEA Associates.
CSAM is a registered investment adviser under the Investment Advisers Act of
1940 with offices located at 000 Xxxxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000 (telephone number (000) 000-0000). CSAM handles equity, balanced,
fixed income, international and derivative based accounts. Portfolios include
international and emerging market investments, common stocks, taxable and non-
taxable bonds, options, futures and venture capital. XXXX manages money for
corporate pension and profit-sharing funds, public pension funds, endowments and
other charitable institutions and private individuals. CSAM--Americas currently
manages approximately $68 billion in assets.
14. ADDITIONAL INFORMATION. An Issuer Tender Offer Statement on Schedule
TO (the "Schedule TO") including the exhibits thereto, filed with the SEC,
provides certain additional information relating to the Offer, and may be
inspected and copied at the prescribed rates at the SEC's public reference
facilities at 000 Xxxxx Xxxxxx, X.X., Xxxx 0000, Xxxxxxxxxx, X.X. 00000, 7 World
Trade Center, Suite 0000, Xxx Xxxx, Xxx Xxxx 00000 and Citicorp Center, 000 X.
Xxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000-0000. Copies of the Schedule
TO and the exhibits may also be obtained by mail at the prescribed rates from
the Public Reference Branch of the SEC at 000 Xxxxx Xxxxxx, X.X., Xxxxxxxxxx,
X.X. 00000.
15. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES. The following
discussion is a general summary of the U.S. federal income tax consequences of a
sale of Shares pursuant to the Offer based on current U.S. federal income tax
law, including applicable Treasury regulations and Internal Revenue Service
rulings. Each shareholder should consult the shareholder's tax advisor for a
full understanding of the tax consequences of such a sale, including potential
state, local and foreign taxation by jurisdictions of which the shareholder is a
citizen, resident or domiciliary.
U.S. SHAREHOLDERS. It is anticipated that shareholders (other than
tax-exempt persons) who are citizens and/or residents of the U.S., corporations,
partnerships or other entities created or organized in or under the laws of the
U.S. or any State thereof or the District of Columbia, estates the income of
which is subject to U.S. federal income taxation regardless of the source of
such income, and trusts if a court within the United States is able to exercise
primary supervision over the administration of the trust and one or more U.S.
persons have the authority to control all substantial decisions of the trust
(collectively, "U.S. shareholders"), and who sell Shares pursuant to the Offer
will recognize gain or loss for U.S. federal income tax purposes equal to the
difference between the amount of cash they receive pursuant to the Offer and
their adjusted tax basis in the Shares sold. The sale date for tax purposes will
be the date the Fund accepts Shares for purchase. This gain or loss will be
capital gain or loss if the Shares sold are held by the tendering U.S.
shareholder at the time of sale as a capital asset
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and will be treated as either long-term or short-term if the Shares have been
held at that time for more than one year or one year or less, respectively. Any
such long-term capital gain realized by a non-corporate U.S. shareholder will be
taxed at a maximum rate of 20% if the Shares have been held for more than one
year at the time of their sale. This U.S. federal income tax treatment, however,
is based on the expectation that not all shareholders will tender their Shares
pursuant to the Offer and that the continuing ownership interest in the Fund of
tendering shareholders will be sufficiently reduced to qualify the sale as a
sale rather than a distribution for U.S. federal income tax purposes. It is
therefore possible that the cash received for the Shares purchased would be
taxable as a distribution by the Fund, rather than as a gain from the sale of
the Shares. In that event, the cash received by a U.S. shareholder will be
taxable as a dividend (i.e., as ordinary income) to the extent of the U.S.
shareholder's allocable share of the Fund's current or accumulated earnings and
profits, with the excess of the cash received over the portion so taxable
constituting a non-taxable return of capital to the extent of the U.S.
shareholder's tax basis in the Shares sold and with any remaining excess of such
cash being treated as either long-term or short-term capital gain from the sale
of the Shares depending on how long they were held by the U.S. shareholder. If
cash received by a U.S. shareholder is taxable as a dividend, the shareholder's
tax basis in the purchased Shares will be considered transferred to the
remaining Shares held by the shareholder. In the case of a tendering U.S.
shareholder that is a corporation treated as receiving a distribution from the
Fund pursuant to the Offer, special basis adjustments may also be applicable
with respect to any Shares of such a U.S. shareholder not purchased pursuant to
the Offer.
Under the "wash sale" rules under the Internal Revenue Code of 1986, as
amended, loss recognized on Shares sold pursuant to the Offer will ordinarily be
disallowed to the extent the U.S. shareholder acquires Shares within 30 days
before or after the date the Shares are purchased pursuant to the Offer and, in
that event, the basis and holding period of the Shares acquired will be adjusted
to reflect the disallowed loss.
The Depositary may be required to withhold 31% of the gross proceeds paid to
a U.S. shareholder or other payee pursuant to the Offer unless either: (a) the
U.S. shareholder has completed and submitted to the Depositary an IRS Form W-9
(or Substitute Form W-9), providing the U.S. shareholder's employer
identification number or social security number as applicable, and certifying
under penalties of perjury that: (a) such number is correct; (b) either (i) the
U.S. shareholder is exempt from backup withholding, (ii) the U.S. shareholder
has not been notified by the Internal Revenue Service that the U.S. shareholder
is subject to backup withholding as a result of an under-reporting of interest
or dividends, or (iii) the Internal Revenue Service has notified the U.S.
shareholder that the U.S. shareholder is no longer subject to backup
withholding; or (c) an exception applies under applicable law. A Substitute Form
W-9 is included as part of the Letter of Transmittal for U.S. shareholders.
NON-U.S. SHAREHOLDERS. The U.S. federal income taxation of a non-U.S.
shareholder on a sale of Shares pursuant to the Offer depends on whether this
transaction is "effectively connected" with a trade or business carried on in
the U.S. by the non-U.S. shareholder as well as the tax characterization of the
transaction as either a sale of the Shares or a distribution by the Fund, as
discussed above for U.S. shareholders. If the sale of Shares pursuant to the
Offer is not so effectively connected and if, as anticipated for U.S.
shareholders, it gives rise to gain or loss, any gain realized by a non-U.S.
shareholder upon the tender of Shares pursuant to the Offer will not be subject
to U.S. federal income tax or to any U.S. tax withholding, provided, however,
that such a gain will be subject to U.S. federal income tax at the rate of 30%
(or such lower rate as may be applicable under a tax treaty) if the non-U.S.
shareholder is a non-resident alien individual who is physically present in the
United States for more than 182 days during the taxable year of the sale. If,
however, U.S. shareholders are deemed to receive a distribution from the Fund
with respect to Shares they tender, the cash received by a tendering non-U.S.
shareholder will also be treated for U.S. tax purposes as a distribution by the
Fund, with the cash then being characterized in the same manner as described
above for U.S. shareholders. In such an event, the portion of the distribution
treated as a dividend to the non-U.S. shareholder would be
22
subject to a U.S. withholding tax at the rate of 30% (or such lower rate as may
be applicable under a tax treaty) if the dividend does not constitute
effectively connected income. If the amount realized on the tender of Shares by
a non-U.S. shareholder is effectively connected income, regardless of whether
the tender is characterized as a sale or as giving rise to a distribution from
the Fund for U.S. federal income tax purposes, the transaction will be treated
and taxed in the same manner as if the Shares involved were tendered by a U.S.
shareholder.
Non-U.S. shareholders should provide the Depositary with a completed Form
W-8 in order to avoid 31% backup withholding on the cash they receive from the
Fund regardless of how they are taxed with respect to their tender of the Shares
involved. A copy of Form W-8 is provided with the Letter of Transmittal for
non-U.S. shareholders.
16. AMENDMENTS; EXTENSION OF TENDER PERIOD; TERMINATION. The Fund reserves
the right, at any time during the pendency of the Offer, to amend, extend or
terminate the Offer in any respect. Without limiting the manner in which the
Fund may choose to make a public announcement of such an amendment, extension or
termination, the Fund shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, except as provided by
applicable law (including Rule 14e-1(d) promulgated under the Exchange Act) and
by the requirements of the NYSE (including the listing agreement with respect to
the Shares).
Except to the extent required by applicable law (including
Rule 13e-4(f)(1) promulgated under the Exchange Act), the Fund will have no
obligation to extend the Offer. In the event that the Fund is obligated to, or
elects to, extend the Offer, the purchase price for each Share purchased
pursuant to the Offer will be equal to 95% of the per Share NAV determined as of
the close of the regular trading session of the NYSE on the Expiration Date as
extended. No Shares will be accepted for payment until on or after the new
Expiration Date.
17. MISCELLANEOUS. The Offer is not being made to, nor will the Fund
accept tenders from, or on behalf of, owners of Shares in any jurisdiction in
which the making of the Offer or its acceptance would not comply with the
securities or "blue sky" laws of that jurisdiction. The Fund is not aware of any
jurisdiction in which the making of the Offer or the acceptance of tenders of,
purchase of, or payment for, Shares in accordance with the Offer would not be in
compliance with the laws of such jurisdiction. The Fund, however, reserves the
right to exclude shareholders in any jurisdiction in which it is asserted that
the Offer cannot lawfully be made or tendered Shares cannot lawfully be
accepted, purchased or paid for. So long as the Fund makes a good-faith effort
to comply with any state law deemed applicable to the Offer, the Fund believes
that the exclusion of holders residing in any such jurisdiction is permitted
under Rule 13e-4(f)(9) promulgated under the Exchange Act. In any jurisdiction
where the securities, blue sky or other laws require the Offer to be made by a
licensed broker or dealer, the Offer shall be deemed to be made on the Fund's
behalf by one or more brokers or dealers licensed under the laws of such
jurisdiction.
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
September 8, 2000
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