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Securities and Exchange Commission
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(AMENDMENT NO. 2)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
The Austria Fund, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
052587102
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(CUSIP Number)
Gregory L. Melville
Bankgesellschaft Berlin AG
Alexanderplatz 2
D-10178 Berlin
Germany
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
October 15, 1998
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(Date of Event which Requires
Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Page 1 of 8 Pages
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CUSIP No.: 052587102 13D Page 2 of 8 Pages
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
Bankgesellschaft Berlin AG
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Republic of Germany
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NUMBER OF SOLE VOTING POWER 904,500
SHARES ---------------------------------------------------------
BENEFICIALLY SHARED VOTING POWER 0
OWNED ---------------------------------------------------------
BY EACH SOLE DISPOSITIVE POWER 904,500
REPORTING ---------------------------------------------------------
PERSON SHARED DISPOSITIVE POWER 0
WITH
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 904,500
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12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 7.7%
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14 TYPE OF REPORTING PERSON BK
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This Amendment No. 2 amends and supplements Items 3, 4, 5 and
7 of the Schedule 13D of Bankgesellschaft Berlin AG (the "Bank") with respect
to the Common Stock, par value $.01 per share (the "Common Stock"), of The
Austria Fund, Inc. (the "Fund").
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
The source of the funds used by the Bank to purchase the
879,400 shares of Common Stock reported in Item 5(a) was working capital and
aggregated approximately $9,253,589 (exclusive of commissions).
ITEM 4. PURPOSE OF TRANSACTION
On or about October 15, 1998, the Bank sent a letter to the
Fund, a copy of which is attached hereto as an exhibit and incorporated herein
by reference, in which the Bank requested that its nominees be considered for
nomination to the Board of Directors of the Fund. Except as set forth herein
and in the initial Schedule 13D and Amendment No. 1 thereto filed by the Bank,
the Bank has not formulated any plans or proposals which relate to or would
result in any of the transactions described in paragraphs (a) through (j) of
Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Fund's proxy statement, dated November 10, 1997,
relating to the 1997 Annual Meeting of Stockholders of the Fund states that, as
of October 31, 1997, there were 11,703,031 shares of Common Stock outstanding.
The percentage set forth in this Item 5(a) was derived using such number.
The Bank is the beneficial owner of 904,500 shares of Common
Stock, which constitute approximately 7.7% of the outstanding shares of Common
Stock.
(b) The Bank has sole power to vote and to dispose of the
shares of Common Stock owned by it.
(c) During the last sixty days, the Bank has effected the
following purchases and sales of the shares of Common Stock, all of which were
made on the New York Stock Exchange.
Page 3 of 8 Pages
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Date Number of Shares Purchased (Sold) Price Per Share
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August 24, 1998 25,000 $10.1875
August 28, 1998 30,000 9.3333
August 31, 1998 20,000 9.4688
September 2, 1998 2,500 9.3750
October 2, 1998 (5,000) 8.7500
October 9, 1998 4,400 8.6250
October 16, 1998 25,100 9.3586
(d) No person other than the Bank has the right to receive or
the power to direct the receipt of dividends from, or the proceeds from the
sale of, the shares of Common Stock owned by the Bank.
(e) It is inapplicable to state the date on which the Bank
ceased to be the beneficial owner of more than five percent of the Common
Stock.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Letter, dated October 15, 1998, from Bankgesellschaft
Berlin AG to The Austria Fund, Inc.
Page 4 of 8 Pages
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SIGNATURE
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is true,
complete and correct.
Date: October 26, 1998 BANKGESELLSCHAFT BERLIN AG
By: /s/ Gregory L. Melville
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Name: Gregory L. Melville
Title: Assistant Director
By: /s/ Moritz A. Sell
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Name: Moritz Sell
Title: Market Strategist
Page 5 of 8 Pages
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EXHIBIT 1
[Letterhead of Bankgesellschaft Berlin]
October 15, 1998
The Austria Fund, Inc.
1345 Avenue of the Americas
New York, NY 10105
USA
Attention: Edmund P. Bergan, Jr.
Dear Mr. Bergan:
Bankgesellschaft Berlin AG (the "Bank") is the holder of 879,400 shares of the
common stock, par value $.01 per share (the "Common Stock"), of The Austria
Fund, Inc. (the "Fund"), representing approximately 7.51 % of the outstanding
shares of Common Stock.
We request that the Nominating Committee of the Board of Directors nominate
Gregory L. Melville and Moritz A. Sell to be considered for election to the
Board at the 1998 annual meeting of shareholders. Brief biographies of Messrs.
Melville and Sell are attached hereto as Annex A. Messrs. Melville and Sell
have confirmed to the Bank that they meet all requirements under the Investment
Company Act of 1940, as amended, and the Fund's articles of incorporation and
by-laws applicable to directors. They will complete a questionnaire prepared by
the Fund designed to confirm the foregoing. In the event that the Committee
determines not to nominate Messrs. Melville and Sell, the bank would appreciate
the opportunity to discuss with the Committee the opportunity of nominating
other individuals to the Board in lieu of Messrs. Melville and Sell.
Mr. Melville has extensive experience in risk management and trading in
international equities. Mr. Sell has significant experience in international
securities as both a trader and an analyst. As the Fund invests primarily in
the securities of Austria, their business experience would prove to be an asset
to the Fund. Additionally, both Messrs. Melville and Sell serve as directors on
the Board of another NYSE listed closed-end country fund.
The persistent discount from net asset value ("NAV") of the shares of Common
Stock is a concern to the Bank, as we are sure it is to most, if not all,
shareholders of the Fund. Messrs. Melville and Sell have indicated to the Bank
that, if elected to the Board, they will be committed to exploring methods of
reducing or eliminating the discount. Such methods might include converting the
Fund to a close-end interval fund, open-ending the Fund, or merging the Fund
with an open-end fund, among others or offering shareholders a one-time in-kind
redemption right.
The Bank believes that the current members of the board which are due for
reelection will not be genuinely committed to reducing or eliminating the
discount. On the other hand, Messrs. Melville
Page 6 of 8 Pages
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and Sell will have the interests of increasing shareholder value as their
mandate. As previously stated, Messrs. Melville and Sell are directors of a
closed-end fund trading in European equities and have been directly and
successfully involved in seeking solutions for reducing discounts in
international closed-end funds.
We wish to thank the Committee for its attention to the Bank's request that its
nominees be considered for nomination to the Board and, due to the time
sensitivity, respectfully request a response to this letter by October 23,
1998.
Very truly yours,
/s/ Serge Demoliere /s/ Dirk Kipp
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Serge Demoliere Dirk Kipp
Managing Director Director
Page 7 of 8 Pages
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GREGORY L. MELVILLE (born July 22, 1956)
US Citizen
B.S, Engineering, 1978, United States Military Academy, West Point
1990 - 1995 Salomon Brothers, Investment Bank, Vice President
1995 - Present Bankgesellschaft Berlin Bank, Assistant Director
Since 1997 Mr. Melville has served as a Director on the Board of the Growth
Fund of Spain, Inc., a NYSE-listed closed-end fund.
MORITZ A. SELL (born October 12, 1967)
US Citizen
B.A. Economics, 1989, George Washington University
1990 - 1994 Canadian Imperial Bank of Commerce, Bank, Vice President
1995 - 1996 Barclays de Zoete Wedd, Investment Bank, Analyst
1996 - Present Bankgesellschaft Berlin, Market Strategist
Since 1997 Mr. Sell has served as a Director on the Board of the Growth Fund of
Spain, Inc., a NYSE-listed closed-end fund.
Page 8 of 8 Pages
