Securities and Exchange Commission
Washington, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
Amendment No.5
The Portugal Fund, Inc.
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
737265108
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(CUSIP Number)
Ralph W. Bradshaw
c/o Deep Discount Advisors, Inc.
One West Pack Square, Suite 777
Asheville, NC 28801
(828) 255-4833
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 2, 1999
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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. [ ]
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CUSIP No.: 737265108 13D Page 2
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
Deep Discount Advisors, Inc.
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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 OO
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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
One West Pack Square, Suite 777 Asheville, NC 28801
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NUMBER OF | | SOLE VOTING POWER
SHARES | 7 | 1089200
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BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
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BY EACH | | SOLE DISPOSITIVE POWER 1089200
REPORTING | 9 |
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PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 1089200
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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) 20.4%
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14 TYPE OF REPORTING PERSON IA
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CUSIP No.: 737265108 13D Page 3
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. ID NO. OF ABOVE PERSON
Ron Olin Investment Management Company
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2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ]
OF A GROUP (b) [ ]
========================================================================
3 SEC USE ONLY
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4 SOURCE OF FUNDS OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL [ ]
PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM 2(d) OR 2(e)
======================================================================
6 CITIZENSHIP OR PLACE OF ORGANIZATION
One West Pack Square, Suite 777 Asheville, NC 28801
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NUMBER OF | | SOLE VOTING POWER
SHARES | 7 | 665300
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BENEFICIALLY | | SHARED VOTING POWER 0
OWNED | 8 |
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BY EACH | | SOLE DISPOSITIVE POWER 665300
REPORTING | 9 |
=====================================================================
PERSON | | SHARED DISPOSITIVE POWER 0
WITH | 10 |
======================================================================
11 AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON 665300
=====================================================================
12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ]
(11) EXCLUDES CERTAIN SHARES
=========================================================================
13 PERCENT OF CLASS REPRESENTED BY
AMOUNT IN ROW (11) 12.4%
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14 TYPE OF REPORTING PERSON IA
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This Amendment No. 5 supplements and updates information in Item 4 and Item 5.
ITEM 4. PURPOSE OF TRANSACTION
THE BOARD REJECTS REGISTRANT'S INITIATIVES AND SUGGESTIONS
The Issuer (the "Fund") issued a press release on July 30 announcing that it
planned to present shareholders with an open-ending proposal containing a
redemption fee and requiring a super-majority vote for approval. In spite of a
"gentlemen's agreement" not to characterize Registrant's ideas in communications
with shareholders, the Fund announced that Registrant had "recently expressed
his opposition to open-ending the Fund." They failed to describe the reasons
the Registrant was opposed to this particular open-ending proposal and the fact
that the Registrant had not indicated opposition to a more effective and
practical "merger" proposal that had been under consideration.
REGISTRANT IN DISCUSSIONS WITH ISSUER
Registrant was engaged in a proxy contest with the Fund when the Fund canceled
the scheduled annual meeting of shareholders and announced that its Board was
considering options to be presented by the adviser of the Fund to reduce or
eliminate the discount at which the Fund's shares had been trading in the
market. The Registrant was of the opinion at the time the meeting was canceled
that the Registrant was likely to win the proxy contest and elect directors
representing substantial shareholder interests who were more committed to
enhancing shareholder value than candidates presented by the current Board.
The Registrant was contacted by the Fund on or about July 8 to discuss the
proposed options it was taking under consideration. Prior to engaging in the
discussion, the Registrant suspended all its market activity in the Fund's
shares and signed a confidentiality agreement which expired at noon on August 2.
A meeting was held with the Fund's adviser and three of the six current
directors at the offices of the Fund's adviser on July 13. At the beginning of
that meeting, a "gentlemen's agreement" was reached between the Registrant and
the other parties not to use ideas expressed and statements made during the
meeting by the other side as a basis for attacking their positions in
communications to shareholders.
OPEN-ENDING OR MERGER OPTIONS PRESENTED BY THE FUND
The two options presented by the Fund for consideration were "open-ending" and
"merger." The open-ending would include a redemption fee to be paid by
redeeming shareholders and would additionally allow the Fund to make
"redemptions-in-kind" of the Fund's Portuguese securities to larger shareholders
who redeemed. The merger involved an existing open-end fund acquiring the
assets of the Fund and would permit the Fund's shareholders to hold shares of
the open-end fund or redeem at full Net Asset Value (NAV) without any redemption
fees. According to the Fund, the open-ending proposal would require approval of
two-thirds of all outstanding shares of the Fund and the merger proposal would
require approval of only a majority of shares.
REGISTRANT OPPOSED TO OPEN-ENDING PROPOSALS WITH REDEMPTION FEES IMPOSED
The Registrant indicated its opposition to the open-ending proposal, as
presented, because it required shareholders not wishing to be in an open-end
structure to pay a redemption fee to leave, it might force large shareholders to
take considerable trouble and expense to sell Portuguese securities delivered
via redemptions-in-kind, and because of the likelihood that the requisite
two-thirds approval of all outstanding shares could not be achieved.
Furthermore, the Registrant felt that the remaining assets likely to be left in
the Fund after redemptions would not allow it to survive as a viable economic
entity. The Registrant expressed its belief that the merger proposal was a far
better choice if the Board was determined to dismantle the Fund in an effort to
deliver shareholder value, but that more effective methods of maximizing
long-term shareholder value existed other than the two limited options being
considered. For example, the Registrant pointed out that another closed-end
fund with which Registrant was involved, Clemente Strategic Value Fund, had
restructured its Board nine months earlier and had shifted its focus to
maximizing shareholder value by enhancing performance and buying large amounts
of its own shares at a discount. From 10/6/98, immediately after the buyback
program began, through 7/9/99, the Clemente fund share price increased +72%.
This far surpassed U.S. and European market returns, where most of that fund's
portfolio investments were concentrated.
REGISTRANT DESIRED THAT MORE EFFECTIVE AND TIMELY MEASURES BE TAKEN
The Registrant expressed its belief that the Board should be reconstituted to
better reflect the interests of existing shareholders, that steps should be
taken immediately to provide the flexibility for the Fund's adviser to improve
performance, and that more practical and immediate steps should be considered by
the Board to enhance long-term shareholder value and to reduce the Fund's
discount to nominal levels. Presenting the shareholders with an "open-end"
option that may well fail to pass the super-majority requirement imposed by the
Fund could hurt the shareholders and cause the subsequent discount to widen
dramatically.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The Fund's annual report, dated February 12,1999,
states that, as of the close of business on December 31, 1998, there were
5,355,416 shares of Common Stock outstanding. The percentage set forth
in this Item 5(a) was derived using such number.
The Reporting Persons are the beneficial owners of
1,754,500 shares of Common Stock, which constitute approximately 32.8%
of the outstanding shares of Common Stock.
(b) Power to vote and to dispose of the securities resides
with the Advisors.
(c) Since the last filing, the following shares
of Common Stock were traded in the open market:
Date Number of Shares Price Per Share
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6/30/99 500 bought 14.4375
7/6/99 1300 bought 14.1875
7/7/99 600 bought 14.1875
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Date: August 2, 1999 Deep Discount Advisors, Inc.
By: /s/ Ralph W. Bradshaw
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Name: Ralph W. Bradshaw
Title: Secretary
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