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The Brazilian Equity Fund, Inc. (NYSE: BZL)
The Chile Fund, Inc. (NYSE: CH)
The First Israel Fund, Inc. (NYSE: ISL)
The Emerging Markets Infrastructure Fund, Inc. (NYSE: EMG)
The Emerging Markets Telecommunications Fund, Inc. (NYSE: ETF)
The Latin American Equity Fund, Inc. (NYSE: LAQ)
The Latin America Investment Fund, Inc. (NYSE: LAM)
May 16, 2000
FOR IMMEDIATE RELEASE
---------------------
Contact: Investor Relations
Credit Suisse Asset Management, LLC
1-800-293-1232
NYSE-Listed Closed-End Equity Funds Managed by Credit Suisse Asset
Management Announce Strategic Actions to Enhance Shareholder Value
New York, May 16, 2000 - The Boards of Directors of seven NYSE-listed
closed-end equity funds managed by Credit Suisse Asset Management, LLC ("CSAM")
announced today the unanimous approval of a series of strategic and structural
actions designed to enhance shareholder value. The funds are: The Brazilian
Equity Fund, Inc. (NYSE: BZL), The Chile Fund, Inc. (NYSE: CH), The First Israel
Fund, Inc. (NYSE: ISL), The Emerging Markets Infrastructure Fund, Inc. (NYSE:
EMG), The Emerging Markets Telecommunications Fund, Inc. (NYSE: ETF), The Latin
America Equity Fund, Inc. (NYSE: LAQ) and The Latin America Investment Fund,
Inc. (NYSE: LAM).
The proposed actions are the result of the previously announced
comprehensive review of strategic and structural alternatives by PaineWebber
Incorporated, which is acting as financial advisor to the Independent Directors
of each fund. PaineWebber's engagement has included discussions with CSAM,
shareholders and market participants, and in-depth analysis of the viability and
details of potential actions in conjunction with the funds' legal and tax
advisors. The proposed strategic and structural actions approved by the Boards
are summarized as follows:
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1. Fund Mergers - To merge LAM into LAQ and to merge EMG into ETF through
tax-free transactions with all shares priced at net asset value.
2. Tender Offers - To conduct tender offers for up to 50% of the
outstanding shares of LAM and EMG at 95% of net asset value, prior to the
consummation and subject to shareholder approval of the proposed mergers.
3. Investment Advisory Fees - To revise the method of calculating
investment advisory fees payable by all of the funds to be based on the stock
market price, rather than the net asset value of each fund respectively.
4. Director Compensation - To partially compensate Independent Directors in
shares of the respective funds.
Fund Mergers
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The Board of Directors of each of LAM, LAQ, EMG and ETF has unanimously
approved the participation of that fund in the proposed mergers of LAM into LAQ
and EMG into ETF.
The combined net assets of LAM/LAQ and EMG/ETF, on a pro forma basis
assuming the tender offers described below are fully subscribed and based upon
current asset levels, would be approximately $146 million for LAM/LAQ, and $207
million for EMG/ETF. In the mergers, each share of common stock of LAM and EMG
will be converted into an equivalent dollar amount of full shares of LAQ and ETF
common stock (plus cash in lieu of fractional shares), computed based on the net
asset value of each fund as of the last trading day immediately prior to the
mergers. The mergers, to be presented for approval to record date shareholders
as of June 30, 2000, are subject to the approval of the holders of a majority of
the outstanding shares of each fund, as well as various other customary closing
conditions, including the receipt of legal opinions that the transactions will
qualify as tax-free reorganizations. Special Meetings of Shareholders of each
fund have been scheduled for Friday, September 15, 2000 to vote upon the
proposed mergers. If approved, the mergers would be consummated shortly after
the completion of the tender offers described below.
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The surviving funds resulting from the mergers, LAQ and ETF, will continue
to operate within the parameters of their respective investment objectives.
o The Latin America Equity Fund, Inc. (LAQ) seeks long-term capital
appreciation by investing primarily in Latin American equity securities,
including up to 10% in unlisted equity securities. The Board of Directors
believes that this clearly defined and well-differentiated investment
objective could eliminate potential confusion among investors, as
contrasted with The Latin America Investment Fund, Inc.(LAM), which invests
in both equity and debt securities. Furthermore, upon absorbing the assets
of LAM, LAQ's larger size may benefit shareholders through enhanced
secondary market liquidity and a lower expense ratio. It is anticipated
that LAQ would become the largest Latin American regional equity fund
listed on the NYSE and the only such fund with an active exposure to
private equity securities.
o The Emerging Markets Telecommunications Fund, Inc. (ETF) seeks
long-term capital appreciation by investing primarily in equity securities
of telecommunications companies in emerging countries, including
significant flexibility to invest in a variety of communications-related
technologies. Under certain circumstances, ETF may also invest up to 25% of
its assets in equity securities of closely held companies and other
illiquid securities. The Board of Directors believes that this clearly
defined and well-differentiated investment objective could eliminate
potential confusion among investors, as contrasted with The Emerging
Markets Infrastructure Fund, Inc. (EMG), which invests in general
infrastructure companies. Furthermore, upon absorbing the assets of EMG,
ETF's larger size may benefit shareholders through enhanced secondary
market liquidity and a lower expense ratio. It is anticipated that ETF
would become one of the largest emerging markets funds listed on the NYSE
and the only such fund with a primary mandate to invest in the
telecommunications sector, including private equity securities.
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Tender Offers
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The Board of Directors of each of LAM and EMG has also unanimously approved
a tender offer to acquire up to fifty percent (50%) of the outstanding shares of
common stock of each such fund at a per share cash purchase price equal to
ninety-five percent (95%) of net asset value as of the expiration date of the
tender offer period. The limitation on the amount of shares purchased through
the tender offers is intended to preserve the tax-free nature of the mergers
described above. In the event that shares tendered exceed 50% of the shares
outstanding, the amount of shares tendered will be pro-rated in accordance with
the number of shares tendered by each shareholder. The tender offers are
expected to be accretive to the net asset value of each fund.
The tender offers are expected to commence on or about August 15, 2000 and
to expire on or about September 18, 2000, unless extended. Although the tender
offer period is expected to expire prior to the consummation of the mergers, the
offers are subject to shareholder approval of such mergers in addition to other
customary closing conditions.
The tender offers for shares of LAM and EMG are intended to be partially
funded through the sale of non-conforming assets relative to the investment
objectives of LAQ and ETF, respectively. Subject to market conditions, it is
expected that LAM and EMG will utilize a portion of their existing tax-loss
carry forward positions in order to offset any realized gains which may result
from the disposition of assets.
Investment Advisory Fees
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The Board of Directors of each of BZL, CH, ISL, EMG, ETF, LAQ and LAM has
unanimously approved a proposal by the investment advisor, Credit Suisse Asset
Management, LLC, to revise the method of calculating investment advisory fees
payable by each fund to be based on average weekly stock market price value
instead of the existing method based on average weekly net asset value. The
change in methodology for calculating investment advisory fees will be effective
as of July 1, 2000.
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Based upon the level of discount from net asset value at which the funds
currently trade, the change in methodology for calculating investment advisory
fees will result in a significant effective dollar reduction in each funds'
investment advisory fee. This will reduce each funds' expense ratio and have an
on-going accretive impact on net asset values.
Furthermore, CSAM and the Board of Directors of each fund believes this
action will directly align the interests of the investment advisor with those of
shareholders and is aimed towards enhancing the market value of the funds,
including efforts to narrow discounts.
Director Compensation
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The Board of Directors of each of BZL, CH, ISL, EMG, ETF, LAQ and LAM has
unanimously approved a proposal by the Independent Directors to partially
compensate Independent Directors in shares of the respective funds. This action
is intended to also align the interests of Directors with those of the each
fund's shareholders. Under the newly adopted policy, the Independent Directors
will receive fifty percent (50%) of their annual retainer in the form of shares
purchased by each respective fund in the open market.
Other Initiatives
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As previously announced, PaineWebber's comprehensive review of alternatives
for all seven funds included analyses of various structural alternatives for
BZL, CH, and ISL. After considering PaineWebber's analyses and other relevant
factors, the Boards of these funds have not approved any new structural actions
at this time. Although the Boards of these funds believe that the revised
advisory fee methodologies and director compensation arrangements are important
strategic steps by these funds, they intend to continue to monitor the continued
viability of each such fund as presently structured and to evaluate possible
additional initiatives in the future.
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The following statements were made in relation to all of the proposed
strategic and structural actions:
o Professor Enrique Arzac, one of the Independent Directors and a
member of the Special Committee that was formed to consider strategic
alternatives, stated: "Both the Special Committee and each Board believe
that these actions represent a clear recognition of the interests of those
shareholders that are concerned about the discount at which each fund's
shares have been trading. We are seeking ways to enhance shareholder value
without abandoning each fund's original mandate to provide a suitable
vehicle for the long-term shareholder seeking exposure to the emerging
markets. After extensive deliberations by both the Special Committee and
the Boards of each fund, as well as numerous discussions with their
representatives and various market participants, we believe that the
actions being taken are in the best interests of each fund and its
shareholders, and the Directors are committed to pursuing these actions to
a successful conclusion."
o William Priest, Chairman of CSAM stated: "The strategic actions
announced today reflect CSAM's and the Funds' Boards' ongoing commitment to
enhance shareholder value. CSAM's decision to base our advisory fees on
share price directly aligns our interests with those of fund shareholders.
In addition to maximizing underlying performance, we believe this
initiative properly orients CSAM to continue pursuing actions that enhance
the market value of these funds, including efforts to narrow discounts."
There can be no assurance that any action proposed or adopted by the Boards
will reduce or eliminate the discounts at which each fund's shares trade or that
any required shareholder or other approvals will be obtained. This announcement
is not an offer to purchase or the solicitation of an offer to sell shares of
any fund. Any tender offer will be made only by the Offer to Purchase and the
related Letter of Transmittal, and any merger proposal will be made only by
means of a proxy statement/prospectus. Shareholders should read these documents
carefully when they are available because they contain important information.
These and other filed documents will be available to investors for free both at
the Web site of the Securities and Exchange Commission and each participating
fund. Neither the offer to purchase shares will be made to, nor will tenders
pursuant to the Offer to Purchase be accepted from or on behalf of, holders of
shares in any jurisdiction in which making or accepting the offer to purchase
would violate that jurisdiction's laws.
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