<PAGE>
As filed with the Securities and Exchange Commission on May 19, 1999
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(Pursuant to Section 13(e)(1) of the Securities Exchange Act of 1934)
The Southern Africa Fund, Inc.
(Name of Issuer)
The Southern Africa Fund, Inc.
(Name of Person(s) Filing Statement)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
842157 10 9
(CUSIP Number of Class of Securities)
Edmund P. Bergan, Jr.
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(212) 969-1000
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
With a copy to:
Bruce D. Senzel
Seward & Kissel
One Battery Park Plaza
New York, New York 10004
May 19, 1999
(Date Tender Offer First Published, Sent or Given to Security Holders)
CALCULATION OF FILING FEE
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- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Transaction Valuation Amount of Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$16,183,127(a)........................................... $3,236.63(b)
- --------------------------------------------------------------------------------
</TABLE>
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(a) Calculated as the aggregate maximum purchase price to be paid for
1,201,420 shares in the offer, based upon the net asset value per share of
$13.47 at May 14, 1999.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
[_]Check box if any part of the fee is offset as provided by Rule O-11(a)(2)
and identify the filing with which the offsetting fee was previously paid.
Identify the previous filing by registration statement number, or the Form
or Schedule and the date of its filing.
Amount Previously Paid: This Schedule 13E-4, including exhibits,
Form or Registration No. consists of [ ] pages.
Filing Party: Exhibit index appears on page [ ].
Date Filed:
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- -------------------------------------------------------------------------------
<PAGE>
Item 1. Security and Issuer.
(a) The name of the issuer is The Southern Africa Fund, Inc., a non-
diversified, closed-end management investment company incorporated in Maryland
(the "Fund"). The address of the principal executive office of the Fund is
1345 Avenue of the Americas, New York, New York 10105.
(b) The Fund is seeking tenders for 1,201,420 of its issued and outstanding
shares of common stock, par value $0.01 per share ("Shares"), for cash at a
price equal to the net asset value ("NAV") per Share determined as of the
close of the regular trading session of the New York Stock Exchange ("NYSE")
on June 17, 1999, upon the terms and subject to the conditions set forth in
the Offer to Purchase dated May 19, 1999 (the "Offer to Purchase") and the
related Letter of Transmittal (which together constitute the "Offer"). The
Offer expires at 12:00 Midnight Eastern Time on June 16, 1999, unless extended
(the "Expiration Date"). If the Offer is extended beyond June 16, 1999, the
purchase price for shares will be equal to their NAV determined as of the
close of the regular trading session of the NYSE on the date after the new
Expiration Date. A copy of the Offer to Purchase and the Letter of Transmittal
are filed as Exhibits (a)(1)(ii) and (a)(2)(i) to this statement,
respectively.
Reference is hereby made to the Cover Page, Section 1--"Price, Number of
Shares"--and Section 10-- "Interest of Certain Related Persons"--of the Offer
to Purchase, which are incorporated herein by reference.
(c) The principal market in which the Shares are traded is the NYSE.
Reference is hereby made to the Cover Page and Section 8--"Price Range of
Shares; Dividends"--of the Offer to Purchase, which are incorporated herein by
reference.
(d) Not applicable.
Item 2. Source and Amount of Funds or Other Consideration.
(a)-(b) Reference is hereby made to Section 7--"Source and Amount of
Funds"--of the Offer to Purchase, which is incorporated herein by reference.
Item 3. Purpose of the Tender Offer and Plans or Proposals of the Issuer or
Affiliate.
Introduction, (a) and (c) Reference is hereby made to Section 2--"Purpose of
the Offer, Plans or Proposals of the Fund"--, Section 7--"Source and Amount of
Funds"--, Section 8--"Price Range of Shares; Dividends"--, and Section 11--
"Certain Effects of the Offer"--of the Offer to Purchase, which are
incorporated herein by reference.
(b) and (d)-(j) Not applicable.
Item 4. Interest in Securities of the Issuer.
Reference is hereby made to Section 10--"Interest of Certain Related
Persons"--of the Offer to Purchase, which is incorporated herein by reference.
Item 5. Contracts, Arrangements, Understandings or Relationships with Respect
to the Issuer's Securities.
Reference is hereby made to Section 2--"Purpose of the Offer; Plans or
Proposals of the Fund"--, Section 7--"Source and Amount of Funds"--, Section
10--"Interest of Certain Related Persons"--, and Section 11--"Certain Effects
of the Offer"-- of the Offer to Purchase, which are incorporated herein by
reference. Except as set forth therein, the Fund does not know of any
contract, arrangement, understanding or relationship with any other person
relating, directly or indirectly, to the Offer between the (A) Fund, any
executive officer or director of the Fund, or any person controlling the Fund
or any executive officer or director of any corporation ultimately in control
of the Fund, and (B) any other person, with respect to any securities of
2
<PAGE>
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).
Item 6. Persons Retained, Employed or to be Compensated.
The Fund has entered into a Depositary Agreement, dated as of May 19, 1999,
with BankBoston, N.A. (the "Depositary") to provide certain depositary
services in connection with the Offer. For its services, the Depositary will
receive a fee of $11,500, plus $9.00 for each Letter of Transmittal processed,
$10.00 for each withdrawal of tendered Shares, $15.00 for each guaranteed
delivery of tendered Shares, and $1,500 for each extension of the Offer. Out-
of-pocket expenses of the Depositary, including telephone charges and mailing
expenses, will also be reimbursed by the Fund. The Depositary Agreement is
filed as Exhibit (c)(1) to this statement, which is incorporated herein by
reference.
No persons have been employed or retained or are to be compensated by or on
behalf of the Fund to make solicitations or recommendations in connection with
the Offer.
Item 7. Financial Information.
(a)(1) The Fund's audited financial statements for the fiscal years ended
November 30, 1998 and November 30, 1997 (the "Audited Financial Statements"),
are included as part of Exhibit (a)(1)(ii) to this statement, which is
incorporated herein by reference in its entirety. The related consent of Ernst
& Young LLP, the independent auditors of the Fund, is filed as Exhibit
(a)(1)(ii)(A) to this statement. For a summary of selected financial
information for these fiscal years, see Section 9--"Selected Financial
Information"--of the Offer to Purchase, which is incorporated herein by
reference.
(2) Not applicable.
(3) Certain ratios applicable to the Fund for the fiscal years ended
November 30, 1998 and November 30, 1997 are contained in the Audited Financial
Statements. Certain ratios applicable to the Fund for these fiscal years are
set forth in Section 9--"Selected Financial Information"--of the Offer to
Purchase, which is incorporated herein by reference.
(4) The Fund's NAV per Share as of November 30, 1998 is set forth in the
Audited Financial Statements for the fiscal year ended November 30, 1998. Such
information is also set forth in Section 9--"Selected Financial Information"--
of the Offer to Purchase, which is incorporated herein by reference.
(b) It is not possible for the Fund to predict the number of Shares that
will be tendered pursuant to the Offer; accordingly, it is not possible for
the Fund to provide pro forma information disclosing the effect of the Offer.
Item 8. Additional Information.
(a) Reference is hereby made to Section 10--"Interest of Certain Related
Persons"--of the Offer to Purchase, which is incorporated herein by reference.
(b)-(d) Not applicable.
(e) The Offer to Purchase and Letter of Transmittal, which are filed as
Exhibit (a)(1)(ii) and Exhibit (a)(2)(i), respectively, to this statement, are
incorporated herein by reference in their entirety.
3
<PAGE>
Item 9. Material to Be Filed as Exhibits.
<TABLE>
<C> <S>
(a)(1)(i) Advertisement printed in The Wall Street Journal on May 19,
1999.
(a)(1)(ii) Offer to Purchase.
(a)(1)(ii)(A) Consent of Ernst & Young LLP.
(a)(2)(i) Form of Letter of Transmittal.
(a)(2)(ii) Form W-8.
(a)(2)(iii) Form of Notice of Guaranteed Delivery.
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(3)(iii) Questions and Answers, to be Used Only by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees and by the
Depositary.
(a)(3)(iv) Form of Letter to Stockholders Who Have Requested Information.
(b) Not applicable.
(c)(1) Depositary Agreement between The Southern Africa Fund, Inc. and
BankBoston, N.A. dated as of May 19, 1999.
(c)(2) Investment Management Agreement between The Southern Africa
Fund, Inc. and Alliance Capital Management L.P. dated February
25, 1994 (as amended April 30, 1998).
(c)(3) Sub-Advisory Agreement between The Southern Africa Fund, Inc.,
Alliance Capital Management L.P. and Sanlam Asset Management
(Gibraltar) Limited (now Gensec Asset Management (Pty) Ltd.)
dated February 25, 1994, as amended as of April 30, 1998.
(c)(4) Shareholder Inquiry Agency Agreement between The Southern Africa
Fund, Inc. and Alliance Fund Services, Inc. dated as of March
27, 1996.
(c)(5) Administration Agreement between The Southern Africa Fund, Inc.
and Middlesex Administrators L.P. (now Princeton Administrators,
L.P.) dated February 25, 1994.
(d)-(f) Not applicable.
</TABLE>
[Remainder of page intentionally left blank]
4
<PAGE>
SIGNATURE
After due 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.
The Southern Africa Fund, Inc.
/s/ Edmund P. Bergan, Jr.
---------------------------
Name: Edmund P. Bergan, Jr.
Title: Secretary
Dated: May 19, 1999
5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Pages in
Sequentially
Exhibit Numbered
Number Exhibit Original
------- ------- ------------
<C> <S> <C>
(a)(1)(i) Advertisement printed in The Wall Street Journal
on May 19, 1999..................................
(a)(1)(ii) Offer to Purchase................................
(a)(2)(i) Form of Letter of Transmittal....................
(a)(1)(ii)(A) Consent of Ernst & Young LLP.....................
(a)(2)(ii) Form W-8.........................................
(a)(2)(iii) Form of Notice of Guaranteed Delivery............
(a)(3)(i) Form of Letter to Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees........
(a)(3)(ii) Form of Letter to Clients of Brokers, Dealers,
Commercial Banks, Trust Companies and Other
Nominees.........................................
(a)(3)(iii) Questions and Answers, to be Used Only by
Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees and by the
Depositary.......................................
(a)(3)(iv) Form of Letter to Stockholders Who Have Requested
Information......................................
(c)(1) Depositary Agreement between The Southern Africa
Fund, Inc. and BankBoston, N.A. dated as of May
19, 1999.........................................
(c)(2) Investment Management Agreement between The
Southern Africa Fund, Inc. and Alliance Capital
Management L.P. dated February 25, 1994 (as
amended April 30, 1998)..........................
(c)(3) Sub-Advisory Agreement between The Southern
Africa Fund, Inc., Alliance Capital Management
L.P. and Sanlam Asset Management (Gibraltar)
Limited (now Gensec Asset Management (Pty) Ltd.)
dated February 25, 1994, as amended as of April
30, 1998.........................................
(c)(4) Shareholder Inquiry Agency Agreement between The
Southern Africa Fund, Inc. and Alliance Fund
Services, Inc. dated as of March 27, 1996........
(c)(5) Administration Agreement between The Southern
Africa Fund, Inc. and Middlesex Administrators
L.P. (now Princeton Administrators, L.P.) dated
February 25, 1994................................
</TABLE>
6
<PAGE>
EXHIBIT (a)(1)(i)
This announcement is neither an offer to purchase nor a solicitation of an offer
to sell Shares (as defined below). The Offer (as defined below) is made solely
by the Offer to Purchase dated May 19, 1999 and the related Letter of
Transmittal and is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. 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 behalf of the Fund (as defined below) by one or more
registered brokers or dealers licensed under the laws of such jurisdiction.
THE SOUTHERN AFRICA FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
- -------------------------------------------------------------------------------
Notice of Offer to Purchase for Cash 1,201,420 of Its
Issued and Outstanding Shares of Common Stock at Net Asset Value Per Share
- -------------------------------------------------------------------------------
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT
EASTERN TIME ON JUNE 16, 1999 UNLESS THE OFFER IS EXTENDED.
- -------------------------------------------------------------------------------
The Southern Africa Fund, Inc. (the "Fund") is offering to purchase,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated May 19, 1999 and the related Letter of Transmittal (which together
constitute the "Offer"), 1,201,420 outstanding shares of its issued and
outstanding Common Stock, par value $0.01 per share ("Shares"), at a price equal
to their net asset value ("NAV") per Share determined as of the close of the
regular trading session of the New York Stock Exchange (the "NYSE") on June 17,
1999. The Offer will expire at 12:00 Midnight Eastern Time on June 16, 1999,
subject to the right of the Board of Directors of the Fund to extend the Offer.
The NAV as of the close of the regular trading session on the NYSE on May 14,
1999 was $13.47 per Share. The purpose of the Offer is to fulfill an undertaking
made by the Fund in connection with the initial public offering of Shares. The
Offer is not conditioned upon Stockholders tendering in the aggregate any
minimum number of Shares.
If more than 1,201,420 Shares are duly tendered prior to the expiration
of the Offer, including any extensions (and not timely withdrawn), unless the
Fund determines not to purchase any Shares, the Fund will purchase 1,201,420
Shares on a pro rata basis (disregarding fractions) in accordance with the
number of Shares tendered by or on behalf of each Stockholder during the period
the Offer is open (and not timely withdrawn).
Shares tendered pursuant to the Offer may be withdrawn by written
notice to the Depositary at the Depositary's mailing address set forth below at
any time prior to 5:00 p.m. Eastern Time on June 18, 1999 (or, if the Offer is
extended, prior to that time on the second day on which the NYSE is open for
trading after the new expiration date), and, if the Shares tendered have not by
then been accepted for payment by the Fund, the Shares may also be withdrawn at
any time after July 15, 1999. The information required to be disclosed by
paragraph (d)(1) of Rule 13e-4 under the Securities Exchange Act of 1934, as
amended, is contained in the Offer to Purchase and is incorporated herein by
reference. The Offer to Purchase and the related Letter of Transmittal contain
important information that should be read carefully before any decision is made
with respect to the Offer.
Each Stockholder tendering Shares is required to submit a check in the
amount of $25.00 payable to BankBoston, N.A. (the "Depositary") which will help
defray the costs associated with effecting the Offer.
Requests for copies of the Offer to Purchase, the Letter of Transmittal
and all other tender offer documents should be directed to the Distribution
Agent at the Distribution Agent's mailing address or telephone number set forth
below between the hours of 9:00 a.m. and 5:00 p.m. Eastern Time, Monday through
Friday (except holidays). Copies of these documents will be furnished promptly
to Stockholders upon request at no expense to them. Stockholders who do not own
Shares directly may also obtain such information from their broker, dealer,
commercial bank, trust company or other nominee and are required to tender their
Shares through that firm. Questions and requests for assistance as well as for
current NAV quotations may be directed to the Depositary at the Depositary's
mailing address or telephone number set forth below, also between the hours of
9:00 a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except holidays).
Distribution Agent: Depositary:
CORPORATE INVESTOR COMMUNICATIONS, INC. BANKBOSTON, N.A.
Distribution Center Attn: Corporate Actions
111 Commerce Road P.O. Box 9573
Carlstadt, New Jersey 07072-2586 Boston, Massachusetts 02205-9573
Telephone Number: (877) 460-9339 Telephone Number: (800) 426-5523
May 19, 1999
<PAGE>
THE SOUTHERN AFRICA FUND, INC.
OFFER TO PURCHASE FOR CASH
1,201,420 OF ITS ISSUED AND OUTSTANDING SHARES
AT NET ASSET VALUE PER SHARE
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME ON
JUNE 16, 1999, UNLESS THE OFFER IS EXTENDED.
To the Stockholders of The Southern Africa Fund, Inc.:
The Southern Africa Fund, Inc., a non-diversified, closed-end management
investment company incorporated in Maryland (the "Fund"), is offering to
purchase 1,201,420 of its issued and outstanding shares of common stock, par
value $0.01 per share (the "Shares"), to fulfill an undertaking made in
connection with the initial public offering of the Shares. See Section 2. The
offer is for cash at a price equal to the net asset value ("NAV") per Share
determined as of the close of the regular trading session of the New York
Stock Exchange (the "NYSE") on the date after 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 constitute the
"Offer"). The Offer will expire at 12:00 Midnight Eastern Time on June 16,
1999, unless extended. The Shares are traded on the NYSE under the symbol
"SOA". The NAV as of the close of the regular trading session of the NYSE on
May 14, 1999 was $13.47 per Share. During the pendency of the Offer, current
NAV quotations can be obtained from BankBoston, N.A. (the "Depositary"), by
calling (800) 426-5523 between the hours of 9:00 a.m. and 5:00 p.m. Eastern
Time, Monday through Friday (except holidays).
THIS OFFER IS SUBJECT TO CERTAIN CONDITIONS. SEE SECTION 3.
IMPORTANT
Stockholders 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), any other documents required by the Letter of
Transmittal, and a check in the amount of $25.00 payable to BankBoston, N.A.,
Depositary (the "Processing Fee"); or (2) request their broker, dealer,
commercial bank, trust company or other nominee to effect the transaction on
their behalf. Stockholders 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 Stockholders 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 or not accompanied by
the Processing Fee.
If you do not wish to tender your Shares, you need not take any action.
NEITHER THE FUND NOR ITS BOARD OF DIRECTORS NOR ALLIANCE CAPITAL MANAGEMENT
L.P. (THE "INVESTMENT MANAGER") NOR GENSEC ASSET MANAGEMENT (PTY) LTD. (THE
"SUB-ADVISOR") MAKES ANY RECOMMENDATION TO ANY STOCKHOLDER 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, THE
INVESTMENT MANAGER OR THE SUB-ADVISOR AS TO WHETHER STOCKHOLDERS 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, THE INVESTMENT
MANAGER OR THE SUB-ADVISOR. STOCKHOLDERS ARE URGED
<PAGE>
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.
Questions and requests for assistance may be directed to the Depositary at
the Depositary's mailing address and at the telephone number set forth below.
Requests for additional copies of this Offer to Purchase, the Letter of
Transmittal and any other tender offer documents should be directed to the
Depositary at the Distribution Agent's address or telephone number.
Stockholders who do not own Shares directly may also obtain such information
and copies from their broker, dealer, commercial bank, trust company or other
nominee and are required to tender their Shares through that firm.
May 19, 1999
THE SOUTHERN AFRICA FUND, INC.
1345 Avenue of the
Americas
New York, New York 10105
<TABLE>
<S> <C> <C>
BANKBOSTON, N.A. DEPOSITARY
TELEPHONE NUMBER: (800) 426-5523
BY REGISTERED, CERTIFIED OR
EXPRESS MAIL OR OVERNIGHT
BY FIRST CLASS MAIL: COURIER: BY HAND:
BankBoston, N.A. BankBoston, N.A. Securities Transfer &
Attn: Corporate Actions Attn: Corporate Actions Reporting Services, Inc.
P.O. Box 9573 70 Campanelli Drive c/o Boston EquiServe LP
Boston, MA 02205-9573 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
CORPORATE INVESTOR COMMUNICATIONS, INC., DISTRIBUTION AGENT
TELEPHONE NUMBER: (877) 460-9339
Distribution Center
111 Commerce Road
Carlstadt, New Jersey 07072-2586
2
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------------------------------------------------------------------------- ----
<S> <C>
1.Price; Number of Shares............................................... 4
2.Purpose of the Offer; Plans or Proposals of the Fund.................. 4
3.Certain Conditions of the Offer....................................... 5
4.Procedures for Tendering Shares....................................... 6
a.Proper Tender of Shares.............................................. 6
b.Signature Guarantees and Method of Delivery.......................... 6
c.Dividend Reinvestment Plan........................................... 7
d.Book-Entry Delivery.................................................. 7
e.Guaranteed Delivery.................................................. 8
f.Determinations of Validity........................................... 8
g.United States Federal Income Tax Withholding......................... 9
5.Withdrawal Rights..................................................... 9
6.Payment for Shares.................................................... 10
7.Source and Amount of Funds............................................ 10
8.Price Range of Shares; Dividends...................................... 11
9.Selected Financial Information........................................ 11
10.Interest of Certain Related Persons................................... 13
11.Certain Effects of the Offer.......................................... 14
12.Certain Information about the Fund.................................... 14
13.Additional Information................................................ 14
14.Certain United States Federal Income Tax Consequences................. 14
15.Amendments; Extension of Tender Period; Termination................... 16
16.Miscellaneous......................................................... 16
Exhibit A: Audited Financial Statements of the Fund for the Fiscal Years
ended November 30, 1998 and November 30, 1997.
</TABLE>
3
<PAGE>
1. Price; Number of Shares. Upon the terms and subject to the conditions of
the Offer, the Fund will accept for payment and purchase up to 1,201,420 of
its issued and outstanding Shares that are properly tendered prior to 12:00
Midnight Eastern Time on June 16, 1999 (and not withdrawn in accordance with
Section 5). The Fund reserves the right to amend, extend or terminate the
Offer. See Sections 3 and 15. The Fund will not be obligated to purchase
Shares pursuant to the Offer under certain circumstances. See Section 3. The
later of June 16, 1999 or the latest date to which the Offer is extended is
hereinafter called the "Expiration Date." The purchase price of the Shares
will be their NAV per Share determined as of the close of the regular trading
session of the NYSE on the date after 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 May 14, 1999 was $13.47
per Share. During the pendency of the Offer, current NAV quotations can be
obtained from the Depositary by calling (800) 426-5523 between the hours of
9:00 a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except holidays).
The Offer is being made to all Stockholders and is not conditioned upon
Stockholders tendering in the aggregate any minimum number of Shares. Pursuant
to the Fund's Prospectuses dated February 25, 1994 (the "Prospectus"),
however, a Stockholder wishing to accept the Offer is required to tender all
(but not less than all) Shares owned by the Stockholder and all Shares
attributed to the Stockholder for federal income tax purposes under Section
318 of the Internal Revenue Code of 1986, as amended (the "Code"), as of the
date of purchase of Shares by the Fund pursuant to the Offer. See Section 14
concerning the tax consequences of tendering Shares.
If more than 1,201,420 Shares are duly tendered pursuant to the Offer (and
not withdrawn as provided in Section 5), unless the Fund determines not to
purchase any Shares, the Fund will purchase Shares from tendering
Stockholders, 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 Stockholder (and not so
withdrawn). See Section 3. If Shares duly tendered by or on behalf of a
Stockholder include Shares held pursuant to the Fund's Dividend Reinvestment
Plan, the proration will be applied first with respect to other Shares
tendered and only thereafter, if and as necessary, with respect to Shares held
pursuant to that Plan.
On May 14, 1999, there were 6,007,100 Shares issued and outstanding, and
there were approximately 126 holders of record of Shares. 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. Purpose of the Offer; Plans or Proposals of the Fund. The purpose of the
Offer is to fulfill an undertaking made in connection with the initial public
offering of the Shares, as set forth in the Fund's Prospectus. In the
Prospectus, the Fund indicated that, in recognition of the possibility that
the Shares might trade at a discount to NAV, the Fund's Board of Directors
(the "Board of Directors" or the "Board") had determined that it would be in
the interest of Stockholders to take action to attempt to reduce or eliminate
a market value discount from NAV.
In this regard, in the Prospectus, the Fund undertook to conduct a tender
offer for Shares during the second quarter of 1997 and each year thereafter
subject to a policy that the Fund would not proceed with the tender offer in a
particular year if Shares have traded on the principal securities exchange
where Shares are listed (at present the NYSE) at an average price (i) at or
above NAV or at an average discount from NAV of less than 5% or (ii) at or
above $15.00 (i.e., the initial public offering price per Share), all
determined on the basis of the average market prices per Share and discounts
as of the last trading day in each week (a "weekly valuation day") during a
period of 12 calendar weeks prior to April 1 of the relevant year (the
"Measurement Period"). On July 31, 1998, the Board fixed as the Measurement
Period for purposes of determining whether a mandatory tender offer was
required to be conducted during the second quarter of 1999, the 12 weeks ended
December 31, 1998. The average trading price of the Shares on the weekly
valuation days during the Measurement Period was $9.66 per Share, and the
average NAV per Share on the same days was $12.032, reflecting an average
discount of approximately 19.6%. Accordingly, the Fund is conducting the
Offer.
4
<PAGE>
In addition to tender offers pursuant to the above-described undertaking,
the Board considers each quarter the making of from time to time other tender
offers for Shares at NAV and open market repurchases of Shares. There can be
no assurance that the Board will authorize any such action. In October 1998,
the Fund announced that the Board authorized the Fund's repurchase of Shares
at such times and in such amounts as Fund management believes will further the
purposes of enhancing shareholder value and reducing the discount at which the
Fund's shares trade from their NAV, subject to Board review. Whether any
Shares will be so repurchased and, if so, the number thereof and the timing of
the repurchases have yet to be determined. There can be no assurance that the
Offer, other Share tender offers, any Share repurchases or the prospect of
such actions will result in the Shares trading at a price equal to their NAV.
The market price of the Shares will be determined by, among other things, the
relative demand for and supply of Shares in the market, the Fund's investment
performance, the Fund's dividends and yield, and investor perception of the
Fund's overall attractiveness as an investment as compared with other
investment alternatives.
Except as set forth above, as referred to in Section 7 or Section 10, or in
connection with the operation of the Fund's Dividend Reinvestment Plan, the
Fund does not have any present plans or proposals that relate to or would
result in (a) the acquisition by any person of additional securities of the
Fund or the disposition of securities of the Fund; (b) an extraordinary
corporate transaction, such as a merger, reorganization or liquidation
involving the Fund; (c) other than in connection with liquidating assets in
the ordinary course of the Fund's operations and for purposes of funding the
Offer, a sale or transfer of a material amount of assets of the Fund; (d) any
change in the composition of the Board or in the 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 vacancy on the Board or
to change any material term of the employment contract of any executive
officer; (e) any material change in the Fund's present dividend rate or
policy, or indebtedness or capitalization of the Fund; (f) 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"); (g) changes in the Fund's articles of incorporation,
bylaws or instruments corresponding thereto or other actions which may impede
the acquisition of control of the Fund by any person; (h) causing a class of
equity security of the Fund to be delisted from a national securities exchange
or to cease to be authorized to be quoted in an inter-dealer quotation system
of a registered national securities association; (i) a class of equity
security of the Fund becoming eligible for termination of registration
pursuant to Section 12(g)(4) of the Exchange Act; or (j) the suspension of the
Fund's obligation to file reports pursuant to Section 15(d) of the Exchange
Act.
3. Certain Conditions of the Offer. Notwithstanding any other provision of
the Offer or the Prospectus, the announced policy of the Board, which may be
changed by the Board, is that the Fund will not purchase shares pursuant to
the Offer if (a) such transaction, if consummated, would (i) result in the
delisting of the Shares from the NYSE (the NYSE having advised the Fund that
it would consider delisting if the aggregate market value of the outstanding
publicly held Shares is less than $5,000,000, the number of publicly held
Shares falls below 600,000 or the number of holders of 100 Shares or more
falls below 1,200) or (ii) impair the Fund's status as a regulated investment
company under the Code (which would make the Fund a taxable entity, causing
the Fund's income to be taxed at the corporate level in addition to the
taxation of Stockholders who receive dividends from the Fund); (b) 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; (c) 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
5
<PAGE>
which, in the Board's judgment, would have a material adverse effect on the
Fund or its Stockholders if Shares tendered pursuant to the Offer were
purchased; or (d) the Board determines that effecting the transaction would
constitute a breach of their fiduciary duty owed the Fund or its stockholders.
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 3 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 15.
4. Procedures for Tendering Shares.
a. Proper Tender of Shares. For Shares to be properly tendered pursuant to
the Offer, 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)), all Shares actually, or as determined
under Section 318 of the Code constructively, owned by the tendering
Stockholder (see Sections 1 and 14) (in proper certificated or uncertificated
form), any other documents required by the Letter of Transmittal and the
Processing Fee must be received by the Depositary at the appropriate address
set forth on page 2 of this Offer before 12:00 Midnight Eastern Time on the
Expiration Date. Letters of Transmittal and certificates representing tendered
Shares should not be sent or delivered to the Fund. Stockholders 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 Stockholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering Stockholder's
representation that the Stockholder 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
6
<PAGE>
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 (including
Shares constructively owned by the tendering Stockholder as determined under
Section 318 of the Code which must also be tendered--see Sections 1 and 14),
it is necessary to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations.
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 6.
c. Dividend Reinvestment Plan. The Bank of New York, the Fund's Transfer
Agent, holds Shares in uncertificated form for certain Stockholders pursuant
to the Fund's Dividend Reinvestment Plan. In addition to tendering all of
their other Shares, Stockholders wishing to accept the Offer must tender all
such uncertificated Shares. See Section 1 concerning the manner in which any
necessary proration will be made.
d. 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,
any other documents required by the Letter of Transmittal and the Processing
Fee, must in any case be received by the Depositary prior to 12:00 Midnight
Eastern Time on the Expiration Date at one of its addresses set forth on page
2 of this Offer, or the tendering Stockholder 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.
7
<PAGE>
Delivery of documents to DTC in accordance with DTC's procedures does not
constitute delivery to the Depositary.
e. Guaranteed Delivery. Notwithstanding the foregoing, if a Stockholder
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 12:00 Midnight Eastern Time on
the Expiration Date, or a Stockholder cannot complete the procedures for
delivery by book-entry transfer on a timely basis, then such Stockholder'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
12:00 Midnight 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 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), any documents required by the Letter
of Transmittal and the Processing Fee, 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 or mail to the Depositary and must include a guarantee
by an Eligible Institution and a representation that the Stockholder 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 STOCKHOLDER. IF DOCUMENTS ARE SENT BY MAIL,
REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. Stockholders 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),
any other documents required by the Letter of Transmittal and the Processing
Fee, 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, any
other documents required by the Letter of Transmittal and the Processing Fee.
f. 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 not accompanied by the
Processing Fee 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
Stockholder(s). The Fund's interpretations of the terms and conditions of the
Offer shall be final and binding.
8
<PAGE>
NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE INVESTMENT MANAGER, THE SUB-
ADVISOR, 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.
g. United States Federal Income Tax Withholding. To prevent the imposition
of U.S. federal backup withholding tax equal to 31% of the gross payments made
pursuant to the Offer, prior to such payments each Stockholder accepting the
Offer who has not previously submitted to the Fund a correct, completed and
signed Form W-9 (for U.S. Stockholders) or Form W-8 (for non-U.S.
Stockholders), or otherwise established an exemption from such withholding,
must submit the appropriate form to the Depositary. See Section 14.
Under certain circumstances (see Section 14), the Depositary will withhold a
tax equal to 30% of the gross payments payable to a non-U.S. Stockholder
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. Stockholder from the 30% withholding tax.) For
this purpose, a non-U.S. Stockholder, is, in general, a Stockholder 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 or any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of the source of such income (a "Non-U.S. Stockholder"). The
Depositary will determine a Stockholder's status as a Non-U.S. Stockholder and
the Stockholder'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. Stockholder that has not previously
submitted the appropriate certificates or statements with respect to a reduced
rate of, or exemption from, withholding for which such Stockholder may be
eligible should consider doing so in order to avoid over-withholding. See
Section 14.
5. Withdrawal Rights. At any time prior to 5:00 P.M. Eastern Time on the
second day on which the NYSE is open for trading after the Expiration Date,
and, if the Shares have not by then been accepted for payment by the Fund, at
any time after July 15, 1999, any Stockholder may withdraw all, but not less
than all, of the Shares that the Stockholder 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. Stockholders may also send a facsimile transmission notice of
withdrawal, which must be timely received by the Depositary at (781) 575-4826,
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 Stockholder-see Sections 1 and 14) 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 retendered by following the
procedures described in Section 4 prior to 12:00 Midnight Eastern Time on the
Expiration Date. Except as otherwise provided in this Section 5, tenders of
Shares made pursuant to the Offer will be irrevocable.
NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE INVESTMENT MANAGER, THE SUB-
ADVISOR, THE DEPOSITARY NOR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE
ANY
9
<PAGE>
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.
6. 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 5 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 Stockholders
promptly as directed by the Fund. The Fund will not pay interest on the
purchase price under any circumstances.
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), (c) any other documents required
by the Letter of Transmittal and (d) the Processing Fee. Stockholders 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 Stockholder. 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 3.
Any tendering Stockholder 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 Stockholder or other payee pursuant to the Offer. See Section 14
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. Stockholders.
7. Source and Amount of Funds. The total cost to the Fund of purchasing
1,201,420 of its issued and outstanding Shares pursuant to the Offer would be
approximately $16,183,000 (based on a price per Share of $13.47, the NAV as of
the close of the regular trading session of the NYSE on May 14, 1999). On May
14, 1999, the aggregate value of the Fund's net assets was approximately
$80,928,000.
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 the Investment Manager, taking into account investment merit,
relative liquidity and applicable investment restrictions and legal
requirements. Although the Fund is authorized to borrow money to finance the
purchase of Shares, the Board believes that the Fund will have sufficient
resources through cash on hand and the disposition of assets to purchase
Shares in the Offer without utilizing such borrowing. However, the Fund
reserves the right to finance a portion of the Offer through temporary
borrowing.
The purchase of Shares by the Fund will decrease the net assets of the Fund
and, therefore, have the effect of increasing the Fund's expense ratio. In
addition, the purchases may have an adverse effect on the Fund's investment
performance.
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, which would tend to decrease the Fund's
net income. As of May 14, 1999, cash and cash equivalents constituted
approximately 2% of the Fund's total assets.
10
<PAGE>
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 Stockholders whose Shares are accepted for purchase by the Fund, as
well as those Stockholders who do not sell Shares pursuant to the Offer.
Stockholders who retain their Shares may be subject to certain other effects
of the Offer. See Section 11.
8. Price Range of Shares; Dividends. 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 per Share paid during such periods.
<TABLE>
<CAPTION>
Net Asset
Value Market Price
------------- -----------------
Dividends/
High Low High Low Distributions
Fiscal Year (ending November 30) ------ ------ -------- -------- -------------
<S> <C> <C> <C> <C> <C>
1997
1st Quarter.................... $19.69 $17.11 $16.00 $14.125 $2.575
2nd Quarter.................... 20.57 19.70 17.00 16.00 -0-
3rd Quarter.................... 22.12 21.12 18.25 17.25 -0-
4th Quarter.................... 22.00 19.01 18.062 15.375 -0-
1998
1st Quarter.................... 18.62 14.50 15.688 12.00 3.009
2nd Quarter.................... 20.96 17.73 17.125 14.75 -0-
3rd Quarter.................... 18.63 10.27 14.9375 7.625 -0-
4th Quarter.................... 13.79 9.87 10.6875 7.25 -0-
1999
1st Quarter.................... 12.24 10.89 10.0625 8.8125 0.383
2nd Quarter (through May 14,
1999) 13.99 12.11 12.125 10.1875 -0-
</TABLE>
As of the close of business on May 14, 1999, the Fund's NAV was $13.47 per
Share, and the high, low and closing prices per Share on the NYSE on that date
were $11.75, $11.625 and $11.625, respectively. During the pendency of the
Offer, current NAV quotations can be obtained by contacting the Depositary in
the manner indicated in Section 1.
The tendering of Shares will not affect the record ownership of the tendered
Shares for purposes of entitlement to any dividends payable by the Fund.
9. Selected Financial Information. Set forth below is a summary of selected
financial information for the Fund as of and for the fiscal years ended
November 30, 1998 and November 30, 1997, and for the three-month periods ended
February 28, 1999 and February 28, 1998. The information with respect to the
two fiscal years has been excerpted from the Fund's audited financial
statements contained in its Annual Reports to Stockholders for these years,
and the information with respect to the two three-month periods has been
excerpted from the Fund's unaudited financial statements for these periods. A
copy of the two audited statements is included as Exhibit A to this Offer to
Purchase. The summary of selected financial information set forth below is
qualified in its entirety by reference to such statements and the financial
information, the notes thereto and related matter contained therein.
11
<PAGE>
SUMMARY OF SELECTED FINANCIAL INFORMATION
For the Periods Indicated Below
<TABLE>
<CAPTION>
Quarter
Ended
Year Ended Year Ended Quarter Ended February
November 30, 1998 November 30, 1997 February 28, 1999 28, 1998
----------------- ----------------- ----------------- ------------
(Audited) (Audited) (Unaudited) (Unaudited)
----------------- ----------------- ----------------- ------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Investment income..... $ 2,879,995 $ 4,947,282 $ 641,865 $ 810,609
Expenses.............. 1,987,574 2,504,912 380,042 528,810
------------ ------------ ----------- ------------
Net investment
income............... 892,421 2,442,370 261,823 281,799
------------ ------------ ----------- ------------
Net gain (loss) on
investments and
foreign currency
transactions......... (23,721,511) 6,595,894 (1,293,582) 11,131,403
------------ ------------ ----------- ------------
Net increase
(decrease) in net
assets from
operations........... $(22,829,090) $ 9,038,264 $(1,031,759) $ 11,413,202
============ ============ =========== ============
STATEMENT OF ASSETS AND
LIABILITIES (AT END OF
PERIOD)
Total assets.......... $ 76,097,510 $115,449,093 $73,201,085 $108,599,305
Total liabilities..... 2,820,023 1,267,152 3,256,077 1,079,526
------------ ------------ ----------- ------------
Net assets............ $ 73,277,487 $114,181,941 $69,945,008 $107,519,779
============ ============ =========== ============
Net asset value per
Share................ $ 12.20 $ 19.01 $ 11.64 $ 17.90
Shares outstanding.... 6,007,100 6,007,100 6,007,100 6,007,100
SELECTED DATA FOR A
SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
Income From Investment Operations
Net investment
income............... $ .16 $ .41 $ .04 $ .05
Net realized and
unrealized gain
(loss) on investments
and foreign currency
transactions......... (3.96) 1.10 (.22) 1.85
------------ ------------ ----------- ------------
Net increase
(decrease) in net
asset value from
operations........... (3.80) 1.51 (.18) 1.90
------------ ------------ ----------- ------------
Dividends and
Distributions
Dividends from net
investment income.... (.15) (.34) -0- (.15)
Distributions in
excess of net
investment income.... (.27) -0- -0- (.27)
Distributions from net
realized gains on
investments and
foreign currency
transactions......... (2.59) (2.24) (.38) (2.59)
------------ ------------ ----------- ------------
Total dividends and
distributions........ (3.01) (2.58) (.38) (3.01)
------------ ------------ ----------- ------------
Net asset value, end
of period............ $ 12.20 $ 19.01 $ 11.64 $ 17.90
------------ ------------ ----------- ------------
Market value, end of
period............... $ 10.0625 $ 15.375 $ 9.81 $ 14.75
------------ ------------ ----------- ------------
RATIOS
Expenses to average
net assets........... 2.10% 2.05% 2.28%* 2.15%*
Net investment income
to average net
assets............... 0.95% 2.00% 1.57%* 1.14%*
TOTAL INVESTMENT RETURN
Total investment
return based on:**
Market value.......... -18.11% 9.28% 1.37% 20.03%
Net asset value....... -19.70% 11.03% -0.82% 17.81%
</TABLE>
- --------
* Annualized.
** Total investment return is calculated assuming a purchase of Shares on the
opening of the first day and a sale on the closing of the last day of the
period reported. Dividends and distributions, if any, are assumed for
purposes of this calculation to be reinvested at prices obtained under the
Fund's Dividend Reinvestment Plan. Generally, total investment return based
on net asset value will be higher than the total investment return based on
market value in periods where there is an increase in the discount or a
decrease in the premium of the market value to the net asset value from the
beginning to the end of such periods. Conversely, total investment return
based on net asset value will be lower than total investment return based on
market value in periods where there is a decrease in the discount or an
increase in the premium of the market value to the net asset value from the
beginning to the end of such periods. Total investment return calculated for
a period of less than one full year is not annualized.
12
<PAGE>
10. Interest of Certain Related Persons. Pursuant to an Investment
Management Agreement dated February 25, 1994 (as amended April 30, 1998) with
the Investment Manager (a copy of which has been filed as an exhibit to
Schedule 13E-4 as defined in Section 13 of this Offer), the Fund employs the
Investment Manager to manage the investment and reinvestment of the assets of
the Fund. The Investment Manager has been the Fund's investment manager since
the Fund's commencement of operations. For services provided by the Investment
Manager under the Investment Management Agreement, the Fund pays the
Investment Manager a fee at an annualized rate of either (i) .81% of the
Fund's average weekly net assets if 90% or less of the Fund's average weekly
net assets are invested in securities of Republic of South Africa issuers as
defined in the Fund's Prospectus ("South African issuers") or (ii) the sum of
(a) .80% of the Fund's average weekly net assets and (b) .10% of the Fund's
average weekly net assets not invested in securities of South African issuers
if greater than 90% of the Fund's average weekly net assets are invested in
securities of South African issuers. In addition, pursuant to a Sub-Advisory
Agreement dated as of February 25, 1994 as amended as of April 30, 1998 with
the Investment Manager and the Sub-Advisor (formerly Sanlam Asset Management
(Gibraltar) Limited) (a copy of which has also been filed as an exhibit to
Schedule 13E-4), the Fund employs the Sub-Advisor to furnish to the Fund and
the Investment Manager certain information, investment recommendation, advice
and assistance concerning securities of South Africa issuers and certain other
information. For services provided by the Sub-Advisor under the Sub-Advisory
Agreement, the Fund pays the Sub-Advisor a fee at an annualized rate of .30%
of the greater of (i) the Fund's average weekly net assets invested in
securities of South African issuers or (ii) 90% of the Fund's average weekly
net assets. The fees payable to both the Investment Manager and the Sub-
Advisor are calculated and paid in arrears on the last day of each calendar
quarter for services performed during that quarter. For purposes of
calculating the fee, average weekly net assets are determined on the basis of
the Fund's average net assets for each weekly period (ending on Friday) ending
during the quarter. The net assets for each weekly period are determined by
averaging the net assets on the Friday of such weekly period with the net
assets on the Friday of the immediately preceding weekly period. When a Friday
is not a Fund business day, the calculation is determined with reference to
the net assets of the Fund on the Fund business day immediately preceding such
Friday. During the fiscal year ended November 30, 1998, the Fund paid to the
Investment Manager a fee totalling $813,261 pursuant to the Investment
Management Agreement, and the Fund paid to the Sub-Advisor a fee totaling
$218,496 pursuant to the Sub-Advisory Agreement. The Fund is also party to a
Shareholder Inquiry Agency Agreement dated as of March 27, 1996 with Alliance
Fund Services, Inc. ("Services"), an affiliate of the Investment Manager.
Pursuant to this agreement (a copy of which has also been filed as an exhibit
to Schedule 13E-4), Services responds to telephone inquiries concerning the
Fund and matters relating thereto from Stockholders and others. The fees
payable to Services under this agreement are limited to the cost to Services
of providing the services involved. During the fiscal year ended November 30,
1998, there were no cost reimbursements to Services under this agreement. In
addition, pursuant to an Administration Agreement dated February 25, 1994 with
Middlesex Administrators L.P. (now Princeton Administrators, L.P.)
("Princeton") (a copy of which has also been filed as an exhibit to Schedule
13E-4), the Fund employs Princeton to render certain administrative and
clerical services. For services provided by Princeton under the Administration
Agreement, the Fund pays Princeton on the first business day of each calendar
month a fee for the previous month at an annual rate equal to the greater of
(i) $150,000 per annum ($12,500 per month) or (ii) at an annual rate equal to
.20% of the Fund's average weekly net assets based upon the net asset values
applicable to shares of the Fund's outstanding stock and, if any, the Fund's
preferred stock and debt. For this purpose average weekly net assets are
computed in the same manner as under the Investment Management Agreement.
During the fiscal year ended November 30, 1998, the Fund paid Princeton a fee
totalling $189,035 pursuant to the Administration Agreement.
During the past forty business days, there have not been any transactions
involving Shares that were effected by the Fund. Based upon information
provided to the Fund, except for the acquisition in an open market transaction
on March 30, 1999 of 85 Shares at a price per Share of $11.125 by Dr. William
de Klerk, a member of the Board, there have not been any transactions in
Shares that were effected during such period by any member of the Board, any
executive officer of the Fund, any director or executive officer of the
general partner of the Investment Manager, the Sub-Advisor, any person
controlling the Fund, any director or executive officer of any corporation
ultimately in control of the Fund, or any associate or subsidiary of any of
the foregoing, including
13
<PAGE>
any executive officer or director of any such subsidiary. There is a policy
applicable to all investment companies to which the Investment Manager
provides investment advisory services contemplating, in the case of the Fund,
that the directors of the Fund will each invest at least $10,000 in Shares. As
of May 14, 1999, certain of the directors had not yet invested this amount in
Shares, and the directors of the Fund as a group owned less than 1% of the
Shares. Based upon information provided to the Fund, no director or officer of
the Fund intends to tender Shares pursuant to the Offer.
11. Certain Effects of the Offer. The purchase of Shares pursuant to the
Offer will have the effect of increasing the proportionate interest in the
Fund of Stockholders who do not tender Shares. All Stockholders remaining
after the Offer will be subject to any increased risks associated with the
reduction in the number of outstanding shares and the reduction in the Fund's
assets resulting from payment for the tendered Shares, such as any greater
volatility due to decreased portfolio diversification and proportionately
higher expenses. Under certain circumstances, the need to raise cash in
connection with the purchase of Shares pursuant to the Offer may have an
adverse effect on the Fund's NAV and/or income per Share. See Section 7. All
Shares purchased by the Fund pursuant to the Offer will be retired and will be
authorized and unissued shares.
12. Certain Information about the Fund. The Fund was incorporated in
Maryland on March 25, 1993 and is registered as a non-diversified, closed-end
management investment company under the 1940 Act. The Fund's investment
objective is long-term capital appreciation through investment in equity and
fixed income securities of Southern African issuers. In seeking to achieve its
investment objective, under normal circumstances the Fund invests at least 60%
of its total assets in equity securities of Southern African companies. The
balance of the Fund's assets are invested in fixed income securities issued or
guaranteed by Southern African governments or governmental entities or by
Southern African companies, or in equity and fixed income securities of
multinational companies the securities of which are listed on a Southern
African securities exchange.
Reference is made to Sections 2, 8 and 9 and to the financial statements
referred to in Section 9.
The principal executive office of the Fund is located at 1345 Avenue of the
Americas, New York, New York 10105.
13. Additional Information. An Issuer Tender Offer Statement on Schedule
13E-4 (the "Schedule 13E-4") including the exhibits thereto, filed with the
Securities and Exchange Commission (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 450 Fifth Street,
N.W., Room 1024, Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New
York, New York 10048 and Citicorp Center, 500 W. Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of the Schedule 13E-4 and the exhibits
may also be obtained by mail at the prescribed rates from the Public Reference
Branch of the SEC at 450 Fifth Street, N.W., Washington, D.C. 20549.
14. 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 Stockholder should consult the Stockholder'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
Stockholder is a citizen, resident or domiciliary. In view of the requirement
of the Offer that a tendering Stockholder must tender, or cause the tender of,
both all of the Shares owned by the Stockholder and all of the Shares
attributed to the Stockholder under Section 318 of the Code as of the date of
purchase of Shares by the Fund pursuant to the Offer, tax advisors should also
be consulted regarding the application of the constructive ownership rules of
Section 318. In general, Section 318 provides that Shares owned by certain
family members of a tendering Stockholder, and by certain entities in which
the Stockholder has a direct or indirect interest, are treated as owned by the
Stockholder for purposes of determining the federal income tax consequences of
a sale of Shares pursuant to the Offer.
14
<PAGE>
U.S. Stockholders. It is anticipated that Stockholders 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 political
subdivision thereof, and estates and trusts the income of which is subject to
U.S. federal income taxation regardless of the source of such income ("U.S.
Stockholders"), 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. This gain or loss will be capital gain or loss if
the Shares sold are held by the tendering U.S. Stockholder at the time of sale
as a capital asset 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. Stockholder will be taxed at a maximum rate of 20% if the
Shares had been held for more than one year at the time of their sale pursuant
to the Offer. This U.S. federal income tax treatment, however, is based on the
expectation that not all Stockholders will tender their Shares pursuant to the
Offer and that the continuing ownership interest in the Fund of tendering
Stockholders will be sufficiently reduced. While not anticipated, 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. Stockholder will be
taxable as a dividend, i.e., as ordinary income, to the extent of the U.S.
Stockholder'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.
Stockholder'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.
Stockholder. In the case of a tendering U.S. Stockholder that is a corporation
treated as receiving a distribution from the Fund pursuant to the Offer,
special basis adjustments may be applicable with respect to any Shares of such
a U.S. Stockholder not purchased pursuant to the Offer.
Under the "wash sale" rules under the Code, recognition of a loss on Shares
sold pursuant to the Offer will ordinarily be disallowed to the extent a U.S.
Stockholder 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. Stockholder or other payee pursuant to the Offer unless either: (a) the
U.S. Stockholder has completed and submitted to the Depositary an IRS Form W-9
(or Substitute Form W-9), providing the U.S. Stockholder'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. Stockholder is exempt from backup withholding, (ii) the U.S.
Stockholder has not been notified by the Internal Revenue Service that the
U.S. Stockholder 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. Stockholder that the U.S. Stockholder 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.
Stockholders.
Non-U.S. Stockholders. The U.S. federal income taxation of a Non-U.S.
Stockholder 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. Stockholder 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. Stockholders. If the sale of Shares pursuant to
the Offer is not so effectively connected and if, as anticipated for U.S.
Stockholders, it gives rise to gain or loss, any gain realized by a Non-U.S.
Stockholder 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. Stockholder 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. Stockholders are deemed to receive a distribution
from the Fund with respect to Shares they tender, the cash received by a
tendering Non-U.S. Stockholder 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. Stockholders. In such an event, the portion
15
<PAGE>
of the distribution treated as a dividend to the Non-U.S. Stockholder would be
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. Stockholder 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. Stockholder.
Non-U.S. Stockholders 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. Stockholders.
15. 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 the per Share NAV determined as of the close of the regular
trading session of the NYSE on the date after the Expiration Date as extended.
No Shares will be accepted for payment until on or after the new Expiration
Date.
16. 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 Stockholders 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.
May 19, 1999
THE SOUTHERN AFRICA FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
16
<PAGE>
Exhibit A
Portfolio Of Investments
November 30, 1998 The Southern African Fund, Inc.
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Shares U.S.$ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--95.8%
BOTSWANA--1.7%
CONSUMER
MANUFACTURING--0.4%
MISCELLANEOUS--0.4%
Sefalana Holdings Co....................................... 350,000 $ 308,353
----------
CONSUMER STAPLES--0.7%
BEVERAGES--0.7%
Kgolo Ya Sechaba, Ltd...................................... 100,000 11,295
Sechaba Breweries, Ltd..................................... 398,000 503,486
----------
514,781
----------
FINANCIAL SERVICES--0.6%
INSURANCE--0.6%
Botswana Insurance
Holdings, Ltd.............................................. 219,979 419,908
----------
Total Botswanan Securities
(cost $1,062,305).......................................... 1,243,042
----------
KENYA--0.5%
CONSUMER STAPLES--0.5%
BEVERAGES--0.5%
East African Breweries, Ltd.
(cost $421,656)............................................ 452,623 387,533
----------
MALAWAI--1.6%
CONSUMER SERVICES--1.6%
PRINTING & PUBLISHING--1.6%
Press Corporation (a)(b)
(cost $2,002,637).......................................... 188,750 1,179,687
----------
MAURITIUS--1.2%
CONSUMER SERVICES--0.7%
RESTAURANTS & LODGING--0.7%
Rogers and Company, Ltd.................................... 83,679 503,561
----------
CONSUMER STAPLES--0.5%
BEVERAGES--0.5%
Mauritius Breweries, Ltd................................... 102,122 385,638
----------
Total Mauritian Securities
(cost $740,512)............................................ 889,199
----------
</TABLE>
<TABLE>
<CAPTION>
Shares U.S.$ Value
<S> <C> <C>
NAMIBIA--0.9%
BASIC INDUSTRY--0.2%
MINING & METALS--0.2%
Namibian Minerals Corp. (a).............................. 130,000 $ 154,375
----------
CONSUMER STAPLES--0.7%
BEVERAGES--0.7%
Namibian Breweries, Ltd.................................. 1,000,000 492,524
----------
Total Namibian Securities
(cost $1,071,883)........................................ 646,899
----------
SOUTH AFRICA--87.2%
BASIC INDUSTRIES--7.1%
GOLD--2.7%
Anglogold, Ltd........................................... 40,000 1,954,134
----------
MINING & METALS--4.4%
Billiton Plc............................................. 1,038,000 2,234,514
South African Iron & Steel
Industry Corp............................................ 4,180,586 1,006,485
----------
3,240,999
----------
5,195,133
----------
CONSUMER SERVICES--11.7%
BROADCASTING &
CABLE--2.6%
Electronic Media/Supersports
International Hldgs...................................... 1,700,000 1,000,791
M-Web Holdings, Ltd. (a)................................. 400,000 875,143
----------
1,875,934
----------
PRINTING & PUBLISHING--4.9%
Nasionale Per Beperk,
N shares................................................. 846,100 3,122,415
Perskorgroep, Ltd........................................ 336,000 501,889
----------
3,624,304
----------
RETAIL-GENERAL MERCHANDISE--4.2%
New Clicks Holdings, Ltd................................. 1,178,602 1,139,146
Pick 'N Pay Stores, Ltd.................................. 1,746,200 1,933,233
----------
3,072,379
----------
8,572,617
----------
</TABLE>
A-1
<PAGE>
Portfolio Of Investments (continued) The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER STAPLES--13.0%
BEVERAGES--6.7%
South African Breweries, Ltd. ........................... 291,710 $4,936,591
----------
TOBACCO--6.3%
Rembrandt Group, Ltd. ................................... 701,500 4,567,362
----------
9,503,953
----------
ENERGY--3.0%
DOMESTIC INTEGRATED--3.0%
Energy Africa, Ltd. (a).................................. 1,225,550 2,153,677
----------
FINANCIAL SERVICES--27.2%
BANKING--20.5%
ABSA Group, Ltd. ........................................ 635,100 3,058,034
Firstrand Limited........................................ 3,945,000 4,852,825
Nedcor, Ltd.............................................. 271,673 5,566,659
Standard Bank Investment Corp. Ltd. ..................... 618,300 1,537,465
----------
15,014,983
----------
INSURANCE--4.5%
Fedsure Holdings, Ltd. .................................. 200,000 1,504,261
Forbes Group, Ltd. ...................................... 1,000,000 1,801,248
----------
3,305,509
----------
MISCELLANEOUS FINANCE--2.2%
Liberty Life Association of Africa, Ltd. ................ 96,000 1,641,473
----------
HEALTH CARE--2.4% 19,961,965
----------
MISCELLANEOUS
HEALTH CARE--2.4%
Macmed Health Care, Ltd. (a)............................. 3,354,000 1,768,210
----------
MULTI-INDUSTRY COMPANIES--8.7%
Anglo-American Corp. of South Africa, Ltd. 117,320 3,760,507
Financiere Richemont--Dep Rec............................ 179,900 2,608,163
----------
6,368,670
----------
TECHNOLOGY--8.7%
CHEMICALS--2.1%
AECI, Ltd. .............................................. 952,000 1,539,127
----------
COMPUTER SOFTWARE--6.6%
Dimension Data Holdings, Ltd. ........................... 1,031,441 3,878,892
Usko, Ltd. .............................................. 2,451,400 947,734
----------
4,826,626
----------
6,365,753
----------
</TABLE>
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) U.S. Dollar denominated security.
See notes to financial statements.
<TABLE>
<CAPTION>
Shares or Principal
Company Amount (000) U.S.$ Value
<S> <C> <C>
UTILITY--5.4%
TELEPHONE UTILITY--5.4%
M-Cell, Ltd. ................................. 3,106,020 $ 3,968,151
-----------
Total South African Securities (cost
$72,510,152).................................. 63,858,129
-----------
ZAMBIA--1.3%
CONSUMER STAPLES--1.3%
BEVERAGES--0.2%
National Breweries Plc.(a).................... 2,000,000 181,636
-----------
FOOD--0.3%
Zambia Sugar Co. ............................. 30,720,000 195,491
-----------
TOBACCO--0.8%
Rothmans of Pall Mall (Zambia) Berhad......... 16,079,032 584,692
-----------
Total Zambian Securities (cost $1,162,450)..... 961,819
-----------
ZIMBABWE--1.4%
CONSUMER STAPLES--0.6%
BEVERAGES--0.6%
Delta Corp.................................... 1,844,282 406,240
-----------
FINANCIAL SERVICES--0.2%
BANKING--0.2%
NMBZ Holdings, Ltd............................ 525,000 156,081
-----------
MULTI-INDUSTRY COMPANY--0.1%
TA Holdings, Ltd. (a)......................... 2,024,800 32,836
-----------
CONSUMER SERVICES--0.5%
BROADCASTING & CABLE--0.5%
Econet Wireless (a)........................... 16,500,000 401,351
-----------
Total Zimbabwean Securities (cost $2,321,543).. 996,508
-----------
Total Common Stocks
(cost $81,293,138)............................ 70,162,816
-----------
TIME DEPOSIT--1.2%
Brown Brothers Harriman & Co.
5.25%, 12/01/98 (cost $900,000)............... $900 900,000
-----------
TOTAL INVESTMENTS--97.0%
(cost $82,193,138)............................ 71,062,816
Other assets less liabilities--3.0%........... 2,214,671
-----------
NET ASSETS--100%.............................. $73,277,487
===========
</TABLE>
A-2
<PAGE>
Statement Of Assets And Liabilities
November 30, 1998 The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $82,193,138)........... $71,062,816
Cash, at value (cost $4,172,540)................................. 4,158,960
Receivable for investment securities sold........................ 664,317
Dividends and interest receivable................................ 206,715
Deferred organization expenses and other assets.................. 4,702
-----------
Total assets..................................................... 76,097,510
-----------
LIABILITIES
Payable for investment securities purchased...................... 2,253,617
Advisory fee payable............................................. 141,337
Sub-advisory fee payable......................................... 47,035
Administrative fee payable....................................... 12,948
Accrued expenses and other liabilities........................... 365,086
-----------
Total liabilities................................................ 2,820,023
-----------
NET ASSETS........................................................ $73,277,487
===========
COMPOSITION OF NET ASSETS
Common stock, at par............................................. $ 60,071
Additional paid-in capital....................................... 82,854,413
Distributions in excess of net investment income................. (174,849)
Accumulated net realized gain on investment transactions......... 1,671,937
Net unrealized depreciation of investments and foreign currency
denominated assets and liabilities.............................. (11,134,085)
-----------
$73,277,487
===========
NET ASSET VALUE PER SHARE (based on 6,007,100 shares outstanding). $ 12.20
===========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-3
<PAGE>
Statement Of Operations
Year Ended November 30, 1998______________________The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Dividends (net of foreign taxes withheld of $32,306). $2,263,118
Interest............................................. 616,877 $ 2,879,995
----------
EXPENSES
Management fee....................................... 813,261
Sub-advisory fee..................................... 218,496
Custodian............................................ 231,587
Audit & legal........................................ 197,959
Administrative fee................................... 189,035
Directors' fees and expenses......................... 185,227
Reports and notices to shareholders.................. 99,723
Registration......................................... 16,167
Amortization of organization expenses................ 11,994
Transfer agency...................................... 8,853
Miscellaneous........................................ 15,272
----------
Total expenses...................................... 1,987,574
------------
Net investment income............................... 892,421
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions......... 1,806,718
Net realized loss on foreign currency transactions... (1,406,572)
Net change in unrealized appreciation (depreciation)
of:
Investments......................................... (23,969,797)
Foreign currency denominated assets and liabilities. (151,860)
------------
Net loss on investments and foreign currency
transactions........................................ (23,721,511)
------------
NET DECREASE IN NET ASSETS FROM OPERATIONS............ $(22,829,090)
============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-4
<PAGE>
Statement Of Changes In Net Assets The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income............................. $ 892,421 $ 2,442,370
Net realized gain on investments and foreign
currency transactions............................ 400,146 15,848,303
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities...... (24,121,657) (9,252,409)
------------ ------------
Net increase (decrease) in net assets from
operations....................................... (22,829,090) 9,038,264
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income............................. (892,421) (2,012,378)
Distributions in excess of net investment income.. (1,624,554) -0-
Net realized gains................................ (15,558,389) (13,455,904)
------------ ------------
Total decrease.................................... (40,904,454) (6,430,018)
NET ASSETS
Beginning of year................................. 114,181,941 120,611,959
------------ ------------
End of year (including undistributed net
investment income of $1,651,537,
as of November 30, 1997)......................... $ 73,277,487 $114,181,941
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-5
<PAGE>
Notes To Financial Statements
November 30, 1998 The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
NOTE A: Significant Accounting Policies
The Southern Africa Fund, Inc. (the "Fund") was incorporated under the laws of
the State of Maryland on March 25, 1993 and is registered under the Investment
Company Act of 1940 as a non-diversified, closed-end management investment
company. The Fund commenced operations on March 7, 1994. The financial state-
ments have been prepared in conformity with generally accepted accounting
principles which require management to make certain estimates and assumptions
that affect the reported amounts of asset and liabilities in the financial
statements and amounts of income and expenses during the reporting period. Ac-
tual results could differ from those estimates. The following is a summary of
significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are
generally valued at the last reported sales price or if no sale occurred, at
the mean of the closing bid and asked prices on that day. Readily marketable
securities traded in the over-the-counter market, securities listed on a
foreign securities exchange whose operations are similar to the U.S. over-the-
counter market, and securities listed on a national securities exchange whose
primary market is believed to be over-the-counter, are valued at the mean of
the current bid and asked prices. U.S. government and fixed income securities
which mature in 60 days or less are valued at amortized cost, unless this
method does not represent fair value.
Securities for which current market quotations are not readily available are
valued at their fair value as determined in good faith by, or in accordance
with procedures adopted by, the Board of Directors. Fixed income securities
may be valued on the basis of prices obtained from a pricing service when such
prices are believed to reflect the fair market value of such securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of ex-
change prevailing when accrued.
Net realized gains or losses on foreign currency transactions represents
foreign exchange gains and losses from sales and maturities of foreign fixed-
income investments and closed forward exchange currency contracts, holdings of
foreign currencies, currency gains and losses realized between the trade and
settlement dates on foreign investment transactions and the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books and the U.S. dollar equivalent of the amounts actually
received or paid. Net currency gains and losses from valuing foreign currency
denominated assets and liabilities at period end exchange rates are reflected
as a component of net unrealized appreciation or depreciation of investments
and foreign currency denominated assets and liabilities.
3. Organization Expenses
Organization expenses of approximately $60,000 have been deferred and are be-
ing amortized on a straight-line basis through March, 1999.
4. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially
all of its investment company taxable income and net realized gains, if any,
to shareholders. Therefore, no provisions for federal income or excise taxes
are required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
A-6
<PAGE>
Notes To Financial Statements (continued)________The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
5. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment trans-
actions are accounted for on the date the securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis. The
Fund accretes discounts on short-term securities as adjustments to interest
income.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distributions are determined in accordance with fed-
eral tax regulations and may differ from those determined in accordance with
generally accepted accounting principles. To the extent these differences are
permanent, such amounts are reclassified within the capital accounts based on
their federal tax basis treatment; temporary differences do not require such
reclassification.
During the current fiscal year, permanent differences, primarily due to net
operating losses and tax classification of distributions resulted in a de-
crease in distributions in excess of net investment income, a decrease in ac-
cumulated net realized gain on investment transactions and a corresponding de-
crease in additional paid in capital. This reclassification had no effect on
net assets.
- -------------------------------------------------------------------------------
NOTE B: Management, Sub-advisory and Administrative fees
Under the terms of the Investment Management Agreement, amended as of May 1,
1998, the Fund pays Alliance Capital Management L.P. (the "Investment Manag-
er") a fee calculated and paid quarterly, based on either (i) .81% of the
Fund's average weekly net assets if 90% or less of the Fund's average weekly
net assets are invested in securities of South African issuers, or (ii) the
sum of (a) .80% of the Fund's average weekly net assets and (b) .10% of the
Fund's average weekly net assets not invested in securities of South African
issuers if greater than 90% of the Fund's average weekly net assets are in-
vested in securities of South African issuers.
Under the new terms of the Sub-Advisory Agreement effective May 1, 1998, the
Fund pays Gensec Asset Management (PTY) a fee calculated and paid quarterly
equal to an annualized rate of .30 of 1% of the greater
of (i) the Fund's average weekly net assets invested in securities of South
African issuers or (ii) 90% of the Fund's average weekly net assets during the
quarter.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Manager, the Fund reim-
burses AFS for costs relating to servicing phone inquires for the Fund. There
were no reimbursements from the Fund to AFS during the year ended November 30,
1998 relating to shareholder servicing costs.
Under the terms of an Administration Agreement, the Fund pays Princeton Admin-
istrators, L.P. (the "Administrator") a monthly fee equal to the annualized
rate of .20 of 1% of the Fund's average adjusted weekly net assets subject to
an annual minimum of $150,000. The Administrator prepares certain financial
and regulatory reports for the Fund and provides clerical and other services.
- -------------------------------------------------------------------------------
Note C: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $79,015,337 and $100,448,141, re-
spectively, for the year ended November 30, 1998. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
November 30, 1998.
At November 30, 1998, the cost of investments for federal income tax purposes
was $82,524,614. Accordingly, gross unrealized appreciation of investments was
$3,835,607 and gross unrealized depreciation of investments was $15,297,405
resulting in net unrealized depreciation of $11,461,798 (excluding foreign
currency transactions).
A-7
<PAGE>
Notes To Financial Statements (continued) The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio
holdings, to hedge certain firm purchase and sales commitments denominated in
foreign currencies and for investment purposes. A forward exchange currency
contract is a commitment to purchase or sell a foreign currency at a future
date at a negotiated forward rate. The gain or loss arising from the
difference between the original contracts and the closing of such contracts is
included in net realized gains or losses from foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at
least equal to the aggregate amount of the Fund's commitments under forward
exchange currency contracts entered into with respect to position hedges.
Risks may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of foreign
currencies relative to the U.S. dollar.
At November 30, 1998, the Fund had no outstanding forward exchange currency
contracts.
- -------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 100,000,000 shares of $.01 par value capital stock authorized.
Of the 6,007,100 shares of Common Stock outstanding at November 30, 1998, the
Investment Manager owned 7,100 shares.
- -------------------------------------------------------------------------------
NOTE E: Concentration of Risk
Investment in equity securities of Southern African issuers involves special
consideration and risks not typically associated with investments in the
United States.
Among others, the risks associated with political and economic uncertainty,
particularly with respect to South Africa, may adversely affect the securities
markets of Southern African countries.
A-8
<PAGE>
Financial Highlights The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
March 7,
Year Ended November 30, 1994(a) to
-------------------------------------- November 30,
1998 1997 1996 1995 1994
-------- -------- -------- -------- ------------
<S> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.... $ 19.01 $ 20.08 $ 21.49 $ 18.34 $ 13.87(b)
-------- -------- -------- -------- --------
Income From Investment
Operations
- ------------------------
Net investment income... .16 .41 .39 .17 .42
Net realized and
unrealized gain (loss)
on investments and
foreign currency
transactions........... (3.96) 1.10 (.30) 4.27 4.05
-------- -------- -------- -------- --------
Net increase (decrease)
in net asset value from
operations............. (3.80) 1.51 .09 4.44 4.47
-------- -------- -------- -------- --------
Less: Dividends and
Distributions
- ------------------------
Dividends from net
investment income...... (.15) (.34) (.59) (.52) -0-
Distributions in excess
of net investment
income................. (.27) -0- -0- -0- -0-
Distributions from net
realized gains on
investments and foreign
currency transactions.. (2.59) (2.24) (.91) (.77) -0-
-------- -------- -------- -------- --------
Total dividends and
distributions.......... (3.01) (2.58) (1.50) (1.29) -0-
-------- -------- -------- -------- --------
Net asset value, end of
period................. $ 12.20 $ 19.01 $ 20.08 $ 21.49 $ 18.34
======== ======== ======== ======== ========
Market value, end of
period................. $10.0625 $ 15.375 $ 16.50 $ 16.75 $ 14.875
======== ======== ======== ======== ========
Total Return
- ------------------------
Total investment return
based on: (c)
Market value.......... -18.11% 9.28% 6.12% 22.90% 5.50%
Net asset value....... -19.70% 11.03% .66% 27.89% 30.07%
Ratios/Supplemental Data
- ------------------------
Net assets, end of
period (000's omitted). $ 73,277 $114,182 $120,612 $129,112 $110,181
Ratio of expenses to
average net assets..... 2.10% 2.05% 2.04% 2.05% 2.30%(d)
Ratio of net investment
income to average net
assets................. 0.95% 2.00% 1.87% .94% 3.65%(d)
Portfolio turnover rate. 86% 46% 62% 41% 15%
</TABLE>
- --------------------------------------------------------------------------------
(a) Commencement of operations.
(b) Net of offering costs of $.23.
(c) Total investment return is calculated assuming a purchase of Shares on
the opening of the first day and a sale on the closing of the last day of
the period reported. Dividends and distributions, if any, are assumed,
for purposes of this calculation, to be reinvested at prices obtained
under the Fund's Dividend Reinvestment Plan. Generally, total investment
return based on net asset value will be higher than total investment
return based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net
asset value from the beginning to the end of such periods. Conversely,
total investment return based on net asset value will be lower than total
investment return based on market value in periods where there is a
decrease in the discount or an increase in the premium of the market
value to the net asset value from the beginning to the end of such
periods. Total investment return calculated for a period of less than one
year is not annualized.
(d) Annualized.
A-9
<PAGE>
Report Of Ernst & Young LLP
Independent Auditors The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
To the Shareholders and Board of Directors The Southern Africa Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Southern Africa Fund, Inc., including the portfolio of investments, as of
November 30, 1998, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods
indicated therein. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of November 30, 1998, by correspondence
with the custodian and brokers. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Southern Africa Fund, Inc. at November 30, 1998, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated periods, in conformity with generally accepted accounting
principles.
ERNST & YOUNG LLP
New York, New York
January 14, 1999
A-10
<PAGE>
Portfolio Of Investments
November 30, 1997 The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS--89.5%
BOTSWANA--1.7%
CONSUMER
MANUFACTURING--0.6%
MISCELLANEOUS--0.6%
Sefalana Holdings Co....................................... 350,000 $ 644,350
----------
CONSUMER STAPLES--0.4%
BEVERAGES--0.4%
Kgolo Ya Sechaba, Ltd...................................... 100,000 9,205
Sechaba Breweries, Ltd..................................... 398,000 423,930
----------
433,135
----------
FINANCIAL SERVICES--0.2%
INSURANCE--0.2%
Botswana Insurance
Holdings, Ltd............................................. 211,646 236,567
----------
Total Botswanan Securities
(cost $1,054,682).......................................... 1,314,052
----------
MAURITIUS--2.5%
CONSUMER SERVICES--0.9%
RESTAURANTS &
LODGING--0.9%
Rogers and Company, Ltd.................................... 83,679 418,395
Sun Resorts, Ltd........................................... 280,000 602,000
----------
1,020,395
----------
CONSUMER STAPLES--0.7%
BEVERAGES--0.3%
Mauritius Breweries, Ltd................................... 102,122 343,501
----------
FOOD---0.4%
Happy World Foods, Ltd..................................... 687,837 497,119
----------
840,620
----------
FINANCIAL SERVICES--0.9%
INSURANCE--0.9%
Mauritius Commercial Bank.................................. 110,000 485,000
State Bank of Mauritius, Ltd............................... 960,000 549,818
----------
1,034,818
----------
Total Mauritian Securities
(cost $2,637,585).......................................... 2,895,833
----------
</TABLE>
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
<S> <C> <C>
NAMIBIA--1.1%
BASIC INDUSTRY--0.5%
MINING & METALS--0.5%
Namibian Minerals Corp.(a).............................. 130,000 $ 589,326
-----------
MULTI-INDUSTRY--0.6%
Namibian Breweries, Ltd................................. 1,000,000 618,174
-----------
Total Namibian Securities
(cost $1,071,883)....................................... 1,207,500
-----------
SOUTH AFRICA--80.3%
BASIC INDUSTRIES--10.9%
GOLD--2.0%
Beatrix Mines, Ltd...................................... 225,000 683,574
HJ Joel Gold Mining Co., Ltd............................ 400,000 181,256
Vaal Reefs Exploration & Mining Co., Ltd................ 40,000 1,384,140
-----------
2,248,970
-----------
MINING & METALS--6.8%
Billiton Plc(a)......................................... 800,000 1,977,343
De Beers Centenary AG(b)................................ 78,900 1,657,631
Gencor, Ltd............................................. 160,000 248,816
South African Iron & Steel Industry Corp................ 8,940,160 3,903,839
-----------
7,787,629
-----------
MISCELLANEOUS--0.3%
Consol, Ltd............................................. 66,000 366,365
-----------
PAPER & FOREST
PRODUCTS--1.8%
Sappi, Ltd.............................................. 365,700 2,045,058
-----------
12,448,022
-----------
CAPITAL GOODS--0.8%
ENGINEERING & CONSTRUCTION--0.8%
Murray & Roberts Holdings, Ltd.......................... 500,000 876,416
-----------
CONSUMER
MANUFACTURING--4.3%
MISCELLANEOUS--4.3%
Nampak, Ltd.(b).......................................... 1,488,000 4,903,811
-----------
</TABLE>
A-11
<PAGE>
Portfolio Of Investments (continued) The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
- -------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER SERVICES--17.1%
BROADCASTING & CABLE--2.8%
<CAPTION>
Electronic Media Network, Ltd........................... 1,700,000 $ 1,523,172
<S> <C> <C>
MIH Holdings, Ltd.(a)................................... 545,700 1,629,794
----------
3,152,996
----------
MISCELLANEOUS--4.5%
Teljoy Holdings, Ltd.(a)................................ 3,696,080 5,169,183
----------
PRINTING AND
PUBLISHING--7.5%
Independent Newspapers Holdings, Ltd.................... 40,000 189,495
Kagiso Media, Ltd....................................... 1,352,740 1,198,101
Nasionale Pers Beperk................................... 363,287 2,993,096
Perskorgroep, Ltd....................................... 336,000 930,834
Omni Media Corp., Ltd................................... 190,000 2,445,932
Times Media, Ltd........................................ 127,800 855,510
----------
8,612,968
----------
RETAIL--GENERAL
MERCHANDISE--2.3%
New Clicks Holdings, Ltd................................ 2,008,494 2,337,382
Pick 'N Pay Stores, Ltd................................. 169,100 268,192
----------
2,605,574
----------
19,540,691
----------
CONSUMER STAPLES--11.3%
BEVERAGES--2.9%
South African Breweries, Ltd.(b)........................ 132,832 3,255,820
----------
FOOD--2.4%
Afriband Holdings, Ltd.................................. 3,333,333 1,524,202
The Premier Group, Ltd.................................. 1,151,200 1,244,861
----------
2,769,063
----------
RETAIL-FOOD & DRUG-- 2.8%
Metro Cash & Carry, Ltd................................. 3,449,136 3,232,455
----------
TOBACCO--3.2%
Rembrandt Group, Ltd.(b)................................ 470,100 3,606,843
----------
12,864,181
----------
ENERGY--5.0%
DOMESTIC INTEGRATED--3.5%
Energy Africa, Ltd.(a).................................. 843,750 3,997,168
----------
OIL SERVICE--1.5%
Sasol, Ltd.(a).......................................... 175,000 1,764,418
----------
5,761,586
----------
</TABLE>
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
<S> <C> <C>
FINANCIAL SERVICES--21.1%
BANKING--12.2%
Amalgamated Banks of South Africa, Ltd................. 674,515 $ 4,154,068
Investec Bank, ltd..................................... 50,000 1,989,701
Nedcor, Ltd............................................ 150,590 3,411,926
Standard Bank Investment Corp., Ltd.................... 100,000 4,366,632
-----------
13,922,327
-----------
INSURANCE--8.9%
Fedsure Holdings, Ltd.................................. 317,196 3,665,231
Forbes Group, Ltd...................................... 1,450,000 2,687,951
Metropolitan Life, Ltd................................. 1,500,000 3,861,998
-----------
10,215,180
-----------
24,137,507
-----------
MULTI-INDUSTRY
COMPANY--2.0%
Anglo-American Corp. of South Africa, Ltd.(b).......... 55,220 2,297,516
-----------
TECHNOLOGY--4.2%
COMMUNICATION
EQUIPMENT--1.6%
Plessey Corp., Ltd..................................... 1,416,374 1,823,344
-----------
COMPUTER SOFTWARE--2.6%
Dimension Data Holdings, Ltd.(a)....................... 686,255 2,968,353
-----------
4,791,697
-----------
UTILITY--3.6%
TELEPHONE UTILITY--3.6%
M-Cell, Ltd............................................ 3,254,460 4,089,023
-----------
Total South African Securities
(cost $81,132,902)..................................... 91,710,450
-----------
ZAMBIA--1.5%
CONSUMER STAPLES--1.5%
FOOD--0.7%
Zambia Sugar Co........................................ 30,720,000 778,003
-----------
TOBACCO--0.8%
Rothmans of Pall Mall.
(Zambia) Berhad........................................ 15,031,902 916,381
-----------
Total Zambian Securities
(cost $859,632)........................................ 1,694,384
-----------
</TABLE>
A-12
<PAGE>
Portfolio Of Investments (continued) The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Company Shares U.S.$ Value
- -------------------------------------------------------------------------------
<S> <C> <C>
ZIMBABWE--2.9%
CONSUMER SERVICES--0.5%
RESTAURANTS & LODGING--0.5%
Meikles Africa, Ltd.(c)................................. 400,000 $ 610,000
-----------
CONSUMER STAPLES--0.7%
BEVERAGES--0.7%
Delta Corp.............................................. 820,731 863,329
-----------
FINANCIAL SERVICES--0.3%
BANKING--0.3%
NMBZ Holdings, Ltd.(a).................................. 200,000 332,180
-----------
MULTI-INDUSTRY
COMPANY--1.4%
TA Holdings, Ltd........................................ 8,024,800 1,554,979
-----------
Total Zimbabwean Securities
(cost $2,322,979)....................................... 3,360,488
-----------
Total Common Stocks
(cost $89,079,663)...................................... 102,182,707
-----------
</TABLE>
Principal
Amount
Company (000) U.S.$ Value
<TABLE>
<S> <C> <C>
FOREIGN GOVERNMENT
OBLIGATIONS--10.7%
SOUTH AFRICA--10.7%
Republic of South Africa, 13.00%, 8/31/10.............. ZAR 36,000 $ 6,844,916
13.50%, 9/15/15....................................... 27,500 5,372,577
------------
Total Foreign Government
Obligations (cost $12,481,062)........................ 12,217,493
------------
TIME DEPOSIT--0.2%
Canadian Imperial Bank
of Commerce
5.6875%, 12/01/97
(cost $200,000)....................................... US $ 200 200,000
------------
TOTAL INVESTMENTS--100.4%
(cost $101,760,725)................................... 114,600,200
------------
Other assets less liabilities--(0.4%)................. (418,259)
------------
NET ASSETS--100%....................................... $114,181,941
============
</TABLE>
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) Securities, or portion thereof, with an aggregate market value $8,883,538
have been segregated to collateralize forward exchange currency contracts.
(c) U.S. Dollar denominated security.
Glossary:
ZAR South African Rand.
See notes to financial statements.
A-13
<PAGE>
Statement Of Assets And Liabilities
November 30, 1997 The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments in securities, at value (cost $101,760,725).......... $114,600,200
Cash, at value (cost $155,343)................................... 154,481
Interest and dividends receivable................................ 520,206
Net unrealized appreciation on forward exchange currency
contracts....................................................... 157,514
Deferred organization expenses and other assets.................. 16,692
------------
Total assets..................................................... 115,449,093
------------
LIABILITIES
Payable for investment securities purchased...................... 627,087
Management fee payable........................................... 281,961
Sub-advisory fee payable......................................... 57,294
Administrative fee payable....................................... 19,440
Accrued expenses and other liabilities........................... 281,370
------------
Total liabilities................................................ 1,267,152
------------
NET ASSETS........................................................ $114,181,941
============
COMPOSITION OF NET ASSETS
Capital stock, at par............................................ $ 60,071
Additional paid-in capital....................................... 83,255,566
Undistributed net investment income.............................. 1,651,537
Accumulated net realized gain on investment transactions......... 16,227,195
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities..................... 12,987,572
------------
$114,181,941
============
NET ASSET VALUE PER SHARE (based on 6,007,100 shares outstanding). $19.01
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-14
<PAGE>
Statement Of Operations
Year Ended November 30, 1997 The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
INVESTMENT INCOME
Interest.............................................. $3,117,631
Dividends (net of foreign taxes withheld of $23,963).. 1,829,651 $4,947,282
----------
EXPENSES
Management fee........................................ $1,099,280
Directors' fees and expenses.......................... 314,200
Custodian............................................. 255,996
Administrative fee.................................... 244,233
Audit & legal......................................... 229,086
Sub-advisory fee...................................... 226,451
Transfer agency....................................... 46,504
Reports and notices to shareholders................... 42,342
Registration.......................................... 15,974
Amortization of organization expenses................. 11,994
Miscellaneous......................................... 18,852
----------
Total expenses........................................ 2,504,912
----------
Net investment income................................. 2,442,370
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net realized gain on investment transactions.......... 16,268,101
Net realized loss on foreign currency transactions.... (419,798)
Net change in unrealized appreciation (depreciation)
of:
Investments.......................................... (9,400,786)
Foreign currency denominated assets and liabilities.. 148,377
----------
Net gain on investments and foreign currency
transactions......................................... 6,595,894
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS............. $9,038,264
==========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-15
<PAGE>
Statement Of Changes In Net Assets The Southern Africa Fund, Inc.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1997 1996
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
Net investment income............................. $ 2,442,370 $ 2,349,924
Net realized gain on investments and foreign
currency transactions............................ 15,848,303 12,952,857
Net change in unrealized appreciation
(depreciation) of investments and foreign
currency denominated assets and liabilities...... (9,252,409) (14,792,618)
------------ ------------
Net increase in net assets from operations........ 9,038,264 510,163
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income............................. (2,012,378) (3,544,189)
Net realized gains................................ (13,455,904) (5,466,461)
------------ ------------
Total decrease.................................... (6,430,018) (8,500,487)
NET ASSETS
Beginning of year................................. 120,611,959 129,112,446
------------ ------------
End of year (including undistributed net
investment income of $1,651,537 and $1,641,343,
respectively).................................... $114,181,941 $120,611,959
============ ============
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-16
<PAGE>
Notes To Financial Statements
November 30, 1997 The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
NOTE A: Significant Accounting Policies
The Southern Africa Fund, Inc. (the "Fund") was incorporated under the laws of
the State of Maryland on March 25, 1993 and is registered under the Investment
Company Act of 1940, as a non-diversified, closed-end management investment
company. The Fund commenced operations on March 7, 1994. The following is a
summary of significant accounting policies followed by the Fund.
1. Security Valuation
Portfolio securities traded on a national securities exchange or on a foreign
securities exchange (other than foreign securities exchanges whose operations
are similar to those of the United States over-the-counter market) are gener-
ally valued at the last reported sales price or if no sale occurred, at the
mean of the closing bid and asked prices on that day. Readily marketable secu-
rities traded in the over-the-counter market, securities listed on a foreign
securities exchange whose operations are similar to the U.S. over-the counter
market, and securities listed on a national securities exchange whose primary
market is believed to be over-the-counter, are valued at the mean of the cur-
rent bid and asked prices. U.S. government and fixed income securities which
mature in 60 days or less are valued at amortized cost, unless this method
does not represent fair value. Securities for which current market quotations
are not readily available are valued at their fair value as determined in good
faith by, or in accordance with procedures adopted by, the Fund's Board of Di-
rectors. Fixed income securities may be valued on the basis of prices obtained
from a pricing service when such prices are believed to reflect the fair value
of such securities.
2. Currency Translation
Assets and liabilities denominated in foreign currencies and commitments under
forward exchange currency contracts are translated into U.S. dollars at the
mean of the quoted bid and asked price of such currencies against the U.S.
dollar. Purchases and sales of portfolio securities are translated into U.S.
dollars at the rates of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated into U.S. dollars at rates of ex-
change prevailing when earned or accrued.
Net realized loss on foreign currency transactions represents net foreign ex-
change gains and losses from sales and maturities of foreign fixed-income in-
vestments and closed forward exchange currency contracts, holdings of foreign
currencies, currency gains and losses realized between the trade and settle-
ment dates on foreign investment transactions and the difference between the
amounts of dividends, interest and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received
or paid.
Net currency gains and losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of
net unrealized appreciation of investments and foreign currency denominated
assets and liabilities.
3. Organization Expenses
Organization expenses of approximately $60,000 have been deferred and are be-
ing amortized on a straight-line basis through March, 1999.
4. Taxes
It is the Fund's policy to meet the requirements of the Internal Revenue Code
applicable to regulated investment companies and to distribute substantially
all of its investment company taxable income and net realized gains, if any,
to shareholders. Therefore, no provisions for federal income or excise taxes
are required. Withholding taxes on foreign interest and dividends have been
provided for in accordance with the applicable tax requirements.
5. Investment Income and Investment Transactions
Dividend income is recorded on the ex-dividend date or as soon as the Fund is
informed of the dividend. Interest income is accrued daily. Investment trans-
actions are accounted for on the date the securities are purchased or sold.
Investment gains and losses are determined on the identified cost basis.
6. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date.
Income and capital gains distributions are determined in accordance with fed-
eral tax regulations and may differ
A-17
<PAGE>
Notes To Financial Statements (continued)________The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
from those determined in accordance with generally accepted accounting princi-
ples. To the extent these differences are permanent, such amounts are reclas-
sified
- -------------------------------------------------------------------------------
within the capital accounts based on their federal tax basis treatment; tempo-
rary differences do not require such reclassification.
NOTE B: Management, Sub-advisory and Administrative fees
Under the terms of a Management Agreement, the Fund pays Alliance Capital Man-
agement, L.P. (the "Investment Manager") a fee calculated and paid quarterly,
equal to an annualized rate of .90 of 1% of the Fund's average weekly net as-
sets during the quarter.
Under the terms of a Sub-Advisory Agreement, the Fund pays Sanlam Asset Man-
agement (Gibraltar) Limited a fee, calculated and paid quarterly, equal to an
annualized rate of .20 of 1% of the greater of (i) the Fund's average weekly
net assets invested in securities of South African issuers or (ii) 90% of the
Fund's average weekly net assets during the quarter.
Under the terms of a Shareholder Inquiry Agency Agreement with Alliance Fund
Services, Inc. ("AFS"), an affiliate of the Investment Manager, the Fund reim-
burses AFS for costs relating to servicing phone inquires for the Fund. The
Fund reimbursed AFS $1,230 during the year ended November 30, 1997 relating to
shareholder servicing costs.
Under the terms of an Administrative Agreement, the Fund pays Princeton Admin-
istrators, L.P. (the "Administrator") a monthly fee equal to the annualized
rate of .20 of 1% of the Fund's average adjusted weekly net assets subject to
an annual minimum of $150,000. The Administrator prepares certain financial
and regulatory reports for the Fund and provides clerical and other services.
NOTE C: Investment Transactions
Purchases and sales of investment securities (excluding short-term investments
and U.S. government securities) aggregated $54,482,301 and $63,100,342, re-
spectively, for the year ended November 30, 1997. There were no purchases or
sales of U.S. government agency obligations for the year ended November 30,
1997.
At November 30, 1997, the cost of investments for federal income tax purposes
was $101,954,231. Accordingly, gross unrealized appreciation of investments
was $21,150,644 and gross unrealized depreciation of investments was
$8,504,675 resulting in net unrealized appreciation of $12,645,969 (excluding
foreign currency transactions).
Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfo-
lio holdings and to hedge certain firm purchase and sale commitments denomi-
nated in foreign currencies. A forward exchange currency contract is a commit-
ment to purchase or sell a foreign currency at a future date at a negotiated
forward rate. The gain or loss arising from the difference between the origi-
nal contract and the closing of such contract is included in net realized gain
or loss on foreign currency transactions.
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain liquid assets in a separate ac-
count of the Fund having a value at least equal to the aggregate amount of the
Fund's commitments under forward exchange currency contracts entered into with
respect to position hedges.
Risk may arise from the potential inability of a counterparty to meet the
terms of a contract and from unanticipated movements in the value of foreign
currencies relative to the U.S. dollar. The face or contract amount, in U.S.
dollars, as reflected in the following table, reflects the total exposure the
Fund has in that particular currency contract.
A-18
<PAGE>
Notes To Financial Statements (continued) The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
At November 30, 1997, the Fund had outstanding forward exchange currency con-
tracts as follows:
<TABLE>
<CAPTION>
U.S.$ Value
Contract on U.S.$ Unrealized
Amount Origination Current Appreciation
(000) Date Value (Depreciation)
-------- ----------- ---------- --------------
<S> <C> <C> <C> <C>
Foreign Currency Buy Contract
- -----------------------------
South African Rand expiring
1/27/1998...................... 14,487 $2,993,205 $2,940,829 $(52,376)
Foreign Currency Sale Contract
- ------------------------------
Zimbabwe Dollars expiring
1/27/1998...................... 37,765 2,854,497 2,644,607 209,890
--------
$157,514
========
</TABLE>
- -------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 100,000,000 shares of $.01 par value capital stock authorized.
Of the 6,007,100 shares of Common Stock outstanding at November 30, 1997, the
Investment Manager owned 7,100 shares.
- -------------------------------------------------------------------------------
NOTE E: Concentration of Risk
Investment in equity securities of Southern African issuers involves special
consideration and risks not typically associated with investments in the
United States.
Among others, the risks associated with political and economic uncertainty,
particularly with respect to South Africa, may adversely affect the securities
markets of Southern African countries.
A-19
<PAGE>
Financial Highlights The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
Year Ended November 30, March 7, 1994(a)
---------------------------- to
1997 1996 1995 November 30, 1994
-------- -------- -------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $ 20.08 $ 21.49 $ 18.34 $ 13.87(b)
-------- -------- -------- --------
Income From Investment
Operations
- ----------------------
Net investment income.......... .41 .39 .17 .42
Net realized and unrealized
gain (loss) on investments and
foreign currency transactions. 1.10 (.30) 4.27 4.05
-------- -------- -------- --------
Net increase in net asset value
from operations............... 1.51 .09 4.44 4.47
-------- -------- -------- --------
Less: Dividends and
Distributions
- -------------------
Dividends from net investment
income........................ (.34) (.59) (.52) -0-
Distributions from net realized
gains on investments and
foreign currency transactions. (2.24) (.91) (.77) -0-
-------- -------- -------- --------
Total dividends and
distributions................. (2.58) (1.50) (1.29) -0-
-------- -------- -------- --------
Net asset value, end of period. $ 19.01 $ 20.08 $ 21.49 $ 18.34
======== ======== ======== ========
Market value, end of period.... $ 15.375 $ 16.50 $ 16.75 $ 14.875
======== ======== ======== ========
Total Return
- ------------
Total investment return based
on: (c)
Market value................. 9.28% 6.12% 22.90% 5.50%
Net asset value.............. 11.03% .66% 27.89% 30.07%
Ratios/Supplemental Data
- ------------------------
Net assets, end of period
(000's omitted)............... $114,182 $120,612 $129,112 $110,181
Ratio of expenses to average
net assets.................... 2.05% 2.04% 2.05% 2.30%(d)
Ratio of net investment income
to average net assets......... 2.00% 1.87% .94% 3.65%(d)
Portfolio turnover rate........ 46% 62% 41% 15%
Average commission rate (e).... $ .0073 $ .0046 -- --
</TABLE>
- -------------------------------------------------------------------------------
(a) Commencement of operations.
(b) Net of offering costs of $.23.
(c) Total investment return is calculated assuming a purchase of Shares on
the opening of the first day and a sale on the closing of the last day of
the period reported. Dividends and distributions, if any, are assumed,
for purposes of this calculation, to be reinvested at prices obtained un-
der the Fund's Dividend Reinvestment Plan. Generally, total investment
return based on net asset value will be higher than total investment re-
turn based on market value in periods where there is an increase in the
discount or a decrease in the premium of the market value to the net as-
set value from the beginning to the end of such periods. Conversely, to-
tal investment return based on net asset value will be lower than total
investment return based on market value in periods where there is a de-
crease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods. To-
tal investment return calculated for a period of less than one year is
not annualized.
(d) Annualized.
(e) For fiscal years beginning on or after September 1, 1995, a fund is re-
quired to disclose its average commission rate per share for trades on
which commissions are charged. This amount includes commissions paid to
foreign brokers which may materially affect the rate shown. Amounts paid
in foreign currencies have been converted into U.S. dollars using the pre-
vailing exchange rate on the date of the transaction.
A-20
<PAGE>
Report Of Ernst & Young LLP
Independent Auditors The Southern Africa Fund, Inc.
- -------------------------------------------------------------------------------
To the Shareholders and Board of Directors The Southern Africa Fund, Inc.
We have audited the accompanying statement of assets and liabilities of The
Southern Africa Fund, Inc., including the portfolio of investments, as of No-
vember 30, 1997, and the related statement of operations for the year then
ended, the statement of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the periods indi-
cated therein. These financial statements and financial highlights are the re-
sponsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing stan-
dards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of November
30, 1997, by correspondence with the custodian and brokers. An audit also in-
cludes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement presenta-
tion. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of The
Southern Africa Fund, Inc. at November 30, 1997, the results of its operations
for the year then ended, the changes in its net assets for each of the two
years in the period then ended, and the financial highlights for each of the
indicated periods, in conformity with generally accepted accounting princi-
ples.
ERNST & YOUNG LLP
New York, New York
January 6, 1998
A-21
<PAGE>
Exhibit (a)(1)(ii)(A)
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our reports dated January 14, 1999 and January 6, 1998
included in this Issuer Tender Offer Statement (Schedule 13E-4) of The Southern
Africa Fund, Inc.
/s/ Ernst & Young LLP
ERNST & YOUNG LLP
New York, New York
May 19, 1999
<PAGE>
LETTER OF TRANSMITTAL
to Accompany Shares of Common Stock, $0.01 Par Value
of
THE SOUTHERN AFRICA FUND, INC.
Tendered Pursuant to the Offer to Purchase Dated May 19, 1999
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME
ON JUNE 16, 1999 UNLESS THE OFFER IS EXTENDED
Depositary Telephone Number: (800) 426-5523
Depositary Addresses:
By Registered, Certified
or Express Mail or
Overnight Courier:
By First Class Mail: By Hand:
BankBoston, N.A.
BankBoston, N.A. Attn: Corporate Actions Securities Transfer &
Attn: Corporate 70 Campanelli Drive Reporting Services, Inc.
Actions Braintree, MA 02184 c/o Boston EquiServe LP
P.O. Box 9573 100 William Street, Galleria
Boston, MA 02205-9573 New York, NY 10038
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS
LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF
TRANSMITTAL IS COMPLETED.
This Letter of Transmittal is to be used (a) if you desire to effect the
tender transaction yourself, (b) if you intend to request your broker, dealer,
commercial bank, trust company or other nominee to effect the transaction for
you and the Shares are not registered in the name of such broker, dealer,
commercial bank, trust company or other nominee, and (c) by a broker, dealer,
commercial bank, trust company or other nominee effecting the transaction as a
registered owner or on behalf of a registered owner. To accept the Offer in
accordance with its terms, 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), any certificates representing Shares
tendered, any other documents required by this Letter of Transmittal and a
check payable to BankBoston, N.A. (the "Depositary") in the amount of $25.00
(the "Processing Fee") must be mailed or delivered to the Depositary at an
appropriate address set forth above and must be received by the Depositary
prior to 12:00 Midnight Eastern Time on June 16, 1999, or such later time and
date to which the Offer is extended, unless the tendering party has satisfied
the conditions for guaranteed delivery described in Section 4(e) of the Offer
to Purchase. Delivery of documents to a book-entry transfer facility does not
constitute delivery to the Depositary.
<PAGE>
DESCRIPTION OF SHARES TENDERED (See Instructions 3 and 4)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Name(s) and Address(es) of Registered Owner(s) (Please Fill in, if Blank,
Exactly the Name(s) in Which Shares Are Registered) (Attach Additional
Signed List, if Necessary) Shares Tendered*
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
Total Number of
Shares
Represented
Share Certificate by
Number(s)** Certificate(s)*
-------------------- -------------------
-------------------- -------------------
-------------------- -------------------
-------------------- -------------------
-------------------- -------------------
-------------------- -------------------
Total Shares.....
- --------------------------------------------------------------------------------------------------------------------------
* If the Shares tendered hereby are in certificate form, the certificates
representing such Shares MUST be returned together with this Letter of
Transmittal.
** Need not be completed for Book-Entry Shares.
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
THE UNDERSIGNED ALSO TENDERS ALL UNCERTIFICATED SHARES HELD IN THE NAME(S) OF
THE UNDERSIGNED BY THE FUND'S TRANSFER AGENT PURSUANT TO THE FUND'S DIVIDEND
REINVESTMENT PLAN, IF ANY. CHECK THIS BOX [_] IF THERE ARE ANY SUCH SHARES.
[_]THIS BOX SHOULD BE CHECKED IF, IN ADDITION TO SHARES TENDERED HEREBY,
SHARES ARE ALSO CONSTRUCTIVELY OWNED BY THE UNDERSIGNED AS DETERMINED UNDER
SECTION 318 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
A SEPARATE LETTER OF TRANSMITTAL MUST BE SUBMITTED BY EACH REGISTERED OWNER OF
SHARES WHICH ARE CONSIDERED TO BE CONSTRUCTIVELY OWNED BY THE UNDERSIGNED.
The boxes below are to be checked by eligible institutions only
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH THE DEPOSITORY TRUST
COMPANY ("DTC") AND COMPLETE THE FOLLOWING:
NAME OF TENDERING INSTITUTION: _____________________________________________
DTC PARTICIPANT NUMBER: ____________________________________________________
[_]CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT TO A NOTICE OF
GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE
FOLLOWING:
NAME(S) OF REGISTERED HOLDER(S): ___________________________________________
WINDOW TICKET NUMBER (IF ANY): _____________________________________________
DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY: ________________________
NAME OF ELIGIBLE INSTITUTION WHICH GUARANTEED DELIVERY: ____________________
DTC PARTICIPANT NUMBER (IF DELIVERED BY BOOK-ENTRY TRANSFER): ______________
NOTE: SIGNATURE(S) MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
<PAGE>
Ladies and Gentlemen:
The person(s) signing this Letter of Transmittal (the "Signor") hereby
tender(s) to The Southern Africa Fund, Inc., a non-diversified, closed-end
management investment company incorporated in Maryland (the "Fund"), the
above-described shares of common stock, par value $0.01 per share (the
"Shares"), of the Fund, for purchase by the Fund at a price (the "Purchase
Price") equal to the net asset value ("NAV") per Share determined as of the
close of the regular trading session of the New York Stock Exchange on June
17, 1999 (or, if the Offer as defined below is extended, on the date after the
Expiration Date as defined in the Offer to Purchase) in cash, under the terms
and subject to the conditions set forth in the Offer to Purchase dated May 19,
1999, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which Offer to Purchase and Letter of Transmittal together
constitute the "Offer").
Subject to, and effective upon, acceptance for payment of, or payment for,
Shares tendered herewith in accordance with the terms and subject to the
conditions of the Offer (including, if the Offer is extended or amended, the
terms or conditions of any such extension or amendment), the Signor hereby
sells, assigns and transfers to, or upon the order of, the Fund all right,
title and interest in and to all of the Shares that are being tendered hereby
that are purchased pursuant to the Offer and hereby irrevocably constitutes
and appoints BankBoston, N.A. (the "Depositary") as attorney-in-fact of the
Signor with respect to such Shares, with full power of substitution (such
power of attorney being deemed to be an irrevocable power coupled with an
interest), to (a) present certificate(s) for such Shares, if any, for
cancellation and transfer on the Fund's books and (b) receive all benefits and
otherwise exercise all rights of beneficial ownership of such Shares, subject
to the next paragraph, all in accordance with the terms and subject to the
conditions set forth in the Offer.
The Signor hereby represents and warrants that (a) the Signor, if a broker,
dealer, commercial bank, trust company or other nominee, has obtained the
tendering Stockholder's instructions to tender pursuant to the terms and
conditions of this Offer in accordance with the letter from the Fund to
brokers, dealers, commercial banks, trust companies and other nominees; (b)
when and to the extent the Fund accepts the Shares for purchase, the Fund will
acquire good, marketable and unencumbered title thereto, free and clear of all
security interests, liens, restrictions, charges, encumbrances, conditional
sales agreements or other obligations relating to their sale or transfer, and
not subject to any adverse claim; (c) on request, the Signor will execute and
deliver any additional documents that the Depositary or the Fund deems
necessary or desirable to complete the assignment, transfer and purchase of
the Shares tendered hereby; and (d) the Signor has read and agrees to all of
the terms and conditions of the Offer.
The name(s) and address(es) of the registered owner(s) should be printed as
on the registration of the Shares. If the Shares tendered hereby are in
certificate form, the certificate(s) representing such Shares must be returned
together with this Letter of Transmittal.
The Signor recognizes that, under certain circumstances as set forth in the
Offer to Purchase, the Fund may amend, extend or terminate the Offer or may
not be required to purchase any of the Shares tendered hereby. In any such
event, the Signor understands that certificate(s) for the Shares not
purchased, if any, will be returned to the Signor at its registered address
unless otherwise indicated under the Special Delivery Instructions below. The
Signor recognizes that the Fund has no obligation, pursuant to the Special
Payment Instructions set forth below, to transfer any Shares from the name of
the registered owner thereof if the Fund purchases none of such Shares.
The Signor understands that acceptance of Shares by the Fund for payment
will constitute a binding agreement between the Signor and the Fund upon the
terms and subject to the conditions of the Offer.
The check for the purchase price of the tendered Shares purchased will be
issued to the order of the Signor and mailed to the address indicated, unless
otherwise indicated below in the box titled Special Payment Instructions or
the box titled Special Delivery Instructions. The Fund will not pay interest
on the purchase price under any circumstances.
All authority herein conferred or agreed to be conferred shall survive the
death or incapacity of the Signor and all obligations of the Signor hereunder
shall be binding upon the heirs, personal representatives, successors and
assigns of the Signor. Except as stated in the Offer, this tender is
irrevocable.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the purchase price and/or return any Share
certificates not accepted for payment in the name(s) of the registered
holder(s) appearing above under "Description of Shares Tendered." Similarly,
unless otherwise indicated under "Special Delivery Instructions," please mail
the check for the purchase price for any Shares purchased and/or return any
Share certificates not accepted for payment (and accompanying documents, as
appropriate) to the address(es) of the registered holder(s) appearing under
"Description of Shares Tendered." In the event that both the Special Payment
Instructions and the Special Delivery Instructions are completed, please issue
the check for the purchase price and/or return any Share certificates not
accepted for payment in the name of, and deliver such check and/or return any
such Share certificates to, the person(s) so indicated. The undersigned
recognizes that the Fund has no obligation pursuant to the Special Payment
Instructions to transfer any Shares from the name of the registered holder
thereof if the Fund does not accept for payment any of the Shares tendered
hereby.
<PAGE>
SPECIAL PAYMENT INSTRUCTIONS (See SPECIAL DELIVERY INSTRUCTIONS
Instructions 1, 5, 6 and 7) (See Instructions 1, 5, 6 and 7)
To be completed ONLY if any cer- To be completed ONLY if any cer-
tificate for Shares not pur- tificate for Shares not pur-
chased, and/or a check for the chased, and/or a check for the
purchase price of Shares accepted purchase price of Shares accepted
for payment, is to be issued in for payment and issued in the
the name of someone other than name of the registered owner(s),
the undersigned. is to be sent to someone other
than the registered owner(s) or
to the registered owner(s) at an
address other than that shown
above.
Issue:[_] Check to:
[_] Certificate(s) to:
Name(s) __________________________
(Please Print) Mail:[_] Check to:
Address(es) ______________________ [_] Certificate(s) to:
__________________________________ Name(s)___________________________
__________________________________ (Please Print)
(Include Zip Code) Address(es) ______________________
__________________________________ __________________________________
(Tax Identification or Social __________________________________
Security Number(s)) (Include Zip Code)
__________________________________
(Tax Identification or Social
Security Number(s))
STOCKHOLDER(S) SIGN HERE
(See Instructions 1 and 5)
(Please see Substitute Form W-9)
(Please Print Except for Signature)
Must be signed by registered owner(s) exactly as Shares are registered.
If signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or another acting in a fiduciary or
representative capacity, please set forth the full title. See Instruction
5. Signature guarantees are required in certain circumstances. See
Instruction 1. By signing this Letter of Transmittal, you represent that
you have read the entire Letter of Transmittal.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Signature(s) Exactly as Shares Are Registered)
Dated , 199
Name(s) ____________________________________________________________________
----------------------------------------------------------------------------
(Please Print Name(s) of Owner(s) Exactly as Shares Are Registered)
----------------------------------------------------------------------------
(Tax Identification or Social Security Number(s))
Daytime Telephone Number, including Area Code ______________________________
<PAGE>
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
(Please Print Except for Signature)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
----------------------------------------------------------------------------
(Include Zip Code)
----------------------------------------------------------------------------
Telephone Number, including Area Code ______________________________________
Dated , 199
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions of the Offer
1. Guarantee of Signatures. No signature guarantee is required on this
Letter of Transmittal if (a) this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered hereby (including, for purposes of
this document, any participant in the book-entry transfer facility of The
Depository Trust Company ("DTC") whose name appears on DTC's security position
listing as the owner of Shares), unless such holder(s) has completed either
the box entitled "Special Payment Instructions" or the box entitled "Special
Delivery Instructions" included in this Letter of Transmittal, or (b) the
Shares 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 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 this Letter of Transmittal must be guaranteed
by an Eligible Institution. See Instruction 5.
2. Delivery of Letter of Transmittal and Certificates. This Letter of
Transmittal is to be used (a) if Shares are to be forwarded herewith, (b) if
uncertificated Shares held by the Fund's transfer agent pursuant to the Fund's
Dividend Reinvestment Plan are to be tendered, or (c) if tenders are to be
made by book-entry transfer to the account maintained by the Depositary
pursuant to the procedure set forth in Section 4 of the Offer to Purchase.
THE METHOD OF DELIVERY OF ANY DOCUMENTS, INCLUDING SHARE CERTIFICATES, THIS
LETTER OF TRANSMITTAL, AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, AND THE PROCESSING FEE IS AT THE
OPTION AND SOLE RISK OF THE TENDERING STOCKHOLDER. IN ALL CASES, SUFFICIENT
TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY. Delivery will be deemed made
only when actually received by the Depositary. If delivery is by mail,
registered mail with return receipt requested, properly insured, is
recommended. Stockholders have the responsibility to cause their Shares (in
proper certificated or uncertificated form), this Letter of Transmittal (or a
copy or facsimile hereof) properly completed and bearing original signature(s)
and the original of any required signature guarantee(s), any other documents
required by this Letter of Transmittal and the Processing Fee to be timely
delivered in accordance with the Offer.
The Fund will not accept any alternative, conditional or contingent tenders.
All tendering Stockholders, brokers, dealers, commercial banks, trust
companies and other nominees, by execution of this Letter of Transmittal (or a
copy or facsimile hereof), waive any right to receive any notice of the
acceptance of their tender.
3. Inadequate Space. If the space provided in any of the boxes to be
completed is inadequate, the necessary information should be listed on a
separate schedule signed by all of the required signatories and attached
hereto.
4. Tender of All Shares Held by the Stockholder. A Stockholder wishing to
accept the Offer must tender, or cause the tender of, all Shares owned by the
Stockholder and all Shares attributed to the Stockholder for Federal income
tax purposes under Section 318 of the Internal Revenue Code of 1986, as
amended, as of the date of purchase of Shares pursuant to the Offer.
Stockholders should consult their tax advisors as to the application of the
constructive ownership rules of Section 318. If more than 1,201,420 Shares are
duly tendered prior to the expiration of the Offer (and not timely withdrawn),
the Fund will purchase Shares from tendering Stockholders, in accordance with
the terms and subject to the conditions specified in the Offer to Purchase, on
a pro rata basis (disregarding fractions) in accordance with the number of
Shares duly tendered by each Stockholder during the period the Offer is open
(and not timely withdrawn), unless the Fund determines not to purchase any
Shares. 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 Stockholder.
5. Signatures on Letter of Transmittal, Authorizations and Endorsements.
If this Letter of Transmittal is signed by the registered holder(s) of the
Shares tendered hereby, 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 hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
<PAGE>
If any of the tendered Shares are registered in different names (including
Shares attributed to the tendering Stockholder for Federal income tax purposes
under Section 318 of the Code) on several certificates, it is necessary to
complete, sign and submit as many separate Letters of Transmittal as there are
different registrations.
If this Letter of Transmittal or any certificate 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 this Letter of Transmittal is signed by the registered holder(s) of the
Shares transmitted hereby, no endorsements of certificates or separate stock
powers 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 this 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.
6. Transfer Taxes. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer, provided, however,
that if (a) payment of the Purchase Price is to be made to, or (in the
circumstances permitted by the Offer) unpurchased Shares are to be registered
in the name(s) of, any person(s) other than the registered owner(s), or (b) if
any tendered certificate(s) are registered, or the Shares tendered are
otherwise held, in the name(s) of any person(s) other than the registered
owner, the amount of any transfer taxes (whether imposed on the registered
owner(s) or such other person(s)) payable on account of the transfer to such
person(s) will be deducted from the Purchase Price unless satisfactory
evidence of the payment of such taxes, or exemption therefrom, is submitted
herewith.
7. Special Payment and Delivery Instructions. If certificate(s) for
unpurchased Shares and/or check(s) are to be issued in the name of a person
other than the registered owner(s) or if such certificate(s) and/or check(s)
are to be sent to someone other than the registered owner(s) or to the
registered owner(s) at a different address, the captioned boxes "Special
Payment Instructions" and/or "Special Delivery Instructions" in this Letter of
Transmittal must be completed.
8. 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 not accompanied by the
Processing Fee 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
Stockholder(s). The Fund's interpretations of the terms and conditions of the
Offer (including these instructions) shall be final and binding.
NEITHER THE FUND, ITS BOARD OF DIRECTORS, THE INVESTMENT MANAGER, THE
SUBADVISOR, 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.
9. Questions and Requests for Assistance and Additional Copies. Questions
and requests for assistance may be directed to the Depositary at the mailing
address provided above or by telephoning (800) 426-5523. Requests for
additional copies of the Offer to Purchase and this Letter of Transmittal may
be directed to Corporate Investor Communications, Inc., the Distribution
Agent, by telephoning (877) 460-9339. Stockholders who do not own Shares
directly may also obtain such information and copies from their broker,
dealer, commercial bank, trust company or other nominee. Stockholders who do
not own Shares directly are required to tender their Shares through their
broker, dealer, commercial bank, trust company or other nominee and should NOT
submit this Letter of Transmittal to the Depositary.
<PAGE>
10. Restriction on Short Sales. Section 14(e) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and Rule 14e-4 promulgated
thereunder, make it unlawful for any person, acting alone or in concert with
others, 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 person making the Offer
within the period specified in the Offer, or (b) an equivalent security and,
upon 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 Stockholder and the Fund upon the terms and
subject to the conditions of the Offer, including the tendering Stockholder's
representation that the Stockholder 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.
11. Backup Withholding Tax. Under the U.S. federal income tax laws, the
Depositary may be required to withhold 31% of the amount of any payment made
to certain holders pursuant to the Offer. In order to avoid such backup
withholding tax, each tendering U.S. Stockholder who has not already submitted
a correct, completed and signed Form W-9 or Substitute Form W-9 to the Fund
should provide the Depositary with the Stockholder's correct taxpayer
identification number ("TIN") by completing a Substitute Form W-9, a copy of
which is included in this Letter of Transmittal. In general, if a U.S.
Stockholder is an individual, the TIN is the individual's Social Security
number. If the Depositary is not provided with the correct TIN, the U.S.
Stockholder may be subject to a penalty imposed by the Internal Revenue
Service. The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering Stockholder has not been issued a TIN and has applied for a TIN or
intends to apply for a TIN in the near future. If the box in Part 2 is checked
and payment of the purchase price of Shares is made within 60 days of the
receipt by the Depositary of the Substitute Form W-9, the Depositary is not
required to withhold any backup withholding tax from the payment. Certain U.S.
Stockholders (including, among others, all U.S. corporations) are not subject
to these backup withholding and reporting requirements, but should nonetheless
complete a Substitute Form W-9 to avoid the possible erroneous imposition of a
backup withholding tax.
In order for a non-U.S. Stockholder to avoid the 31% backup withholding tax,
the non-U.S. Stockholder must submit a statement to the Depositary signed
under penalties of perjury attesting as to its non-U.S. status. A copy of Form
W-8 and instructions for completing that form are enclosed for such
Stockholders.
Backup withholding tax is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding tax
will be reduced by the amount of tax withheld. If backup withholding results
in an overpayment of taxes, the Stockholder may claim a refund from the
Internal Revenue Service. All Stockholders are urged to consult their own tax
advisors as to the specific tax consequences to them of the Offer.
The tax information set forth above is included for general information only
and may not be applicable to the situations of certain taxpayers.
* * *
IMPORTANT: THIS LETTER OF TRANSMITTAL (OR A COPY OR FACSIMILE HEREOF)
PROPERLY COMPLETED AND BEARING ORIGINAL SIGNATURE(S) AND THE ORIGINAL OF ANY
REQUIRED SIGNATURE GUARANTEE(S), SHARES (IN PROPER CERTIFICATED OR
UNCERTIFICATED FORM), OTHER REQUIRED DOCUMENTS AND THE PROCESSING FEE MUST BE
RECEIVED BY THE DEPOSITARY, OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE
OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION OF THE OFFER.
<PAGE>
PAYER'S NAME: BankBoston, N.A., Depositary
- --------------------------------------------------------------------------------
Part 1--PLEASE PROVIDE YOUR Social Security Number
SUBSTITUTE TIN IN THE BOX AT THE RIGHT or
Form W-9 AND CERTIFY BY SIGNING AND Employer Identification
DATING BELOW Number
----------------------
------------------------------------------------------------
CERTIFICATION-UNDER PENALTIES OF PER-
JURY, I CERTIFY THAT: (1) THE INFOR-
MATION PROVIDED ON THIS FORM IS TRUE,
CORRECT AND COMPLETE, AND (2) I AM
NOT SUBJECT TO BACKUP WITHHOLDING EI-
Department of THER BECAUSE (I) I AM EXEMPT FROM
the Treasury BACKUP WITHHOLDING, (II) I HAVE NOT
Internal BEEN NOTIFIED BY THE INTERNAL REVENUE
Revenue SERVICES (THE "IRS") THAT I AM SUB- Part 2
Service JECT TO BACKUP WITHHOLDING AS A RE-
SULT OF UNDERREPORTING INTEREST OR Awaiting
DIVIDENDS, OR (III) THE IRS HAS NOTI- TIN [_]
FIED ME THAT I AM NO LONGER SUBJECT Please see
Payer's Request TO BACKUP WITHHOLDING. (YOU MUST below.
for Taxpayer CROSS OUT ITEM (2) IN THE IMMEDIATELY
Identification PRECEDING SENTENCE IF YOU HAVE BEEN
Number (TIN) NOTIFIED BY THE IRS THAT YOU ARE CUR-
RENTLY SUBJECT TO BACKUP WITHHOLDING
BECAUSE YOU FAILED TO REPORT ALL IN-
TEREST AND DIVIDENDS ON YOUR RETURN.)
Signature: _____________ Date: ______
Name: ________________________________
(Please Print)
Address: _____________________________
______________________________________
(Include Zip Code)
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING
OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECK THE BOX
IN PART 2 OF SUBSTITUTE FORM W-9
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER CERTIFICATION
I certify, under penalties of perjury, that a Taxpayer Identification
Number has not been issued to me, and that I have mailed or delivered an
application to receive a Taxpayer Identification Number to the appropriate
Internal Revenue Service Center or Social Security Administration Office
(or I intend to mail or deliver an application in the near future). I
understand that if I do not provide a Taxpayer Identification Number to the
payer within 60 days, the Depositary is required to withhold 31% of all
payments due to me pursuant to the Offer.
_________________________________________________________ _________________
Signature Date
<PAGE>
Form W-8
(Rev. November 1992) Certificate of Foreign Status
Department of the Treasury
Internal Revenue Service
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
Name of owner (If joint account, also give U.S. taxpayer
joint owner's name.) (See Specific identification
Instructions.) number (if any)
----------------------------------------------------------------------------
Permanent address (See Specific Instructions.) (Include apt. or suite no.)
Please ----------------------------------------------------------------------------
print City, province or state, postal code, and country
or
type ----------------------------------------------------------------------------
Current mailing address, if different from permanent address (Include apt.
or suite no., or P.O. box if mail is not delivered to street address.)
----------------------------------------------------------------------------
City, town or post office, state, and ZIP code (If foreign address, enter
city, province or state, postal code, and country.)
- ------------------------------------------------------------------------------------
List account Account number Account type Account number Account type
information here
(Optional, see
Specific
Instructions.)
- ------------------------------------------------------------------------------------
</TABLE>
Notice of Change in Status.--To notify the payer, mortgage interest
recipient, broker, or barter exchange that you no longer qualify for
exemption, check here...................................................... [_]
If you check this box, reporting will begin on the account(s) listed.
- -------------------------------------------------------------------------------
Certification.--(Check applicable box(es)). Under penalties of
perjury, I certify that:
[_] For INTEREST PAYMENTS, I am not a U.S. citizen or resident (or I
am filing for a foreign corporation, partnership, estate, or
trust).
Please
Sign [_] For DIVIDENDS, I am not a U.S. citizen or resident (or I am filing
Here for a foreign corporation, partnership, estate, or trust).
[_] For BROKER TRANSACTIONS or BARTER EXCHANGES, I am an exempt
foreign person as defined in the instructions below.
---------------------------------------------------------------------
Signature Date
- -------------------------------------------------------------------------------
General Instructions
(Section references are to the Internal Revenue Code, unless otherwise
stated.)
Purpose
Use Form W-8 or a substitute form containing a substantially similar statement
to tell the payer, mortgage interest recipient, middleman, broker, or barter
exchange that you are a nonresident alien individual, foreign entity, or
exempt foreign person not subject to certain U.S. information return reporting
or backup withholding rules.
Caution: Form W-8 does not exempt the payee from the 30% (or lower treaty)
nonresident withholding rates.
Nonresident Alien Individual
For income tax purposes, "nonresident alien individual" means an individual
who is neither a U.S. citizen nor resident. Generally, an alien is considered
to be a U.S. resident if:
. The individual was a lawful permanent resident of the United States at any
time during the calendar year, that is, the alien held an immigrant visa (a
"green card"), or
. The individual was physically present in the United States on:
(1) at least 31 days during the calendar year, and
(2) 183 days or more during the current year and the 2 preceding calendar
years (counting all the days of physical presence in the current year, one-
third the number of days of presence in the first preceding year, and only
one-sixth of the number of days in the second preceding year).
See Pub. 519, U.S. Tax Guide for Aliens, for more information on resident and
nonresident alien status.
Note: If you are a nonresident alien individual married to a U.S. citizen or
resident and have made an election under section 6013(g) or (h), you are
treated as a U.S. resident and may not use Form W-8.
Exempt Foreign Person
For purposes of this form, you are an "exempt foreign person" for a calendar
year in which:
1. You are a nonresident alien individual or a foreign corporation,
partnership, estate or trust,
2. You are an individual who has not been, and plans not to be, present in
the United States for a total of 183 days or more during the calendar year,
and
3. You are neither engaged, nor plan to be engaged during the year, in a U.S.
trade or business that has effectively connected gains from transactions with
a broker or barter exchange.
If you do not meet the requirements of 2 or 3 above, you may instead certify
on FORM 1001, Ownership, Exemption, or Reduced Rate Certificate, that your
country has a tax treaty with the United States that exempts your transactions
from U.S. tax.
Filing Instructions
When to File.--File Form W-8 or substitute form before a payment is made.
Otherwise, the payer may have to withhold and send part of the payment to the
Internal Revenue Service (see Backup Withholding below). This certificate
generally remains in effect for three calendar years. However, the payer may
require you to file a new certificate each time a payment is made to you.
Where To File.--File this form with the payer of the qualifying income who is
the withholding agent (see WITHHOLDING AGENT on page 2). Keep a copy for your
own records.
Backup Withholding
A U.S. taxpayer identification number or Form W-8 or substitute form must be
given to the payers of certain income. If a taxpayer identification number or
Form W-8 or substitute form is not provided or the wrong taxpayer
identification number is provided, these payers may have to withhold 20% of
each payment or transaction. This is called backup withholding.
Note: On January 1, 1993, the backup withholding rate increases from 20% to
31%.
Reportable payments subject to backup withholding rules are:
. Interest payments under section 6049(a).
- -------------------------------------------------------------------------------
Cat. No. 10230M Form W-8 (Rev. 11-92)
Please print or type
<PAGE>
Form W-8 (Rev. 11-92) Page 2
- --------------------------------------------------------------------------------
.Dividend payments under sections 6042(a) and 6044.
.Other payments (i.e., royalties and payments from brokers and barter
exchanges) under sections 6041, 6041A(a), 6045, 6050A, and 6050N.
If backup withholding occurs, an exempt foreign person who is a nonresident
alien individual may get a refund by filing Form 1040NR, U.S. Nonresident Alien
Income Tax Return, with the Internal Revenue Service Center, Philadelphia, PA
19255, even if filing the return is not otherwise required.
U.S. Taxpayer Identification Number
The Internal Revenue law requires that certain income be reported to the
Internal Revenue Service using a U.S. taxpayer Identification number (TIN).
This number can be a social security number assigned to individuals by the
Social Security Administration or an employer identification number assigned to
businesses and other entities by the Internal Revenue Service.
Payments to account holders who are foreign persons (nonresident alien
individuals, foreign corporations, partnerships, estates, or trusts) generally
are not subject to U.S. reporting requirements. Also, foreign persons are not
generally required to have a TIN, nor are they subject to any backup
withholding because they do not furnish a TIN to a payer or broker.
However, foreign persons with income effectively connected with a trade or
business in the United States (income subject to regular (graduated) income
tax), must have a TIN. To apply for a TIN, use Form SS-4, Application for
Employer Identification Number, available from local Internal Revenue Service
offices, or Form SS-5, Application for a Social Security Card, available from
local Social Security Administration offices.
Special Rules
Mortgage Interest.--For purposes of the reporting rules, mortgage interest is
interest paid on a mortgage to a person engaged in a trade or business
originating mortgages in the course of that trade or business. A mortgage
interest recipient is one who receives interest on a mortgage that was acquired
in the course of a trade or business.
Mortgage interest is not subject to backup withholding rules, but is subject
to reporting requirements under section 6050H. Generally, however, the
reporting requirements do not apply if the payer of record is a nonresident
alien individual who pays interest on a mortgage not secured by real property
in the United States. Use Form W-8 or substitute form to notify the mortgage
interest recipient that the payer is a nonresident alien individual.
Portfolio Interest.--Generally, portfolio interest paid to a nonresident alien
individual or foreign partnership, estate, or trust is not subject to backup
withholding rules. However, if interest is paid on portfolio investments to a
beneficial owner that is neither a financial institution nor a member of a
clearing organization, Form W-8 or substitute form is required.
Registered obligations not targeted to foreign markets qualify as portfolio
interest not subject to 30% withholding, but require the filing of Form W-8 or
substitute form. See instructions to Withholding Agents on this page for
reporting rules.
See Pub. 515, Withholding of Tax on Nonresident Aliens and Foreign
Corporations, for registered obligations targeted to foreign markets and when
Form W-8 or substitute form is not required on these payments.
Bearer Obligations.--The interest from bearer obligations targeted to foreign
markets is treated as portfolio interest and is not subject to 30% withholding.
Form W-8 or substitute form is not required.
Dividends.--Any distribution or payment of dividends by a U.S. corporation sent
to a foreign address is subject to the 30% (or lower treaty) withholding rate,
but is not subject to backup withholding. Also, there is no backup withholding
on dividend payments made to a foreign person by a foreign corporation.
However, the 30% withholding (or lower treaty) rate applies to dividend
payments made to a foreign person by a foreign corporation if:
. 25% or more of the foreign corporation's gross income for the three
preceding taxable years was effectively connected with a U.S. trade or
business, and
. The corporation was not subject to the branch profits tax because of an
income tax treaty (see section 884(e)).
If a foreign corporation makes payments to another foreign corporation, the
recipient must be a qualified resident of its country of residence to benefit
from that country's tax treaty.
Broker or Barter Exchanges.--Income from transactions with a broker or barter
exchanges is subject to reporting rules and backup withholding unless Form W-8
or substitute form is filed to notify the broker or barter exchange that you
are an exempt foreign person as defined on page 1.
Specific Instructions
Name of Owner.--If Form W-8 is being filed for portfolio interest, enter the
name of the beneficial owner.
U.S. Taxpayer Identification Number.--If you have a U.S. taxpayer
identification number, enter your number in this space (see the discussion
earlier).
Permanent Address.--Enter your complete address in the country where you reside
permanently for income tax purposes.
<TABLE>
<CAPTION>
If you are: Show the
address of:
<S> <C>
An individual Your permanent
residence
A partnership Principal office
or corporation
An estate or Permanent residence
trust or principal office of
any fiduciary
</TABLE>
Also show your current mailing address if it differs from your permanent
address.
Account Information (optional).--If you have more than one account (savings,
certificate of deposit, pension, IRA, etc.) with the same payer, list all
account numbers and types on one Form W-8 or substitute form unless your payer
requires you to file a separate certificate for each account.
If you have more than one payer, file a separate Form W-8 with each payer.
Signature.--If only one foreign person owns the account(s) listed on this form,
that foreign person should sign the Form W-8.
If each owner of a joint account is a foreign person, each should sign a
separate Form W-8.
Notice of Change in Status.--If you become a U.S. citizen or resident after you
have filed Form W-8 or substitute form, or you cease to be an exempt foreign
person, you must notify the payer in writing within 30 days of your change in
status.
To notify the payer, you may check the box in the space provided on this form
or use the method prescribed by the payer.
Reporting will then begin on the account(s) listed and backup withholding may
also begin unless you certify to the payer that:
(1) The U.S. taxpayer identification number you have given is correct, and
(2) The Internal Revenue Service has not notified you that you are subject to
backup withholding because you failed to report certain income.
You may use Form W-9, Request for Taxpayer Identification Number and
Certification, to make these certifications.
If an account is no longer active, you do not have to notify a payer of your
change in status unless you also have another account with the same payer that
is still active.
False Certificate.--If you file a false certificate when you are not entitled
to the exemption from withholding or reporting, you may be subject to fines
and/or imprisonment under U.S. perjury laws.
Instructions to Withholding Agents
Withholding Agent.--Generally, the person responsible for payment of the items
discussed above to a nonresident alien individual or foreign entity is the
withholding agent (see Pub. 515).
Retention of Statement.--Keep Form W-8 or substitute form in your records for
at least four years following the end of the last calendar year during which
the payment is paid or collected.
Portfolio Interest.--Although registered obligations not targeted to foreign
markets are not subject to 30% withholding, you must file Form 1042S, Foreign
Person's U.S. Source Income Subject to Withholding, to report the interest
payment. Both Form 1042S and a copy of Form W-8 or substitute form must be
attached to Form 1042, Annual Withholding Tax Return for U.S. Source Income of
Foreign Persons.
<PAGE>
Notice of Guaranteed Delivery
Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of Its Issued and Outstanding
Shares at Net Asset Value Per Share
This form must be used to accept the Offer (as defined below) if a
Stockholder's certificates for Shares are not immediately available or if time
will not permit the Letter of Transmittal and other required documents to
reach the Depositary on or before the Expiration Date. Each term used in this
form that is not otherwise defined herein shall have the meaning specified in
the Offer to Purchase dated May 19, 1999. This form may be delivered by hand,
overnight courier or mail to the Depositary at the appropriate address set
forth below and must bear original signatures (not photocopies or facsimiles).
Tenders using this form may be made only by or through an Eligible Institution
as defined in Section 4(b) of the Offer to Purchase.
Depositary Addresses:
By Registered, Certified
Or Express
By First Class Mail: Mail Or Overnight By Hand:
Courier:
BankBoston, N.A. BankBoston, N.A. Securities Transfer &
Attn: Corporate Actions Attn: Corporate Actions Reporting Services, Inc.
P.O. Box 9573 70 Campanelli Drive c/o Boston EquiServe LP
Boston, MA 02205-9573 Braintree, MA 02184 100 William Street,
Galleria
New York, NY 10038
Depositary Telephone Number: (800) 426-5523
Depositary Telephone Number to Confirm Receipt of Notices: (781) 575-4816
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE DOES NOT
CONSTITUTE VALID DELIVERY.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to The Southern Africa Fund, Inc. (the
"Fund"), upon the terms and subject to the conditions set forth in its Offer
to Purchase dated May 19, 1999 and the related Letter of Transmittal (which
together constitute the "Offer"), receipt of which are hereby acknowledged,
(i) the number of Shares specified below pursuant to the guaranteed delivery
procedures set forth in Section 4(e) of the Offer to Purchase and (ii) all
Shares held in the name(s) of the registered holder(s) by the Fund's transfer
agent pursuant to the Fund's Dividend Reinvestment Plan.
(Please Print Except for Signature(s))
Number of Shares Tendered: __________
Certificate Nos. (if available): ____ Name(s) of Record Holder(s): ________
_____________________________________ _____________________________________
_____________________________________ _____________________________________
If Shares will be tendered by book- Address: ____________________________
entry transfer to The Depository
Trust Company, please check
box: [_]
_____________________________________
_____________________________________
DTC Participant Number: _____________ Telephone Number, including Area
Code:
_____________________________________
If the undersigned is the beneficial owner of the Shares being tendered, the
undersigned hereby represents and warrants that all Shares owned by the
undersigned as of the date of purchase of Shares by the Fund pursuant to the
Offer and all Shares attributed to the undersigned for Federal income tax
purposes as of such date under Section 318 of the Internal Revenue Code of
1986, as amended, have been or will be tendered pursuant to the Offer.
Dated: ________________________, 1999
Individual(s) Entity
_____________________________________ _____________________________________
Name of Firm
_____________________________________
Signature(s) _____________________________________
Authorized Signature
Name: _______________________________
Title: ______________________________
2
<PAGE>
GUARANTEE
The undersigned, an Eligible Institution as defined in Section 4(b) of the
Offer to Purchase, hereby, with respect to the Shares tendered hereby pursuant
to the guaranteed delivery procedures set forth in Section 4(e) of the Offer
to Purchase: (a) represents that the person(s) named on the previous page
"own(s)" such Shares within the meaning of Rule 14e-4 under the Securities
Exchange Act of 1934, as amended; (b) represents that the tender of such
Shares complies with Rule 14e-4; and (c) guarantees to deliver to the
Depositary certificates representing such Shares, in proper form for transfer
(or to tender Shares pursuant to the procedure for book-entry transfer into
the Depositary's account at The Depository Trust Company if so specified on
the foregoing page), together with a properly completed and duly executed
Letter of Transmittal with any required signature guarantees, any other
required documents, and the $25.00 Processing Fee payable to BankBoston, N.A.,
prior to 5:00 P.M. Eastern Time on the second New York Stock Exchange trading
day after the date of execution of this Guarantee.
(Please Print Except for Signature)
Name of Firm: _________________________________________________________________
Authorized Signature: _________________________________________________________
Name: _________________________________________________________________________
Title: ________________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
(Include Zip Code)
Telephone Number, including Area Code: ________________________________________
Dated: , 1999
3
<PAGE>
Form of Letter to Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of its Issued and Outstanding
Shares at Net Asset Value Per Share
To Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees:
Pursuant to your request, we are enclosing the material listed below
relating to the offer by The Southern Africa Fund, Inc. (the "Fund") to
purchase 1,201,420 of its issued and outstanding shares of common stock, par
value $0.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session
of the New York Stock Exchange ("NYSE") on June 17, 1999 upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 19,
1999 and the related Letter of Transmittal (which together constitute the
"Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 16, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended beyond June
16, 1999, the purchase price for Shares will be their NAV determined as of the
close of the regular trading session of the NYSE on the date after the new
Expiration Date.
The following documents are enclosed:
(1) Offer to Purchase dated May 19, 1999;
(2) Letter of Transmittal to be used to tender all Shares;
(3) Notice of Guaranteed Delivery;
(4) Form of Letter to Clients, which may be sent upon request for
information by your clients for whose account you hold shares registered in
your name (or in the name of your nominee); and
(5) Questions and Answers regarding the Offer (for internal use only, not
for distribution to your clients or others).
No fees or commissions will be payable to brokers, dealers or other persons
for soliciting tenders of Shares pursuant to the Offer. The Fund will pay all
transfer taxes on its purchase of Shares, subject to Instruction 6 of the
Letter of Transmittal. Backup withholding tax at a 31% rate may be required
unless an exemption is proved or unless the required taxpayer identification
information is or has previously been provided to the Fund or the Depositary.
Certain withholdings may also apply with respect to payments to non-U.S.
Stockholders. See Instruction 11 of the Letter of Transmittal.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) Stockholders in any jurisdiction in which the making of the Offer
or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. 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 behalf of the Fund by one or more registered brokers
or dealers licensed under the laws of that jurisdiction.
If a client instructs you by telephone to tender Shares, please record the
telephone conversation (in accordance with applicable law) and ask the client
to affirm that all Shares owned by such client as of the date of purchase of
Shares pursuant to the Offer and all Shares attributed to such client for
Federal income tax purposes as of such date under Section 318 of the Internal
Revenue Code of 1986, as amended, have been or will be tendered pursuant to
the Offer.
Additional copies of the enclosed material may be obtained from Corporate
Investor Communications, Inc., the Distribution Agent, in the manner indicated
in the Offer to Purchase. Any questions you have with respect to the Offer
should be directed to BankBoston, N.A., the Depositary, at (800) 426-5523.
Very truly yours,
The Southern Africa Fund, Inc.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU
OR ANY OTHER PERSON AS THE AGENT OF EITHER THE FUND OR THE DEPOSITARY OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS WITH RESPECT TO
THE OFFER, OTHER THAN THE STATEMENTS SPECIFICALLY SET FORTH IN THE OFFER TO
PURCHASE AND THE LETTER OF TRANSMITTAL, OR TO DISTRIBUTE ANY MATERIAL WITH
RESPECT TO THE OFFER OTHER THAN AS SPECIFICALLY AUTHORIZED HEREIN.
<PAGE>
Form of Letter to Clients of Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees
Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of Its Issued and Outstanding
Shares at Net Asset Value Per Share
To Our Clients:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated May 19, 1999 of The Southern Africa Fund, Inc. (the "Fund") and
the related Letter of Transmittal pursuant to which the Fund is offering to
purchase 1,201,420 shares of its issued and outstanding common stock, par
value $0.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session
of the New York Stock Exchange ("NYSE") on June 17, 1999, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 19,
1999 and the related Letter of Transmittal (which together constitute the
"Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 16, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended beyond June
16, 1999, the purchase price for Shares will be their NAV determined as of the
close of the regular trading session of the NYSE on the date after the new
Expiration Date, as extended.
The Offer is being made to fulfill an undertaking made in connection with
the initial public offering of the Shares. Information regarding this
undertaking, as well as information regarding possible future tender offers by
the Fund, is set forth in the Offer to Purchase
The Offer to Purchase and the Letter of Transmittal are being forwarded to
you as the beneficial owner of Shares held by us for your account but not
registered in your name. We are sending you the Letter of Transmittal for your
information only; you cannot use it to tender Shares we hold for your account.
A tender of such Shares can be made only by us as the holder of record and
only pursuant to your instructions.
Your attention is called to the following:
1. Unless extended, the Offer expires at 12:00 Midnight Eastern Time on
June 16, 1999 and withdrawal rights expire at 5:00 P.M. Eastern Time on
June 18, 1999.
2. The Offer is subject to certain conditions set forth in the Offer to
Purchase. Under certain circumstances, the Fund will not be required to
accept for payment, purchase or pay for any Shares tendered, and the Fund
may also amend, extend or terminate the Offer.
3. A Stockholder wishing to accept the Offer must tender, or cause the
tender of, all Shares owned by the Stockholder and all Shares attributed to
the Stockholder for federal income tax purposes under Section 318 of the
Internal Revenue Code of 1986, as amended, as of the date of purchase of
Shares pursuant to the Offer. Stockholders should consult their tax
advisors as to the application of the constructive ownership rules of
Section 318.
4. If more than 1,201,420 Shares are duly tendered (and not timely
withdrawn), the Fund will purchase Shares from tendering Stockholders, in
accordance with the terms and subject to the conditions specified in the
Offer to Purchase, on a pro rata basis (disregarding fractions) in
accordance with the number of Shares duly tendered by each Stockholder
during the period the Offer is open and not timely withdrawn), unless the
Fund determines not to purchase any Shares.
5. Each tendering Stockholder is required to submit a check in the amount
of $25.00 payable to BankBoston, N.A. as a processing fee to help defray
the cost associated with effecting the Offer. A broker, dealer, commercial
bank, trust company or other nominee may also charge a fee for processing
transactions on behalf of a Stockholder. Tendering Stockholders are not
obligated to pay brokerage commissions or, subject to Instruction 6 of the
Letter of Transmittal, transfer taxes on the purchase of Shares of the Fund
pursuant to the Offer.
IF YOU WISH TO HAVE US TENDER YOU SHARES, PLEASE SO INSTRUCT US BY
COMPLETING, EXECUTING AND RETURNING TO US THE INSTRUCTION FORM ON THE REVERSE
SIDE HEREOF. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO
PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF ON OR BEFORE THE EXPIRATION OF THE
OFFER. THE OFFER AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 16, 1999, UNLESS
EXTENDED.
The Offer is not being made to (not will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. 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 behalf of
the Fund by one or more registered brokers or dealers licensed under the laws
of that jurisdiction.
Very truly yours,
<PAGE>
Instructions Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of Its Issued and Outstanding
Shares at Net Asset Value Per Share
THIS FORM IS NOT TO BE USED TO TENDER SHARES DIRECTLY TO THE DEPOSITARY. IT
SHOULD BE SENT TO YOUR BROKER, DEALER, COMMERCIAL BANK, TRUST COMPANY OR OTHER
NOMINEE IF THAT FIRM IS THE HOLDER OF RECORD OF YOUR SHARES AND WILL BE
EFFECTING THE TENDER ON YOUR BEHALF.
DO NOT COMPLETE THIS FORM IF YOU HAVE DECIDED NOT TO TENDER YOUR SHARES.
The undersigned acknowledge(s) receipt of your letter and the accompanying
Offer to Purchase dated May 19, 1999 and the related Letter of Transmittal
(which together constitute the "Offer") in connection with the Offer by The
Southern Africa Fund, Inc. (the "Fund") to purchase 1,201,420 shares of its
issued and outstanding common stock, par value $0.01 per share (the "Shares"),
at the net asset value per Share as of the close of the regular trading
session of the New York Stock Exchange on the date after the Expiration Date
(as defined in the Offer to Purchase), on the terms and subject to the
conditions of the Offer.
The undersigned hereby instructs you to tender to the Fund all Shares that
are held by you for the account of the undersigned, including all
uncertificated Shares that may be held for the account of the undersigned by
the Fund's transfer agent pursuant to the Fund's Dividend Reinvestment Plan,
upon the terms and subject to the conditions of the Offer.
The undersigned hereby represents and warrants that: (i) all Shares owned by
the undersigned as of the date of purchase of Shares pursuant to the Offer and
all Shares attributed to the undersigned for Federal income tax purposes as of
such date under Section 318 of the Internal Revenue Code of 1986, as amended,
have been or will be tendered pursuant to the Offer; (ii) the undersigned has
a net long position in such Shares within the meaning of Rule 14e-4
promulgated under the Securities Exchange Act of 1934, as amended; and (iii)
the tender of such Shares complies with Rule 14e-4.
(Please Print Except for Signature(s))
Account Number: _____________________
Name(s) and Tax Identification or Social Security Number(s) of Beneficial
Owner(s): _____________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Address: ______________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
Telephone Number(s) including Area Code(s): ___________________________________
_____________________________________ _____________________________________
(Signature of beneficial owner) (Signature of additional beneficial
owner, if any)
Dated: , 1999
<PAGE>
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
Questions and Answers
Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of its Issued and Outstanding
Shares at Net Asset Value Per Share
To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees and
to the Depositary:
The following is a set of questions that may be asked of you, and possible
answers you might give in response, concerning the Offer by The Southern
Africa Fund, Inc. (the "Fund") to purchase 1,201,420 of its issued and
outstanding shares of common stock, par value $0.01 per share, for cash at a
price equal to their net asset value per share determined as of the close of
the regular trading session of the New York Stock Exchange on June 17, 1999,
the date after the date the offer expires (or, if the Offer is extended, on
the date after the new expiration date), upon the terms and subject to the
conditions set forth in the Offer to Purchase dated May 19, 1999 and the
related Letter of Transmittal (which together constitute the "Offer"). These
questions and answers are intended only for internal use by brokers, dealers,
commercial banks, trust companies and other nominees and by the Depositary,
and are not to be transmitted to others. Also, these questions and answers are
not intended as a substitute for a thorough reading and understanding of the
terms and conditions of the Offer. To the extent, if any, that these questions
and answers may differ from the terms and conditions of the Offer, the terms
and conditions of the Offer will prevail.
Any question you have with respect to the Offer should be directed to the
Depositary at (800) 426-5523.
Very truly yours,
THE SOUTHERN AFRICA FUND, INC.
NOTHING CONTAINED HEREIN SHALL CONSTITUTE YOU OR ANY OTHER PERSON AS THE
AGENT OF EITHER THE FUND OR THE DEPOSITARY OR AUTHORIZE YOU OR ANY OTHER
PERSON (A) TO MAKE ANY STATEMENTS WITH RESPECT TO THE OFFER, OTHER THAN THE
STATEMENTS SPECIFICALLY SET FORTH IN THE OFFER TO PURCHASE AND THE LETTER OF
TRANSMITTAL, OR (B) TO DISTRIBUTE ANY MATERIAL WITH RESPECT TO THE OFFER
(INCLUDING, WITHOUT LIMITATION, THESE QUESTIONS AND ANSWERS) OTHER THAN AS
SPECIFICALLY AUTHORIZED BY THE FUND.
<PAGE>
NOT FOR DISTRIBUTION TO STOCKHOLDERS OR OTHERS
FOR USE ONLY BY ELIGIBLE INSTITUTIONS AND BY THE DEPOSITARY
1. Q. What is the tender offer?
A. The Southern Africa Fund, Inc. (the "Fund") has commenced an offer to
purchase 1,201,420 of its shares of common stock for cash at a price per
share equal to the per share net asset value as of the close of the
regular trading session of the New York Stock Exchange on June 17, 1999,
unless the offer is extended, upon specified terms and subject to
conditions as set forth in the tender offer documents.
2. Q. When does the tender offer expire?
A. The tender offer is to expire at 12:00 Midnight Eastern Time on June 16,
1999, unless extended by the Fund.
3. Q. Why is the Fund making this tender offer?
A. The tender offer is being made to fulfill an undertaking made by the
Fund in connection with the initial public offering of shares of the
Fund's common stock in 1994.
4. Q. How do I tender my shares?
A. If your shares are registered in your name, you should obtain a package
of the tender offer materials, including the Offer to Purchase dated May
19, 1999 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 BankBoston, N.A., the Depositary, in proper form
before 12:00 Midnight Eastern Time on June 16, 1999, unless the tender
offer is extended by the Fund. However, 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.
5. Q. Is there any cost to me to tender?
A. There is a $25.00 processing fee (the "Processing Fee") per tendering
stockholder. Your tender will not be a proper one if a check payable to
BankBoston, N.A. for this fee does not accompany the documents submitted
to BankBoston, N.A. The Processing Fee will be refunded only if no
shares tendered are purchased pursuant to the offer. Your broker,
dealer, commercial bank, trust company or other nominee may charge you
additional fees according to its individual policies.
6. Q. Is the Fund required to complete the tender offer and purchase all
shares tendered up to the number of shares tendered for?
A. Under most circumstances, yes. There are certain circumstances, however,
in which the Fund will not be required to accept for payment, purchase
or pay for any shares tendered as described in Section 3 of the Offer to
Purchase.
7. Q. Will this be my last opportunity to tender shares to the Fund?
A. Under the terms of the Fund's original undertaking, the Fund is required
to conduct a tender offer during each year after 1999 subject to a
policy that the Fund would not proceed with a tender offer in a
particular year if Fund shares have traded on the NYSE at an average
price (i) at or above their net asset value ("NAV") or at an average
discount from NAV of less than 5% or (ii) at or above $15.00, all
determined on the basis of the average market price per share and
discounts as of the last trading day in each week during a period to be
fixed by the Fund's Board of Directors of 12 calendar weeks prior to
April 1 of the relevant year. Pursuant to the undertaking, the Fund may,
but is not required to, conduct other tender offers. See Section 2 of
the Offer to Purchase for details.
2
<PAGE>
8. Q. How can I obtain copies of the tender offer documents?
A. Copies of the tender offer documents, including the Offer to Purchase
and the related Letter of Transmittal, may be obtained from your broker,
bank or other nominee or from Corporate Investor Communications, Inc.,
the Distribution Agent, by calling (877) 460-9339.
9. Q. Should I tender my shares?
A. Neither the Fund nor its Board of Directors nor Alliance Capital
Management L.P. (the investment adviser to the Fund) nor any other
person associated with the Fund is making any recommendation as to
whether stockholders should tender or refrain from tendering shares, and
no such person has been authorized to make any such recommendation on
their behalf. You should read the tender offer materials thoroughly, and
you may wish to consult your investment and tax advisors.
10. Q. What price will I get for the shares that are tendered?
A. If shares are purchased by the Fund, you will receive the net asset
value per share as of the close of the regular trading session of the
New York Stock Exchange on the date after the expiration date of the
tender offer. The expiration date is June 16, 1999, unless the offer is
extended.
11. Q. What is the net asset value per share now?
A. On May 14, 1999, the net asset value per share was $13.47. During the
pendency of the offer, current net asset value quotations can be
obtained from BankBoston, N.A. by calling (800) 426-5523 between 9:00
a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except
holidays).
12. Q. 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?
A. No one can accurately predict the net asset value at a future date.
13. Q. Will the Fund pay interest on the purchase price of the tendered
shares?
A. No.
14. Q. When will the tender offer expire?
A. The tender offer will expire at 12:00 Midnight Eastern Time on June 16,
1999, unless it is extended. The Fund may extend the period of time the
offer is open by making a public announcement.
15. Q. May I withdraw my shares after I have tendered them?
A. Yes, you may withdraw your shares at any time prior to 5:00 P.M. Eastern
Time on June 18, 1999 (or, if the offer is extended, prior to 5:00 P.M.
Eastern Time on the second day on which the NYSE is open for trading
after the new expiration date).
16. Q. Is there any reason shares tendered would not be accepted?
A. 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 all
shares actually and constructively (as determined under the Internal
Revenue Code) are not tendered and if the tender does not include the
Processing Fee, original signature(s) or the original of any required
signature guarantee(s). Also, the Fund may determine not to purchase any
shares under the circumstances referred to in Section 3 of the Offer to
Purchase.
3
<PAGE>
17. Q. If shares I tender are accepted by the Fund, when will payment be made?
A. It is contemplated, subject to change, that payment for tendered shares,
if accepted, will be made on or about June 25, 1999.
18. Q. What if more than 1,201,420 shares are tendered (and not timely
withdrawn)?
A. In that event, the Fund will purchase duly tendered shares from
tendering Stockholders 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 Stockholder (and not timely
withdrawn), unless the Fund determines not to purchase any shares.
19. Q. If all of the shares I tender are not purchased by the Fund, for any
reason, how will I get those shares back?
A. These shares will be returned to you or your broker, dealer, commercial
bank, trust company or other nominee promptly after the expiration date,
subject to any extension thereof, in accordance with the instructions in
the Letter of Transmittal.
20. Q. Can the tender offer materials be sent to me by overnight delivery
service?
A. The Depositary can send the tender offer materials to you by overnight
delivery service if you arrange in advance to pay the delivery charges.
If your shares are held in nominee (e.g., in "street name"), you should
contact your broker, dealer, commercial bank, trust company or other
nominee for a copy of the tender offer documents.
4
<PAGE>
Form of Letter to Stockholders Who Have
Requested Information Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 1,201,420 of Its Issued and Outstanding
Shares at Net Asset Value Per Share
Dear Stockholder:
Pursuant to your request, enclosed for your consideration are the Offer to
Purchase dated May 19, 1999 of The Southern Africa Fund, Inc. (the "Fund") and
the related Letter of Transmittal pursuant to which the Fund is offering to
purchase 1,201,420 shares of its issued and outstanding common stock, par
value $0.01 per share (the "Shares"), for cash at a price equal to their net
asset value ("NAV") determined as of the close of the regular trading session
of the New York Stock Exchange ("NYSE") on June 17, 1999, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated May 19,
1999 and the related Letter of Transmittal (which together constitute the
"Offer"). THE OFFER EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON JUNE 16, 1999,
UNLESS EXTENDED (THE "EXPIRATION DATE"). If the Offer is extended beyond June
16, 1999, the purchase price for Shares will be their NAV determined as of the
close of the regular trading session of the NYSE on the date after the new
Expiration Date, as extended.
Neither the Fund nor its Board of Directors nor Alliance Capital Management
L.P. (the Fund's investment adviser) (the "Adviser") is making any
recommendation to any holder of Shares as to whether to tender Shares. Each
Stockholder is urged to consult the Stockholder's own investment and tax
advisors before deciding whether to tender Shares. If, after considering the
Offer to Purchase and Letter of Transmittal, you wish to tender your Shares
pursuant to the Offer, if you are the record owner of Shares, you should
follow the instructions contained in the Offer to Purchase and Letter of
Transmittal, and, if the Shares are held of record in the name of a broker,
dealer, commercial bank, trust company or other nominee, you should contact
that firm to effect the tender for you.
Your attention is called to the following:
1. Unless extended, the Offer expires at 12:00 Midnight Eastern Time on
June 16, 1999 and withdrawal rights expire at 5:00 P.M. Eastern Time on
June 18, 1999.
2. The Offer is subject to certain conditions set forth in the Offer to
Purchase. Under certain circumstances, the Fund will not be required to
accept for payment, purchase or pay for any Shares tendered, and the Fund
may also amend, extend or terminate the Offer.
3. A Stockholder wishing to accept the Offer must tender, or cause the
tender of, all Shares owned by the Stockholder and all Shares attributed to
the Stockholder for federal income tax purposes under Section 318 of the
Internal Revenue Code of 1986, as amended, as of the date of purchase of
Shares pursuant to the Offer. Stockholders should consult their tax
advisors as to the application of the constructive ownership rules of
Section 318.
4. If more than 1,201,420 Shares are duly tendered (and not timely
withdrawn), the Fund will purchase Shares from tendering Stockholders, in
accordance with the terms and subject to the conditions specified in the
Offer to Purchase, on a pro rata basis (disregarding fractions) in
accordance with the number of Shares duly tendered by each Stockholder
during the period the Offer is open (and not timely withdrawn), unless the
Fund determines not to purchase any Shares.
5. Each tendering Stockholder is required to submit a check in the amount
of $25.00 payable to BankBoston, N.A. (the "Depositary") as a processing
fee to help defray the cost associated with effecting the Offer. A broker,
dealer, commercial bank, trust company or other nominee may also charge a
fee for processing transactions on behalf of a Stockholder. Tendering
Stockholders are not obligated to pay brokerage commissions or, subject to
Instruction 6 of the Letter of Transmittal, transfer taxes on the purchase
of Shares by the Fund pursuant to the Offer.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the Offer or its
acceptance would violate the laws of such jurisdiction. 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 behalf of
the Fund by one or more registered brokers or dealers licensed under the laws
of that jurisdiction.
Should you have any other questions concerning the enclosed material, please
contact your broker, dealer, commercial bank, trust company or other nominee,
or call the Depositary at the number indicated in the Offer to Purchase.
Very truly yours,
The Southern Africa Fund, Inc.
<PAGE>
EXHIBIT (c)(1)
Depositary Agreement
--------------------
This Depositary Agreement is entered into as of this 19th day of
May by and between The Southern Africa Fund, Inc., a Maryland corporation (the
"Company"), and BankBoston, N.A., a national banking association with its
principal offices in Boston, Massachusetts (the Depositary").
WHEREAS, the Company is making a tender offer (hereinafter
referred to, together with any amendment or extensions thereto, as the "Tender
Offer") to purchase 1,201,420 outstanding shares of the Company's Common Stock,
par value of $0.01 per share (the "Shares"), upon the terms and subject to the
conditions set forth in the Offer to Purchase, dated May 19, 1999 (the "Offer to
Purchase"), and in the related Letter of Transmittal including the instructions
set forth therein (the "Letter of Transmittal") (the Offer to Purchase and the
"Letter of Transmittal" being collectively referred to as the "Tender Offer
Documents").
WHEREAS, the Tender Offer is being commenced on May 19, 1999, and
will expire at 12:00 Midnight Eastern Time, on June 16, 1999, unless extended by
the Company as provided in the Offer to Purchase (the last date to which the
Tender Offer is extended and on which it expires is herein referred to as the
"Expiration Date").
WHEREAS, the Company desires that BankBoston, N.A act as
Depositary in connection with the Tender Offer, and BankBoston, N.A. has
indicated its willingness to do so.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, the parties hereto agree as follows:
1. Appointment of Depositary.
-------------------------
The Company hereby appoints the Depositary to act as such in
connection with the Tender Offer for the purpose of receiving and making payment
for, on behalf of the Company, Shares tendered pursuant to the terms of the
Tender Offer Documents. The Depositary hereby agrees to serve as such, upon the
terms and conditions set forth herein. In connection with such
1
<PAGE>
appointment, the Company has delivered to the Depositary a copy of the Tender
Offer Documents. The Company agrees to notify the Depositary of, and confirm
in writing, any extension or amendment of the Tender Offer or the Tender Offer
Documents.
2. Concerning the Depositary.
--------------------------
The Depositary is hereby authorized and directed, and hereby agrees to
the following:
(a) The Depositary shall examine the Letters of Transmittal,
the certificates for Shares and the other documents delivered or mailed to the
Depositary in connection with tenders of Shares to ascertain whether they are
completed and executed in accordance with the instructions set forth in the
Letters of Transmittal. In the event any Letter of Transmittal has been
improperly completed or executed, or the certificates for Shares accompanying
such Letter of Transmittal are not in proper form for transfer (as required by
the aforesaid instructions), or if some other irregularity in connection with
any tender of Shares exists, the Depositary shall forward the defective item
back to the stockholder to be corrected. Determination of all questions as to
the validity, form, eligibility (including timeliness of receipt) and acceptance
of any Shares tendered or delivered shall be determined by the Depositary on
behalf of the Company; provided that the Company has reserved in the Tender
Offer Documents the absolute right to reject any or all tenders of any
particular Shares not in appropriate form or the acceptance of which would, in
the opinion of the Company's counsel, be unlawful and to waive any of the
conditions of the Tender Offer or any defect or irregularity in the tender of
any Shares, and the Company's interpretation of the terms and conditions of the
Tender Offer will be final.
(b) All Shares must be tendered in accordance with the terms
and conditions set forth in the Tender Offer Documents. Payment for Shares
tendered and purchased pursuant to the Tender Offer Documents shall be made only
after deposit with the Depositary of the certificates therefor, the Letter of
Transmittal and any other required documents.
2
<PAGE>
(c) A tendering stockholder may withdraw Shares tendered as
set forth in the Tender Offer Documents, in which event the Depositary shall, as
promptly as possible after notification of such withdrawal, return such Shares
to, or in accordance with the instruction of, such stockholder and such Shares
shall no longer be considered properly tendered. All questions as to the form
and validity of notices of withdrawal, including timeliness of receipt, shall be
determined by the Company, whose determination shall be final and binding.
(d) On each business day up to and including the Expiration
Date (as defined in the Offer to Purchase), the Depositary shall advise by
facsimile transmission to Andrew L. Gangolf, Mark D. Gersten, and such other
persons as either of them may direct, of the number of Shares which have been
duly tendered on such day, stating separately the number of Shares tendered by
Notices of Guaranteed Delivery, the number of Shares tendered about which the
Depositary has questions concerning validity, and the cumulative number of
Shares tendered through time of such facsimile transmission. The Depositary
shall also inform the aforementioned person, and such other persons as may be
designated, upon request made from time to time, of such other information as
he/she may request, including without limitation, the names and addresses of -
registered holders of tendered Shares.
(e) The Depositary shall date and time stamp all Letters of
Transmittal or facsimile transmissions submitted in lieu thereof, and preserve
such records in accordance with the Securities Exchange Act of 1934, as amended,
and other applicable law. The Depositary shall match Notice of Guaranteed
Delivery submitted with the Share(s) tendered pursuant thereto. If so instructed
by the Company, the Depositary shall telephone Eligible Institutions (as defined
in the Offer to Purchase) which have tendered a significant number of Shares by
means of the aforementioned procedures to ascertain information in connection
therewith.
3
<PAGE>
(f) The Depositary shall follow and act upon any amendments,
modifications or supplements to these instructions, and upon any further
instructions in connection with the Tender Offer, any of which may be given to
the Depositary by the Company or such other persons as it may authorize.
(g) If, pursuant to the Offer to Purchase, the Company
instructs the Depositary not to accept the instructions and/or Shares received
from a tendering stockholder, the Depositary shall return the certificates for
such Shares to the persons who deposited the same, together with a letter of
notice, in form satisfactory to the Company, explaining why the deposited shares
are being returned, and return to the Company any surplus funds deposited by the
Company with the Depositary.
(h) In addition to the services the Depositary is to
perform as provided for herein, the Depositary shall perform as Depositary such
other services as are required or contemplated to be performed by the
Depositary under the Tender Offer Documents including, but not limited to,
making proration computations, returning to stockholders Shares tendered but not
accepted for purchase and responding to requests for information and documents.
(i) The Depositary:
(1) shall have no obligation to make payment for any
tendered Shares unless the Company shall have provided the necessary funds to
pay in full all amounts due and payable with respect thereto;
(2) shall have no duties or obligations other than
those specifically set forth herein or as may subsequently be requested of the
Depositary by the Company with respect to the Tender Offer;
(3) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value or genuineness
of any stock certificates or
4
<PAGE>
the Shares represented thereby deposited with the Depositary pursuant to the
Tender Offer and will not be required and will make no representations as to the
validity, value or genuineness of the Tender Offer;
(4) may rely on and shall be protected in acting upon any
certificate, instrument, opinion, notice, letter, facsimile transmission,
telegram or other document, or any security delivered to it, and reasonably
believed by it to be genuine and to have been signed by the proper party or
parties;
(5) may rely on and shall be protected in acting upon
written or oral instructions from the Company with respect to any matter
relating to its acting as Depositary specifically covered by this Depositary
Agreement;
(6) may consult with counsel satisfactory to it (including
counsel for the Company) and the written advice or opinion of such counsel shall
be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in accordance with
such advice or opinion of such counsel;
(7) shall arrange for insurance protecting the Company and
itself against any liability arising out of non-receipt by shareholders of
certificates sent by the Depositary; and
(8) shall not at any time advise any person as to the
wisdom of making any tender pursuant to the Tender Offer, the value of the
Shares or as to any other financial or legal aspect of the Tender Offer or any
transaction related thereto.
3. Deposits.
---------
(a) The Company will from time to time deposit or cause to be
deposited with the Depositary, as Depositary and agent for tendering holders of
Shares, within a reasonable time after the Company's acceptance for purchase of
tendered Shares, an amount equal to the aggregate purchase price of all Shares
to be purchased which the Depositary then holds. The Company will deposit with
the Depositary or cause to be deposited with it an amount equal to
5
<PAGE>
the total stock transfer taxes, if any, payable by the Company pursuant to the
instructions of the Letter of Transmittal in respect of the transfer of all the
Shares to be purchased which the Depositary holds. The Depositary shall
thereupon, as promptly as possible, (a) purchase and affix appropriate stock
transfer tax stamps, (b) cause the tendered Shares which have been thus paid for
to be transferred and delivered to the Company, and (c) send a check for the
purchase price (less the amount, if any, of any stock transfer taxes and, if
applicable, adjusted in accordance with the provisions of the Tender Offer
Documents) of the Shares purchased to, or otherwise pursuant to the instructions
of each of the stockholders who has tendered Shares.
(b) It is understood and agreed that the securities, money,
assets or property (the "Property") to be deposited with or received by the
Depositary from the Company shall be held solely for the benefit of the Company
and stockholders tendering Shares, as their interests may appear. The Depositary
hereby waives any and all rights of lien, attachment or set-off whatever, if any
against the Property so to be deposited, which such rights arise by reason of
statutory or common law, by contract or otherwise.
4. Compensation the Depositary by the Company.
-------------------------------------------
The Company shall pay fees for the services rendered hereunder as
set forth in the attached Fee Schedule which fees shall include the compensation
of all subcontractors referred to in Section 11(B). The Depositary shall also be
entitled to reimbursement from the Company for all reasonable and necessary out-
of-pocket expenses paid or incurred by it in connection with the administration
by the Depositary of its duties hereunder
5. Indemnification.
----------------
The Company covenants and agrees to indemnify and to hold
the Depositary harmless against any costs, expenses (including reasonable fees
of its legal counsel), losses or damages, which may be paid, incurred or
suffered by or to which it may become subject arising
6
<PAGE>
from or out of, directly or indirectly, any claims or liability resulting from
its actions as Depositary pursuant hereto; provided, that such covenant and
agreement does not extend to, and the Depositary shall not be indemnified with
respect to, such costs, expenses, losses and damages incurred or suffered by the
Depositary as a result of, or arising out of, its negligence, bad faith, willful
misconduct or willful failure to perform any of the Depositary's obligation
hereunder. In no case will the Company be liable under this indemnity with
respect to any claim against the Depositary unless, promptly after the receipt
by the Depositary of notice of any demand or claim or the commencement of any
action, suit, proceeding or investigation, or of the service of any summons on
the Depositary, or other first legal process giving information as to the nature
and basis of the claim, the Depositary shall, if a claim in respect thereof is
to be made against the Company, notify the Company thereof in writing. The
Company shall be entitled to participate as its own expense in the defense of
any such claim or proceeding, and, if it so elects at any time after receipt of
such notice, it may assume the defense of any suit brought to enforce any such
claim or of any other legal action or proceeding. The Company shall be entitled
to participate at its own expense in the defense of any such claim or
proceeding, and, if the Company so elects at any time after receipt of such
notice, it may assume the defense of any suit brought to enforce any such claim
or of any other legal action or proceeding. In the event the Company assumes the
defense of any such suit, the Company may select counsel of its own choosing for
such purpose, and the Company will not be liable for the fees and expenses of
any additional counsel retained by you. For the purposes of this Section 5, the
term "expense or loss" means any amount paid or payable to satisfy any claim,
demand, action, suit or proceeding settled with the express written consent of
the Depositary and the Company, and all reasonable costs and expenses,
including, but not limited to, reasonable counsel fees and disbursements, paid
or incurred in investigating or defending against any such claim, demand,
action, suit, proceeding or investigation.
6. Further Assurance.
------------------
From time-to-time and after the date hereof, the Company
shall deliver or cause to be delivered to the Depositary such further documents
and instruments and shall do and cause to be
7
<PAGE>
done such further acts as the Depositary shall reasonably request (it being
understood that the Depositary shall have no obligation to make any such
request) to carry out more effectively the provisions and purposes of this
Depositary Agreement, to evidence compliance herewith or to assure itself that
it is protected in acting hereunder.
7. Term.
----
This Agreement shall remain in effect until terminated on August
6, 1999 (the "Termination Date") or, prior to the Termination Date, upon 30
days' written notice by either party to the other. Upon termination of this
Agreement, all canceled certificates for Shares and related documentation will
be returned to the Company or agent designated by the Company
8. Notices.
-------
Until further notice in writing by either party hereto to the
other party, all written reports, notices and other communications between the
Depositary and the Company required or permitted hereunder shall be delivered or
mailed by first class mail, postage prepaid, addressed as follows:
If to the Company, to:
The Southern Africa Fund, Inc.
c/o Alliance Capital Management L.P.
1345 Avenue of the Americas
NY, NY 10105
Attn: Andrew L. Gangolf, Esq.
If to the Depositary, to:
BankBoston, N.A.
c/o Boston EquiServe Limited Partnership
150 Royall Street
Canton, MA 02021
Attn: Reorganization Department
8
<PAGE>
9. Governing Law.
--------------
This Depositary Agreement shall be governed by and construed in
accordance with the laws of The Commonwealth of Massachusetts and shall inure to
the benefit of and the obligations created hereby shall be binding upon the
successors and assigns of the parties hereto.
10. Counterparts.
-------------
This Depositary Agreement may be executed in separate
counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall together constitute but one and the same
instrument.
11. Assignment.
-----------
A. Except as provided in Section 1O(B) below, neither this
Agreement nor any rights or obligations hereunder may be assigned by either
party without the written consent of the other party.
B. The Depositary may, without further consent on the part of
the Company, (i) subcontract for the performance hereof with Boston EquiServe
Limited Partnership or (ii) subcontract with other subcontractors for systems,
processing, and telephone and distribution services as may be required from time
to time; provided, however, that the Depositary shall be as fully responsible to
the Company for the acts and omissions of any subcontractor as it is for its own
acts and omissions.
C. Except as explicitly stated elsewhere in this Agreement,
nothing under this Agreement shall be construed to give any rights or benefits
in this Agreement to anyone other than the Depositary and the Company, and the
duties and responsibilities undertaken pursuant to this Agreement shall be for
the sole and exclusive benefit of the Depositary and the Company. This Agreement
shall inure to the benefit of and be binding upon the parties and their
respective permitted successors and assigns.
9
<PAGE>
12. Third Party Beneficiaries
-------------------------
This Agreement does not constitute an agreement for a
partnership or joint venture between the Depositary and the Company. Neither
party shall make any commitments with third parties that are binding on the
other party without the other party's prior written consent.
13. Force Majeure
-------------
In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage or other cause reasonably beyond its control,
such party shall not be liable for damages to the other for any damages
resulting from such failure to perform or otherwise from such causes.
Performance under this Agreement shall resume when the affected party or parties
are able to perform substantially that party's duties.
14. Consequential Damages
---------------------
Neither party to this Agreement shall be liable to the other
party for any consequential, indirect, special or incidental damages under any
provision of this Agreement or for any consequential, indirect special or
incidental damages arising out of any act or failure to act hereunder even if
that party has been advised of or has foreseen the possibility of such damages.
15. Severability
------------
If any provision of this Agreement shall be held invalid,
unlawful or unenforceable the validity, legality and enforceability of the
remaining provisions shall not thereby in any be affected or impaired.
16. Confidentiality
---------------
The Depositary and the Company agree that all books, records,
information and data pertaining to the business of the other party which are
exchanged or received pursuant to the negotiation or the carrying out of this
Agreement, and shall not be voluntarily disclosed to any other person, except as
may be required by law.
10
<PAGE>
17. Merger of Agreement
-------------------
This Agreement constitutes the entire agreement between the
parties hereto with respect to such subject matter, and supersedes any prior
agreement whether oral or written.
IN WITNESS WHEREOF, the parties hereto have caused this Depositary Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
day and year first above written.
THE SOUTHERN AFRICA BANKBOSTON, N.A.
FUND, INC.
By: /s/ Edmund P. Bergan, Jr. By: /s/ Daniel McGrory
------------------------------ ------------------------------
Edmund P. Bergan, Jr. Daniel McGrory
Title: Secretary Title: Managing Director
--------------------------- ---------------------------
11
<PAGE>
The Southern Africa Fund, Inc.
Exhibit A
Fee Schedule
Project Management $11,500.00
Per Letter of Transmittal for $ 9.00
Registered/Beneficial Holders
Per Letter of Transmittal Withdrawal $10.00
Per Guarantee of Delivery $15.00
Per Extension of Tender Offer $ 1,500.00
Items Not Covered
. All out-of-pocket expenses such as telephone line charges associated
with toll-free telephone calls, certificates, checks, postage,
stationery, wire transfers and excess material disposal will be billed
as incurred.
. Services not specified in the Depository Agreements, including any
services associated with new duties, legislation or regulatory front
which become effective after May 19, 1999.
. Reasonable legal review fees if referred to outside counsel.
12
<PAGE>
EXHIBIT (c)(2)
INVESTMENT MANAGEMENT AGREEMENT
-------------------------------
The Southern Africa Fund, Inc.
1345 Avenue Of The Americas
New York, New York 10105
February 25, 1994
(as amended April 30, 1998)
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
Dear Sirs:
The undersigned herewith confirm our agreement with you as follows:
1. The Southern Africa Fund, Inc. (the "Fund") is a closed-end, non-
diversified management investment company registered under the Investment
Company Act of 1940 (the "Act"). The Fund is engaged in the business of
investing and reinvesting its assets in securities of the type and in accordance
with the limitations specified in our respective governing documents, the
registration statement filed by the Fund with the Securities and Exchange
Commission under the Securities Act of 1933 and the Act, and any representations
made in the Fund's prospectus, all in such manner and to such extent as we may
from time to time duly authorize. The Fund encloses a copy of its governing
documents and the other documents referred to above and will from time to time
furnish you with any amendments thereof.
<PAGE>
2. (a) The Fund hereby employs you to manage the investment and
reinvestment of its assets (the "portfolio assets") and, without limiting the
generality of the foregoing, to provide management and other services specified
below.
(b) You will make decisions with respect to all purchases and sales of
the portfolio assets. To carry out such decisions, you are hereby authorized,
as the Fund's agent and attorney-in-fact, for its account and at its risk and in
its name, to place orders for the investment and reinvestment of the portfolio
assets. In all purchases, sales and other transactions in the portfolio assets
you are authorized to exercise full discretion and act for the Fund in the same
manner and with the same force and effect as the Fund might or could do with
respect to such purchases, sales or other transactions, as well as with respect
to all other things necessary or incidental to the furtherance or conduct of
such purchases, sales or other transactions. You are permitted to utilize the
services of sub-advisers with respect to the management of the portfolio assets
subject to your obtaining the Fund's prior written approval before entering into
any such sub-advisory agreement.
(c) You will report to the Fund's Board of Directors at each meeting
thereof all changes in the
2
<PAGE>
portfolio assets since the prior report, and will also keep the Fund in touch
with important developments affecting the portfolio assets and on your own
initiative will furnish the Fund from time to time with such information as you
may believe appropriate for this purpose, whether concerning the individual
issuers whose securities are included in the Fund's portfolio, the industries in
which they engage, or the conditions prevailing in the economy generally. You
will also furnish the Fund with such statistical and analytical information with
respect to the portfolio assets as you may believe appropriate or as the Fund
reasonably may request. In making such purchases and sales of portfolio assets,
you will bear in mind the policies set from time to time by the Fund's Board of
Directors as well as the limitations imposed by the Fund's Articles of
Incorporation and in the Fund's Registration Statement under the Act and the
Securities Act of 1933, the limitations in the Act and of the Internal Revenue
Code of 1986 in respect of regulated investment companies.
(d) It is understood that you will from time to time employ or
associate with yourselves such persons as you believe to be particularly fitted
to assist you in the execution of your duties hereunder, the cost of performance
of such duties to be borne and paid by you; provided, that
3
<PAGE>
the Fund may agree to engage and pay sub-advisers or other consultants in
accordance with the requirements of the 1940 Act, including the engagement of
Sanlam Asset Management (Gibraltar) Limited. No obligation may be incurred on
the Fund's behalf in any such respect. During the continuance of this agreement
at the Fund's request you will provide the Fund persons satisfactory to the
Fund's Board of Directors to serve as the Fund's officers. Such personnel may be
employees of you or your affiliates. Nothing contained herein shall be construed
to restrict the Fund's right to hire its own employees or to contract for
services to be performed by third parties. Furthermore, you or your affiliates
(other than us) shall furnish us without charge with such management supervision
and assistance and such office facilities as you may believe appropriate or as
we may reasonably request subject to the requirements of any regulatory
authority to which you may be subject.
3. The Fund hereby confirms that, subject to the foregoing, the Fund
shall be responsible and hereby assumes the obligation for payment of all the
Fund's other expenses, including: (a) payment of the fee payable to you under
paragraph 5 hereof; (b) brokerage and commission expenses; (c) federal, state,
local and foreign taxes, including issue and transfer taxes, incurred by or
levied on us;
4
<PAGE>
(d) interest charges on borrowings; (e) the Fund's organizational and offering
expenses, whether or not advanced by you; (f) fees and expenses of registering
the Fund's shares under the appropriate federal securities laws and of
qualifying the Fund's shares under applicable state securities laws; (g) fees
and expenses of listing and maintaining the listing of the Fund's shares on any
national securities exchange; (h) expenses of printing and distributing reports
to shareholders; (i) costs of proxy solicitation; (j) fees, charges and expenses
of the Fund's administrator, custodians, subcustodians, nominees and registrar,
transfer and dividend disbursing agents; (k) fees of Sanlam Asset Management
(Gibraltar) Limited in its capacity as sub-adviser; (l) compensation of the
Fund's officers, directors and employees who do not devote any part of their
time to your affairs, the affairs of your affiliates, the affairs of the sub-
advisers or the affairs of their respective affiliates, other than the Fund; (m)
legal and auditing expenses; (n) the cost of stock certificates representing
shares of the Fund's common stock; and (o) costs of stationery and supplies.
4. The Fund shall expect of you, and you will give the Fund the
benefit of, your best judgment and efforts in rendering these services to the
Fund, and the Fund agrees
5
<PAGE>
as an inducement to your undertaking these services that you shall not be liable
hereunder for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, you against any liability to the Fund or to the Fund's
security holders to which you would otherwise be subject by reason of willful
misfeasance, bad faith or gross negligence in the performance of your duties
hereunder, or by reason of your reckless disregard of your obligations and
duties hereunder.
5. In consideration of the foregoing you shall receive a quarterly
fee at an annualized rate of .90% of the Fund's average weekly net assets for
periods prior to the date on which this agreement as amended becomes effective,
and for periods thereafter, at an annualized rate of either (i) .81% of the
Fund's average weekly net assets if 90% or less of the Fund's average weekly net
assets are invested in securities of Republic of South Africa issuers within the
meaning of the Fund's prospectuses dated February 25, 1994 ("South African
issuers") or (ii) the sum of (a) .80% of the Fund's average weekly net assets
and (b) .10% of the Fund's average weekly net assets not invested in securities
of
6
<PAGE>
South African issuers if greater than 90% of the Fund's average weekly net
assets are invested in securities of South African issuers. For purposes of the
calculation of such fee, average weekly net assets shall be determined on the
basis of the Fund's average net assets for each weekly period (ending on Friday)
ending during the quarter. The net assets for each weekly period are determined
by averaging the net assets on the Friday of such weekly period with the net
assets on the Friday of the immediately preceding weekly period. When a Friday
is not a business day for the Fund, then the calculation will be based on our
net assets on the business day immediately preceding such Friday. Such fee
shall be payable in arrears on the last day of each calendar quarter for
services performed hereunder during such quarter. If this Agreement or an
amendment thereto with respect to the calculation of the fee payable to you
hereunder becomes effective after the beginning of a quarter, or this agreement
terminates prior to the end of a quarter, the fee for the quarter at the proper
rate in effect for any relevant portions thereof shall be prorated according to
the proportion which such portions of the quarter bear to the full quarter.
6. This agreement shall continue in effect until January 31, 1999
and thereafter for successive twelve-month periods (computed from each February
1) provided that such continuance is specifically approved at least annually by
7
<PAGE>
the Fund's Board of Directors or by majority vote of the holders of the Fund's
outstanding voting securities (as defined in the Act), and, in either case, by a
majority of the Fund's Board of Directors who are not interested persons, as
defined in the Act, of any party to this agreement (other than as Directors of
the Fund) provided further, however, that if the continuation of this agreement
is not approved, you may continue to render the services described herein in the
manner and to the extent permitted by the Act and the rules and regulations
thereunder. Upon the effectiveness of this agreement, it shall supersede all
previous agreements between us covering the subject matter hereof. This
agreement may be terminated at any time, without the payment of any penalty by
vote of a majority of the Fund's outstanding voting securities (as so defined),
or by a vote of a majority of the Fund's entire Board of Directors on sixty
days' written notice to you, or by you on sixty days' written notice to the
Fund.
7. This agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by you and this agreement shall terminate
automatically in the event of any such transfer, assignment, sale, hypothecation
or pledge by you. The term "transfer", "assignment" and "sale" as used in this
paragraph shall have the meanings
8
<PAGE>
ascribed hereto by governing law and any interpretation thereof contained in
rules or regulations promulgated by the Securities and Exchange Commission
thereunder.
8. You are, and at all times during the term of this agreement shall
be, duly registered as an investment adviser under the Investment Advisers Act
of 1940 (the "Advisers Act") and not prohibited by the Advisers Act or the Act
or the rules and regulations under the Advisers Act or the Act, from acting for
the Fund as contemplated by the Fund's prospectus and this agreement.
9. (a) Except to the extent necessary to perform your obligations
hereunder, nothing herein shall be deemed to limit or restrict your right, or
the right of any of your employees, or any of the officers or directors of
Alliance Capital Management Corporation, your general partner, who may also be a
director, officer or employee of ours, or persons otherwise affiliated with us
(within the meaning of the Act) to engage in any other business or to devote
time and attention to the management or other aspects of any other business,
whether of a similar or dissimilar nature, or to render service of any kind to
any other trust, corporation, firm individual or association.
9
<PAGE>
(b) You will notify us of any change in the general partner of your
partnership within a reasonable time after such change.
10. You may from time to time make available without charge to us for
our use such marks or symbols owned by you as you may consider appropriate. Any
such marks or symbols so made available will remain your property and you shall
have the right, upon notice in writing, to require us to cease the use of such
mark or symbol at any time.
11. This Agreement shall be construed in accordance with the laws of
the State of New York, provided, however, that nothing herein shall be construed
as being inconsistent with the Act.
If the foregoing is in accordance with your understanding, will you
kindly so indicate by signing and returning to the Fund the enclosed copy
hereof.
Very truly yours,
THE SOUTHERN AFRICA FUND, INC.
By __________________________
Name:
Title:
Agreed to and accepted
as of the date first set forth above.
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
/s/ John D. Carifa
By_______________________________
Name: John D. Carifa
Title: President and
Chief Operating Officer
10
<PAGE>
The Fund and Alliance Capital Management L.P. hereby agree to the amendment
of this agreement as set forth above effective as of April 30, 1998.
THE SOUTHERN AFRICA FUND, INC.
/s/ Edmund P. Bergan, Jr.
By_______________________________
Name: Edmund P. Bergan, Jr.
Title: Secretary
ALLIANCE CAPITAL MANAGEMENT L.P.
By ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
/s/ John D. Carifa
By_______________________________
Name: John D. Carifa
Title: President and
Chief Operating Officer
11
<PAGE>
The Fund and Alliance Capital Management L.P. hereby agree to the
amendment of this agreement as set forth above effective as of April 30, 1998.
THE SOUTHERN AFRICA FUND, INC.
By /s/ Edmund P. Bergan, Jr.
---------------------------------
Name: Edmund P. Bergan, Jr.
Title: Secretary
ALLIANCE CAPITAL MANAGEMENT L.P.
BY ALLIANCE CAPITAL MANAGEMENT
CORPORATION,
its General Partner
By /s/ John D. Carifa
-------------------------------
Name: John D. Carifa
Title: President and
Chief Operating Officer
<PAGE>
EXHIBIT (c)(3)
SUB-ADVISORY AGREEMENT
----------------------
AGREEMENT made as of the 25th day of February, 1994, as amended as of
the 30th day of April, 1998, by and among The Southern Africa Fund, Inc. (the
"Fund"), a corporation organized under the laws of the State of Maryland,
Alliance Capital Management L.P., a Delaware limited partnership (the
"Investment Manager"), and Sanlam Asset Management (Gibraltar) Limited, a
corporation organized under the laws of Gibraltar (the "Sub-Adviser").
WITNESSETH:
WHEREAS, the Fund has entered into an Investment Management Agreement
(the "Management Agreement") with the Investment Manager pursuant to which the
Fund has engaged the Investment Manager to manage the investment and
reinvestment of the Fund's assets (the "portfolio assets"); and
WHEREAS, as permitted under the Management Agreement, the Fund desires
the Investment Manager to utilize the services of the Sub-Adviser as sub-adviser
with respect to certain portfolio assets; and
WHEREAS, the Sub-Adviser is willing to perform such services on the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, it is agreed as follows:
<PAGE>
2. The Sub-Adviser shall furnish to the Fund and the
Investment Manager as the Fund or the Investment Manager shall reasonably
require from time to time (i) information, investment recommendations, advice
and assistance with respect to the Fund's investment in both new or outstanding,
listed or unlisted, securities of Republic of South Africa issuers within the
meaning of the Fund's prospectuses dated February 25, 1994 ("South African
issuers"), including data, analyses and other information regarding particular
issuers and securities and (ii) information concerning the political situation
and developments, and economic conditions, statistics and forecasts in and for
South Africa. Information to be furnished by the Sub-Adviser to the Fund and
Investment Manager shall also include information obtained through public or
private sources concerning the integrity and standing of officials and of
particular issuers of both new and outstanding securities, their officers and
directors. The Sub-Adviser's activities under this Agreement will at all times
be subject to the supervision and direction of the Investment Manager.
2. In consideration of the services to be performed by the Sub-
Adviser hereunder, the Sub-Adviser shall receive from the Fund a fee, calculated
and paid
2
<PAGE>
quarterly, at an annualized rate of .20% (.30% for periods on and after the date
of approval by the Fund's stockholders of the amendment of this Agreement to
such rate) of the greater of (i) the Fund's average weekly net assets invested
in securities of South African issuers or (ii) 90% of the Fund's average weekly
net assets. For purposes of the calculation of such fee, average weekly net
assets shall be determined on the basis of the average net assets of the Fund
for each weekly period (ending on Friday) ending during the quarter. The net
assets for each weekly period are determined by averaging the net assets on the
Friday of such weekly period with the net assets on the Friday of the
immediately preceding weekly period. When a Friday is not a business day for the
Fund, then the calculation will be based on the Fund's net assets on the
business day immediately preceding such Friday. Such fee shall be payable in
arrears on the last day of each calendar quarter for services performed
hereunder during such quarter. For purposes of this Agreement, a business day
shall be a day on which stock exchanges in the United States are open for
business. If this Agreement or an amendment thereto with respect to the
calculation of the fee payable to the Sub-Adviser hereunder becomes effective
after the beginning of a
3
<PAGE>
quarter, or this Agreement terminates prior to the end of a quarter, the fee for
the quarter at the proper rate in effect for any relevant portion thereof shall
be pro-rated according to the proportion which such portions of the quarter bear
to the full quarter.
4. The Sub-Adviser will bear all of its expenses in connection with
the performance of its services hereunder and will from time to time at its sole
expense employ or associate with itself such persons as it believes to be
particularly fitted to assist it in the execution of its duties. The Investment
Manager will be responsible for all expenses which it has agreed to bear
pursuant to the Management Agreement.
4. The Sub-Adviser is, and at all times during the term of this
Agreement shall be, duly registered as an investment adviser under the
Investment Advisers Act of 1940 (the "Advisers Act") and not prohibited by the
Advisers Act or the Investment Company Act of 1940, as amended (the "Investment
Company Act") or the rules and regulations under such Acts, from acting as Sub-
Adviser for the Fund as contemplated by the Fund's prospectuses as referred to
above and this Agreement. The Sub-Adviser agrees that it will be in full
compliance with any provisions of the Investment
4
<PAGE>
Company Act and the Advisers Act, applicable to it and its directors, officers
or employees, and to interested persons with respect to it.
5. For a period of five years following the initial effective date of
this Agreement, neither the Sub-Adviser, nor any affiliate under the control of
the Sub-Adviser, shall, without the prior written consent of the Investment
Manager, provide any services of the nature described in Section 1 hereof to any
investment company which is authorized to invest 65% or more of its assets in
South African securities, the shares of which are listed on any recognized stock
exchange in the United States or any other country outside South Africa, other
than the Fund. Except as provided in the preceding sentence, and except to the
extent necessary to perform its obligations hereunder, nothing shall be deemed
to limit or restrict the Sub-Adviser's right or the right of any of the Sub-
Adviser's employees, officers or directors, to engage in any other business or
devote time and attention to the management or other aspects of any other
business, whether of a similar or dissimilar nature and to render services of
any kind to any other trust, corporation, firm, individual or association.
5
<PAGE>
6. Nothing herein shall be construed as constituting the Sub-
Adviser an agent of the Investment Manager or the Fund or requiring the Sub-
Adviser to take or refrain from taking any action that would cause the
Sub-Adviser to be in violation of the laws of South Africa or any other law
applicable to the Sub-Adviser in connection with its duties hereunder.
6. The Sub-Adviser shall be entitled to rely on information
reasonably believed by it to be accurate and reliable. It is agreed that, except
as may otherwise be provided by the Investment Company Act, neither the
Sub-Adviser nor its officers, directors, employees or agents shall be subject to
any liability for any mistake of judgment or in any event whatsoever, except for
lack of good faith, provided that nothing herein shall be deemed to protect, or
purport to protect, the Sub-Adviser against any liability to the Fund or the
Investment Manager to which it would otherwise be subject by reason of
fraudulent activities, willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder, or by reason of its reckless disregard of
its obligations and duties hereunder.
6
<PAGE>
7. This Agreement shall continue in effect until January 31, 1999
and thereafter for successive twelve month periods (computed from each February
1) provided that such continuance is specifically approved at least annually by
the affirmative vote of (i) a majority of the members of the Fund's Board of
Directors who are not parties to the Agreement or interested persons of any such
party (other than as Directors of the Fund), cast in person at a meeting called
for the purpose of voting on such approval and (ii) the Fund's Board of
Directors or the holders of a majority of the outstanding voting securities of
the Fund, and provided further, however, that if the continuation of this
Agreement is not approved, the Sub-Adviser may continue to render the services
described herein in the manner and to the extent permitted by the Act and the
rules and regulations thereunder. This Agreement may nevertheless be terminated
at any time, without penalty, by the Fund's Board of Directors or by vote of
holders of a majority of the outstanding voting securities of the Fund, upon
sixty days' written notice delivered or sent by registered mail, postage
prepaid, to the Sub-Adviser, at its address for purposes of Section 10, or by
the Sub-Adviser upon sixty days' written notice to the Investment Manager or the
Fund at the address
7
<PAGE>
for each of them for purposes of Section 10. Any such notice shall be deemed
given when received by the addressee.
8. This Agreement may not be transferred, assigned, sold or in any
manner hypothecated or pledged by any party hereto, and this Agreement shall
terminate automatically in the event of any such transfer, assignment, sale,
hypothecation or pledge by you. The term "transfer", "assignment" and "sale" as
used in this paragraph shall have the meanings ascribed hereto by governing law
and any interpretation thereof contained in rules or regulations promulgated by
the Securities and Exchange Commission thereunder.
8. This Agreement and any disputes arising hereunder shall be governed
by the laws of the State of New York without any effect being given to New
York's choice of law rules, provided, however, that nothing herein shall be
construed as being inconsistent with the Investment Company Act. As used herein
the terms "interested person", "assignment", and "vote of the holders of a
majority of the outstanding voting securities" shall have the meanings set forth
in the Investment Company Act. The parties hereto hereby consent to the
jurisdiction of the state and federal courts of New York and provide that the
exclusive forum for
8
<PAGE>
any such disputes shall be in the Supreme Court of the State of New York, New
York County, or the United States District Court for the Southern District of
New York. Any service of process and legal papers, including a summons and
complaint and subpoenas, shall be deemed to be good and effective service on any
party hereto by both facsimile transmission of a true copy thereof to such party
at the address for the party set forth on Attachment A hereto or to any other
address of which such party shall have notified the other parties by the
foregoing procedure and by mailing a copy thereof to such address.
9
<PAGE>
IN WITNESS WHEREOF, this Agreement has been entered into the day
and year first above written.
The Southern Africa Fund, Inc.
By /s/ Edmund P. Bergan, Jr.
________________________________________
Name: Edmund P. Bergan, Jr.
Title: Secretary
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its General Partner
By /s/ John D. Carifa
________________________________________
Name: John D. Carifa
Title: President and
Chief Operating Officer
Sanlam Asset Management
(Gibraltar) Limited
By /s/ Gerrit Smit
________________________________________
Name: Gerrit Smit
Title: Director
10
<PAGE>
The Fund, the Investment Manager and the Sub-Adviser hereby
agree to the amendment of the foregoing Agreement as set forth above effective
as of the 30th day of April, 1998.
The Southern Africa Fund, Inc.
By /s/ Edmund P. Bergan, Jr.
-------------------------------------
Name: Edmund P. Bergan, Jr.
Title: Secretary
Alliance Capital Management L.P.
By Alliance Capital Management
Corporation, its General Partner
By /s/ John D. Carifa
-------------------------------------
Name: John D. Carifa
Title: President and
Chief Operating Officer
Sanlam Asset Management
(Gibraltar) Limited
By /s/ Gerrit Smit
-------------------------------------
Name: Gerrit Smit
Title: Director
11
<PAGE>
The Southern Africa Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
(212) 554-4639
Alliance Capital Management L.P.
1345 Avenue of the Americas
New York, New York 10105
(212) 554-4613
Sanlam Asset Management (Gibraltar) Limited
Suite 110
Neptune House
Marina Bay
Gibraltar
(350) 42500
12
<PAGE>
EXHIBIT (c)(4)
ALLIANCE FUND SERVICES, INC.
SHAREHOLDER INQUIRY AGENCY AGREEMENT
AGREEMENT, dated as of March 27, 1996, between The Southern Africa
Fund, Inc., a Maryland Corporation and a closed-end investment company
registered with the Securities and Exchange Commission (the "SEC") under the
Investment Company Act of 1940 (the "Investment Company Act"), having its
principal place of business at 1345 Avenue of Americas, New York, New York 10105
(the "Fund"), and ALLIANCE FUND SERVICES, INC., a Delaware corporation, having
its principal place of business at 500 Plaza Drive, Secaucus, New Jersey 07094
("Fund Services").
WHEREAS, Fund Services has agreed to act as shareholder inquiry
agent to the Fund for the purpose of responding to telephone inquiries
concerning the Fund and matters relating thereto from Shareholders and others;
NOW THEREFORE, for and in consideration of the mutual covenants and
agreements contained herein, the parties do hereby agree as follows:
SECTION 1. Upon the terms set forth in this Agreement, the
Fund hereby appoints Fund Services as its shareholder inquiry agent, and Fund
Services agrees to act in that capacity. Capitalized terms used in this
Agreement and not otherwise defined shall have the meanings assigned to them in
SECTION 10.
SECTION 2.
(a) As shareholder inquiry agent hereunder, Fund Services shall
respond to telephone inquiries concerning the Fund and matters relating thereto
from Shareholders and others.
(b) In responding to the inquiries referred to in SECTION 2(a),
Fund Services shall be limited to providing information that is otherwise
publicly available.
(c) With respect to any inquiries that Fund Services is unable to
respond to or which are beyond the scope of its services under this Agreement,
to the extent reasonable under the circumstances, Fund Services shall direct
such inquiries to the appropriate person.
SECTION 3. The Fund shall provide Fund services with copies of any
materials relating to the Fund that are reasonably requested by Fund Services
for the purposes of performing its services under this Agreement.
SECTION 4. Upon the declaration of each dividend and each capital
gains distribution by the Fund's Directors, the Fund shall notify Fund Services
of the date of such declaration, the
<PAGE>
amount payable per Share, the record date for determining the Shareholders
entitled to payment, the payment and the reinvestment date price.
SECTION 5. Nothing contained in this Agreement is intended to
or shall require Fund Services to perform any functions or duties on any day
other than a Business Day. Functions or duties normally scheduled to be
performed on any day which is not a Business Day shall be performed on, and as
of, the next Business Day, unless otherwise required by law.
SECTION 6. For the services rendered by Fund Services as
described above, the Fund shall pay to Fund Services a fee at a rate to be
mutually agreed upon from time to time, provided that in no event shall the fee
be more than the cost to Fund Services of providing such services.
SECTION 7. Fund Services shall not be liable for any taxes,
assessments or governmental charges that may be levied or assessed on any basis
whatsoever in connection with the Fund or any Shareholder, excluding taxes
assessed against Fund Services for compensation received by it hereunder.
SECTION 8.
(a) Fund Services shall at all times act in good faith and
with reasonable care in performing the services to be provided by it under this
Agreement, but shall not be liable for any loss or damage unless such loss or
damage is caused by the negligence, bad faith or willful misconduct of Fund
Services or its employees or agents.
(b) Without limiting the foregoing:
(i) Fund Services may rely upon the statements and
instructions of Fund officers and advice of the Fund or counsel to the Fund or
Fund Services. Fund Services shall not be liable for any action taken in good
faith reliance upon such instructions or advice;
(ii) Fund Services shall not be liable for any action
reasonably taken in good faith reliance upon any such instructions or advice or
upon a certified copy of any resolution of the Fund's Directors. Fund Services
may rely upon the genuineness of any document, or copy thereof, reasonably
believed by Fund Services in good faith to have been validly executed;
(iii) Fund Services may rely, and shall be protected by
the Fund in acting, upon any signature, instruction, request, opinion of
counsel, statement, report, notice or other
2
<PAGE>
document reasonably believed by it in good faith to be genuine and to have been
duly signed or presented on behalf of the Fund.
(c) The Fund shall indemnify Fund Services and hold it
harmless from any and all losses, costs, damages, liabilities and expenses,
including reasonable expenses of counsel, incurred by it resulting from any
claim, demand, action or suit in connection with the performance of its duties
hereunder, including any error, omission, inaccuracy or other deficiency
contained in materials provided to Fund Services by the Fund, or as a result of
acting upon any instruction reasonably believed by it to have been properly
given by a duly authorized officer of the Fund, or out of the failure of the
Fund to provide any information in the Fund's possession needed by Fund Services
to knowledgeably perform its functions; provided the Fund shall have no
obligation to indemnify Fund Services or hold it harmless with respect to any
expenses, damages, claims, suits, liabilities, actions, demands or losses caused
directly or indirectly by acts or omissions of Fund Services, and provided that
this indemnification shall not apply to actions or omissions of Fund Services in
cases of its own bad faith, willful misconduct or negligence, and provided
further that if in any case the Fund may be asked to indemnify or hold Fund
Services harmless pursuant to this Section, the Fund shall have been fully and
promptly advised by Fund Services of all material facts concerning the situation
in question. The Fund shall have the option to defend Fund Services against any
claim which may be the subject of this indemnification, and in the event that
the Fund so elects, it will so notify Fund Services, and thereupon the Fund
shall retain competent counsel to undertake defense of the claim, and Fund
Services shall in such situations incur no further legal or other expenses for
which it may seek indemnification under this Section.
SECTION 9. This Agreement may be amended from time to time by
a written supplemental agreement executed by the Fund and Fund Services and
without notice to or approval of the Shareholders; provided this Agreement may
not be amended in any manner which would substantially increase the Fund's
obligations hereunder unless the amendment is first approved by the Fund's
Directors, including a majority of the Directors who are not a party to this
Agreement or interested persons of any such party, at a meeting called for such
purpose, and thereafter is approved by the Shareholders if such approval is
required under the Investment Company Act or the rules and regulations
thereunder. The parties hereto may adopt procedures as may be appropriate or
practical under the circumstances, and Fund Services may conclusively rely on
the determination of the Fund that any procedure that has been approved by the
Fund does not conflict
3
<PAGE>
with or violate any requirement of its Articles of Incorporation or By-Laws, or
any rule, regulation or requirement of any regulatory body.
SECTION 10. The terms, as defined in this Section, whenever
used in this Agreement or in any amendment or supplement hereto, shall have the
meanings specified below, insofar as the context will allow.
(a) Business Day: The term Business Day shall mean any day an
which the Fund is open for business as described in its Prospectus.
(b) Shareholders: The term Shareholders shall mean the
registered owners from time to time of the Shares, as reflected on the stock
registry records of the Fund.
(c) Shares: The term Shares shall mean all or any part of each
class of the shares of capital stock of the Fund which from time to time are
authorized and/or issued by the Fund.
SECTION 11. Fund Services shall not be liable for any delays
or errors occurring by reason of circumstances beyond its control, including but
not limited to acts of civil or military authorities, national emergencies,
fire, flood or catastrophe, acts of God, insurrection, war, riot, or failure of
transportation, communication or power supply, except to the extent that Fund
Services shall have failed to use its best efforts to minimize the likelihood of
occurrence of such circumstances or to mitigate any loss or damage to the Fund
caused by such circumstances.
SECTION 12. The Fund may give Fund Services sixty (60) days
and Fund Services may give the Fund ninety (90) days written notice of the
termination of this Agreement, such termination to take effect at the time
specified in the notice. Upon notice of termination, the Fund may, but is not
required to, appoint a successor shareholder inquiry agent. Upon receipt from
the Fund of written notice of the appointment of the successor shareholder
inquiry agent and related instructions, Fund Services shall, upon request of the
Fund and the successor shareholder inquiry agent and upon payment of Fund
Services' reasonable charges and disbursements, promptly transfer to the
successor shareholder inquiry agent all materials held by Fund Services
hereunder and cooperate with, and provide reasonable assistance to, the
successor shareholder inquiry agent in the transition to carry out its
responsibilities hereunder.
4
<PAGE>
SECTION 13. Any notice or other communication required by
or permitted to be given in connection with this Agreement shall be in writing,
and shall be delivered in person or sent by first-class mail, postage prepaid,
to the respective parties.
Notice to the Fund shall be given as follows until further notice:
The Southern Africa Fund, Inc.
1345 Avenue of the Americas
New York, New York 10105
Attention: Secretary
Notice to Fund Services shall be given as follows until further
notice:
Alliance Fund Services, Inc.
500 Plaza Drive
Secaucus, New Jersey 07094
SECTION 14. The Fund represents and warrants to Fund Services that
the execution and delivery of this Agreement by the undersigned officer of the
Fund has been duly and validly authorized by resolution of the Fund's Directors.
Fund Services represents and warrants to the Fund that the execution and
delivery of this Agreement by the undersigned officer of Fund Services has also
been duly and validly authorized.
SECTION 15. This Agreement may be executed in more than one
counterpart, each of which shall be deemed to be an original, and shall become
effective as of March 27, 1996, unless otherwise agreed by the parties. Unless
sooner terminated pursuant to SECTION 12, this Agreement will continue until
January 31, 1997 and will continue in effect thereafter for successive 12 month
periods only if such continuance is specifically approved at least annually by
the Directors or by a vote of the Shareholders and in either case by a majority
of the Directors who are not parties to this Agreement or interested persons of
any such party, at a meeting called for the purpose of voting on this Agreement.
SECTION 16. This Agreement shall extend to and shall bind the parties
hereto and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by the Fund without the written consent of
Fund Services or by Fund Services without the written consent of the Fund,
authorized or approved by a resolution of the Fund's Directors. Notwithstanding
the foregoing, either party may assign this Agreement without the consent of the
other party so
5
<PAGE>
long as the assignee is an affiliate, parent or subsidiary of the assigning
party and is qualified to act under the Investment Company Act, as amended from
time to time.
SECTION 17. This Agreement shall be governed by the laws
of the state of New York.
WITNESS the following signatures:
THE SOUTHERN AFRICA FUND, INC.
By: /s/ Edmund P. Bergan, Jr.
------------------------------
Title:
----------------------------
ALLIANCE FUND SERVICES, INC.
By: /s/ George Hrabovsky
------------------------------
Title:
----------------------------
6
<PAGE>
EXHIBIT (c)(5)
ADMINISTRATION AGREEMENT
AGREEMENT made this 25th day of February 1994, by and between The Southern
Africa Fund, Inc., a Maryland corporation (hereinafter called the "Fund"), and
Middlesex Administrators L.P., a Delaware limited partnership (hereinafter
called the "Administrator");
WITNESSETH
----------
WHEREAS, the Fund is a closed-end non-diversified management investment
company and is registered as such under the Investment Company Act of 1940, as
amended (the "1940 Act"); and
WHEREAS, the Fund and Alliance Capital Management L.P. (the "Investment
Adviser") are entering into an Investment Management Agreement (the "Investment
Management Agreement") pursuant to which the Investment Adviser will provide
investment advice to the Fund and be responsible for the portfolio management of
the Fund; and
WHEREAS, the Fund and the Investment Adviser are entering into Sub-Advisory
Agreements (the "Sub-Advisory Agreements") with Investec Asset Management
(International) Limited and Sanlam Asset Management (Gilbraltar) Limited
(together, the "Sub-Advisers") pursuant to which the Sub-Advisers will provide
investment advice and research to the Investment Adviser; and
WHEREAS, the Fund desires to retain the Administrator to render certain
administrative services in the manner and on the terms and conditions hereafter
set forth; and
WHEREAS, the Administrator desires to be retained to perform services on
said terms and conditions.
<PAGE>
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the Fund and the Administrator agree as follows:
1. Duties of the Administrator. The Fund hereby retains the Administrator
---------------------------
to act as administrator of the Fund, subject to the supervision and direction of
the Board of Directors of the Fund, as hereinafter set forth. The Administrator
shall perform or arrange for the performance of the following administrative
services and clerical services: (i) maintain and keep certain of the books and
records of the Fund; (ii) prepare and, subject to approval by the Fund, file
certain reports and other documents required by U.S. Federal securities laws and
regulations and by U.S. stock exchanges on which Fund shares are listed; (iii)
coordinate tax-related matters; (iv) prepare periodic reports to Fund
shareholders; (v) respond to inquiries from Fund shareholders; (vi) calculate,
or arrange for the calculation of, the net asset value of the Fund's shares;
(vii) arrange for payment of the Fund's expenses; (viii) oversee the performance
of administrative and professional services rendered to the Fund by others,
including its custodian, registrar, transfer agent, dividend disbursing agent
and dividend reinvestment plan agent, as well as accounting, auditing and other
services; (ix) provide the Fund with the services of persons competent to
perform such administrative and clerical functions as are necessary to provide
effective operation of the Fund; (x) provide the Fund with administrative office
and data processing facilities; (xi) consult with the Fund's officers,
independent accountants, legal counsel, custodian and any sub-custodian,
registrar, transfer agent and dividend disbursing agent and dividend
reinvestment plan agent in establishing the accounting policies of the Fund;
(xii) prepare such financial information and reports as may be required by any
banks from which the Fund borrows funds; (xiii) provide such assistance to the
Investment Adviser, the Sub-Advisers, the custodian and any sub-custodian, and
the Fund's counsel and auditors as generally may be required to carry on
properly the business and operations of the Fund; and (xiv) prepare reports
related to the Fund's preferred stock, if any, as required by rating agencies.
The Fund agrees to cause the custodian and Investment Adviser and Sub-Advisers
to deliver, on a timely basis, such information to the Administrator as may be
necessary or appropriate for the Administrator's performance of its duties and
responsibilities hereunder,
2
<PAGE>
including but not limited to, daily records of transactions, valuation of
investments in United States dollars (which may be based on information provided
by a pricing service) and expenses borne by the Fund, the Fund management letter
to stockholders and such other information necessary for the Administrator to
prepare the above referenced reports and filings, and the Administrator shall be
entitled to rely on the accuracy and completeness of such information in
performing its duties hereunder.
2. Expenses of the Administrator. The Administrator will bear all
-------------------------------
expenses necessary to perform its obligations under this Agreement, except that
the Fund shall pay reasonable travel expenses of persons who perform
administrative, clerical and bookkeeping functions on behalf of the Fund. The
Fund and the Investment Adviser assume and shall pay or cause to be paid all
other expenses of the Fund as set forth in the Investment Management Agreement.
The expenses of the legal counsel and accounting experts retained by the
Administrator, after consulting with the Fund counsel and independent auditors,
as may be necessary or appropriate for the Administrator's performance of its
duties and responsibilities under this Agreement are deemed expenses of, and
shall be paid by, the Fund.
3. Compensation of the Administrator. For the services rendered to the
-----------------------------------
Fund by the Administrator pursuant to this Agreement, the Fund shall pay to the
Administrator on the first business day of each calendar month a fee for the
previous month at an annual rate equal to the greater of (i) $150,000 per annum
($12,500 per month), or (ii) at an annual rate equal to .20% of the Fund's
average weekly net assets based upon the net asset values applicable to shares
of the Fund's common stock and, if any, shares of the Fund's preferred stock and
debt. For the purpose of determining fees payable to the Administrator, the
value of the Fund's average weekly net assets shall be computed at the times and
in the manner specified in the Fund's registration statement on Form N-2, as
amended from time to time (the "Registration Statement"). Compensation by the
Fund of the Administrator shall commence on the date of the first receipt by the
Fund of the proceeds of the sale of its shares to the Underwriters as described
in the Registration Statement, and the fee for the period from the date the Fund
shall first receive the proceeds of the sale of its shares to the Underwriters
as aforesaid to the end of the month
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during which such proceeds are so received, shall be pro-rated according to the
proportion that such period bears to the full monthly period. Upon termination
of this Agreement before the end of a month, the fee for such part of that month
shall be pro-rated according to the proportion that such period bears to the
full monthly period and shall be payable within (7) days after the date of
termination of this Agreement.
4. Limitation of Liability of the Administrator, Indemnification.
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(a) The Administrator shall exercise its best judgment in
rendering its services pursuant to this Agreement. The Administrator shall not
be liable to any person for any error of judgment or mistake of law or for any
loss arising out of any act or omission by the Administrator in the performance
of its duties hereunder, provided, however, that nothing herein contained shall
be construed to protect the Administrator against any liability to the Fund or
its shareholders, to which the Administrator shall otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the performance
of its duties, or by reckless disregard of its obligations and duties hereunder.
(b) The Administrator may, with respect to questions of law,
apply for and obtain the advice and opinion of legal counsel, and with respect
to the application of generally accepted accounting principles or Federal tax
accounting principles, apply for and obtain the advice and opinion of accounting
experts, at the expense of the Fund. The Administrator shall be fully protected
with respect to any action taken or omitted by it in good faith in conformity
with such advice or opinion.
(c) The Fund agrees to indemnify and hold harmless the
Administrator from and against all charges, claims, expenses (including legal
fees) and liabilities reasonably incurred by the Administrator in or by reason
of any action, suit, investigation or other proceeding arising out of or based
upon any action actually taken or allegedly taken or omitted by the
Administrator in connection with the performance of its duties hereunder.
Notwithstanding the preceding sentence, nothing contained herein shall protect
or be deemed to protect the Administrator against or entitle or be deemed to
entitle the Administrator to indemnification by reason of the Administrator's
willful
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misfeasance, bad faith or gross negligence in the performance of its duties, or
by reason of its reckless disregard of its obligations and duties hereunder.
Such expenses shall be paid by the Fund in advance of the final disposition of
such matter upon invoice by the Administrator and receipt by the Fund of an
undertaking from the Administrator to repay such amounts if it shall ultimately
be established that the Administrator is not entitled to payment of such
expenses hereunder.
(d) As used in this Paragraph 4, the term "Administrator" shall
include any affiliates of the Administrator performing services for the Fund
contemplated hereby and directors, partners, officers, agents and employees of
the Administrator and such affiliates.
5. Activities of the Administrator. The services of the
-------------------------------
Administrator under this Agreement are not to be deemed exclusive, and the
Administrator and any person controlled by or under common control with the
Administrator shall be free to render similar services to others.
6. Duration and Termination of this Agreement. This Agreement
------------------------------------------
shall become effective as of the date first above written, shall supersede any
other written agreement between the parties hereto, and shall remain in force
until terminated as provided herein. This Agreement may be terminated at any
time, without the payment of any penalty, by the Fund or the Administrator, on
sixty days' written notice to the other party. This Agreement shall
automatically terminate in the event of its assignment.
7. Amendments of this Agreement. This Agreement may be amended
----------------------------
by the parties hereto only if such amendment is specifically approved by the
Board of Directors of the Fund and such amendment is set forth in a written
instrument executed by each of the parties hereto.
8. Governing Law. The provisions of this Agreement shall be
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construed and interpreted in accordance with the laws of the State of New York
as at the time in effect and the applicable provisions of the 1940 Act. To the
extent that the applicable law of the State of New York, or any of the
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provisions herein, conflict with the applicable provisions of the 1940 Act, the
latter shall control.
9. Counterparts. This Agreement may be executed by the parties hereto in
--------------
counterparts and if executed in more than one counterpart the separate
instruments shall constitute one agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
THE SOUTHERN AFRICA FUND, INC.
By: /s/ Edmund P. Bergan, Jr.
------------------------------
Title: Secretary
---------------------------
MIDDLESEX ADMINISTRATORS L.P.
By MIDDLESEX ADMINISTRATORS, INC.,
General Partner
By: /s/ Stephen M.M. Miller
------------------------------
Title: Executive Vice President
------------------------
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