<PAGE>
As filed with the Securities and Exchange Commission on April 25, 2000
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
---------------
Schedule TO
Tender Offer Statement under Section 14(d)(1) or 13(e)(4)
of the Securities Exchange Act of 1934
(Amendment No. )*
The Southern Africa Fund, Inc.
(Name of Subject Company (issuer))
The Southern Africa Fund, Inc.
(Names of Filing Persons (offerer and issuer))
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 filing persons)
With a copy to:
Bruce D. Senzel
Seward & Kissel LLP
One Battery Park Place
New York, New York 10004
Calculation of Filing Fee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Transaction Valuation Amount of Filing Fee
- --------------------------------------------------------------------------------
<S> <C>
$4,130,481.90(a)......................................... $826.10(b)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
</TABLE>
(a) Calculated as the aggregate maximum purchase price to be paid for 240,284
shares in the offer, based upon the net asset value per share of $17.19 at
April 20, 2000.
(b) Calculated as 1/50th of 1% of the Transaction Valuation.
[_]Check the 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:
Form or Registration No.
Filing Party:
Date Filed:
[_]Check the box if the filing relates solely to preliminary communications
made before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
[_]third-party tender offer subject to Rule 14d-1.
[X]issuer tender offer subject to Rule 13e-4.
[_]going-private transaction subject to Rule 13e-3.
[_]amendment to Schedule 13D under Rule 13d-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: [_]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
Introductory Statement
This Tender Offer Statement on Schedule TO relates to an offer by The
Southern Africa Fund, Inc., a Maryland corporation (the "Fund"), to purchase
for cash up to 240,284 of the Fund's issued and outstanding shares of Common
Stock, par value $0.01 per share, upon the terms and subject to the conditions
contained in the Offer to Purchase dated April 25, 2000 and the related Letter
of Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer") and are filed as exhibits to this
Schedule TO.
The information in the Offer to Purchase and the related Letter of
Transmittal is incorporated herein by reference in answer to the items
required to be disclosed in this Schedule TO.
Item 12. Exhibits.
<TABLE>
<C> <S>
(a)(1)(i) Offer to Purchase, dated April 25, 2000.
(a)(1)(i)(A) Consent of Ernst & Young LLP, dated April 25, 2000.
(a)(1)(ii) Form of Letter of Transmittal.
(a)(1)(iii) Form W-8.
(a)(1)(iv) Form of Notice of Guaranteed Delivery.
(a)(1)(v) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(1)(vi) Form of Letter to Clients of Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(1)(vii) Form of Letter to Stockholders Who Have Requested Information.
(a)(2) None.
(a)(3) Not Applicable.
(a)(4) Not applicable.
(a)(5) Advertisement printed in The Wall Street Journal on April 25,
2000.
(a)(6) Press release issued on February 28, 2000. (Previously filed as a
preliminary communication with the Fund's Schedule TO submitted
via Edgar on February 29, 2000.)
(b) None.
(d) Investment Management Agreement between The Southern Africa Fund,
Inc. and Alliance Capital Management L.P. dated February 25, 1994
(as amended April 20, 1998). (Previously filed as Exhibit (c)(2)
to the Fund's Schedule 13E-4 submitted via Edgar on May 19,
1999).
(g) None.
(h) None.
</TABLE>
Item 13. Information Required by Schedule 13E-3.
Not applicable.
<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: April 25, 2000
<PAGE>
THE SOUTHERN AFRICA FUND, INC.
OFFER TO PURCHASE FOR CASH 240,284 OF ITS ISSUED
AND OUTSTANDING SHARES AT NET ASSET VALUE PER SHARE
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME ON
MAY 22, 2000, 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 240,284 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 principal market in which the Shares are traded (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 with any amendments or
supplements thereto collectively constitute the "Offer"). The Offer will
expire at 12:00 Midnight Eastern Time on May 22, 2000, 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 April 20, 2000 was $17.19 per
Share. During the pendency of the Offer, current NAV quotations can be
obtained from EquiServe Trust Company, 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 INFORMATION
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 EquiServe Trust
Company, 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 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.
<PAGE>
EQUISERVE TRUST COMPANY, N.A. DEPOSITARY
TELEPHONE NUMBER: (800) 426-5523
<TABLE>
<S> <C> <C>
BY REGISTERED, CERTIFIED OR
EXPRESS MAIL OR OVERNIGHT
BY FIRST CLASS MAIL: COURIER: BY HAND:
EquiServe Trust Company, EquiServe Trust Company, N.A. Securities Transfer &
N.A.
Attn: Corporate Actions Attn: Corporate Actions Reporting Services, Inc.
P.O. Box 9573 40 Campanelli Drive c/o EquiServe Trust Company, N.A.
Boston, MA 02205-9573 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
CORPORATE INVESTOR COMMUNICATIONS, INC., DISTRIBUTION AGENT
TELEPHONE NUMBER: (800) 346-7885
(Attention: Gloria Iatridis)
Distribution Center
111 Commerce Road
Carlstadt, New Jersey 07072-2586
SUMMARY TERM SHEET
(Section references are to the Offer to Purchase)
This Summary Term Sheet highlights certain information concerning this tender
offer. To understand the offer fully and for a more complete discussion of the
terms and conditions of the offer, you should read carefully the entire Offer
to Purchase and the related Letter of Transmittal.
What is the tender offer?
. The Southern Africa Fund, Inc. (the "Fund") is offering to purchase
240,284 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 regular
trading session of the NYSE on May 23, 2000 (or, if the offer is
extended, on the date after the date to which the offer is extended)
upon specified terms and subject to conditions as set forth in the
tender offer documents.
When will the tender offer expire, and may the offer be extended?
. The tender offer will expire at 12:00 Midnight Eastern Time on May 22,
2000, unless extended. The Fund may extend the period of time the offer
will be open by issuing a press release or making some other public
announcement by no later than the next business day after the offer
otherwise would have expired. See Section 15.
What is the net asset value per Fund share as of a recent date?
. As of April 20, 2000, the net asset value per share was $17.19. See
Section 8 of the Offer to Purchase for details. During the pendency of
the transfer offer, current net asset value quotations can be obtained
from EquiServe Trust Company, N.A. by calling (800) 426-5523 between
9:00 a.m. and 5:00 p.m. Eastern Time, Monday through Friday (except
holidays).
Will the net asset value be higher or lower on the date that the price to be
paid for tendered shares is to be determined?
. No one can accurately predict the net asset value at a future date.
2
<PAGE>
How do I tender my shares?
. If your shares are registered in your name, you should obtain the tender
offer materials, including the Offer to Purchase and the related Letter
of Transmittal, read them, and if you should decide to tender, complete
a Letter of Transmittal and submit any other documents required by the
Letter of Transmittal. These materials must be received by EquiServe
Trust Company, N.A., the Depositary, in proper form before 12:00
Midnight Eastern Time on May 22, 2000 (unless the tender offer is
extended by the Fund in which case the new deadline will be as stated in
the public announcement of the extension). If your shares are held by a
broker, dealer, commercial bank, trust company or other nominee (e.g.,
in "street name"), you should contact that firm to obtain the package of
information necessary to make your decision, and you can only tender
your shares by directing that firm to complete, compile and deliver the
necessary documents for submission to the Depositary by May 22, 2000 (or
if the offer is extended, the expiration date as extended). See Section
4.
Is there any cost to me to tender?
. There is a $25.00 processing fee per tendering stockholder. A tender
will not be a proper one unless a check payable to EquiServe Trust
Company, N.A. for this fee accompanies the tender documents submitted to
EquiServe Trust Company, 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. See the Letter of
Transmittal.
May I withdraw my shares after I have tendered them and, if so, by when?
. Yes, you may withdraw your shares at any time prior to 5:00 P.M. Eastern
Time on May 24, 2000 (or if the offer is extended, 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 new expiration date). Withdrawn shares may be re-
tendered by following the tender procedures before the offer expires
(including any extension period). In addition, if shares tendered have
not by then been accepted for payment, you may withdraw your tendered
shares at any time after June 20, 2000. See Section 5.
How do I withdraw tendered shares?
. A notice of withdrawal of tendered shares must be timely received by
EquiServe Trust Company, N.A., which specifies the name of the
stockholder who tendered the shares, the number of shares being
withdrawn (which must be all of the shares tendered) and, as regards
share certificates which represent tendered shares that have been
delivered or otherwise identified to EquiServe Trust Company, N.A., the
name of the registered owner of such shares if different than the person
who tendered the shares. See Section 5.
May I place any conditions on my tender of shares?
. No.
Is there a limit on the number of shares I may tender?
. No. Also, your tender will be proper only if you tender all Fund shares
you own or which you are considered to own under specified federal tax
rules. See Sections 1 and 14.
What if more than 240,284 shares are tendered (and not timely withdrawn)?
. 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. The Fund's present intention, if
the tender offer is oversubscribed, is not to purchase more than 240,284
shares. See Section 1.
3
<PAGE>
If I decide not to tender, how will the tender offer affect the Fund shares I
hold?
. Your percentage ownership interest in the Fund will increase after
completion of the tender offer. See Section 11.
Does the Fund have the financial resources to make payment?
. Yes. Although permitted to do so, the Fund does not expect to borrow
money to finance the purchase of any tendered shares. See Section 7.
If shares I tender are accepted by the Fund, when will payment be made?
. It is contemplated, subject to change, that payment for tendered shares,
if accepted, will be made on or about May 31, 2000. See Section 6.
Is my sale of shares in the tender offer a taxable transaction?
. For most stockholders, yes. All U.S. stockholders other than those who
are tax exempt who sell shares in the tender offer will recognize gain
or loss for U.S. federal income tax purposes equal to the difference
between the cash they receive for the shares sold and their adjusted
basis in the shares. The sale date for tax purposes will be the date the
Fund accepts shares for purchase. See Section 14 for details, including
the nature of the income or loss and the differing rules for U.S. and
non-U.S. stockholders. Please consult your tax advisor as well.
Is the Fund required to complete the tender offer and purchase all shares
tendered up to the number of shares tendered for?
. Under most circumstances, yes. There are certain circumstances, however,
in which the Fund will not be required to purchase any shares tendered
as described in Section 3.
Is there any reason shares tendered would not be accepted?
. In addition to those circumstances described in Section 3 in which the
Fund is not required to accept tendered shares, the Fund has reserved
the right to reject any and all tenders determined by it not to be in
appropriate form. Tenders will be rejected if all shares actually and
constructively (as determined under the Internal Revenue Code) are not
tendered or if the tender does not include the processing fee, original
signature(s) or the original of any required signature guarantee(s).
How will tendered shares be accepted for payment?
. Properly tendered shares, up to the number tendered for, will be
accepted for payment by a determination of the Fund's Board of Directors
followed by notice of acceptance to EquiServe Trust Company, N.A. which
is thereafter to make payment as directed by the Fund with funds to be
deposited with it by the Fund. See Section 6.
What action need I take if I decide not to tender my shares?
. None.
Does management encourage stockholders to participate in the tender offer, and
will they participate in the tender offer?
. No. Neither the Fund, its Board of Directors nor the Fund's investment
manager or sub-advisor is making any recommendation to tender or not to
tender shares in the tender offer. No director or officer of the Fund
intends to tender shares. See Section 10.
4
<PAGE>
Will this be my last opportunity to tender shares to the Fund?
. Under the terms of the Fund's original prospectus undertaking, the Fund
is also to conduct a tender offer during each year after 2000, 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.
How do I obtain information?
. Questions and requests for assistance should be directed to EquiServe
Trust Company, N.A., the Depository for the tender offer, toll free at
(800) 426-5523. Requests for additional copies of the Offer to Purchase,
the Letter of Transmittal and all other tender offer documents should be
directed to Corporate Investor Communications, Inc., the Distribution
Agent for the tender offer, toll free at (800) 346-7885 (Attention:
Gloria Iatridis). If you do not own shares directly, you should obtain
this information and the documents from your broker, dealer, commercial
bank, trust company or other nominee, as appropriate.
5
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
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<S> <C>
Summary Term Sheet....................................................... 2
1.Price; Number of Shares................................................ 7
2.Purpose of the Offer; Plans or Proposals of the Fund................... 7
3.Certain Conditions of the Offer........................................ 8
4.Procedures for Tendering Shares........................................ 9
a.Proper Tender of Shares............................................... 9
b.Signature Guarantees and Method of Delivery........................... 9
c.Dividend Reinvestment Plan............................................ 10
d.Book-Entry Delivery................................................... 10
e.Guaranteed Delivery................................................... 11
f.Determinations of Validity............................................ 11
g.United States Federal Income Tax Withholding.......................... 12
5.Withdrawal Rights...................................................... 12
6.Payment for Shares..................................................... 13
7.Source and Amount of Funds............................................. 13
8.Price Range of Shares; Dividends/Distributions......................... 14
9.Selected Financial Information......................................... 14
10.Interest of Certain Related Persons.................................... 16
11.Certain Effects of the Offer........................................... 17
12.Certain Information about the Fund..................................... 17
13.Additional Information................................................. 17
14.Certain United States Federal Income Tax Consequences.................. 18
15.Amendments; Extension of Tender Period; Termination.................... 19
16.Miscellaneous.......................................................... 19
Exhibit A: Audited Financial Statements of the Fund for the Fiscal Years
ended November 30, 1999 and November 30, 1998.
</TABLE>
6
<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 for cash up to
240,284 of its issued and outstanding Shares that are properly tendered prior
to 12:00 Midnight Eastern Time on May 22, 2000 (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 May 22, 2000 or the latest date to which the Offer is extended
is hereinafter called the "Expiration Date." The purchase price of the Shares
will be 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 April 20, 2000 was $17.19
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 240,284 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). 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. The Fund does not contemplate extending the Offer and increasing the
number of Shares covered thereby by reason of more than 240,284 Shares having
been tendered.
On April 20, 2000, there were 4,805,680 Shares issued and outstanding, and
there were 113 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 October 1, 1999, 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 2000, the 12 weeks ended
December 31, 1999. The average trading price of the Shares on the weekly
valuation days during the Measurement Period was approximately $13.13 per
Share, and the average NAV per Share on the same days was approximately
$16.92, reflecting an average discount of approximately 22.38%. Accordingly,
the Fund is conducting the Offer.
7
<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. The Fund
previously announced that the Board has authorized the Fund's repurchase of
Shares at such times and in such amounts as Fund management believes will
further the purposes of enhancing stockholder value and reducing the discount
at which the Fund's shares trade from their NAV, subject to Board review. No
shares have to date been repurchased pursuant to this authorization. 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 the last paragraph
of 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 and
is not engaged in any negotiations that relate to or would result in (a) any
extraordinary transaction, such as a merger, reorganization or liquidation,
involving the Fund or any of its subsidiaries; (b) other than in connection
with transactions in the ordinary course of the Fund's operations and for
purposes of funding the Offer, any purchase, sale or transfer of a material
amount of assets of the Fund or any of its subsidiaries; (c) any material
change in the Fund's present dividend rate or policy, or indebtedness or
capitalization of the Fund; (d) any change in the composition of the Board or
management of the Fund, including, but not limited to, any plans or proposals
to change the number or the term of members of the Board, to fill any existing
vacancies on the Board or to change any material term of the employment
contract of any executive officer; (e) any other material change in the Fund's
corporate structure or business, including any plans or proposals to make any
changes in the Fund's investment policy for which a vote would be required by
Section 13 of the Investment Company Act of 1940, as amended (the "1940 Act");
(f) any class of equity securities of the Fund to be delisted from a national
securities exchange or to cease to be authorized to be quoted in an automated
quotations system operated by a national securities association; (g) any class
of equity securities of the Fund becoming eligible for termination of
registration pursuant to Section 12(g)(4) of the Exchange Act; (h) the
suspension of the Fund's obligation to file reports pursuant to Section 15(d)
of the Exchange Act; (i) the acquisition by any person of additional
securities of the Fund, or the disposition of securities of the Fund; or (j)
any changes in the Fund's charter, bylaws or other governing instruments or
other actions that could impede the acquisition of control of the Fund.
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,
8
<PAGE>
(v) commencement of war, armed hostilities or other international or national
calamity directly or indirectly involving the United States or any foreign
country that is material to the Fund, or (vi) other event or condition which,
in the Board's judgment, would have a material adverse effect on the Fund or
its 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
9
<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.
10
<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.
11
<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 June 20, 2000, 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 re-tendered 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
12
<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
240,284 of its issued and outstanding Shares pursuant to the Offer would be
$4,130,481.96 (based on a price per Share of $17.19, the NAV as of the close
of the regular trading session of the NYSE on April 20, 2000). On April 20,
2000, the aggregate value of the Fund's net assets was $82,591,718.
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
13
<PAGE>
assets in cash and cash equivalents, which would tend to decrease the Fund's
net income. As of April 20, 2000, cash and cash equivalents constituted
approximately 6.50% of the Fund's total assets.
Under some market circumstances, it may be necessary for the Fund to raise
cash by liquidating portfolio securities in a manner that could reduce the
market value of such securities and, thus, reduce both the NAV of the Shares
and the proceeds from the sale of such securities. Liquidating portfolio
securities, if necessary, may also lead to the premature disposition of
portfolio investments and additional transaction costs. Depending upon the
timing of such sales, any such decline in NAV may adversely affect any
tendering 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/Distributions. The following table sets
forth, for the periods indicated, the high and low NAVs per Share and the high
and low closing sale prices per Share as reported on the NYSE Composite Tape,
and the amounts of cash dividends/distributions per Share paid during such
periods.
<TABLE>
<CAPTION>
Net Asset
Value Market Price
------------- -----------------
Dividends/
High Low High Low Distributions
Fiscal Year (ending November 30) ------ ------ -------- -------- -------------
<S> <C> <C> <C> <C> <C>
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.................... 12.28 10.68 10.125 8.8125 .383
2nd Quarter.................... 14.24 11.60 12.50 9.75 -0-
3rd Quarter.................... 14.81 13.39 12.50 11.125 -0-
4th Quarter.................... 17.04 14.14 13.3125 10.8125 -0-
2000
1st Quarter.................... 23.81 17.01 19.00 13.25 .049
2nd Quarter (through April 20,
2000)......................... 21.39 16.94 17.1875 12.8125 -0-
</TABLE>
As of the close of business on April 20, 2000, the Fund's NAV was $17.19 per
Share, and the high, low and closing prices per Share on the NYSE on that date
were $12.9375, $12.875 and $12.9375, 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, unless and until shares tendered are accepted for
payment and purchase, will not affect the record ownership of any such
tendered Shares for purposes of entitlement to any dividends payable by the
Fund.
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, 1999 and November 30, 1998, and for the three-month periods ended
February 29, 2000 and February 28, 1999. 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.
14
<PAGE>
SUMMARY OF SELECTED FINANCIAL INFORMATION
For the Periods Indicated Below
<TABLE>
<CAPTION>
Year Ended Year Ended Quarter Ended Quarter Ended
November 30, 1999 November 30, 1998 February 29, 2000 February 28, 1999
----------------- ----------------- ----------------- -----------------
(Audited) (Audited) (Unaudited) (Unaudited)
----------------- ----------------- ----------------- -----------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
Investment income..... $ 2,185,484 $ 2,879,995 $ 276,036 $ 641,865
Expenses.............. 1,763,558 1,987,574 466,532 380,042
----------- ------------ ------------ -----------
Net investment income
(loss)............... 421,926 892,421 (190,496) 261,823
----------- ------------ ------------ -----------
Net gain (loss) on
investments and
foreign currency
transactions......... 26,690,648 (23,721,511) 21,902,155 (1,293,582)
----------- ------------ ------------ -----------
Net increase
(decrease) in net
assets from
operations........... $27,112,574 $(22,829,090) $21,711,659 $(1,031,759)
=========== ============ ============ ===========
STATEMENT OF ASSETS AND
LIABILITIES (AT END OF
PERIOD)
Total assets.......... $83,679,279 $ 76,097,510 $106,878,176 $73,201,085
Total liabilities..... 2,919,881 2,820,023 4,642,598 3,256,077
----------- ------------ ------------ -----------
Net assets............ $80,759,398 $ 73,277,487 $102,235,578 $69,945,008
=========== ============ ============ ===========
Net asset value per
Share................ $ 16.80 $ 12.20 $ 21.27 $ 11.64
Shares outstanding.... 4,805,680 6,007,100 4,805,680 6,007,100
SELECTED DATA FOR A
SHARE OUTSTANDING
THROUGHOUT EACH PERIOD
Income From Investment Operations
Net investment income
(loss)............... $ .08(a) $ .16 $ (.04) $ .04
Net realized and
unrealized gain
(loss) on investments
and foreign currency
transactions......... 4.90 (3.96) 4.56 (.22)
----------- ------------ ------------ -----------
Net increase
(decrease) in net
asset value from
operations........... 4.98 (3.80) 4.52 (.18)
----------- ------------ ------------ -----------
Dividends and
Distributions
Dividends from net
investment income.... (.05) (.15) (.05) -0-
Distributions in
excess of net
investment income.... -0- (.27) -0- -0-
Distribution from net
realized gains on
investments and
foreign currency
transactions......... -0- (2.59) -0- (.38)
Distributions in
excess of net
realized gains on
investments and
foreign currency
transactions......... (.30) -0- -0- -0-
Tax return of
capital.............. (.03) -0- -0- -0-
----------- ------------ ------------ -----------
Total dividends and
distributions........ (.38) (3.01) (.05) (.38)
----------- ------------ ------------ -----------
Net asset value, end
of period............ $ 16.80 $ 12.20 $ 21.27 $ 11.64
----------- ------------ ------------ -----------
Market value, end of
period............... $ 13.3125 $ 10.0625 $ 17.1875 $ 9.8125
----------- ------------ ------------ -----------
RATIOS
Expenses to average
net assets........... 2.39% 2.10% 1.93%(b) 2.28%(b)
Net investment income
to average net
assets............... .57% .95% (.79)%(b) 1.57%(b)
TOTAL INVESTMENT RETURN
Total investment
return based on:(c)
Market value.......... 37.53% (18.11)% 33.05% 1.37%
Net asset value....... 43.15% (19.70)% 30.47% (.82)%
</TABLE>
- --------
(a) Based on average shares outstanding.
(b) Annualized.
(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 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.
15
<PAGE>
10. Interest of Directors, Executive Officers and Certain Related
Persons. The directors and executive officers of the Fund and the aggregate
number and percentage of the Shares each of them beneficially owns is set
forth in the table below. The address of each of them is in care of the Fund
at 1345 Avenue of the Americas, New York, New York 10105. 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. In
the case of the Fund, there are practical difficulties relating to the current
exchange control restrictions in certain Southern African countries which tend
to inhibit residents of such countries in engaging in transactions in Fund
shares. As of April 21, 2000, certain of the directors had not yet invested
this amount in Shares, and the directors of the Fund as a group beneficially
owned less than 1% of the Shares. The Investment Manager does not own any
Shares.
<TABLE>
<CAPTION>
Number of Percentage of
Shares Beneficially Shares Beneficially
Name and Position Owned Owned
----------------- ------------------- -------------------
<S> <C> <C>
Edmund P. Bergan, Jr., Secretary...... 0 0
Norman S. Bergel, Senior Vice
President............................ 0 0
Mark H. Breedon, Senior Vice
President............................ 0 0
T.N. Chapman, Director................ 925 0.019
Prof. Dennis Davis, Director.......... 0 0
Dr. Willem de Klerk, Director......... 470 0.010
Mark D. Gersten, Treasurer and Chief
Financial Officer.................... 0 0
David D.T. Hatendi, Director.......... 0 0
Moss L. Leoka, Director............... 0 0
Wendy N. Luhabe, Director............. 0 0
Ronnie Masson, Director............... 0 0
Sam N. Montsi, Director............... 0 0
Frank Savage, Director................ 850 0.018
Johannes C. van Reenen, Director...... 0 0
Dave H. Williams, Chairman and
President............................ 10,000 0.208
Dr. Reba W. Williams, Director........ 10,000 0.208
Peter G.A. Wrighton, Director......... 1,140 0.024
</TABLE>
Pursuant to an Investment Management Agreement dated February 25, 1994 (as
amended April 30, 1998), with the Investment Manager (a copy of which is
reflected as an exhibit to Schedule TO 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, whose business
address and telephone numbers are 1345 Avenue of the Americas, New York, New
York 10105 and (212) 969-1000, 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), the Fund employs the Sub-Advisor to furnish to the Fund
and the Investment Manager certain information, investment recommendations,
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 and (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
16
<PAGE>
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 years
ended November 30, 1999 and November 30, 1998, the Fund paid to the Investment
Manager fees totalling $596,596 and $813,261, respectively, pursuant to the
Investment Management Agreement, and the Fund paid to the Sub-Advisor fees
totaling $199,189 and $218,496, respectively, pursuant to the Sub-Advisory
Agreement.
During the past sixty days, there have not been any transactions involving
Shares that were effected by the Fund. Based upon the Fund's records and upon
information provided to the Fund, except for the sale by the Investment
Manager in an open market transaction on March 8, 2000 of 7,100 Shares at an
average price per Share of $16.08 there have not been any transactions in
Shares that were effected during such period by any director or executive
officer of the Fund, any person controlling the Fund, any director or
executive officer of any corporation or other person ultimately in control of
the Fund, any associate or minority-owned subsidiary of the Fund or any
executive officer or director of any subsidiary of the Fund. Based upon
information provided or available to the Fund, no director, officer or
affiliate of the Fund intends to tender Shares pursuant to the Offer. The
Offer does not, however, restrict the purchase of shares pursuant to the Offer
from any such person.
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
thereafter 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 and business address of the Fund is located
at 1345 Avenue of the Americas, New York, New York 10105. The Fund's business
telephone number is (212) 969-1000.
13. Additional Information. An Issuer Tender Offer Statement on Schedule TO
(the "Schedule TO") 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 TO 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.
17
<PAGE>
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.
U.S. Stockholders. It is anticipated that Stockholders (other than tax
exempt persons) who are citizens and/or residents of the U.S., corporations,
partnerships or other entities created or organized in or under the laws of
the U.S. or any 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. The sale date for
tax purposes will be the date the Fund accepts shares for purchase. This gain
or loss will be capital gain or loss if the Shares sold are held by the
tendering U.S. 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. 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. 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. If cash
received by a U.S. Stockholder is taxable as a dividend, the Stockholder's tax
basis in the purchased shares will be considered transferred to the remaining
shares held by the 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 also 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, loss recognized 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.
18
<PAGE>
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
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.
April 25, 2000 THE SOUTHERN AFRICA FUND, INC.
19
<PAGE>
EXHIBIT A
PORTFOLIO OF INVESTMENTS
November 30, 1999 The Southern Africa Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
COMMON STOCKS--100.6%
BOTSWANA--1.9%
CONSUMER
MANUFACTURING--0.5%
MISCELLANEOUS--0.5%
Sefalana Holding
Company Ltd. ........................... 350,000 $ 402,400
----------
CONSUMER STAPLES--0.5%
BEVERAGES--0.5%
Kgolo Ya Sechaba, Ltd. ................ 100,000 16,118
Sechaba Breweries, Ltd. ............... 398,000 436,204
----------
452,322
----------
FINANCIAL SERVICES--0.9 %
INSURANCE--0.9%
Botswana Insurance
Holdings, Ltd. ......................... 227,298 708,272
----------
Total Botswanan Securities
(cost $1,077,927) ..................... 1,562,994
----------
KENYA--0.5%
CONSUMER STAPLES--0.5%
BEVERAGES--0.5%
East African Breweries, Ltd. ..........
(cost $421,656) ........................ 452,623 424,713
----------
MALAWI--1.3%
CONSUMER SERVICES--1.3%
PRINTING & PUBLISHING--1.3%
Press Corporation (a)
(cost $2,002,638) ...................... 188,750 1,038,125
----------
MAURITIUS--1.5%
CONSUMER SERVICES--0.7%
RESTAURANTS & LODGING--0.7%
New Mauritius Hotels, Ltd. ............ 167,358 320,445
Rogers and Company, Ltd. .............. 83,679 242,811
----------
563,256
----------
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
CONSUMER STAPLES--0.3%
BEVERAGES--0.3%
Mauritius Breweries, Ltd. ............. 102,122 $ 274,153
-----------
FINANCIAL SERVICES--0.5%
BANKING--0.5%
Mauritius Commercial Bank.. 100,000 .. 365,180
-----------
Total Mauritian Securities
(cost $1,154,737) ...................... 1,202,589
-----------
NAMIBIA--1.6%
BASIC INDUSTRY--0.9%
MINING & METALS--0.9%
Namibian Minerals Corp. ............... 130,000 698,750
-----------
CONSUMER STAPLES--0.7%
BEVERAGES--0.7%
Namibia Breweries, Ltd. ............... 1,000,000 569,661
-----------
Total Namibian Securities
(cost $1,071,883) ...................... 1,268,411
-----------
SOUTH AFRICA--86.8%(b)
BASIC INDUSTRIES--19.9%
CHEMICALS--2.9%
Sasol Limited ......................... 304,000 2,307,956
-----------
GOLD--1.5%
Anglogold, Ltd. ....................... 23,560 1,202,625
-----------
MINING & METALS--10.4%
Anglo American Platinum ............... 83,100 2,491,249
Billiton Plc .......................... 1,018,600 4,885,847
South African Iron
& Steel Industry Corp. ................. 317,558 1,049,778
-----------
8,426,874
-----------
MISCELLANEOUS--5.1%
Johnnies Industrial
Corp., Ltd. ............................ 456,468 4,120,121
-----------
16,057,576
-----------
A-1
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) The Southern Africa Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
CONSUMER SERVICES--16.1%
BROADCASTING & CABLE--5.7%
MIH Holdings, Ltd. .................... 707,092 $ 4,583,322
-----------
PRINTING & PUBLISHING--3.9%
Nasionale Pers Beperk,
N shares ............................. 351,000 3,128,342
-----------
RETAIL--GENERAL
MERCHANDISE--6.5%
New Clicks Holdings, Ltd. .............. 1,673,188 2,711,372
Pick `N Pay Stores, Ltd. ............... 1,721,220 2,582,806
-----------
5,294,178
-----------
13,005,842
-----------
CONSUMER STAPLES--5.9%
BEVERAGES--3.8%
South African
Breweries, Ltd. ........................ 326,345 3,067,252
-----------
TOBACCO--2.1%
Rembrandt Group, Ltd. ................. 213,000 1,667,137
-----------
4,734,389
-----------
FINANCIAL SERVICES--20.6%
BANKING--17.1%
ABSA Group, Ltd. ...................... 198,488 749,436
Firstrand Limited ..................... 2,203,000 2,673,873
Nedcor, Ltd. .......................... 175,198 3,213,809
Old Mutual Plc ........................ 1,492,000 3,251,888
Standard Bank Investment
Corp., Ltd. ........................... 1,122,232 3,928,085
-----------
13,817,091
-----------
INSURANCE--1.9%
Alexander Forbes, Ltd. ................ 657,600 1,502,538
-----------
MISCELLANEOUS FINANCE--1.6%
Liberty Life Association
of Africa, Ltd. ........................ 134,858 1,343,991
-----------
16,663,620
-----------
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
MULTI-INDUSTRY
COMPANIES--10.3%
African Lakes Corp. (c) ............... 900,968 $1,168,841
Anglo American Corp.
of South Africa, Ltd. ................ 76,620 4,497,126
Compagnie Financiere
Richemont AG ........................... 119,800 2,663,516
----------
8,329,483
----------
TECHNOLOGY--7.4%
COMPUTER SOFTWARE--7.4%
Dimension Data
Holdings, Ltd. ......................... 579,084 3,002,867
Softline, Ltd. ........................ 2,165,000 2,968,060
----------
5,970,927
----------
UTILITY--6.6%
TELEPHONE UTILITY--6.6%
M-Cell, Ltd. .......................... 2,075,316 5,347,193
----------
Total South African Securities
(cost $52,848,851) ..................... 70,109,030
----------
ZAMBIA--1.0%
CONSUMER STAPLES--0.2%
BEVERAGES--0.2%
National Breweries Plc ................ 2,000,000 136,122
----------
FOOD--0.1%
Zambia Sugar Co., Ltd. ................ 30,720,000 116,806
----------
TOBACCO--0.7%
Rothmans of Pall Mall-
(Zambia) Berhad ........................ 16,079,032 519,665
----------
Total Zambian Securities
(cost $1,162,451) ...................... 772,593
----------
ZIMBABWE--6.0%
CONSUMER STAPLES--1.6%
BEVERAGES--1.6%
Delta Corp., Ltd. ..................... 4,015,139 1,262,953
----------
A-2
<PAGE>
The Southern Africa Fund
================================================================================
Company Shares U.S. $ Value
- --------------------------------------------------------------------------------
CONSUMER SERVICES--4.4%
BROADCASTING & CABLE--4.4%
Econet Wireless
Holdings (b) .................................. 20,000,000 $ 3,564,875
------------
Total Zimbabwean Securities
(cost $2,232,992) ............................ 4,827,828
------------
TOTAL INVESTMENTS--100.6%
(cost $61,973,135) ........................... $ 81,206,283
Other assets less liabilities--(0.6%) ........... (446,885)
------------
NET ASSETS--100% ................................... $ 80,759,398
------------
(a) U.S. Dollar denominated security.
(b) These securities have been segregated to collateralize forward exchange
currency contracts.
(c) Non-income producing security.
See notes to financial statements.
A-3
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999 The Southern Africa Fund
================================================================================
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Investments in securities, at value (cost $61,973,135) .......... $81,206,283
Foreign cash, at value (cost $1,705,333) ........................ 1,700,995
Receivable for investment securities sold ....................... 676,776
Dividends receivable ............................................ 95,225
------------
Total assets ..................................................... 83,679,279
------------
LIABILITIES
Payable for investment securities purchased ..................... 2,184,402
Advisory fee payable ............................................ 147,565
Tender fees payable ............................................. 135,090
Sub-advisory fee payable ........................................ 49,188
Net unrealized depreciation of forward exchange currency contract 22,032
Administrative fee payable ...................................... 12,646
Accrued expenses and other liabilities .......................... 368,958
------------
Total liabilities ................................................ 2,919,881
------------
NET ASSETS ....................................................... $80,759,398
============
COMPOSITION OF NET ASSETS:
Common stock, at par ............................................ $48,057
Additional paid-in capital ...................................... 65,372,141
Distribution in excess of net investment income ................. (91,505)
Accumulated net realized losses on investments and
transactions ................................................... (3,784,890)
Net unrealized appreciation of investments and foreign
currency denominated assets and liabilities .................... 19,215,595
------------
$80,759,398
============
NET ASSET VALUE PER SHARE (based on 4,805,680 shares outstanding) $16.80
======
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-4
<PAGE>
STATEMENT OF OPERATIONS
Year Ended November 30, 1999 The Southern Africa Fund
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C>
Dividends (net of foreign taxes withheld of $41,761) ................... $2,092,786
Interest ............................................................... 92,698 $2,185,484
----------
EXPENSES
Management fee ......................................................... 596,596
Audit and legal ........................................................ 343,413
Sub-advisory fee ....................................................... 199,189
Custodian .............................................................. 185,691
Directors' fees and expenses ........................................... 174,357
Administrative fee ..................................................... 153,979
Reports and notices to shareholders .................................... 66,993
Transfer agency ........................................................ 13,324
Amortization of organization expenses .................................. 3,152
Registration ........................................................... 1,550
Miscellaneous .......................................................... 25,314
----------
Total expenses ......................................................... 1,763,558
---------
Net investment income .................................................. 421,926
---------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS
Net realized loss on investment transactions ............................ (3,627,949)
Net realized loss on foreign currency transactions ...................... (31,083)
Net change in unrealized appreciation/depreciation of:
Investments ............................................................ 30,363,470
Foreign currency denominated assets and liabilities .................... (13,790)
----------
Net gain on investments and foreign currency transactions .............. 26,690,648
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS ............................... $27,112,574
===========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-5
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS The Southern Africa Fund
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1999 1998
---- ----
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C> <C>
Net investment income ............................................................... $421,926 $892,421
Net realized gain (loss) on investments and foreign currency transactions ........... (3,659,032) 400,146
Net change in unrealized appreciation (depreciation) of investments
and foreign currency denominated assets and liabilities ............................ 30,349,680 (24,121,657)
---------- -----------
Net increase (decrease) in net assets from operations ............................... 27,112,574 (22,829,090)
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income ............................................................... (310,672) (892,421)
Distributions in excess of net investment income .................................... -0- (1,624,554)
Net realized gains .................................................................. -0- (15,558,389)
Distribution in excess of net realized gains ........................................ (1,828,878) -0-
Tax return of capital ............................................................... (161,170) -0-
COMMON STOCK TRANSACTIONS
Tender offer (resulting in the redemption of 1,201,420 shares
of its common stock) ................................................................ (17,180,306) -0-
Tender offer costs .................................................................. (149,637) -0-
---------- -----------
Total increase (decrease) ........................................................... 7,481,911 (40,904,454)
NET ASSETS:
Beginning of year ................................................................... 73,277,487 114,181,941
---------- -----------
End of year ......................................................................... $80,759,398 $73,277,487
=========== ===========
</TABLE>
- --------------------------------------------------------------------------------
See notes to financial statements.
A-6
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1999 The Southern Africa Fund
================================================================================
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
statements 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.
Actual results could differ from those estimates. The following is a summary of
significant accounting policies of 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 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 Fund's 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 exchange
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 of investments and foreign currency denominated assets
and liabilities.
3. 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.
4. 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
transactions 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.
5. Dividends and Distributions
Dividends and distributions to shareholders are recorded on the ex-dividend
date. Distributions in excess of net realized capital gains are due primarily to
differing tax treatments for post-October losses. Income and capital gains
distributions are determined
A-7
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) The Southern Africa Fund
================================================================================
in accordance with federal 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 tax classification of distribution and tax return
of capital, resulted in a net decrease in Distribution in excess of net
investment income and additional paid-in capital and a corresponding decrease in
accumulated net realized loss. 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 Manager")
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 invested in securities of
South African issuers.
Under the terms of the Sub-Advisory Agreement, effective May 31, 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
reimburses 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, 1999 relating to shareholder servicing costs.
Under the terms of an Administrative Agreement, the Fund pays Princeton
Administrators, 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 $39,424,193 and $55,116,247,
respectively, for the year ended November 30, 1999. There were no purchases or
sales of U.S. government or government agency obligations for the year ended
November 30, 1999.
At November 30, 1999, the cost of investments for federal income tax purposes
was $62,494,917. Accordingly, gross unrealized appreciation of investments was
$21,291,417 and gross unrealized depreciation of investments was $2,580,051
resulting in net unrealized appreciation of $18,711,366 (excluding foreign
currency transactions).
At November 30 1999, the Fund had a capital loss carryforward of $3,376,645
which will expire in 2007.
Forward Exchange Currency Contracts
The Fund enters into forward exchange currency contracts to hedge its exposure
to changes in foreign currency exchange rates on its foreign portfolio holdings,
to hedge certain firm purchase and sales commitments denominated in foreign
currencies and for investment purposes. A forward exchange currency contract is
a commitment to purchase or sell a foreign currency at a future date at a
negotiated forward rate. The gain or loss arising from the difference between
the original contracts and the closing of such contracts is included in net
realized gains or losses on foreign currency transactions.
A-8
<PAGE>
The Southern Africa Fund
================================================================================
Fluctuations in the value of forward exchange currency contracts are recorded
for financial reporting purposes as unrealized gains or losses by the Fund.
The Fund's custodian will place and maintain cash not available for investment
or other liquid assets in a separate account of the Fund having a value at least
equal to the aggregate amount of the Fund's commitments under forward exchange
currency contracts entered into with respect to position hedges.
Risk may arise from the potential inability of a counterparty to meet the terms
of a contract and from unanticipated movements in the value of foreign
currencies relative to the U.S. dollar.
At November 30, 1999, the Fund had outstanding forward exchange currency
contracts, as follows:
<TABLE>
<CAPTION>
U.S.$
Contract Value on U.S.$
Amount Origination Current Unrealized
(000) Date Value Depreciation
----- ---- ----- ------------
Forward Exchange Currency
- -------------------------
Sale Contract
- -------------
South African Rand
<S> <C> <C> <C> <C>
Settling 1/26/2000 . . . . . . . . 43,162 $6,972,296 $6,994,328 $(22,032)
</TABLE>
- --------------------------------------------------------------------------------
NOTE D: Capital Stock
There are 100,000,000 shares of $.01 par value capital stock authorized. On
June 24, 1999, the Fund purchased and retired 1,201,420 shares of its
outstanding common stock for $14.30 per share pursuant to a tender offer. The
Fund incurred tender offer costs of $149,637 which were charged to additional
paid-in capital.
Of the 4,805,680 shares of Common Stock outstanding at November 30, 1999, the
Investment Manager owned 7,100 shares.
- --------------------------------------------------------------------------------
NOTE E: Concentration of Risk
Investment in securities of foreign companies involves special risks which
include the possibility of future political and economic developments which
could adversely affect the value of such securities.
Moreover, securities of many foreign companies and their markets may be less
liquid and their prices more volatile than those of comparable U.S. companies.
A-9
<PAGE>
FINANCIAL HIGHLIGHTS The Southern Africa Fund
================================================================================
Selected Data For A Share Of Common Stock Outstanding Throughout Each Year
<TABLE>
<CAPTION>
Year Ended November 30,
-----------------------
1999 1998 1997 1996 1995
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year ........ $12.20 $19.01 $20.08 $21.49 $18.34
------ ------ ------ ------ ------
Income From Investment Operations
- ---------------------------------
Net investment income ..................... .08(a) .16 .41 .39 .17
Net realized and unrealized gain (loss) on
investments and foreign currency
transactions ............................ 4.90 (3.96) 1.10 (.30) 4.27
------ ------ ------ ------ ------
Net increase (decrease) in net asset value
from operations ......................... 4.98 (3.80) 1.51 .09 4.44
------ ------ ------ ------ ------
Less: Dividends and Distributions
- ---------------------------------
Dividends from net investment income ...... (.05) (.15) (.34) (.59) (.52)
Distributions in excess of
net investment income ................... -0- (.27) -0- -0- -0-
Distribution from net realized gains
on investments and foreign currency
transactions ............................ -0- (2.59) (2.24) (.91) (.77)
Distribution in excess of net realized
gains on investments and foreign currency
transactions ............................ (.30) -0- -0- -0- -0-
Tax return of capital ..................... (.03) -0- -0- -0- -0-
------ ------ ------ ------ ------
Total dividends and distributions ......... (.38) (3.01) (2.58) (1.50) (1.29)
------ ------ ------ ------ ------
Net asset value, end of year .............. $16.80 $12.20 $19.01 $20.08 $21.49
======== ======== ======= ====== ======
Market value, end of year ................. $13.3125 $10.0625 $15.375 $16.50 $16.75
======== ======== ======= ====== ======
Total Return
- ------------
Total investment return based on: (b)
Market value .............................. 37.53% (18.11)% 9.28% 6.12% 22.90%
Net asset value ........................... 43.15% (19.70)% 11.03% .66% 27.89%
Ratios/Supplemental Data
- ------------------------
Net assets, end of year (000's omitted) ... $80,759 $73,277 $114,182 $120,612 $129,112
Ratio of expenses to average net assets ... 2.39% 2.10% 2.05% 2.04% 2.05%
Ratio of net investment income
to average net assets ................... .57% .95% 2.00% 1.87% .94%
Portfolio turnover rate ................... 55% 86% 46% 62% 41%
</TABLE>
- --------------------------------------------------------------------------------
(a) Based on average shares outstanding.
(b) Total investment return is calculated assuming a purchase of common stock on
the opening of the first day and a sale on the closing of the last day of
the year 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 year.
A-10
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS The Southern Africa Fund
================================================================================
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. (the "Fund"), including the portfolio of investments,
as of November 30, 1999, and the related statements 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 auditing standards generally accepted
in the United States. 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 disclosure in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of November 30, 1999, by correspondence with
the custodian and others. 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, 1999, 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 accounting principles generally accepted in the
United States.
/s/ Ernst & Young LLP
New York, New York
January 14, 2000
- --------------------------------------------------------------------------------
Tax Information (Unaudited)
In order to meet certain requirements of the Internal Revenue Code, we are
advising you that the fund made capital gain distributions of $1,828,878 during
the fiscal year ended November 30, 1999 which are subject to a maximum tax rate
20%.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 2000.
A-11
<PAGE>
PORTFOLIO OF INVESTMENTS
November 30, 1998 The Southern Africa Fund
================================================================================
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
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
----------
MALAWI--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 $740,512) ....................... 889,199
----------
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
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 $1,071,883) ..................... 646,899
----------
SOUTH AFRICA--87.2%
BASIC INDUSTRIES--7.1%
GOLD--2.7%
Anglogold, Ltd. ....................... 40,000 1,954,134
----------
MINING & METALS--4.4%
Billiton Plc ............................. 1,038,000 2,234,514
South African Iron & Steel
Industry Corp. ........................ 4,180,586 1,006,485
----------
3,240,999
----------
5,195,133
----------
CONSUMER SERVICES--11.7%
BROADCASTING & CABLE--2.6%
Electronic Media/Supersports
International Hldgs .................... 1,700,000 1,000,791
M-Web Holdings, Ltd.(a) ............... 400,000 875,143
----------
1,875,934
----------
PRINTING & PUBLISHING--4.9%
Nasionale Pers Beperk,
N shares .............................. 846,100 3,122,415
Perskorgroep, Ltd. ....................... 336,000 501,889
----------
3,624,304
----------
RETAIL-GENERAL
MERCHANDISE--4.2%
New Clicks Holdings, Ltd. ............. 1,178,602 1,139,146
Pick 'N Pay Stores, Ltd. .............. 1,746,200 1,933,233
----------
3,072,379
----------
8,572,617
----------
A-12
<PAGE>
PORTFOLIO OF INVESTMENTS (continued) The Southern Africa Fund
================================================================================
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
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
-----------
19,961,965
-----------
HEALTH CARE--2.4%
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
-----------
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
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
------------
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 $1,162,450) ..................... 961,819
------------
ZIMBABWE--1.4%
CONSUMER STAPLES--0.6%
BEVERAGES--0.6%
Delta Corp. ........................... 1,844,282 406,240
------------
FINANCIAL SERVICES--0.2%
BANKING--0.2%
NMBZ Holdings, Ltd. ................... 525,000 156,081
------------
A-13
<PAGE>
The Southern Africa Fund
================================================================================
Company Shares U.S.$ Value
- --------------------------------------------------------------------------------
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
===========
- --------------------------------------------------------------------------------
(a) Non-income producing security.
(b) U.S. Dollar denominated security.
See notes to financial statements.
A-14
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1998 The Southern Africa Fund
================================================================================
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
============
- --------------------------------------------------------------------------------
See notes to financial statements.
A-15
<PAGE>
STATEMENT OF OPERATIONS
Year Ended November 30, 1998 The Southern Africa Fund
================================================================================
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C>
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>
STATEMENT OF CHANGES IN NET ASSETS
================================================================================
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, November 30,
1998 1997
---- ----
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS
<S> <C> <C>
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-16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1998 The Southern Africa Fund
================================================================================
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
statements 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.
Actual 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 exchange
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 being
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
transactions 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.
A-17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (continued) The Southern Africa Fund
================================================================================
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 federal
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 decrease
in distributions in excess of net investment income, a decrease in accumulated
net realized gain on investment transactions and a corresponding decrease 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 Manager")
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 invested 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
reimburses 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
Administrators, 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,
respectively, 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).
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
A-18
<PAGE>
The Southern Africa Fund
================================================================================
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-19
<PAGE>
FINANCIAL HIGHLIGHTS The Southern Africa Fund
================================================================================
Selected Data For A Share Of Common Stock Outstanding Throughout Each Period
<TABLE>
<CAPTION>
March 7, 1994 (a)
Year Ended November 30, to
-----------------------
1998 1997 1996 1995 November 30, 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 ...................... (.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 .......................... .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 common stock 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 for a period
of less than one year is not annualized.
(d) Annualized.
A-20
<PAGE>
REPORT OF ERNST & YOUNG LLP
INDEPENDENT AUDITORS The Southern Africa Fund
================================================================================
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. 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.
/s/ Ernst & Young LLP
New York, New York
January 14, 1999
- --------------------------------------------------------------------------------
Federal Income Tax Information (Unaudited)
In order to meet certain requirements of the Internal Revenue Code, we are
advising you that the Fund made capital gain distributions of $13,476,714 during
the fiscal year ended November 30, 1998 which are subject to a maximum tax rate
20%.
Shareholders should not use the above information to prepare their tax returns.
The information necessary to complete your income tax returns will be included
with your Form 1099 DIV which will be sent to you separately in January 1999.
A-21
<PAGE>
Exhibit (a)(1)(i)(A)
CONSENT OF INDEPENDENT AUDITORS
We consent to the use of our reports dated January 14, 2000 and January 14, 1999
included in this Issuer Tender Offer Statement (Schedule TO) of The Southern
Africa Fund, Inc.
ERNST & YOUNG LLP
New York, New York
April 25, 2000
<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 April 25, 2000
THE OFFER WILL EXPIRE AT 12:00 MIDNIGHT EASTERN TIME
ON MAY 22, 2000, UNLESS THE OFFER IS EXTENDED
Depositary Telephone Number: (800) 426-5523
Depositary Addresses:
<TABLE>
<CAPTION>
By Registered, Certified or
Express Mail or Overnight
By First Class Mail: Courier: By Hand:
<S> <C> <C>
EquiServe Trust EquiServe Trust Company, Securities Transfer &
Company, N.A. N.A. Reporting Services, Inc.
Attn: Corporate Attn: Corporate Actions c/o EquiServe Trust Company,
Actions 40 Campanelli Drive N.A.
P.O. Box 9573 Braintree, MA 02184 100 William Street, Galleria
Boston, MA 02205-9573 New York, NY 10038
</TABLE>
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.
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> <C>
Total Number of
Share Certificate Shares Represented
Number(s)** by 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>
<PAGE>
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 EquiServe Trust Company, 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 May 22, 2000, 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.
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 May 23,
2000 (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 April
25, 2000, receipt of which is hereby acknowledged, and in this Letter of
Transmittal (which Offer to Purchase and Letter of Transmittal together with
any amendments or supplements thereto collectively 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 EquiServe Trust Company, 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:
[_] Certificate(s) to:
Address(es) ______________________
__________________________________ 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 , 2000
-----------
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 , 2000
<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 240,284 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 (800) 346-7885 (Attention: Gloria Iatridis).
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>
<TABLE>
<CAPTION>
PAYER'S NAME: EquiServe Trust Company, N.A., Depositary
- -------------------------------------------------------------------------------
SUBSTITUTE Part 1--PLEASE PROVIDE YOUR Social Security Number
Form W-9 TIN IN THE BOX AT THE RIGHT or
AND CERTIFY BY SIGNING AND Employer Identification
DATING BELOW Number
-----------------------
------------------------------------------------------
<S> <C> <C>
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
Department of NOT SUBJECT TO BACKUP WITHHOLDING EI-
the Treasury THER BECAUSE (I) I AM EXEMPT FROM
Internal BACKUP WITHHOLDING, (II) I HAVE NOT
Revenue BEEN NOTIFIED BY THE INTERNAL REVENUE
Service SERVICES (THE "IRS") THAT I AM SUB-
JECT TO BACKUP WITHHOLDING AS A RE-
SULT OF UNDERREPORTING INTEREST OR
DIVIDENDS, OR (III) THE IRS HAS NOTI-
FIED ME THAT I AM NO LONGER SUBJECT
TO BACKUP WITHHOLDING. (YOU MUST Part 2
Payer's Request for CROSS OUT ITEM (2) IN THE IMMEDIATELY
Taxpayer Identification PRECEDING SENTENCE IF YOU HAVE BEEN Awaiting TIN [_]
Number (TIN) NOTIFIED BY THE IRS THAT YOU ARE CUR- Please see below.
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)
</TABLE>
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
- -------------------------------------------------------------------------------
Please print or type
- -------------------------------------------------------------------------------
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.)
----------------------------------------------------------------------------
City, province or state, postal code, and country
----------------------------------------------------------------------------
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 information Account number Account type Account number Account type
here (Optional, see
Specific Instructions.)
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
Please Sign Here
- -------------------------------------------------------------------------------
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).
[_] For DIVIDENDS, I am not a U.S. citizen or resident (or I am filing
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)
<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 240,284 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 April 25, 2000. 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 By Hand:
Or Express
By First Class Mail: Mail Or Overnight Securities Transfer &
Courier: Reporting Services, Inc.
EquiServe Trust Company, c/o EquiServe Trust
N.A. EquiServe Trust Company, Company, N.A.
Attn: Corporate Actions N.A. 100 William Street,
P.O. Box 9573 Attn: Corporate Actions Galleria
Boston, MA 02205-9573 40 Campanelli Drive New York, NY 10038
Braintree, MA 02184
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 April 25, 2000 and the related Letter of Transmittal (which
together with any amendments or supplements thereto collectively 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: ________________________, 2000
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 EquiServe Trust
Company, 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: , 2000
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 240,284 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 240,284 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 May 23, 2000 upon the terms and
subject to the conditions set forth in the Offer to Purchase dated April 25,
2000 and the related Letter of Transmittal (which together with any amendments
or supplements thereto collectively constitute the "Offer"). THE OFFER EXPIRES
AT 12:00 MIDNIGHT EASTERN TIME ON MAY 22, 2000, UNLESS EXTENDED (THE
"EXPIRATION DATE"). If the Offer is extended beyond May 22, 2000, 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 April 25, 2000;
(2) Letter of Transmittal to be used to tender all Shares;
(3) Notice of Guaranteed Delivery; and
(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).
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 EquiServe Trust Company, 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 240,284 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 April 25, 2000 of The Southern Africa Fund, Inc. (the "Fund")
and the related Letter of Transmittal pursuant to which the Fund is offering
to purchase 240,284 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 May 23, 2000, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated April 25,
2000 and the related Letter of Transmittal (which together with any amendments
or supplements thereto collectively constitute the "Offer"). THE OFFER EXPIRES
AT 12:00 MIDNIGHT EASTERN TIME ON MAY 22, 2000, UNLESS EXTENDED (THE
"EXPIRATION DATE"). If the Offer is extended beyond May 22, 2000, 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
May 22, 2000 and withdrawal rights expire at 5:00 P.M. Eastern Time on May
24, 2000.
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 240,284 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 EquiServe Trust Company, 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 EXPIRES AT 12:00 MIDNIGHT EASTERN TIME ON MAY 22, 2000,
UNLESS EXTENDED.
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.
Very truly yours,
<PAGE>
Instructions Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 240,284 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 April 25, 2000 and the related Letter of Transmittal
(which together with any amendments or supplements thereto collectively
constitute the "Offer") in connection with the Offer by The Southern Africa
Fund, Inc. (the "Fund") to purchase 240,284 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: , 2000
<PAGE>
Form of Letter to Stockholders Who Have
Requested Information Regarding the Offer by
THE SOUTHERN AFRICA FUND, INC.
To Purchase for Cash 240,284 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 April 25, 2000 of The Southern Africa Fund, Inc. (the "Fund")
and the related Letter of Transmittal pursuant to which the Fund is offering
to purchase 240,284 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 May 23, 2000, upon the terms and
subject to the conditions set forth in the Offer to Purchase dated April 25,
2000 and the related Letter of Transmittal (which together with any amendments
or supplements thereto collectively constitute the "Offer"). THE OFFER EXPIRES
AT 12:00 MIDNIGHT EASTERN TIME ON MAY 22, 2000, UNLESS EXTENDED (THE
"EXPIRATION DATE"). If the Offer is extended beyond May 22, 2000, 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 manager) or Gensec Asset Management (Pty) Ltd.
(the Fund's sub-advisor) 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
May 22, 2000 and withdrawal rights expire at 5:00 P.M. Eastern Time on May
24, 2000.
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 240,284 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 EquiServe Trust Company, 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>
This announcement is not an offer to purchase or a solicitation of an offer to
sell Shares (as defined below). The Offer (as defined below) is made only by the
Offer to Purchase dated April 25, 2000 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 making or accepting the Offer would
violate that jurisdiction's laws. 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 that jurisdiction's
laws.
THE SOUTHERN AFRICA FUND, INC.
1345 Avenue of the Americas
New York, New York 10105
Notice of Offer to Purchase for Cash 240, 284 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 MAY 22, 2000, UNLESS THE OFFER IS EXTENDED.
The Southern Africa Fund, Inc., a Maryland corporation (the "Fund"), is
offering to purchase for cash, upon the terms and subject to the conditions set
forth in the Offer to Purchase dated April 25, 2000 and the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "Offer"), 240,284 of its issued and outstanding
shares of Common Stock, par value $0.01 per share ("Shares"), 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 May 23,
2000, or, if the Offer is extended by the Board of Directors of the Fund, on the
date after the date to which the Offer is extended. The Offer will expire at
12:00 Midnight Eastern Time on May 22, 2000, unless extended. An extension
would be communicated by issuance of a press release or other public
announcement. The NAV as of the close of the regular trading session of the
NYSE on April 20, 2000 was $17.19 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 240,284 Shares are duly tendered prior to the expiration of
the Offer, including any extension (and not timely withdrawn), unless the Fund
determines not to purchase any Shares, the Fund will purchase 240,284 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). The Fund does not contemplate extending the
Offer and increasing the number of Shares covered thereby by reason of more than
240,284 Shares having been tendered. The acceptance of tendered Shares for
payment and purchase will be by action of the Fund's Board of Directors with
notice thereof to the Depositary. The Fund will deposit the aggregate purchase
price with the Depositary, which will make payment to stockholders in accordance
with the Offer. For taxable stockholders, the sale of Shares pursuant to the
Offer will be a taxable transaction for federal income tax purposes and may also
be a taxable transaction under applicable state, local and foreign tax laws.
Stockholders may tender Shares registered in their names only by completing
a Letter of Transmittal and submitting it and any other documents required by
the Letter of Transmittal in proper form to the Depositary at the appropriate
address set forth in the Offer before the Offer expires, including any
extension. Stockholders whose Shares are held by a broker, dealer, commercial
bank, trust company or other nominee (e.g., in "street name") can only tender
their Shares by directing that firm to properly complete, compile and deliver
the necessary documents on a timely basis to the Depositary. Shares tendered
pursuant to the Offer may be withdrawn by written or facsimile notice received
by the Depositary at the appropriate address at any time prior to 5:00 p.m.
Eastern Time on May 24, 2000 (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 Shares tendered have not been accepted for payment by the Fund,
the Shares may also be withdrawn at any time after June 20, 2000. The notice is
to specify the name of the stockholder who tendered the Shares, the number of
Shares being withdrawn (which must be all of the Shares tendered) and, as
regards Share certificates which represent tendered Shares that have been
delivered or otherwise identified to the Depositary, the name of the registered
owner(s) of such Shares if different than the person who tendered the Shares.
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 EquiServe Trust Company, N.A. which will help defray
the costs associated with effecting the Offer.
Requests for copies of the Offer to Purchase, the related Letter of
Transmittal and any other tender offer documents should be directed to the
Distribution Agent at the Distribution Agent's address or telephone number 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 documents from the broker, dealer,
commercial bank, trust company or other nominee that holds their Shares.
Questions and requests for assistance and for current NAV quotations may be
directed to the Depositary at the Depositary's address and telephone number
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. EQUISERVE TRUST COMPANY, 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: (800) 346-7885 Telephone Number: (800) 426-5523
April 25, 2000
