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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13E-4
ISSUER TENDER OFFER STATEMENT
(PURSUANT TO SECTION 13(e)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934)
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
(Name of Issuer)
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
(Name of Person(s) Filing Statement)
COMMON STOCK, PAR VALUE $0.001 PER SHARE
(Title of Class of Securities)
290921-10-5
(CUSIP Number of Class of Securities)
Hal Liebes, Esq.
Senior Vice President
The Emerging Markets Infrastructure Fund, Inc.
One Citicorp Center
153 East 53rd Street
New York, New York 10022
(212) 832-2626
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications on Behalf of the Person(s) Filing Statement)
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Copy To:
Daniel Schloendorn, Esq.
Willkie Farr & Gallagher
787 Seventh Avenue
New York, New York 10019-6099
(212) 728-8000
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MAY 27, 1999
(Date Tender Offer First Published,
Sent or Given to Security Holders)
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CALCULATION OF FILING FEE
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TRANSACTION VALUATION* $30,779,717 AMOUNT OF FILING FEE** $6,155.94
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* Calculated solely for the purpose of determining the filing fee, based upon
the purchase of a maximum of 3,011,714 shares of Common Stock at a price per
share of $10.22, which represents 95% of $10.76, the net asset value per
share as of May 21, 1999.
** Calculated as 1/50th of 1% of the Transaction Valuation.
/ / Check box if any part of the fee is offset as provided by Rule 0-11(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: ________________________________________________________________
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ITEM 1. SECURITY AND ISSUER.
(a) The issuer of the securities to which this Schedule 13E-4 relates is
The Emerging Markets Infrastructure Fund, Inc., a Maryland corporation (the
"Fund"), registered as a non-diversified, closed-end management investment
company under the Investment Company Act of 1940 (the "1940 Act"). The principal
executive office of the Fund is c/o Credit Suisse Asset Management, One Citicorp
Center, 153 East 53rd Street, New York, New York 10022.
(b) This Schedule 13E-4 relates to the offer by the Fund to purchase up to
3,011,714 shares of its outstanding shares of Common Stock, par value $0.001 per
share (the "Shares"), at a price per Share, net to the seller in cash, equal to
95% of the net asset value in U.S. Dollars per Share, as determined by the Fund
as of the close of the regular trading session on the New York Stock Exchange on
the closing date of the offer, which is June 25, 1999, or such later date to
which the offer is extended, upon the terms and subject to the conditions set
forth in the Offer to Purchase, dated May 26, 1999 and in the related Letter of
Transmittal (which together constitute the "Offer"), copies of which are
attached as Exhibit (a)(1) and (a)(2), respectively, to this Schedule 13E-4. As
of May 21, 1999, the Fund had 15,058,569 Shares issued and outstanding. The Fund
has been advised that none of its directors or officers intend to tender any
Shares pursuant to the Offer. The information set forth under "Introduction,"
"The Offer -- 1. Number of Shares; Proration" and "The Offer -- 11. Interests of
Directors and Officers; Transactions and Arrangements Concerning the Shares" in
the Offer to Purchase is incorporated herein by reference.
(c) The information set forth under "Introduction" and "The Offer -- 6.
Price Range of Shares; Dividends" in the Offer to Purchase is incorporated
herein by reference.
(d) Not applicable.
ITEM 2. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
(a) The information set forth under "Introduction," "The Offer -- 7.
Purpose of the Offer" and "The Offer -- 9. Source and Amount of Funds" in the
Offer to Purchase is incorporated herein by reference.
(b) Not applicable.
ITEM 3. PURPOSE OF THE TENDER OFFER AND PLANS OR PROPOSALS OF THE ISSUER OR
AFFILIATE.
(a)-(j) The information set forth under "Introduction," "The Plan," "The
Offer -- 7. Purpose of the Offer," "The Offer -- 9. Source and Amount of Funds,"
"The Offer -- 11. Interests of Directors and Officers; Transactions and
Arrangements Concerning the Shares" and "The Offer -- 12. Certain Legal Matters;
Regulatory Approvals" in the Offer to Purchase is incorporated herein by
reference.
ITEM 4. INTEREST IN SECURITIES OF THE ISSUER.
The information set forth under "The Offer -- 11. Interests of Directors and
Officers; Transactions and Arrangements Concerning the Shares" in the Offer to
Purchase is incorporated herein by reference.
ITEM 5. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO THE ISSUER'S SECURITIES.
The information set forth under "Introduction," "The Offer -- 7. Purpose of
the Offer" and "The Offer -- 11. Interests of Directors and Officers;
Transactions and Arrangements Concerning the Shares" in the Offer to Purchase is
incorporated herein by reference.
ITEM 6. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED.
The information set forth under "Introduction" and "The Offer -- 13. Fees
and Expenses" in the Offer to Purchase is incorporated herein by reference.
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ITEM 7. FINANCIAL INFORMATION.
(a)-(b) The information set forth in the Offer to Purchase under "The Offer
- -- 8. Certain Information Concerning the Fund" and "Exhibit A -- Audited
Financial Statements for the fiscal years ended November 30, 1998 and November
30, 1997" is incorporated herein by reference.
ITEM 8. ADDITIONAL INFORMATION.
(a) Not applicable.
(b) The information set forth under "The Offer -- 12. Certain Legal
Matters; Regulatory Approvals" in the Offer to Purchase is incorporated
herein by reference.
(c) Not applicable.
(d) Not applicable.
(e) The information set forth in the Offer to Purchase and Letter of
Transmittal, copies of which are attached hereto as Exhibit (a)(1) and
(a)(2), respectively, is incorporated herein by reference.
ITEM 9. MATERIAL TO BE FILED AS EXHIBITS.
(a)(1) Form of Offer to Purchase dated May 26, 1999.
(a)(2) Form of Letter of Transmittal (including Certification of Taxpayer
Identification Number on Substitute Form W-9).
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies
and Other Nominees.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6) Form of Letter to Shareholders of the Fund dated May 26, 1999, from
William W. Priest, Jr., Chairman of the Board.
(a)(7) Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9.
(a)(8) Certificate of Foreign Status on Form W-8 and General Instructions
thereto.
(b) Not applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
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SIGNATURE
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this Schedule 13E-4 is true, complete and correct.
THE EMERGING MARKETS
INFRASTRUCTURE FUND, INC.
By: /s/ WILLIAM W. PRIEST, JR.
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William W. Priest, Jr.
Chairman of the Board of Directors
Dated: May 26, 1999
4
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- --------------- ------------------------------------------------------------
<S> <C>
(a)(1) Form of Offer to Purchase dated May 26, 1999.
(a)(2) Form of Letter of Transmittal (including Certification of
Taxpayer Identification Number on Substitute Form W-9).
(a)(3) Form of Notice of Guaranteed Delivery.
(a)(4) Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees.
(a)(5) Form of Letter to Clients for Use by Brokers, Dealers,
Commercial Banks, Trust Companies and Other Nominees.
(a)(6) Form of Letter to Shareholders of the Fund dated May 26,
1999, from William W. Priest, Jr., Chairman of the Board.
(a)(7) Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9.
(a)(8) Certificate of Foreign Status on Form W-8 and General
Instructions thereto.
(b) Not Applicable.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
</TABLE>
5
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OFFER TO PURCHASE FOR CASH
BY
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
UP TO 3,011,714 SHARES OF ITS ISSUED AND OUTSTANDING COMMON STOCK
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THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE
AT THE CLOSE OF REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE,
ON JUNE 25, 1999, UNLESS THE OFFER IS EXTENDED (THE "TERMINATION DATE").
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THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL (WHICH
TOGETHER CONSTITUTE THE "OFFER") ARE NOT CONDITIONED ON ANY MINIMUM NUMBER OF
SHARES BEING TENDERED, BUT ARE SUBJECT TO OTHER CONDITIONS AS OUTLINED HEREIN
AND IN THE LETTER OF TRANSMITTAL.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE EMERGING
MARKETS INFRASTRUCTURE FUND, INC. (THE "FUND"). THE FUND HAS BEEN ADVISED THAT
NO DIRECTOR OR OFFICER OF THE FUND INTENDS TO TENDER ANY SHARES PURSUANT TO THE
OFFER.
IMPORTANT
Any shareholder desiring to tender all or any portion of his shares should
either (1) complete and sign the enclosed Letter of Transmittal or a facsimile
thereof in accordance with the instructions in the Letter of Transmittal, have
his signature thereon guaranteed if required by Instruction 1 of the Letter of
Transmittal and mail or deliver the Letter of Transmittal or such facsimile with
his certificate(s) evidencing his tendered shares if such shareholder has been
issued physical certificates and any other required documents to the depositary
for the Offer, Boston Equiserve (the "Depositary"), or follow the procedure for
book-entry tender of shares set forth in Section 4 of this Offer to Purchase, or
(2) ask his broker, dealer, commercial bank, trust company or other nominee to
effect the transaction for him. shareholders having shares registered in the
name of a broker, dealer, commercial bank, trust company or other nominee must
contact such broker, dealer, commercial bank, trust company or other nominee if
they desire to tender their shares so registered. A shareholder who desires to
tender shares and whose certificates for such shares are not immediately
available should tender such shares by following the procedures for guaranteed
delivery set forth in Section 4 hereof.
Questions and requests for assistance may be directed to Georgeson &
Company, Inc., the information agent for the Offer (the "Information Agent"), at
the address and telephone number set forth on the back cover of this Offer to
Purchase. Requests for additional copies of this Offer to Purchase and the
Letter of Transmittal may be directed to the Information Agent or to brokers,
dealers, commercial banks or trust companies.
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<S> <C>
The Information Agent for the Offer is: GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect:
(212) 440-9800
All Others Call Toll-Free:
(800) 223-2064
</TABLE>
May 26, 1999
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
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<C> <S> <C>
Introduction............................................... 2
The Plan................................................... 3
The Offer.................................................. 4
1. Number of Shares; Proration....................... 4
2. Acceptance for Payment and Payment for Shares..... 5
3. Withdrawal Rights................................. 6
4. Procedure for Tendering Shares.................... 7
5. Certain Federal Income Tax Consequences........... 9
6. Price Range of Shares; Dividends.................. 10
7. Purpose of the Offer.............................. 11
8. Certain Information Concerning the Fund........... 11
9. Source and Amount of Funds........................ 12
10. Certain Conditions of the Offer................... 14
11. Interest of Directors and Officers; Transactions
and Arrangements Concerning the Shares........... 15
12. Certain Legal Matters; Regulatory Approvals....... 15
13. Fees and Expenses................................. 16
14. Miscellaneous..................................... 16
Schedule I -- Schedule of Transactions in Shares
During the Past 40 Business Days
Exhibit A -- Audited Financial Statements for the Fiscal
Years Ended November 30, 1998 and November 30,
1997
</TABLE>
1
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To All Holders of Common Stock of
The Emerging Markets Infrastructure Fund, Inc.:
INTRODUCTION
The Emerging Markets Infrastructure Fund, Inc., a Maryland corporation (the
"Fund") registered under the Investment Company Act of 1940, as amended (the
"1940 Act"), as a closed-end, non-diversified management investment company,
hereby offers to purchase up to 3,011,714 of its outstanding shares of Common
Stock, par value $0.001 per share (the "Shares"), at a price per Share (the
"Purchase Price"), net to the seller in cash, equal to 95% of the net asset
value in U.S. Dollars ("NAV") per Share, as determined by the Fund as of the
close of regular trading on The New York Stock Exchange (the "NYSE"), on June
25, 1999 or such later date to which the offer is extended (the "Termination
Date"), upon the terms and subject to the conditions set forth in this Offer to
Purchase and in the related Letter of Transmittal (which together constitute the
"Offer"). Tendering shareholders will not be obliged to pay brokerage fees or
commissions or, except as set forth in Instruction 6 of the Letter of
Transmittal, stock transfer taxes on the purchase of Shares by the Fund pursuant
to the Offer. The Fund will pay all charges and expenses of Boston Equiserve
(the "Depositary") and Georgeson & Company, Inc. (the "Information Agent"). The
Fund expects to mail materials relating to the Offer to record holders on or
about May 27, 1999.
THIS OFFER TO PURCHASE AND THE ACCOMPANYING LETTER OF TRANSMITTAL ARE NOT
CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING TENDERED, BUT ARE SUBJECT TO
OTHER CONDITIONS AS OUTLINED HEREIN AND IN THE LETTER OF TRANSMITTAL.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THE OFFER OTHER THAN THOSE CONTAINED HEREIN
AND IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MAY NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND.
THE FUND HAS BEEN ADVISED THAT NO DIRECTOR OR OFFICER OF THE FUND INTENDS TO
TENDER ANY SHARES PURSUANT TO THE OFFER.
The Shares are traded on the NYSE. On May 17, 1999, the last trading day
before the Fund's announcement of the Board of Directors' approval of the Offer,
and on May 21, 1999, the last reported sales prices of the Shares on the NYSE
were $9.125 and $8.8125, respectively. SHAREHOLDERS ARE URGED TO OBTAIN CURRENT
MARKET QUOTATIONS. See "The Offer--6. Price Range of Shares; Dividends."
As of May 21, 1999, the Fund had issued and outstanding 15,058,569 Shares,
and the NAV was $10.76 per share. The Fund does not expect that the number of
Shares issued and outstanding will be materially different on the Termination
Date. The 3,011,714 Shares that the Fund is inviting shareholders to tender
pursuant to the Offer represent approximately 20% of the Shares outstanding as
of May 21, 1999. Shareholders may contact Georgeson, the Fund's Information
Agent, to obtain current NAV quotations for the Shares.
Any Shares acquired by the Fund pursuant to the Offer will become authorized
but unissued shares and will be available for issuance by the Fund without
further shareholder action (except as required by applicable law).
THE BOARD OF DIRECTORS OF THE FUND (THE "BOARD") HAS APPROVED THE MAKING OF
THE OFFER. HOWEVER, NEITHER THE FUND NOR ITS BOARD OF DIRECTORS NOR THE FUND'S
INVESTMENT ADVISER MAKES ANY RECOMMENDATION TO ANY SHAREHOLDER AS TO WHETHER TO
TENDER ALL OR ANY SHARES. THE FUND HAS BEEN ADVISED THAT NO DIRECTOR OR OFFICER
OF THE FUND INTENDS TO TENDER ANY SHARES PURSUANT TO THE OFFER. SHAREHOLDERS ARE
URGED TO EVALUATE ALL INFORMATION IN THE OFFER AND CONSULT THEIR OWN INVESTMENT
AND TAX ADVISERS. SHAREHOLDERS MUST MAKE THEIR
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OWN DECISION AS TO WHETHER TO TENDER SHARES AND, IF SO, HOW MANY SHARES TO
TENDER AND THEY SHOULD REVIEW "THE OFFER -- 1. NUMBER OF SHARES; PRORATION"
BELOW BEFORE DETERMINING HOW MANY SHARES TO TENDER.
THE PLAN
The Offer is designed to provide shareholders with an attractive opportunity
to sell Shares at a price above current market prices.
Over the past few months, a number of shareholders of the Fund have
expressed their desire to obtain liquidity for their Shares at a price closer to
net asset value than current market prices. A proposal recommending that the
Board take action to realize NAV was submitted by a shareholder for inclusion in
the Fund's proxy statement in connection with the Fund's 1999 annual
shareholders' meeting. The same shareholder solicited proxies in favor of the
election of two candidates to the Board in opposition to the Board's nominees,
and also in support of the other shareholder proposals included in the Fund's
proxy statement, including a proposal to terminate the advisory agreement
between the Fund and its investment adviser, Credit Suisse Asset Management
("CSAM"). Although the proposals submitted by the shareholders, including the
proposal to realize net asset value, were not formally voted upon at the annual
meeting because the proponents did not attend the meeting, the issues raised in
connection with the 1999 annual meeting drew significant interest from
shareholders, and the Board has been and remains committed to respond to such
interest in an appropriate manner.
As noted below in "The Offer--6. Price Range of Shares; Dividends," the
Shares have been trading at substantial discounts from NAV for an extended
period. The Board has been reviewing this market discount on a regular basis
with a view towards reducing the disparity between NAV and market price while at
the same time continuing to pursue the Fund's mandate of investing in
infrastructure companies in emerging markets. In October 1998, the Board
implemented a share repurchase program which was subsequently enhanced by the
Board in February, 1999 (the "Share Repurchase Program"). The Fund was
authorized to repurchase in open market transactions at prevailing market prices
no less than 10% and no more than 15% (on a rolling twelve month basis) of the
Fund's Shares. The Fund announced that it was committed to actively seeking to
repurchase its outstanding Shares (subject to the 15% annual cap and subject to
applicable legal requirements) whenever the discount to NAV was 15% or more. The
Share Repurchase Program was intended both to provide additional liquidity to
those shareholders who wished to sell their Shares and to enhance the NAV of the
Shares held by those shareholders who wished to maintain their investment. At
the time the Fund's proxy statement relating to the 1999 annual shareholders'
meeting was prepared and sent, the Board believed that the enhanced Share
Repurchase Program would provide sufficient liquidity and other benefits to make
a tender offer unnecessary. As of May 17, 1999, the Fund has repurchased
1,048,600 of its Shares under the Share Repurchase Program, representing
approximately 7% of its issued and outstanding Shares, with a $ 0.13 per Share
accretive (positive) impact to NAV.
As certain shareholders continued to express interest in obtaining greater
liquidity for their Shares and others expressed support for the Fund's current
closed-end format, the Board resolved that it was in the best interest of the
Fund and its shareholders to offer shareholders an opportunity to sell a greater
amount of Shares at a higher price than they were able to through the Share
Repurchase Program, while maintaining the closed-end format. At a meeting held
on May 11, 1999, the Board approved in principle a self-tender for 25% of the
outstanding Shares of the Fund at a per Share price equal to 90.1% of NAV.
However, after further analysis and discussions with several major shareholders
of the Fund, at a meeting held on May 17, 1999 the Board resolved to increase
the self-tender purchase price to 95% of NAV, but to reduce the number of shares
subject to repurchase to 20% of the Fund's outstanding Shares, as more fully
described herein.
The Board concluded that, priced at 95% of NAV, the Offer presented an
attractive opportunity to those shareholders who are seeking liquidity for their
Shares. The Board believes the increased Offer
3
<PAGE>
price may also benefit shareholders who elect not to tender or whose tender is
only partially accepted, by demonstrating that the Board, when appropriate, will
provide an opportunity for shareholders to sell Shares at a price that is close
to NAV. The Board believes that its decision in October to authorize market
repurchases of Shares, and its decision earlier this year to enhance such Share
Repurchase Program, have had an ameliorative impact on the market discount
beyond the strictly numerical accretive effect to the NAV or the effect on
supply and demand. The Board believes the Offer may have a similar effect.
The Board further believes that the 95% of NAV Offer price strikes an
appropriate balance between achieving some accretive benefit for continuing
shareholders and fixing a price that is close to net asset value for
shareholders that participate in the Offer. The Fund estimates that the Offer
will result in an accretive (positive) benefit to the Fund's NAV of
approximately $0.13 per Share, which more than offsets the Offer transaction
costs and any increase in the Fund's expense ratio resulting from a decrease in
the size of the Fund. The Board also believes that, as modified, the Offer has
less potential for disrupting the Fund's investment program and is therefore
protective of the interests of those shareholders who wish to maintain their
investment and have the Fund pursue its long-term investment objective. When
compared to the initial proposal, the Offer will enable the Fund to preserve
approximately $6 million more for investment in infrastructure companies in
emerging markets.
In light of the Offer, the Board of Directors has suspended the operation of
the Share Repurchase Program, and will reevaluate its continued advisability
following the completion of the Offer.
THE OFFER
1. NUMBER OF SHARES; PRORATION. Upon the terms and subject to the
conditions of the Offer, the Fund will accept for payment and pay for up to
3,011,714 outstanding Shares validly tendered on or before the Termination Date
and not theretofore withdrawn in accordance with Section 3 of this Offer to
Purchase. The term "Termination Date" means the close of regular trading on the
NYSE, on June 25, 1999, unless and until the Fund, in its sole discretion, shall
have extended the period of time for which the Offer is open, in which event the
term "Termination Date" shall mean the latest time and date at which the Offer,
as so extended by the Fund, shall expire. For purposes of the Offer, a "business
day" means any day other than a Saturday, Sunday or Federal holiday and consists
of the time period from 12:01 A.M. through 12:00 Midnight, New York City time.
The Offer is not conditioned on any minimum number of Shares being tendered.
If more than 3,011,714 Shares are validly tendered on or before the
Termination Date and not withdrawn, the Fund will, upon the terms and subject to
the conditions of the Offer, accept for payment 3,011,714 Shares as follows: (i)
all Shares validly tendered before the Termination Date by any shareholder who
owned beneficially, as of the close of business on June 25, 1999, an aggregate
of fewer than 100 Shares ("Odd Lot Shares") and who tenders all of such Shares
and completes the box captioned "Odd Lots" on the Letter of Transmittal and, if
applicable, the Notice of Guaranteed Delivery, will be purchased; and (ii) other
Shares validly tendered before the Termination Date will be purchased on a pro
rata basis (with appropriate adjustments to avoid purchases of fractional
Shares). If not more than 3,011,714 Shares are validly tendered on or before the
Termination Date and not withdrawn, the Fund will, upon the terms and subject to
the conditions of the Offer, accept for payment all such Shares.
Because of the difficulty of determining the precise number of Shares
validly tendered and not withdrawn and as a result of the "Odd Lots" procedure
outlined above, if proration is required, the Fund expects that announcement of
the final results of proration may occur significantly after the Termination
Date. Preliminary results of proration will be announced by press release as
promptly as
4
<PAGE>
practicable. Holders of Shares may obtain such preliminary and final information
from the Depositary or the Information Agent and may be able to obtain such
information from their brokers.
The Fund expressly reserves the right, at any time and from time to time, to
extend the period of time during which the Offer is open by giving oral or
written notice of such extension to the Depositary. There cannot be any
assurance that the Fund will exercise such right to extend the Offer. The Fund
expressly reserves the right (i) to amend the Offer or to delay acceptance for
payment of or payment for any Shares, or to terminate the Offer by giving notice
of such termination to the Depositary, and not to accept for payment or pay for
any Shares not theretofore accepted for payment or paid for, upon the occurrence
of any of the conditions specified in Section 13 and (ii) at any time and from
time to time, to amend the Offer in any respect. Any such extension, termination
or amendment will be followed as promptly as practicable by public announcement
thereof, such announcement in the case of an extension to be issued not later
than 9:00 A.M., New York City time, on the next business day after the
previously scheduled Termination Date. The manner in which the Fund will make
such public announcement may, if appropriate, be limited to a release to the Dow
Jones News Service. The reservation by the Fund of the right to delay acceptance
for payment of or payment for any Shares is subject to the provisions of
applicable law, which require that the Fund pay the consideration offered or
return the Shares deposited by or on behalf of shareholders promptly after
termination or withdrawal of the Offer.
Shareholders should consider the relative costs of tendering Shares at a 5%
discount to NAV pursuant to the Offer or selling Shares at the market price with
the associated transaction costs.
If the Fund shall decide to increase or decrease the consideration offered
in the Offer to holders of Shares, to increase by more than two percent of the
outstanding Shares the percentage being sought, or to decrease the number of
Shares being sought, and if at the time that notice of such increase or decrease
is first published, sent or given to holders of Shares in the manner specified
above, the Offer is scheduled to expire at any time earlier than the expiration
of a period ending on the tenth business day from, and including, the date that
such notice is first so published, sent or given, the Offer will be extended
until the expiration of such period of ten business days. If the Fund waives any
material condition to the Offer, or amends the Offer in any other material
respect, and if at the time that notice of such waiver or amendment is first
published, sent or given to holders of Shares in the manner specified above, the
Offer is scheduled to expire at any time earlier than the expiration of a period
ending on the fifth business day from, and including, the date that such notice
is first so published, sent or given, the Offer will be extended until the
expiration of such period of five business days.
This Offer to Purchase and the related Letter of Transmittal and other
relevant materials will be mailed to record holders of Shares and will be
furnished to brokers, banks and similar persons whose names, or the names of
whose nominees, appear on the shareholder lists or, if applicable, who are
listed as participants in a clearing agency's security position listing, for
subsequent transmittal to beneficial owners of Shares by the Fund.
2. ACCEPTANCE FOR PAYMENT AND PAYMENT FOR SHARES. Upon the terms and
subject to the conditions of the Offer (including, if the Offer is extended or
amended, the terms and conditions of any such extension or amendment), the Fund
will accept for payment, and will pay for, Shares validly tendered on or before
the Termination Date and not properly withdrawn in accordance with Section 3
(including Shares validly tendered and not withdrawn during any extension of the
Offer, if the Offer is extended, subject to the terms and conditions of such
extension) as soon as practicable after the Termination Date. In all cases,
payment for Shares accepted for payment pursuant to the Offer will be made only
after timely receipt by the Depositary of (i) certificates for such Shares (or
timely confirmation (a "Book-Entry Confirmation") of the book-entry transfer of
such Shares into the Depositary's account at The Depository Trust Company, the
Midwest Securities Trust Company or the Philadelphia Depository Trust Company
(collectively, the "Book-Entry Transfer Facilities"), pursuant to the procedures
set forth in Section 4, (ii) a properly completed and duly executed Letter of
Transmittal (or
5
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facsimile thereof) and (iii) any other documents required by the Letter of
Transmittal. The Fund expressly reserves the right, in its sole discretion, to
delay the acceptance for payment of, or payment for, Shares, in order to comply,
in whole or in part, with any applicable law. Any such delays will be effected
in compliance with Rule 14e-1(c) under the Exchange Act (relating to the
purchaser's obligation to pay for or return tendered Shares promptly after the
termination of withdrawal of the Offer).
All Odd Lot Shares properly tendered and not withdrawn prior to the
Termination Date will be accepted before proration, if any, of the purchase of
other tendered Shares. This preference is not available to holders of 100 or
more Shares, even if such holders have separate stock certificates for fewer
than 100 Shares. A purchase of Odd Lot Shares pursuant to the Offer will reduce
the costs to the Fund of servicing the accounts of holders of Odd Lot Shares.
For purposes of the Offer, the Fund will be deemed to have accepted for
payment, and thereby purchased, tendered Shares properly tendered to the Fund
and not withdrawn, if, as and when the Fund gives oral or written notice to the
Depositary of its acceptance for payment of the tenders of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the aggregate purchase price therefor with the Depositary, which will act as
agent for the tendering shareholders for purposes of receiving payment from the
Fund and transmitting payment to tendering shareholders. Under no circumstances
will the Fund pay interest on the purchase price of the Shares to be paid by the
Fund, regardless of any delay in making such payment.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer for any reason, or are not paid for because of
invalid tender, or if certificates are submitted for more Shares than are
tendered (i) certificates for such unpurchased Shares will be returned, without
expense to the tendering shareholder, as soon as practicable following
expiration or termination of the Offer, or (ii) in the case of Shares tendered
by book-entry transfer of such Shares into the Depositary's account at a
Book-Entry Transfer Facility as described below in "4. Procedure for Tendering
Shares," such Shares will be credited to an account maintained within such
Book-Entry Transfer Facility, or (iii) in the case of uncertificated Shares held
by the Fund's transfer agent pursuant to the Investlink-TM- Program will be
returned to the Investlink-TM- Program account maintained by the transfer agent.
If the Fund is delayed in its acceptance for payment of or in its payment
for Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Fund's rights under this
Offer (but subject to compliance with Rule 14e-1(c) under the Exchange Act), the
Depositary may, nevertheless, on behalf of the Fund, retain tendered Shares, and
such Shares may not be withdrawn except to the extent tendering shareholders are
entitled to withdrawal rights as described below in "3. Withdrawal Rights."
The per Share consideration paid to any shareholder pursuant to the Offer
will equal 95% of the Share's NAV (a 5% discount) as of the close of regular
trading on the NYSE, on June 25, 1999, or such later date to which the Offer is
extended. Tendering Shareholders will not be obliged to pay brokerage
commissions, fees, or except in the circumstances set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares by the Fund.
The Fund normally calculates the NAV of its Shares each business day at the
close of regular trading on the NYSE. On May 21, 1999 the NAV was $10.76 per
Share. The Shares are listed on the NYSE. On May 21, 1999, the last sales price
at the close of regular trading on the NYSE was $8.8125 per Share. The NAV of
the Fund's Shares will be available from the Fund's Information Agent.
3. WITHDRAWAL RIGHTS. Tenders of Shares made pursuant to the Offer may be
withdrawn at any time prior to the Termination Date. After the Termination Date
all tenders made pursuant to the Offer are irrevocable.
To be effective, a written, telegraphic, telex or facsimile notice of
withdrawal must be timely received by the Depositary at one of its addresses set
forth on the back cover of this Offer to Purchase.
6
<PAGE>
Any notice of withdrawal must specify the name of the person having tendered the
Shares to be withdrawn, the number of Shares to be withdrawn and the name of the
registered holder, if different from the name of the person who tendered the
shares. If certificates for Shares have been delivered or otherwise identified
to the Depositary, then, before the physical release of such certificates, the
serial numbers shown on such certificates must be submitted to the Depositary
and the signatures on the notice of withdrawal must be guaranteed by a firm
which is a member of a national securities exchange or of the National
Association of Securities Dealers, Inc. (the "NASD") or by a commercial bank or
trust company having an office or correspondent in the United States
(collectively, "Eligible Institutions"), unless such Shares have been tendered
for the account of any Eligible Institution. If Shares have been delivered
pursuant to the procedures for book-entry delivery as set forth in "4. Procedure
for Tendering Shares," any notice of withdrawal must also specify the name and
the number of the account at the appropriate Book-Entry Transfer Facility to be
credited with the withdrawn Shares and otherwise comply with such Book-Entry
Transfer Facility's procedures. Withdrawal of tenders of Shares may not be
rescinded, and any Shares properly withdrawn will be deemed not to be validly
tendered for purposes of the Offer. Withdrawn Shares may, however, be retendered
by repeating one of the procedures described in "4. Procedure for Tendering
Shares" at any time before the Termination Date.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Fund, in its sole discretion,
whose determination shall be final and binding. Neither the Fund, the Fund's
investment adviser, the Information Agent, the Depositary nor any other person
will be under any duty to give notification of any defects or irregularities in
any notice of withdrawal or to incur any liability for failure to give any such
notification.
If the Fund is delayed in its acceptance for payment of Shares, or is unable
to accept for payment Shares tendered pursuant to the Offer, for any reason,
then, without prejudice to the Fund's rights under this Offer, the Depositary
may, on behalf of the Fund, retain tendered Shares, and such Shares may not be
withdrawn except to the extent that tendering Shareholders are entitled to
withdrawal rights as set forth in this Section 3.
4. PROCEDURE FOR TENDERING SHARES. Shareholders having Shares that are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee should contact such firm to tender their Shares. To tender Shares
validly pursuant to the Offer, a shareholder must cause a properly completed and
duly executed Letter of Transmittal (or facsimile thereof), with any required
signature guarantees and any other required documents, to be received by the
Depositary at one of its addresses set forth on the back cover of this Offer and
must either cause certificates for tendered Shares to be received by the
Depositary at one of such addresses or cause such Shares to be delivered
pursuant to the procedures for book-entry delivery set forth below (and a
confirmation of receipt of such delivery to be received by the Depositary), in
each case before the Termination Date, or (in lieu of the foregoing) such
shareholder must comply with the guaranteed delivery procedure set forth below.
The Fund's transfer agent holds Shares in uncertificated form for certain
shareholders pursuant to the Fund's dividend reinvestment plan. Shareholders may
tender such uncertificated Shares by completing the appropriate section of the
Letter of Transmittal or Notice of Guaranteed Delivery.
The Depositary will establish accounts with respect to the Shares at the
Book-Entry Transfer Facilities for purposes of the Offer within two business
days after the date of this Offer. Any financial institution that is a
participant in any of the Book-Entry Transfer Facilities' systems may make book-
entry delivery of the Shares by causing such Book-Entry Transfer Facility to
transfer such Shares into the Depositary's account in accordance with such
Book-Entry Transfer Facility's procedure for such transfer and causing a
confirmation of receipt of such delivery to be received by the Depositary. The
Book Entry Transfer Facility may charge the account of such financial
institution for tendering Shares on behalf of shareholders. Although delivery of
Shares may be effected through book-entry transfer into the Depositary's account
at a Book-Entry Transfer Facility, the Letter of Transmittal (or
7
<PAGE>
facsimile thereof), with any required signature guarantees and any other
required documents, must, in any case, be transmitted to and received by the
Depositary at one of its addresses set forth on the back cover of this Offer
before the Termination Date, or the tendering shareholder must comply with the
guaranteed delivery procedure described below.
DELIVERY OF DOCUMENTS TO A BOOK ENTRY TRANSFER FACILITY IN ACCORDANCE WITH
SUCH BOOK ENTRY TRANSFER FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO
THE DEPOSITARY.
Signatures on all Letters of Transmittal must be guaranteed by an Eligible
Institution, except in cases where Shares are tendered (i) by a registered
holder of Shares who has not completed either the box entitled "Special Payment
Instructions" or the box entitled "Special Delivery Instructions" on the Letter
of Transmittal or (ii) for the account of an Eligible Institution. See
"Instructions--1. Guarantee of Signatures" in the Letter of Transmittal. If the
certificates are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made to a person other than the
registered owner of the certificates surrendered, then the certificates must be
endorsed or accompanied by appropriate stock powers, in either case signed
exactly as the name or names of the registered owner or owners appear on the
certificates, with the signature(s) on the certificates or stock powers
guaranteed as aforesaid. See "Instructions--6. Transfer Taxes" in the Letter of
Transmittal.
THE METHOD OF DELIVERY OF ALL REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK
OF EACH SHAREHOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT
REQUESTED, PROPERLY INSURED, IS RECOMMENDED.
Unless an exemption applies under the applicable law and regulations
concerning "backup withholding" of federal income tax, the Depositary will be
required to withhold, and will withhold, 31% of the gross proceeds otherwise
payable to a shareholder pursuant to the Offer if the shareholder does not
provide his taxpayer identification number (social security number or employer
identification number) and certify that such number is correct, and that he is
not subject to backup withholding. Each tendering shareholder should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal, so as to provide the information and certification
necessary to avoid backup withholding, unless an applicable exemption exists and
is proved in a manner satisfactory to the Fund and the Depositary. Foreign
shareholders who have not previously submitted a Form W-8 to the Fund must do so
in order to avoid backup withholding. If the Fund's purchase of Shares were
treated as a dividend rather than an exchange with respect to a tendering
shareholder, such shareholder may be subject to backup withholding if the
Internal Revenue Service so advised the Fund, or if such shareholder failed to
certify that such Shareholder is not subject to backup withholding. See "5.
Certain Federal Income Tax Consequences" above.
If a shareholder desires to tender Shares pursuant to the Offer and such
shareholder's certificates are not immediately available or such shareholder
cannot deliver the certificates and all other required documents to the
Depositary before the Termination Date, such Shares may nevertheless be
tendered, provided that all of the following conditions are satisfied:
(a) such tenders are made by or through an Eligible Institution;
(b) a properly completed and duly executed Notice of Guaranteed
Delivery, substantially in the form provided by the Fund, is received by the
Depositary as provided below on or before the Termination Date; and
(c) the certificates for all tendered Shares, in proper form for
transfer (or a Book-Entry Confirmation with respect to all such tendered
Shares), together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof) with any required signature guarantees
and all other documents required by the Letter of Transmittal are received
by the Depositary within three business days after the Termination Date.
The Notice of Guaranteed Delivery may be delivered by hand or transmitted by
telegram, telex, facsimile transmission or mail to the Depositary and must
include a guarantee by an Eligible Institution in the form set forth in such
Notice.
8
<PAGE>
In all cases, payment for Shares tendered and accepted for payment pursuant
to the Offer will be made only after timely receipt by the Depositary of
certificates for such Shares (or a Book Entry Confirmation of such Shares), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal.
It is a violation of Section 10(b) of the Exchange Act, and Rule 10b-4
thereunder, for a person to tender Shares for his own account unless the person
so tendering (i) owns such Shares or (ii) owns other securities convertible into
or exchangeable for such Shares or owns an option, warrant or right to purchase
such Shares and intends to acquire such Shares for tender by conversion,
exchange or exercise of such option, warrant or right. Section 10(b) of the
Exchange Act and Rule 10b-4 thereunder provide a similar restriction applicable
to the tender or guarantee of a tender on behalf of another person. The valid
tender of Shares pursuant to one of the procedures described above will
constitute a binding agreement between the tendering shareholder and the Fund
upon the terms and subject to the conditions of the Offer, including the
tendering shareholder's representation, warranty and agreement that (i) such
shareholder owns, and at the expiration of the Offer will own, within the
meaning of Rule 10b-4 under the Exchange Act, the Shares being tendered and (ii)
the tender of such Shares complies with Rule 10b-4.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for payment of any tender of Shares will be determined
by the Fund, in its sole discretion, whose determination shall be final and
binding. The Fund reserves the absolute right to reject any and all tenders
determined by it not to be in proper form or the acceptance for payment of which
may, in the opinion of its counsel, be unlawful. The Fund also reserves the
absolute right to waive any of the conditions of the Offer or any defect or
irregularity in the tender of any Shares of any particular Shareholder whether
or not similar defects or irregularities are waived in the case of other
Shareholders. None of the Fund, the Fund's investment adviser, the Depositary,
the Information Agent or any other person will be under any duty to give
notification of any defects or irregularities in tenders or shall incur any
liability for failure to give any such notification. The Fund's interpretation
of the terms and conditions of the Offer (including the Letter of Transmittal
and of the instructions thereto) will be final and binding.
5. CERTAIN FEDERAL INCOME TAX CONSEQUENCES.
THE U.S. FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR
GENERAL INFORMATION ONLY. IN VIEW OF THE INDIVIDUAL NATURE OF TAX CONSEQUENCES,
EACH SHAREHOLDER IS URGED TO CONSULT HIS TAX ADVISOR WITH RESPECT TO THE TAX
CONSEQUENCES TO HIM OF THE OFFER, INCLUDING THE EFFECTS OF STATE, LOCAL, FOREIGN
AND OTHER TAX LAWS AND OF CHANGES IN THE TAX LAWS.
The sale of Shares pursuant to the Offer will be a taxable transaction for
federal income tax purposes, either as a "sale or exchange," or under certain
circumstances, as a "dividend." Under Section 302(b) of the Internal Revenue
Code of 1986, as amended (the "Code"), a sale of Shares pursuant to the Offer
generally will be treated as a "sale or exchange" if the receipt of cash by the
Shareholder: (a) results in a "complete termination" of the Shareholder's
interest in the Fund, (b) is "substantially disproportionate" with respect to
the Shareholder, or (c) is "not essentially equivalent to a dividend" with
respect to the Shareholder. In determining whether any of these tests has been
met, Shares actually owned, as well as Shares considered to be owned by the
Shareholder by reason of certain constructive ownership rules set forth in
Section 318 of the Code, generally must be taken into account. If any of these
three tests for "sale or exchange" treatment is met, a Shareholder will
recognize gain or loss equal to the difference between the price paid by the
Fund for the Shares purchased in the Offer and the Shareholder's adjusted basis
in such Shares. If such Shares are held as a capital asset, the gain or loss
will be capital gain or loss. The maximum tax rate applicable to net capital
gains recognized by individuals and other non-corporate taxpayers is (i) the
same as the applicable ordinary income rate for capital assets held for one year
or less or (ii) 20% for capital assets held for more than one year.
9
<PAGE>
If none of the tests set forth in Section 302(b) of the Code is met, amounts
received by a Shareholder who sells Shares pursuant to the Offer will be taxable
to the Shareholder as a "dividend" to the extent of such Shareholder's allocable
share of the Fund's current or accumulated earnings and profits. To the extent
that amounts received exceed such Shareholder's allocable share of the Fund's
current and accumulated earnings and profits, such excess will constitute a
non-taxable return of capital (to the extent of the Shareholder's adjusted basis
in the Shares sold pursuant to the Offer) and any amounts in excess of the
Shareholder's adjusted basis will constitute taxable gain. Thus, a Shareholder's
adjusted basis in the Shares sold will not reduce the amount of the "dividend."
Any remaining adjusted basis in the Shares tendered to the Fund will be
transferred to any remaining Shares held by such Shareholder. In addition, if a
tender of Shares is treated as a "dividend" to a tendering Shareholder, a
constructive dividend under Section 305(c) of the Code may result to a non-
tendering Shareholder whose proportionate interest in the earnings and assets of
the Fund has been increased by such tender. The Fund believes, however, that the
nature of the repurchase will be such that the sale of Shares pursuant to the
Offer will normally satisfy the test for a sale that is "not essentially
equivalent to a dividend" and therefore will qualify for "sale or exchange"
treatment (as opposed to "dividend" treatment).
FOREIGN SHAREHOLDERS. Any payments to a tendering Shareholder who is a
nonresident alien individual, a foreign trust or estate or a foreign corporation
that does not hold his, her or its shares in connection with a trade or business
conducted in the United States (a "foreign Shareholder") that are treated as
dividends for U.S. federal income tax purposes under the rules set forth above,
will be subject to U.S. withholding tax at the rate of 30% (unless a reduced
rate applies under an applicable tax treaty). A tendering foreign Shareholder
who realizes a capital gain on a tender of Shares will not be subject to U.S.
Federal income tax on such gain, unless the shareholder is an individual who is
physically present in the United States for 183 days or more and certain other
conditions are satisfied. Such persons are advised to consult their own tax
advisers. Special rules may apply in the case of foreign Shareholders (i) that
are engaged in a U.S. trade or business, (ii) that are former citizens or
residents of the United States or (iii) that are "controlled foreign
corporations", "foreign personal holding companies", corporations that
accumulate earnings to avoid U.S. federal income tax, and certain foreign
charitable organizations. Such persons are advised to consult their own tax
advisers.
BACKUP WITHHOLDING. The Fund generally will be required to withhold tax at
the rate of 31% ("backup withholding") from any payment to a tendering
Shareholder that is an individual (or certain other non-corporate persons) if
the Shareholder fails to provide to the Fund its correct taxpayer identification
number. If the payment by the Fund to any such Shareholder is treated as a
dividend rather than a "sale or exchange" as described above, backup withholding
also will be required with respect to that payment if the Internal Revenue
Service advises the Fund that the shareholder is subject to backup withholding
for prior underreporting of reportable interest or dividend payments or if the
Shareholder fails to certify that it is not subject thereto. A foreign
Shareholder generally will be able to avoid backup withholding with respect to
payments by the Fund that are treated as made in exchange for tendered Shares
only if it furnishes to the Fund a duly completed Form W-8, signed under penalty
of perjury, stating that it (1) is neither a citizen nor a resident of the
United States, (2) has not been and reasonably does not expect to be present in
the United States for a period aggregating 183 days or more during the calendar
year, and (3) reasonably expects not to be engaged in a trade or business within
the United States to which the gain on sale of the Shares would be effectively
connected. Backup withholding is not an additional tax, and any amounts withheld
may be credited against a Shareholder's U.S. federal income tax liability.
6. PRICE RANGE OF SHARES; DIVIDENDS. The Shares are listed and traded on
the NYSE. The following table sets forth, during each fiscal quarter of the Fund
during the past two fiscal years,
10
<PAGE>
the reported high and low sales prices per Share and the closing sale price and
NAV per Share as of the last day of such fiscal quarter.
<TABLE>
<CAPTION>
NET ASSET
FISCAL QUARTER ENDED: MARKET PRICE VALUE
- --------------------------------------------------- --------------------------------- -----------
1999 HIGH LOW CLOSING
--------- --------- -----------
<S> <C> <C> <C> <C>
Through May 21, 1999............................... $ 9.43 $ 7.31 $ 8.81 $ 10.76
February 26, 1999.................................. 7.87 6.93 7.50 9.14
1998
November 30, 1998.................................. 7.87 5.50 7.43 9.60
August 31, 1998.................................... 10.56 6.43 6.43 9.12
May 29, 1998....................................... 12.43 10.12 10.12 13.15
February 27, 1998.................................. 12.00 10.62 11.43 14.33
1997
November 28, 1997.................................. 14.00 10.87 11.25 14.69
August 29, 1997.................................... 14.38 12.25 13.06 16.39
May 30, 1997....................................... 12.50 11.63 12.50 15.43
February 28, 1997.................................. 12.75 10.50 12.25 14.82
</TABLE>
On May 21, 1999, the closing sale price of the Shares reported on the NYSE
Composite Tape was $8.81, and the NAV was $10.76.
SHAREHOLDERS ARE URGED TO OBTAIN A CURRENT MARKET QUOTATION FOR THE SHARES.
IT IS ANTICIPATED THAT NO CASH DIVIDEND WILL BE DECLARED BY THE BOARD OF
DIRECTORS WITH A RECORD DATE OCCURRING BEFORE THE EXPIRATION OF THE OFFER AND
THAT, ACCORDINGLY, HOLDERS OF SHARES PURCHASED PURSUANT TO THE OFFER WILL NOT
RECEIVE ANY SUCH DIVIDEND WITH RESPECT TO SUCH SHARES. THE AMOUNT AND FREQUENCY
OF DIVIDENDS IN THE FUTURE WILL DEPEND ON CIRCUMSTANCES EXISTING AT THAT TIME.
7. PURPOSE OF THE OFFER. For a description of the purpose of the Offer,
see "The Plan" above.
8. CERTAIN INFORMATION CONCERNING THE FUND. The Fund is a Maryland
corporation with its principal executive offices located at One Citicorp Center,
153 East 53rd Street, New York, New York 10022. The Fund is a closed-end,
non-diversified, management investment company organized as a Maryland
corporation. The Shares were first issued to the public on December 23, 1993. As
a closed-end investment company the Fund differs from an open-end investment
company (i.e., a mutual fund) in that it does not redeem its Shares at the
election of a Shareholder and does not continuously offer its Shares for sale to
the public. The Fund's investment objective is long-term capital appreciation
through investments primarily in equity securities of infrastructure companies
in emerging countries.
The Fund has been managed since its inception by CSAM (formerly known as BEA
Associates). CSAM is a registered investment adviser under the Investment
Advisers Act of 1940. CSAM is the institutional asset management and mutual fund
arm of Credit Suisse Group. CSAM employs approximately 1,600 people worldwide
and has global assets under management of approximately $154 billion in multiple
product services, including equities, fixed income, derivatives and balanced
portfolios. The principal business address of CSAM is Uetlibergstrasse 231, CH
8045, Zurich, Switzerland. CSAM's U.S. asset management business, formerly known
as BEA Associates, changed its name to CSAM in January 1999 to more accurately
reflect its integration into Credit Suisse Asset Management. Together with its
predecessor firms, CSAM has been engaged in the investment advisory business in
the United States for over 60 years. In the United States, CSAM is an investment
manager
11
<PAGE>
for corporate and state pension funds, endowments and other institutions, and
has assets under management of approximately $37 billion. The principal business
address of CSAM's U.S. operations is 153 East 53rd Street, New York, New York
10022. Currently, CSAM is organized as a general partnership with two general
partners, Credit Suisse Capital Corp. and Credit Suisse Advisors Corp. As part
of an impending reorganization, CSAM will reorganize as a limited liability
company or a corporation, which will be a direct or indirect wholly-owned U.S.
subsidiary of Credit Suisse Group.
The Fund is subject to the informational filing requirements of the 1940 Act
and in accordance therewith is obliged to file reports and other information
with the Securities and Exchange Commission (the "Commission") relating to its
business, financial condition and other matters. Information, as of particular
dates, concerning the Fund's directors and officers, their remuneration, the
principal holders of the Fund's securities, any material interests of such
persons in transactions with the Fund and other matters is required to be
disclosed in proxy statements distributed to the Fund's shareholders and filed
with the Commission. The Fund has also filed an Issuer Tender Offer Statement on
Schedule 13E-4 with the Commission. Such report, proxy statements and other
information may be inspected at the public reference facilities of the
Commission at 450 Fifth Street, N.W., Washington, D.C., and at the regional
offices of the Commission at Room 1204, Everett McKinley Dirksen Building, 219
South Dearborn Street, Chicago, Illinois; and Room 1102, Jacob K. Javits Federal
Building, 7 World Trade Center, New York, New York 10048. The Fund's filings are
also available to the public on the Commission's internet site
(http://www.sec.gov). Copies may be obtained, by mail, upon payment of the
Commission's customary charges, by writing to its principal office at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material should also be available for
inspection at the library of the NYSE, 20 Broad Street, New York, New York.
Exhibit A to this Offer contains the Fund's audited financial statements for
the fiscal years ended November 30, 1998 and November 30, 1997.
9. SOURCE AND AMOUNT OF FUNDS. The actual cost of the Offer to the Fund
cannot be determined at this time because the number of Shares to be purchased
will depend on the number tendered, and the price will be determined by the NAV
per Share on the Pricing Date. If the NAV per Share were the same as the NAV per
Share on May 21,1999 ($10.76), and if tenders for 3,011,714 shares are received
pursuant to the Offer, the estimated payments by the Fund to Shareholders would
be approximately $30.8 million. See the Pro Forma Capitalization table below.
The monies to be used by the Fund to purchase Shares pursuant to the Offer
will be obtained from cash on hand and from sales of securities in the Fund's
investment portfolio.
THE OFFER MAY HAVE CERTAIN ADVERSE CONSEQUENCES FOR TENDERING AND
NON-TENDERING SHAREHOLDERS.
EFFECT ON NAV AND CONSIDERATION RECEIVED BY TENDERING SHAREHOLDERS. The
Fund is required to sell a substantial amount of portfolio securities to raise
cash to finance the Offer. Such sales could cause the market prices of the
Fund's portfolio securities, and hence the Fund's NAV, to decline. If such a
decline occurs, the Fund cannot predict what its magnitude might be or whether
such a decline would be temporary or continue to or beyond the Termination Date.
Because the price per Share to be paid in the Offer will be dependent upon the
NAV per Share as determined on the Termination Date, if such a decline continued
up to the Termination Date, the consideration received by tendering shareholders
would be reduced. In addition, sales of portfolio securities could occur at
inopportune times, when CSAM would not otherwise sell such securities. Also, the
sale of portfolio securities will cause increased brokerage and related
transaction expenses, and the Fund may receive proceeds from the sale of
portfolio securities less than their valuations by the Fund. Accordingly,
because of the Offer, the Fund's NAV per Share may decline more than it
otherwise might, or increase less than it otherwise might, thereby reducing the
amount of proceeds received by tendering shareholders and the value per Share
for non-tendering shareholders.
12
<PAGE>
Shareholders should note, however, that the Offer is expected to result in a
modest accretion to the Fund's NAV per Share due to the fact that the Purchase
Price represents a 5% discount to the Fund's NAV per Share. The potential
accretion to the Fund's NAV per Share is expected to offset in whole or in part
any decline in the Fund's NAV that could result from the Offer.
The Fund will sell portfolio securities during the pendency of the Offer to
raise cash for the purchase of Shares. Thus, during the pendency of the Offer,
and possibly for a short time thereafter, the Fund will hold a greater than
normal percentage of its net assets in cash and cash equivalents. The Fund is
required by law to pay for tendered Shares it accepts for payment promptly after
the Termination Date of this Offer. Because the Fund will not know the number of
Shares tendered or the Purchase Price until the Termination Date, the Fund will
not know until the Termination Date the amount of cash required to pay for such
Shares. Because of this uncertainty, the Fund may sell more portfolio securities
than necessary to generate cash to pay for tendered Shares, and as a result,
incur unneccesary transaction costs in selling such securities and reinvesting
the proceeds thereof. If on or prior to the Termination Date the Fund does not
have, or believes it is unlikely to have, sufficient cash to pay for all Shares
tendered, it may extend the Offer to allow additional time to sell portfolio
securities and raise sufficient cash.
The costs of effecting the Offer (estimated to be approximately $200,000)
will be borne by the Fund. It is expected that such costs will be accrued prior
to the Termination Date in accordance with applicable accounting principles.
RECOGNITION OF CAPITAL GAINS. As noted, the Fund will likely be required to
sell portfolio securities to finance the Offer. If the Fund's tax basis for the
securities sold is less than the sale proceeds, the Fund will recognize capital
gains. The Fund would expect to declare any such gains to Shareholders of record
(reduced by net capital losses realized during the fiscal year, if any, and
available capital loss carryforwards) following the end of the Fund's fiscal
year on November 30th but before December 31st of the same calendar year, and
distribute such gains in January of the next calendar year. This recognition and
distribution of gains, if any, would have two negative consequences: first,
Shareholders at the time of a declaration of distributions would be required to
pay taxes on a greater amount of capital gain distributions than otherwise would
be the case; and second, to raise cash to make the distributions, the Fund might
need to sell additional portfolio securities, thereby possibly being forced to
realize and recognize additional capital gains. The Fund may incur more capital
gains than necessary in connection with the Offer if it raises cash in excess of
the amount required to be paid for tendered Shares. It is impossible to predict
what the amount of unrealized gains or losses would be in the Fund's portfolio
at the time that the Fund is required to liquidate portfolio securities (and
hence the amount of capital gains or losses that would be realized and
recognized). As of May 21, 1999 there was unrealized appreciation of over
approximately $8.3 million. As of November 30, 1998, there were capital loss
carryforwards totalling approximately $51.4 million that for tax purposes could
offset some or all of any gains actually realized.
In addition, some of the distributed gains may be realized on securities
held for one year or less, which would generate income taxable to the
Shareholders at ordinary income rates. To the extent realized gains exceed
available capital loss carryforwards, the Fund's performance could be adversely
affected.
TAX CONSEQUENCES OF REPURCHASES TO SHAREHOLDERS. The Fund's purchase of
tendered Shares pursuant to the Offer will have tax consequences for tendering
Shareholders and may have tax consequences for non-tendering Shareholders. "See
5. Certain Federal Income Tax Consequences" above.
HIGHER EXPENSE RATIO AND LESS INVESTMENT FLEXIBILITY. If the Fund purchases
a substantial number of Shares pursuant to the Offer, the net assets of the Fund
will be reduced accordingly. The
13
<PAGE>
reduced net assets of the Fund as a result of the Offer will result in a higher
expense ratio for the Fund, and possibly in less investment flexibility for the
Fund, depending on the number of Shares repurchased. However, the potential
accretion to the Fund's NAV per share is expected to exceed any expense ratio
increase.
PRO FORMA EFFECTS ON CAPITALIZATION. The following table sets forth the net
assets of the Fund as of May 21, 1999, adjusted to give effect to the Offer
(excluding expenses and assuming the Fund repurchases 20% of its outstanding
Shares):
PRO FORMA CAPITALIZATION (1)
<TABLE>
<CAPTION>
ADJUSTMENT FOR
AS OF MAY 21, PURCHASE AT $10.22 PRO FORMA AS
1999 PER SHARE (2) ADJUSTED
---------------- --------------------- ----------------
<S> <C> <C> <C>
Total net assets....................................... $ 162,023,633 $ 30,779,717 $ 131,243,916
Shares outstanding..................................... 15,058,569 3,011,714 12,046,855
NAV per Share (3)...................................... $ 10.76 $ 0.13 $ 10.89
</TABLE>
- ------------------------
(1) This table assumes purchase by the Fund of 3,011,714 Shares, equal to 20% of
the Fund's outstanding Shares.
(2) This amount represents 95% of the Fund's NAV as determined on May 21, 1999.
Shares tendered pursuant to the Offer will be purchased at a 5% discount to
NAV on the Termination Date, which may be more or less than $10.22 per
Share.
(3) The NAV per Share of the Fund is normally determined each business that the
NYSE is open, as of the close of regular trading on the NYSE, and is
determined by dividing the total net assets of the Fund by the number of
Shares outstanding.
10. CERTAIN CONDITIONS OF THE OFFER. Notwithstanding any other provision
of the Offer, the Fund shall not be required to accept for payment or pay for,
or may delay the acceptance for payment of or payment for, tendered Shares, or
may, in the sole discretion of the Fund, terminate or amend the Offer as to any
Shares not then paid for if (1) such transactions, if consummated, would (a)
result in delisting of the Fund's Common Stock from the NYSE or (b) impair the
Fund's status as a regulated investment company under the Code (which would make
the Fund subject to U.S. federal income taxes on all of its income and gains in
addition to the taxation of Shareholders who receive distributions from the
Fund); (2) the amount of Shares of Common Stock tendered would require
liquidation of such a substantial portion of the Fund's securities that the Fund
would not be able to liquidate portfolio securities in an orderly manner in
light of the existing market conditions and liquidation would have an adverse
effect on the NAV of the Fund to the detriment of non-tendering Shareholders; or
(3) any of the following events shall occur:
(a) there shall be threatened, instituted or pending any action or
proceeding by any government or governmental authority or agency, domestic
or foreign, or by any other person, domestic or foreign, before any court or
governmental authority or agency, domestic or foreign, (i) challenging or
seeking to make illegal, to delay or otherwise directly or indirectly to
restrain or prohibit the making of the Offer, the acceptance for payment of
or payment for some of or all the Shares by the Fund, (ii) otherwise
directly or indirectly relating to the Offer or which otherwise, in the sole
judgment of the Fund, might materially adversely affect the Fund or the
value of the Shares, or (iii) in the sole judgment of the Fund, materially
adversely affecting the business, properties, assets, liabilities,
capitalization, shareholders' equity, condition (financial or other),
operations, licenses or franchises, results of operations or prospects of
the Fund;
14
<PAGE>
(b) there shall be any action taken, or any statute, rule, regulation,
interpretation, judgment, order or injunction proposed, enacted, enforced,
promulgated, amended, issued or deemed applicable by any court, government
or governmental, administrative or regulatory authority or agency, domestic
or foreign, which, in the sole judgment of the Fund, might, directly or
indirectly, result in any of the consequences referred to in clauses (i)
through (iii) of paragraph (a) above;
(c) any change (or any condition, event or development involving a
prospective change) shall have occurred or been threatened in the business,
properties, assets, liabilities, capitalization, shareholders' equity,
condition (financial or other), operations, licenses, franchises, permits,
permit applications, results of operations or prospects of the Fund which,
in the sole judgment of the Fund, is or may be materially adverse; or
(d) there shall have occurred (i) any general suspension of trading in,
or limitation on prices for, securities on any national securities exchange
or in the over-the-counter market, or any material adverse change in prices
generally of shares on the NYSE, (ii) a declaration of a banking moratorium
or any suspension of payments in respect of banks by federal or state
authorities in the United States, (iii) any limitation (whether or not
mandatory) by any governmental authority or agency on, or other event which,
in the sole judgment of the Fund, might affect the extension of credit by
banks or other lending institutions, (iv) a commencement of a war, armed
hostilities or other national or international calamity directly or
indirectly involving the United States, (v) a material change in United
States or any other currency exchange rates or a suspension of, or
limitation on, the markets therefor, or (vi) in the case of any of the
foregoing existing at the time of the commencement of the Offer, a material
acceleration or worsening thereof; or
(4) the Fund's Shares are trading at a discount to NAV of 5% or less at the
Termination Date or the Board determines that effecting such a transaction would
constitute a breach of a their fiduciary duty owed to the Fund or its
Shareholders.
The foregoing conditions are for the sole benefit of the Fund and may be
asserted by the Fund regardless of the circumstances (including any action or
inaction by the Fund) giving rise to such condition or may be waived by the Fund
in whole or in part at any time and from time to time in the sole discretion of
the Fund. A public announcement shall be made of a material change in, or waiver
of, such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver. Any determination by the Fund
concerning any event described in this Section shall be final and binding upon
all parties.
A final announcement shall be made of a material change in, or waiver of,
such conditions, and the Offer may, in certain circumstances, be extended in
connection with any such change or waiver.
If the Offer is suspended or postponed, the Fund will provide notice to the
Shareholders of such suspension or postponement.
11. INTEREST OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS
CONCERNING THE SHARES. Except as set forth in Schedule I hereto, neither the
Fund nor, to the best of the Fund's knowledge, any of the Fund's officers or
directors, or associates of any of the foregoing, has effected any transaction
in Shares during the past 40 business days. Except as set forth in this Offer,
neither the Fund, nor, to the best of the Fund's knowledge, any of the Fund's
officers or directors, is a party to any contract, arrangement, understanding or
relationship with any other person relating, directly or indirectly, to the
Offer with respect to any securities of the Fund, including, but not limited to,
any contract, arrangement, understanding or relationship concerning the transfer
or the voting of any such securities, joint ventures, loan or option
arrangements, puts or calls, guaranties of loans, guaranties against loss or the
giving or withholding of proxies, consents or authorizations.
12. CERTAIN LEGAL MATTERS; REGULATORY APPROVALS. The Fund is not aware of
any approval or other action by any government or governmental, administrative
or regulatory authority or agency,
15
<PAGE>
domestic or foreign, that would be required for the acquisition or ownership of
Shares by the Fund as contemplated herein. Should any such approval or other
action be required, the Fund presently contemplates that such approval or other
action will be sought. The Fund is unable to predict whether it may determine
that it is required to delay the acceptance for payment of, or payment for,
Shares tendered pursuant to the Offer pending the outcome of any such matter.
There can be no assurance that any such approval or other action, if needed,
would be obtained without substantial conditions or that the failure to obtain
any such approval or other action might not result in adverse consequences to
the Fund's business. The Fund's obligations under the Offer to accept for
payment and pay for Shares are subject to certain conditions described in "10.
Certain Conditions of the Offer."
13. FEES AND EXPENSES. The Fund will not pay any fees or commissions to
any broker or dealer or other person (other than the Information Agent) for
soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial
banks and trust companies will be reimbursed by the Fund for customary mailing
and handling expenses incurred by them in forwarding offering materials to their
customers. No such broker, dealer, commercial bank or trust company has been
authorized to act as the agent of the Fund or the Depositary for purposes of the
Offer.
Georgeson has been retained by the Fund to act as the Information Agent in
connection with the Offer. The Information Agent and the Depositary each will
receive reasonable and customary compensation for their services, will be
reimbursed for certain reasonable out-of-pocket expenses and will be indemnified
against certain liabilities and expenses in connection therewith, including
certain liabilities under the federal securities laws.
14. MISCELLANEOUS. 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 making of the Offer or the acceptance thereof would not be in compliance
with the laws of such jurisdiction. Nevertheless, the Fund may, in its sole
discretion, take such action as it may deem necessary to make the Offer in any
such jurisdiction and extend the Offer to holders of Shares in such
jurisdiction. In any jurisdiction the securities laws or blue sky laws of which
require the Offer to be made by a licensed broker or dealer, the Offer shall be
made on behalf of the Fund by brokers or dealers licensed under the laws of such
jurisdiction.
The Fund is not aware of any jurisdiction in which the making of the Offer
or the acceptance of Shares in connection therewith would not be in compliance
with the laws of such jurisdiction. Consequently, the Offer is currently being
made to the all holders of Shares. However, the Fund reserves the right to
exclude Shareholders in any jurisdiction in which it is asserted that the Offer
cannot be lawfully made. So long as the Fund makes a good faith effort to comply
with any state law applicable to the Offer, the Fund believes that the exclusion
of Shareholders residing in such jurisdiction is permitted under Rule
13e-4(f)(9) promulgated under the Exchange Act.
The Fund has filed with the Commission a Statement on Schedule 13E-4,
pursuant to Rule 13e-4 under the Exchange Act, furnishing certain additional
information with respect to the Offer, and may file amendments thereto. Such
Statement and any amendments thereto, including exhibits, may be examined and
copies may be obtained from the principal office of the Commission in
Washington, D.C. in the manner set forth in Section 8 above.
No person has been authorized to give any information or make any
representation on behalf of the Fund not contained in this Offer or in the
Letter of Transmittal and, if given or made, such information or representation
must not be relied upon as having been authorized.
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
May 26, 1999
16
<PAGE>
SCHEDULE I
SCHEDULE OF TRANSACTIONS IN SHARES
DURING THE PAST 40 BUSINESS DAYS
<TABLE>
<CAPTION>
SHARES PRICE PER
TRADE DATE ACQUIRED(1) SHARE
- ------------------------------------------------------------------------ --------- -----------
<S> <C> <C>
04/09/99................................................................ 101,100 $ 8.31
04/12/99................................................................ 6,400 8.24
04/15/99................................................................ 1,400 8.37
04/16/99................................................................ 2,000 8.50
</TABLE>
(1)All Shares were acquired pursuant to the Fund's Share Repurchase Program. See
"The Plan" in the attached Offer to Purchase.
<PAGE>
EXHIBIT A
AUDITED FINANCIAL STATEMENTS FOR THE FISCAL
YEARS ENDED NOVEMBER 30, 1998 AND NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$148,072,435) (Note A)................. $134,688,454
Cash (including $126,996 of foreign
currencies with a cost of $126,833)
(Note A)............................... 13,432,532
Collateral received for securities
loaned (Note A)........................ 3,488,263
Receivables:
Investments sold...................... 8,675,808
Dividends............................. 832,843
Interest.............................. 36,450
Prepaid expenses and other assets....... 6,351
------------
Total Assets............................ 161,160,701
------------
LIABILITIES
Payables:
Payable upon return of securities
loaned (Note A)...................... 3,488,263
Investments purchased................. 2,454,751
Investment advisory fee (Note B)...... 319,286
Administration fees (Note B).......... 38,805
Other accrued expenses................ 189,237
------------
Total Liabilities....................... 6,490,342
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $154,670,359
------------
------------
NET ASSET VALUE PER SHARE ($154,670,359
DIVIDED BY 16,107,169)................ $9.60
------------
------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
16,107,169 shares issued and
outstanding (100,000,000 shares
authorized)............................ $ 16,107
Paid-in capital......................... 223,751,241
Undistributed net investment income..... 367,211
Accumulated net realized loss on
investments and foreign currency
related transactions................... (56,073,138)
Net unrealized depreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... (13,391,062)
------------
Net assets applicable to shares
outstanding............................ $154,670,359
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-1
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 4,710,569
Interest.............................. 1,267,118
Less: Foreign taxes withheld.......... (381,477)
------------
Total Investment Income............... 5,596,210
------------
Expenses:
Investment advisory fees (Note B)..... 2,615,834
Custodian fees........................ 371,291
Administration fees (Note B).......... 333,447
Accounting fees....................... 147,600
Audit and legal fees.................. 115,404
Printing.............................. 111,150
Directors' fees....................... 43,500
Transfer agent fees................... 25,200
NYSE listing fees..................... 24,192
Insurance............................. 20,984
Amortization of organizational
costs................................ 9,994
Other................................. 28,720
Brazilian taxes (Note A).............. 217,292
Chilean repatriation taxes (Note A)... 90,249
------------
Total Expenses........................ 4,154,857
------------
Net Investment Income................. 1,441,353
------------
NET REALIZED AND UNREALIZED LOSS ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized loss from:
Investments........................... (55,444,643)
Foreign currency related
transactions......................... (788,831)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... (19,664,151)
------------
Net realized and unrealized loss on
investments and foreign currency
related transactions................... (75,897,625)
------------
NET DECREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $(74,456,272)
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-2
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Fiscal Years Ended
November 30,
-----------------------------
1998 1997
<S> <C> <C>
-----------------------------
INCREASE/(DECREASE) IN NET ASSETS
Operations:
Net investment income................. $ 1,441,353 $ 1,145,156
Net realized gain/(loss) on
investments and foreign currency
related
transactions......................... (56,233,474) 29,101,315
Net change in unrealized appreciation
in value of investments
and translation of other assets and
liabilities denominated in foreign
currencies........................... (19,664,151) (7,995,918)
------------ ------------
Net increase/(decrease) in net
assets resulting from operations... (74,456,272) 22,250,553
------------ ------------
Dividends and distributions to
shareholders:
Net investment income................. (453,397) (1,449,645)
Net realized gain on investments and
foreign currency related
transactions......................... (6,955,900) --
------------ ------------
Total dividends and distributions to
shareholders....................... (7,409,297) (1,449,645)
------------ ------------
Total increase/(decrease) in net
assets............................. (81,865,569) 20,800,908
------------ ------------
NET ASSETS
Beginning of year....................... 236,535,928 215,735,020
------------ ------------
End of year (including undistributed net
investment income of $367,211 and
$330,212, respectively)................ $154,670,359 $236,535,928
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-3
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Period
December 29,
For the Fiscal Years Ended 1993*
November 30, through
------------------------------------------ November 30,
1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C>
------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period..... $14.69 $13.39 $11.60 $14.17 $13.89**
--------- --------- --------- --------- ----------------
Net investment income/(loss)............. 0.08 0.07 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss)
on investments and foreign currency
related transactions.................... (4.71) 1.32 1.76 (2.59) 0.29
--------- --------- --------- --------- ----------------
Net increase/(decrease) in net assets
resulting from operations............... (4.63) 1.39 1.88 (2.52) 0.28
--------- --------- --------- --------- ----------------
Dividends and distributions to
shareholders:
Net investment income.................. (0.03) (0.09) (0.09) (0.03) --
Net realized gain on investments and
foreign currency related
transactions.......................... (0.43) -- -- (0.02) --
--------- --------- --------- --------- ----------------
Total dividends and distributions to
shareholders............................ (0.46) (0.09) (0.09) (0.05) --
--------- --------- --------- --------- ----------------
Net asset value, end of period........... $9.60 $14.69 $13.39 $11.60 $14.17
--------- --------- --------- --------- ----------------
--------- --------- --------- --------- ----------------
Market value, end of period.............. $7.44 $11.25 $10.75 $9.75 $11.88
--------- --------- --------- --------- ----------------
--------- --------- --------- --------- ----------------
Total investment return(a)............... (30.41)% 5.46% 11.11% (17.49)% (14.87)%
--------- --------- --------- --------- ----------------
--------- --------- --------- --------- ----------------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000
omitted)................................ $154,670 $236,536 $215,735 $186,921 $228,171
Ratio of expenses to average net
assets#................................. 2.07% 2.02% 1.81% 1.83% 2.02%(b)
Ratio of net investment income/(loss) to
average net assets...................... 0.72% 0.46% 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate.................. 169.85% 108.68% 23.89% 13.73% 24.63%
</TABLE>
- ---------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.06 per share.
# Ratios shown are inclusive of Brazilian transaction and Chilean
repatriation taxes, if any. If such taxes had not been imposed, the
ratio of expenses to average net assets would have been 1.91% for the
fiscal year ended November 30, 1998, 1.83% for the fiscal year ended
November 30, 1997 and 1.96% for the period December 29, 1993 through
November 30, 1994.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment of
dividends and distributions, if any, at actual prices pursuant to the
Fund's dividend reinvestment program. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized.
(b) Annualized.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-4
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Infrastructure Fund, Inc. (the "Fund") was incorporated in
Maryland on October 12, 1993 and commenced investment operations on December 29,
1993. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last current bid and asked prices). Securities that are traded
over-the-counter are valued at the mean between the current bid and the asked
prices, if available. All other securities and assets are valued at the fair
value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of non-publicly traded securities. At November 30, 1998,
the Fund held 9.41% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $18,463,398 and fair value of
$14,553,688. The net asset value per share of the Fund is calculated on each
business day, with the exception of those days on which the New York Stock
Exchange is closed.
At the time of the Fund's organization, the Board of Directors of the Fund
adopted the following non-fundamental policies: (i) up to 30% of the Fund's
total assets may be invested in private placements of equity securities where
the Fund's investment adviser anticipates that a liquid market will develop for
these securities within a period of two to five years from the date of
acquisition; and (ii) up to 10% of the Fund's total assets may be invested in
equity securities of emerging market corporate issuers that are not
infrastructure companies. As disclosed in the Fund's prospectus at that time,
these policies and percentage limitations are subject to modification by the
Board of Directors if, in the reasonable exercise of the Board's business
judgment, modification is determined to be necessary or appropriate to carry out
the Fund's investment objective of long-term capital appreciation.
At a meeting of the Board of Directors held on December 8, 1997, the Board of
Directors unanimously approved modifications to the foregoing policies to
increase the limit on non-infrastructure companies from 10% to 20% and to permit
within that 20% limit investments in private equity funds (whether in corporate
or partnership form) that invest primarily in emerging markets without regard to
whether a liquid market is expected to develop for such investment. Any such
investment would continue to count against the overall 30% limit on private
placements. The Board approved these changes on the basis that the long-term
value added approach of an emerging markets private equity strategy is well
suited to the long-term capital appreciation objective of the Fund. When
investing through another investment fund, the Fund will bear its proportionate
share of the expenses incurred by that fund, including management fees.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are
- --------------------------------------------------------------------------------
A-5
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
classified as cash. At November 30, 1998, the interest rate was 4.375% which
resets on a daily basis. Amounts on deposit are generally available on the same
business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
At November 30, 1998, the Fund had a capital loss carryforward of $51,411,531
which expires in 2006.
Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the fiscal
year ended November 30, 1998, the Fund incurred $90,249 of such expense.
Effective January 23, 1997, Brazil imposes a 0.20% CONTRIBUCAO SOBRE
MOVIMENTACAO FINANCIERA ("CPMF") tax that applies to most debit transactions
carried out by financial institutions. For the fiscal year ended November 30,
1998, the Fund incurred $217,292 of such expense. Effective January 23, 1999,
the CPMF tax will expire and no longer be charged.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to change in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and income tax
reporting purposes.
Net currency gains or losses from valuing foreign currency denominated assets
and liabilities at period end exchange rates are reflected as a component of net
unrealized appreciation/depreciation in value of investments and translation of
other assets and liabilities denominated in foreign currencies.
Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and
- --------------------------------------------------------------------------------
A-6
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
forward foreign currency contracts, exchange gains or losses realized between
the trade date and settlement dates on security transactions, and the difference
between the amounts of interest and dividends recorded on the Fund's books and
the U.S. dollar equivalent of the amounts actually received.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.
SECURITIES LENDING: The market value of securities out on loan to brokers at
November 30, 1998, was $3,262,069, for which the Fund has received cash as
collateral of $3,488,263. Such cash collateral was reinvested into an overnight
repurchase agreement with Bear, Stearns & Co. Inc., which is in turn
collateralized by U.S. Government agency securities with a value of $3,622,383.
Security loans are required at all times to have collateral at least equal to
102% of the market value of the securities on loan; however, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
For the fiscal year ended November 30, 1998, the Fund earned $15,265 in
securities lending income which is included under the caption INTEREST in the
Statement of Operations.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
At November 30, 1998, the Fund reclassified $950,957 of net realized losses from
foreign currency related transactions to undistributed net investment income.
OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.
The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The Fund, subject to local investment limitations, may invest up to 30% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial
- --------------------------------------------------------------------------------
A-7
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
losses. Because of the current absence of any liquid trading market for these
investments, the Fund may take longer to liquidate these positions than would be
the case for publicly traded securities. Although these securities may be resold
in privately negotiated transactions, the prices realized on such sales could be
significantly less than those originally paid by the Fund. Further, companies
whose securities are not publicly traded may not be subject to the disclosure
and other investor protection requirements applicable to companies whose
securities are publicly traded.
The Fund may enter into repurchase agreements ("repos") on U.S. Government
securities with primary government securities dealers recognized by the Federal
Reserve Bank of New York and member banks of the Federal Reserve System and on
securities issued by the governments of foreign countries, their
instrumentalities and with creditworthy parties in accordance with established
procedures. Repurchase agreements are contracts under which the buyer of a
security simultaneously buys and commits to resell the security to the seller at
an agreed upon price and date. Repurchase agreements are deposited with the
Fund's custodian and, pursuant to the terms of the repurchase agreement, the
collateral must have an aggregate market value greater than or equal to the
repurchase price plus accrued interest at all times. If the value of the
underlying securities fall below the value of the repurchase price plus accrued
interest, the Fund will require the seller to deposit additional collateral by
the next business day. If the request for additional collateral is not met, or
the seller defaults on its repurchase obligation, the Fund maintains the right
to sell the underlying securities at market value and may claim any resulting
loss against the seller; collectibility of such claims may be limited. At
November 30, 1998, the Fund had no such agreements, other than the cash
collateral received that was reinvested in a repo under the Fund's securities
lending program.
NOTE B. AGREEMENTS
BEA Associates ("BEA") serves as the Fund's investment adviser with respect to
all investments. As compensation for its advisory services, BEA receives from
the Fund an annual fee, calculated weekly and paid quarterly, equal to 1.30% of
the Fund's average weekly net assets. For the fiscal year ended November 30,
1998, BEA earned $2,615,834 for advisory services. BEA also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the fiscal year
ended November 30, 1998, BEA was reimbursed $19,986 for administrative services
rendered to the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a fee for its services rendered that is
computed at an annual rate of 0.12% of the Fund's average weekly net assets. For
the fiscal year ended November 30, 1998, BSFM earned $241,462 for administrative
services.
BankBoston, N.A., Sao Paulo ("BB") and CELFIN Administradora de Fondos de
Inversion de Capital Extranjero S.A. ("Chilean administrator") serve as the
Fund's administrators with respect to Brazilian and Chilean investments,
respectively. BB is paid for its services out of the custody fee payable to
Brown Brothers Harriman & Co., the Fund's accounting agent and custodian, a
quarterly fee based on an annual rate of 0.10% of average month end Brazilian
net assets of the Fund. In return for services rendered, the Chilean
administrator's fee is paid quarterly at an annual rate of 0.10% of the Fund's
average weekly net assets invested in Chile, subject to certain minimum annual
fees and reimbursement for a predefined limit of their expenses.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 16,107,169 shares outstanding at November 30, 1998, BEA
owned 7,169 shares.
- --------------------------------------------------------------------------------
A-8
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at November
30, 1998 was $154,265,678. Accordingly, the net unrealized depreciation of
investments (including investments denominated in foreign currencies) of
$19,577,224, was composed of gross appreciation of $8,664,208 for those
investments having an excess of value over cost and gross depreciation of
$28,241,432 for those investments having an excess of cost over value.
For the fiscal year ended November 30, 1998, total purchases and sales of
securities, other than short-term investments, were $305,089,229 and
$311,256,228, respectively.
NOTE E. CREDIT AGREEMENT
The Fund, along with 10 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with BankBoston, N.A. The
agreement provides that each fund is permitted to borrow an amount equal to the
lesser of $25,000,000 or 25% of the net assets of the fund. However, at no time
shall the aggregate outstanding principal amount of all loans to any of the 11
funds exceed $25,000,000. The line of credit will bear interest at (i) the
greater of the bank's prime rate or the Federal Funds Effective Rate plus 0.50%
or (ii) the Adjusted Eurodollar Rate plus 1.50%. The Fund had no amounts
outstanding under the credit agreement for the fiscal year ended November 30,
1998.
NOTE F. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of shares held, the acquisition dates, aggregate costs,
fair value as of November 30, 1998, per share value of the securities and
percentage of net assets which the securities comprise.
<TABLE>
<CAPTION>
NUMBER FAIR VALUE PERCENTAGE
OF ACQUISITION AT NOVEMBER 30, VALUE OF
SECURITY SHARES DATES COST 1998 PER SHARE NET ASSETS
- --------------------------------------- -------- ---------------- ---------- ------------------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Emerging Markets Ventures, L.P......... 159,653 01/22/98 $ 159,653 $ 148,637 $ 0.93 0.10
Emerging Markets Ventures, L.P......... 3,525 03/05/98 3,658 3,282 0.93 --
Emerging Markets Ventures, L.P......... 586,127 05/05/98 586,127 545,685 0.93 0.35
Emerging Markets Ventures, L.P......... 361,637 07/07/98 361,637 336,685 0.93 0.22
Emerging Markets Ventures, L.P......... 42,334 08/17/98 42,334 39,413 0.93 0.03
Emerging Markets Ventures, L.P......... 296,812 10/27/98 296,812 276,332 0.93 0.18
Exxel Capital Partners................. 1,787,688 05/11/98 1,861,836 1,787,688 1.00 1.16
Exxel Capital Partners................. 111,520 07/07/98 113,293 111,520 1.00 0.07
Exxel Capital Partners................. 34,610 09/01/98 34,610 34,610 1.00 0.02
Jamaican Assets I L.P.................. 578,162 07/29/97 582,682 559,973 0.97 0.36
Jamaican Assets I L.P.................. 578,162 10/20/97 582,681 559,973 0.97 0.36
K.T. Concord Venture Fund L.P.......... 250,000 12/08/97 252,288 222,539 0.89 0.14
Superbowl Acquisition LDC.............. 96 10/10/94 960,866 1,245,984 12,979.00 0.81
The Renaissance Fund LDC............... 160 03/30/94 1,537,995 1,245,028 7,781.43 0.80
</TABLE>
The Fund may incur certain costs in connection with the disposition of the above
securities.
- --------------------------------------------------------------------------------
A-9
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE G. SHARE REPURCHASE PROGRAM
On October 21, 1998, the Fund announced that its Board of Directors has
authorized the repurchase by the Fund of up to 15% of the Fund's outstanding
common stock, for the purposes of enhancing shareholder value. The Fund's Board
has authorized management of the Fund to repurchase such shares in open market
transactions at prevailing market prices from time to time and in a manner
consistent with the Fund continuing to seek to achieve its investment
objectives. The Board's actions were taken in light of the significant discounts
at which the Fund's shares recently have been trading. It is intended both to
provide additional liquidity to those shareholders that elect to sell their
shares and to enhance the net asset value of the shares held by those
shareholders that maintain their investment. The repurchase program will be
subject to review by the Directors of the Fund. From October 21, 1998 to
November 30, 1998, the Fund did not repurchase any of its shares.
- --------------------------------------------------------------------------------
A-10
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of The Emerging Markets Infrastructure Fund, Inc.:
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Emerging Markets Infrastructure
Fund, Inc. (the "Fund") at November 30, 1998, and the results of its operations
for the year then ended, changes in its net assets for each of the two years in
the period then ended, and its financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
November 30, 1998 by correspondence with the custodian, brokers and issuers,
provide a reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 14, 1999
- --------------------------------------------------------------------------------
A-11
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES - NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at value (Cost
$210,206,356) (Note A)................. $216,489,276
Cash (including $1,475,287 of foreign
currencies with a cost of $1,477,937)
(Note A)............................... 25,019,949
Collateral received for securities
loaned (Note A)........................ 10,879,100
Receivables:
Investments sold...................... 1,570,953
Dividends............................. 191,326
Interest.............................. 16,698
Prepaid expenses and other assets....... 37,260
------------
Total Assets............................ 254,204,562
------------
LIABILITIES
Payables:
Payable upon return of securities
loaned............................... 10,879,100
Investments purchased................. 5,781,098
Advisory fee (Note B)................. 552,868
Administration fees (Note B).......... 67,070
Other accrued expenses................ 388,498
------------
Total Liabilities....................... 17,668,634
------------
NET ASSETS (applicable to 16,107,169
shares of common stock outstanding)
(Note C)............................... $236,535,928
------------
------------
NET ASSET VALUE PER SHARE ($236,535,928
DIVIDED BY 16,107,169)................ $14.69
------------
------------
NET ASSETS CONSIST OF
Capital stock, $0.001 par value;
16,107,169 shares issued and
outstanding (100,000,000 shares
authorized)............................ $ 16,107
Paid-in capital......................... 223,751,241
Undistributed net investment income..... 330,212
Accumulated net realized gain on
investments and foreign currency
related transactions................... 6,165,279
Net unrealized appreciation in value of
investments and translation of other
assets and liabilities denominated in
foreign currencies..................... 6,273,089
------------
Net assets applicable to shares
outstanding............................ $236,535,928
------------
------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-12
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF OPERATIONS - FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Income (Note A):
Dividends............................. $ 5,364,960
Interest.............................. 1,197,438
Less: Foreign taxes withheld.......... (375,844)
-----------
Total Investment Income............... 6,186,554
-----------
Expenses:
Investment advisory fees (Note B)..... 3,242,573
Custodian fees........................ 408,425
Administration fees (Note B).......... 384,440
Accounting fees....................... 170,799
Printing.............................. 121,620
Audit and legal fees.................. 83,084
Directors' fees....................... 40,996
Transfer agent fees................... 30,333
NYSE listing fees..................... 23,994
Insurance............................. 22,579
Amortization of organizational
costs................................ 9,911
Other................................. 31,131
Brazilian taxes (Note A).............. 286,421
Chilean repatriation taxes (Note A)... 185,092
-----------
Total Expenses........................ 5,041,398
-----------
Net Investment Income................. 1,145,156
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY
RELATED TRANSACTIONS
Net realized gain/(loss) from:
Investments........................... 29,783,638
Foreign currency related
transactions......................... (682,323)
Net change in unrealized appreciation in
value of investments and translation of
other assets and liabilities
denominated in foreign currencies...... (7,995,918)
-----------
Net realized and unrealized gain on
investments and foreign currency
related transactions................... 21,105,397
-----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS........................ $22,250,553
-----------
-----------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-13
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Fiscal Years Ended
November 30,
-----------------------------
1997 1996
<S> <C> <C>
-----------------------------
INCREASE IN NET ASSETS
Operations:
Net investment income................. $ 1,145,156 $ 1,880,763
Net realized gain/(loss) on
investments and foreign currency
related transactions................. 29,101,315 (9,785,197)
Net change in unrealized
appreciation/(depreciation) in value
of investments and translation of
other assets and liabilities
denominated in foreign currencies.... (7,995,918) 38,167,737
------------ ------------
Net increase in net assets resulting
from operations.................... 22,250,553 30,263,303
------------ ------------
Dividends to shareholders:
Net investment income................. (1,449,645) (1,449,645)
------------ ------------
Total increase in net assets........ 20,800,908 28,813,658
------------ ------------
NET ASSETS
Beginning of year....................... 215,735,020 186,921,362
------------ ------------
End of year (including undistributed net
investment income of $330,212 and
$1,154,898, respectively).............. $236,535,928 $215,735,020
------------ ------------
------------ ------------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-14
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Contained below is per share operating performance data for a share of common
stock outstanding, total investment return, ratios to average net assets and
other supplemental data for each period indicated. This information has been
derived from information provided in the financial statements and market price
data for the Fund's shares.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Fiscal Years Ended
November 30, For the Period
------------------------------------ December 29, 1993*
through
1997 1996 1995 November 30, 1994
<S> <C> <C> <C> <C>
---------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period........................ $13.39 $11.60 $14.17 $13.89**
---------- ---------- ---------- ----------
Net investment income/(loss)................................ 0.07 0.12 0.07 (0.01)
Net realized and unrealized gain/(loss) on investments and
foreign currency related transactions...................... 1.32 1.76 (2.59) 0.29
---------- ---------- ---------- ----------
Net increase/(decrease) in net assets resulting from
operations................................................. 1.39 1.88 (2.52) 0.28
---------- ---------- ---------- ----------
Dividends and distributions to shareholders:
Net investment income...................................... (0.09) (0.09) (0.03) --
Net realized gain on foreign currency related
transactions............................................. -- -- (0.02) --
---------- ---------- ---------- ----------
Total dividends and distributions to shareholders.......... (0.09) (0.09) (0.05) --
---------- ---------- ---------- ----------
Net asset value, end of period.............................. $14.69 $13.39 $11.60 $14.17
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Market value, end of period................................. $11.25 $10.75 $9.75 $11.88
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Total investment return(a).................................. 5.46% 11.11% (17.49)% (14.87)%
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)..................... $236,536 $215,735 $186,921 $228,171
Ratio of expenses to average net assets #................... 2.02% 1.81% 1.83% 2.02%(b)
Ratio of net investment income/(loss) to average net
assets..................................................... 0.46% 0.90% 0.65% (0.13)%(b)
Portfolio turnover rate..................................... 108.68% 23.89% 13.73% 24.63%
Average commission rate per share(c)........................ $0.0005 $0.0009 -- --
</TABLE>
- ---------------------------------------------------------------------------
* Commencement of investment operations.
** Initial public offering price of $15.00 per share less underwriting
discount of $1.05 per share and offering expenses of $0.06 per share.
# Ratios shown are inclusive of taxes, if any. If such taxes had not
been imposed, the ratio of expenses to average net assets would have
been 1.83% for the fiscal year ended November 30, 1997 and 1.96% for
the period December 29, 1993 through November 30, 1994.
(a) Total investment return at market value is based on the changes in
market price of a share during the period and assumes reinvestment of
dividends and distributions, if any, at actual prices pursuant to the
Fund's dividend reinvestment program. Total investment return does not
reflect brokerage commissions or initial underwriting discounts and
has not been annualized.
(b) Annualized.
(c) Computed by dividing the total amount of brokerage commissions paid by
the total shares of investment securities purchased and sold during
the respective periods for which commissions were charged, as required
by the SEC for fiscal years beginning on or after September 1, 1995.
- --------------------------------------------------------------------------------
See accompanying notes to financial statements.
A-15
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE A. SIGNIFICANT ACCOUNTING POLICIES
The Emerging Markets Infrastructure Fund, Inc. (the "Fund") was incorporated in
Maryland on October 12, 1993 and commenced investment operations on December 29,
1993. The Fund is registered under the Investment Company Act of 1940, as
amended, as a closed-end, non-diversified management investment company.
Significant accounting policies are as follows:
MANAGEMENT ESTIMATES: The preparation of financial statements in accordance with
generally accepted accounting principles requires management to make certain
estimates and assumptions that may affect the reported amounts and disclosures
in the financial statements. Actual results could differ from those estimates.
PORTFOLIO VALUATION: Investments are stated at value in the accompanying
financial statements. All securities for which market quotations are readily
available are valued at the closing price quoted for the securities prior to the
time of determination (but if bid and asked quotations are available, at the
mean between the last current bid and asked prices). Securities that are traded
over-the-counter are valued at the mean between the current bid and the asked
prices, if available. All other securities and assets are valued at the fair
value as determined in good faith by the Board of Directors. Short-term
investments having a maturity of 60 days or less are valued on the basis of
amortized cost. The Board of Directors has established general guidelines for
calculating fair value of non-publicly traded securities. At November 30, 1997,
the Fund held 8.56% of its net assets in securities valued in good faith by the
Board of Directors with an aggregate cost of $17,271,131 and fair value of
$20,252,676. The net asset value per share of the Fund is calculated weekly, at
the end of each month and at any other times determined by the Board of
Directors.
At the time of the Fund's organization, the Board of Directors of the Fund
adopted the following non-fundamental policies: (i) up to 30% of the Fund's
total assets may be invested in private placements of equity securities where
the Fund's investment adviser anticipates that a liquid market will develop for
these securities within a period of two to five years from the date of
acquisition; and (ii) up to 10% of the Fund's total assets may be invested in
equity securities of emerging market corporate issuers that are not
infrastructure companies. As disclosed in the Fund's prospectus at that time,
these policies and percentage limitations are subject to modification by the
Board of Directors if, in the reasonable exercise of the Board's business
judgment, modification is determined to be necessary or appropriate to carry out
the Fund's investment objective of long-term capital appreciation.
At a meeting of the Board of Directors held on December 8, 1997, the Board of
Directors unanimously approved modifications to the foregoing policies to
increase the limit on non-infrastructure companies from 10% to 20% and to permit
within that 20% limit investments in private equity funds (whether in corporate
or partnership form) that invest primarily in emerging markets without regard to
whether a liquid market is expected to develop for such investment. Any such
investment would continue to count against the overall 30% limit on private
placements. The Board approved these changes on the basis that the long-term
value added approach of an emerging markets private equity strategy is well
suited to the long-term capital appreciation objective of the Fund. When
investing through another investment fund, the Fund will bear its proportionate
share of the expenses incurred by that fund, including management fees.
CASH: Deposits held at Brown Brothers Harriman & Co., the Fund's custodian, in a
variable rate account are classified as cash. At November 30, 1997, the interest
- --------------------------------------------------------------------------------
A-16
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
rate was 5.50% which resets on a daily basis. Amounts on deposit are generally
available on the same business day.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME: Investment transactions are
accounted for on the trade date. The cost of investments sold is determined by
use of the specific identification method for both financial reporting and
income tax purposes. Interest income is recorded on an accrual basis; dividend
income is recorded on the ex-dividend date.
TAXES: No provision is made for U.S. federal income or excise taxes as it is the
Fund's intention to continue to qualify as a regulated investment company and to
make the requisite distributions to its shareholders which will be sufficient to
relieve it from all or substantially all U.S. federal income and excise taxes.
For U.S. federal income tax purposes, realized foreign currency losses incurred
after October 31, 1997, within the fiscal year, are deemed to arise on the first
day of the following fiscal year. The Fund incurred and elected to defer such
losses of $162,126.
Income received by the Fund from sources within emerging countries and other
foreign countries may be subject to withholding and other taxes imposed by such
countries.
The Fund is subject to a 10% Chilean repatriation tax with respect to all
remittances from Chile in excess of original invested capital. For the fiscal
year ended November 30, 1997, the Fund incurred $185,092 of such expense.
Effective January 23, 1997, Brazil imposes a 0.20% CONTRIBUCAO SOBRE
MOVIMENTACAO FINANCIERA ("CPMF") tax that applies to most debit transactions
carried out by financial institutions. Stock exchange transactions are not
affected by this tax. For the fiscal year ended November 30, 1997, the Fund
incurred $286,421 of such expense. For the calendar year ending December 31,
1994, the Brazilian Congress imposed a 0.25% witholding tax on financial
transactions.
FOREIGN CURRENCY TRANSLATIONS: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(I) market value of investment securities, assets and liabilities at the
current rate of exchange; and
(II) purchases and sales of investment securities, income and expenses at
the relevant rates of exchange prevailing on the respective dates of
such transactions.
The Fund does not isolate that portion of gains and losses in investments in
equity securities which is due to changes in the foreign exchange rates from
that which is due to change in market prices of equity securities. Accordingly,
realized and unrealized foreign currency gains and losses with respect to such
securities are included in the reported net realized and unrealized gains and
losses on investment transactions balances. However, the Fund does isolate the
effect of fluctuations in foreign exchange rates when determining the gain or
loss upon the sale or maturity of foreign currency denominated debt obligations
pursuant to U.S. federal income tax regulations, with such amount categorized as
foreign exchange gain or loss for both financial reporting and income tax
reporting purposes.
Net currency gains from valuing foreign currency denominated assets and
liabilities at period end exchange rates are reflected as a component of net
- --------------------------------------------------------------------------------
A-17
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
unrealized appreciation/depreciation in value of investments and translation of
other assets and liabilities denominated in foreign currencies.
Net realized foreign exchange losses represent foreign exchange gains and losses
from sales and maturities of debt securities, transactions in foreign currencies
and forward foreign currency contracts, exchange gains or losses realized
between the trade date and settlement dates on security transactions, and the
difference between the amounts of interest and dividends recorded on the Fund's
books and the U.S. dollar equivalent of the amounts actually received.
The Fund reports certain foreign currency related transactions and foreign taxes
withheld on security transactions as components of realized gains for financial
reporting purposes, whereas such components are treated as ordinary income for
U.S. federal income tax purposes.
SECURITIES LENDING: The market value of securities out on loan to brokers at
November 30, 1997, was $10,549,586, for which the Fund has received cash as
collateral of $10,879,100. Such cash collateral was reinvested into an overnight
repurchase agreement with Bear, Stearns & Co. Inc., which is in turn
collateralized by U.S. Government agency securities with a value of $11,097,392.
Security loans are required at all times to have collateral at least equal to
102% of the market value of the securities on loan; however, in the event of
default or bankruptcy by the other party to the agreement, realization and/or
retention of the collateral may be subject to legal proceedings.
For the fiscal year ended November 30, 1997, the Fund earned $56,837 in
securities lending income which is included under the caption INTEREST in the
Statement of Operations.
DISTRIBUTIONS OF INCOME AND GAINS: The Fund distributes at least annually to
shareholders substantially all of its net investment income and net realized
short-term capital gains, if any. The Fund determines annually whether to
distribute any net realized long-term capital gains in excess of net realized
short-term capital losses, including capital loss carryovers, if any. An
additional distribution may be made to the extent necessary to avoid the payment
of a 4% U.S. federal excise tax. Dividends and distributions to shareholders are
recorded by the Fund on the ex-dividend date.
On December 10, 1997, a distribution in the aggregate amount of $2,416,075,
equal to $0.15 per share was declared. The distribution was comprised of $0.03
per share from net investment income and $0.12 per share from net realized
long-term capital gains. The distribution is payable on January 16, 1998 to
shareholders of record as of December 31, 1997.
The character of distributions made during the year from net investment income
or net realized gains may differ from their ultimate characterization for U.S.
federal income tax purposes due to U.S. generally accepted accounting
principles/tax differences in the character of income and expense recognition.
At November 30, 1997 the Fund reclassified $520,197 of net realized losses from
foreign currency related transactions to undistributed net investment income.
OTHER: Some countries require governmental approval for the repatriation of
investment income, capital or the proceeds of sales of securities by foreign
investors. In addition, if there is a deterioration in a country's balance of
payments or for other reasons, a country may impose temporary restrictions on
foreign capital remittances abroad. Amounts repatriated prior to the end of
specified periods may be subject to taxes as imposed by a foreign country.
- --------------------------------------------------------------------------------
A-18
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The emerging countries' securities markets are substantially smaller, less
liquid and more volatile than the major securities markets in the United States.
A high proportion of the securities of many companies in emerging countries may
be held by a limited number of persons, which may limit the number of securities
available for investment by the Fund. The limited liquidity of emerging country
securities markets may also affect the Fund's ability to acquire or dispose of
securities at the price and time it wishes to do so.
The Fund, subject to local investment limitations, may invest up to 30% of its
assets in non-publicly traded equity securities which may involve a high degree
of business and financial risk and may result in substantial losses. Because of
the current absence of any liquid trading market for these investments, the Fund
may take longer to liquidate these positions than would be the case for publicly
traded securities. Although these securities may be resold in privately
negotiated transactions, the prices realized on such sales could be less than
those originally paid by the Fund. Further, companies whose securities are not
publicly traded may not be subject to the disclosure and other investor
protection requirements applicable to companies whose securities are publicly
traded.
The Fund may enter into repurchase agreements on U.S. Government securities with
primary government securities dealers recognized by the Federal Reserve Bank of
New York and member banks of the Federal Reserve System and on securities issued
by the governments of foreign countries, their instrumentalities and with
creditworthy parties in accordance with established procedures. Repurchase
agreements are contracts under which the buyer of a security simultaneously buys
and commits to resell the security to the seller at an agreed upon price and
date. Repurchase agreements are deposited with the Fund's custodian and,
pursuant to the terms of the repurchase agreement, the collateral must have an
aggregate market value greater than or equal to the repurchase price plus
accrued interest at all times. If the value of the underlying securities fall
below the value of the repurchase price plus accrued interest, the Fund will
require the seller to deposit additional collateral by the next business day. If
the request for additional collateral is not met, or the seller defaults on its
repurchase obligation, the Fund maintains the right to sell the underlying
securities at market value and may claim any resulting loss against the seller;
collectibility of such claims may be limited (see Note G).
- --------------------------------------------------------------------------------
A-19
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE B. AGREEMENTS
BEA Associates ("BEA") serves as the Fund's investment adviser with respect to
all investments. As compensation for its advisory services, BEA receives from
the Fund an annual fee, calculated weekly and paid quarterly, equal to 1.30% of
the Fund's average weekly net assets. For the fiscal year ended November 30,
1997, BEA earned $3,242,573 for advisory services. BEA also provides certain
administrative services to the Fund and is reimbursed by the Fund for costs
incurred on behalf of the Fund (up to $20,000 per annum). For the fiscal year
ended November 30, 1997, BEA earned $19,752 for administrative services rendered
to the Fund.
Bear Stearns Funds Management Inc. ("BSFM") serves as the Fund's U.S.
administrator. The Fund pays BSFM a fee for its services rendered that is
computed at an annual rate of 0.12% of the Fund's average weekly net assets. For
the fiscal year ended November 30, 1997, BSFM earned $299,319 for administrative
services.
The First National Bank of Boston, Sao Paulo ("Banco de Boston") and CELFIN
Administradora de Fondos de Inversion de Capital Extranjero S.A. ("Chilean
administrator") serve as the Fund's administrators with respect to Brazilian and
Chilean investments, respectively. Banco de Boston is paid for its services a
quarterly fee based on an annual rate of 0.10% of average month end Brazilian
net assets of the Fund. In return for services rendered, the Chilean
administrator's fee is paid quarterly at an annual rate of 0.10% of the Fund's
average weekly net assets invested in Chile, subject to certain minimum annual
fees and reimbursement for a predefined limit of their expenses.
NOTE C. CAPITAL STOCK
The authorized capital stock of the Fund is 100,000,000 shares of common stock,
$0.001 par value. Of the 16,107,169 shares outstanding at November 30, 1997, BEA
owned 7,169 shares.
NOTE D. INVESTMENT IN SECURITIES
For U.S. federal income tax purposes, the cost of securities owned at November
30, 1997 was $210,427,155. Accordingly, the net unrealized appreciation of
investments (including investments denominated in foreign currencies) of
$6,062,121, was composed of gross appreciation of $10,327,565 for those
investments having an excess of value over cost and gross depreciation of
$4,265,444 for those investments having an excess of cost over value.
For the fiscal year ended November 30, 1997, total purchases and sales of
securities, other than short-term investments, were $248,509,016 and
$252,608,040, respectively.
NOTE E. CREDIT AGREEMENT
The Fund, along with 18 other U.S. regulated investment companies for which BEA
serves as investment adviser, has a credit agreement with The First National
Bank of Boston. The agreement provides that each fund is permitted to borrow an
amount equal to the lesser of $50,000,000 or 25% of the net assets of the fund.
However, at no time shall the aggregate outstanding principal amount of all
loans to any of the 19 funds exceed $50,000,000. The line of credit will bear
interest at (i) the greater of the bank's prime rate or the Federal Funds
Effective Rate plus 0.50% or (ii) the Adjusted Eurodollar Rate plus 1.50%. The
maximum amount outstanding under the credit agreement for the Fund was
$4,000,000 with an average of $95,890 with an average interest rate of 8.50%
during the fiscal year ended November 30, 1997. The Fund had no amounts
outstanding under the credit agreement at November 30, 1997.
- --------------------------------------------------------------------------------
A-20
<PAGE>
- --------------------------------------------------------------------------------
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
NOTE F. RESTRICTED SECURITIES
Certain of the Fund's investments are restricted as to resale and are valued at
the direction of the Fund's Board of Directors in good faith, at fair value,
after taking into consideration appropriate indications of value. The table
below shows the number of shares held, the acquisition dates, aggregate costs,
fair value as of November 30, 1997, per share value of the securities and
percentage of net assets which the securities comprise.
<TABLE>
<CAPTION>
NUMBER FAIR VALUE VALUE PERCENTAGE
OF ACQUISITION AT NOVEMBER 30, PER OF
SECURITY SHARES DATES COST 1997 SHARE NET ASSETS
- --------------------------------------- -------- ---------------- ---------- ------------------- -------- ------------
<S> <C> <C> <C> <C> <C> <C>
Superbowl Acquisition LDC.............. 96 10/10/94 $ 960,866 $ 1,241,472 $12,932 0.52
The Renaissance Fund LDC............... 160 03/30/94 1,537,995 1,561,257 9,758 0.66
</TABLE>
The Fund may incur certain costs in connection with the disposition of the above
securities.
NOTE G. COLLATERAL FOR REPURCHASE AGREEMENT
Listed below is the collateral associated with the repurchase agreement with
Citibank, N.A. outstanding at November 30, 1997:
<TABLE>
<CAPTION>
INTEREST MATURITY CLP MARKET ACCRUED TOTAL
SECURITY SERIES RATE DATE PAR VALUE INTEREST VALUE
- -------------------------------------------------- ------ ---------- -------- ----------- -------- ------ --------
<S> <C> <C> <C> <C> <C> <C> <C>
Pagares Capitolo Diez y Nueve..................... QA 7.97% 12/18/99 4,147,498 $ 9,490 $ 349 $ 9,839
Pagares Capitolo Diez y Nueve..................... QA 7.88 09/15/99 205,842,982 471,037 2,475 473,512
Pagares Capitolo Diez y Nueve..................... QA 8.05 11/07/99 5,068,339 11,598 199 11,797
-------- ------ --------
Total......................................... $492,125 $3,023 $495,148
-------- ------ --------
-------- ------ --------
</TABLE>
- --------------------------------------------------------------------------------
A-21
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Directors
of The Emerging Markets Infrastructure Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of The
Emerging Markets Infrastructure Fund, Inc., including the schedule of
investments, as of November 30, 1997 and the related statements of operations
for the year then ended, and changes in net assets for each of the two years
then ended and the financial highlights for each of the periods presented. 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 investments owned as of
November 30, 1997, by correspondence with the custodians, brokers and issuers.
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
Emerging Markets Infrastructure Fund, Inc., as of November 30, 1997 and the
results of its operations for the year then ended, the changes in its net assets
for each of the two years then ended and its financial highlights for each of
the periods presented, in conformity with generally accepted accounting
principles.
COOPERS & LYBRAND L.L.P.
2400 Eleven Penn Center
Philadelphia, Pennsylvania
January 16, 1998
- --------------------------------------------------------------------------------
A-22
<PAGE>
Facsimile copies of the Letter of Transmittal will be accepted. The Letter
of Transmittal and certificates for Shares and any other required documents
should be sent or delivered by each shareholder or his broker, dealer,
commercial bank, trust company or other nominee to the Depositary at one of its
addresses set forth below:
The Depositary is:
BOSTON EQUISERVE
<TABLE>
<CAPTION>
BY OVERNIGHT COURIER: BY HAND:
<S> <C>
Securities Transfer & Reporting Services,
Boston Equiserve Inc.
Attn: Corporate Actions c/o Boston Equiserve
40 Campanelli Drive 100 Williams Street, Galleria
Braintree, MA 02184 New York, NY 10038
BY FIRST CLASS MAIL:
Boston Equiserve
Attn: Corporate Actions
P.O. Box 9573
Boston, MA 02205-9573
</TABLE>
Any questions or requests for assistance or additional copies of this Offer
to Purchase and the Letter of Transmittal may be directed to the Information
Agent at its telephone numbers and location listed below. Shareholders may also
contact their local broker, dealer, commercial bank or trust company or other
nominee for assistance concerning the Offer.
<TABLE>
<C> <S>
The Information Agent is: GEORGESON & COMPANY INC.
Wall Street Plaza
New York, New York 10005
Banks and Brokers Call Collect: (212) 440-9800
All Others Call Toll-Free: (800) 223-2064
</TABLE>
<PAGE>
LETTER OF TRANSMITTAL
TO ACCOMPANY SHARES OF
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
(THE "FUND")
TENDERED PURSUANT TO ITS OFFER TO PURCHASE FOR CASH
DATED MAY 26, 1999
- -----------------------------------------------------------------------------
THE REPURCHASE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT THE CLOSE OF
REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE ON JUNE 25, 1999, UNLESS
EXTENDED
(THE "TERMINATION DATE")
- -----------------------------------------------------------------------------
THE DEPOSITARY:
BOSTON EQUISERVE
FACSIMILE COPY NUMBER:
(781) 575-4826
CONFIRM BY TELEPHONE:
(781) 575-4816
FOR ACCOUNT INFORMATION CALL:
(800) 730-6001
<TABLE>
<S> <C> <C>
BY FIRST CLASS MAIL: BY OVERNIGHT, CERTIFIED OR BY HAND:
EXPRESS MAIL DELIVERY:
Boston Equiserve Boston Equiserve Securities Transfer & Reporting
Attn: Corporate Actions Attn: Corporate Actions Services, Inc.
P.O. Box 9573 40 Campanelli Drive c/o Boston Equiserve LP
Boston, MA 02205-9573 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED (SEE INSTRUCTIONS 3 AND 4)
- ----------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED SHARE(S) TENDERED
HOLDER(S): (ATTACH ADDITIONAL SIGNED SCHEDULE IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF SHARES
REPRESENTED BY NUMBER OF SHARES
CERTIFICATE NUMBER(S)* CERTIFICATE(S) TENDERED**
--------------------------- ------------------------ -------------------
--------------------------- ------------------------ -------------------
--------------------------- ------------------------ -------------------
--------------------------- ------------------------ -------------------
--------------------------- ------------------------ -------------------
--------------------------- ------------------------ -------------------
Total Shares Tendered
- ----------------------------------------------------------------------------------------------------------------------
* Need not be completed by shareholders who tender Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by any certificates delivered to the
Depositary are being tendered. See Instruction 4.
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
THE UNDERSIGNED TENDERS ALL UNCERTIFICATED SHARES THAT MAY BE HELD IN THE NAME
OF THE REGISTERED HOLDER(S) BY THE FUND'S TRANSFER AGENT PURSUANT TO THE FUND'S
DIVIDEND REINVESTMENT PLAN. / / YES / / NO
Note: If you do not check either of the boxes above, uncertificated Shares (as
defined below), if any, held in the name of the registered holder(s) by the
Fund's transfer agent pursuant to the Fund's dividend reinvestment plan will NOT
be tendered.
Delivery of this Letter of Transmittal to an address other than that shown
above or transmission of instructions via a facsimile or telex number other than
as listed above does not constitute a valid delivery. The instructions
accompanying this letter should be read carefully before this Letter of
Transmittal is completed.
This Letter of Transmittal is to be used (a) if certificates for Shares are
to be forwarded herewith, or (b) if uncertificated Shares held by the Fund's
transfer agent pursuant to the Investlink-TM- Program are to be tendered, or (c)
if tenders are to be made by book-entry transfer to any of the accounts
maintained by the Depositary at the Depository Trust Company ("DTC"), pursuant
to the procedure set forth in the Offer to Purchase under "The Offer--4.
Procedure for Tendering Shares."
1
<PAGE>
Shareholders whose certificates are not immediately available or who cannot
deliver their certificates for Shares (other than uncertificated Shares held by
the Fund's transfer agent pursuant to the Investlink-TM- Program) or deliver
confirmation of the book-entry transfer of their Shares into the Depositary's
account at DTC and all other documents required hereby to the Depositary prior
to the Termination Date may nevertheless tender their Shares according to the
guaranteed delivery procedures set forth in the Offer to Purchase under "The
Offer--4. Procedure for Tendering Shares." See Instruction 2 below. DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER
MADE TO THE ACCOUNT MAINTAINED BY THE DEPOSITARY WITH DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution: _____________________________________________
Account Number: ____________________________________________________________
Transaction Code Number: ___________________________________________________
/ / CHECK HERE IF CERTIFICATES FOR 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 Owner(s): ____________________________________________
Date of Execution of Notice of Guaranteed Delivery: ________________________
Name of Institution which Guaranteed Delivery: _____________________________
Account Number (if delivered by book-entry transfer): ______________________
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING DOCUMENTS CAREFULLY.
Sir/Madam:
The undersigned hereby tenders to The Emerging Markets Infrastructure Fund,
Inc., a Maryland corporation, the shares of common stock, par value $0.001 per
share, of the Fund (the "Shares"), described below, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated May 26, 1999, receipt
of which is hereby acknowledged, and in this Letter of Transmittal (which
together constitute the "Offer") at a price equal to an amount per Share, net to
the seller in cash, of 95% of the net asset value per Share (the "Purchase
Price"), as determined by the Fund as of the close of regular trading on the New
York Stock Exchange on June 25, 1999 or such later date to which the Offer may
be extended.
Subject to, and effective upon, acceptance for payment of the Shares
tendered herewith in accordance with the terms and subject to the conditions of
the Offer, the undersigned hereby sells, assigns and transfers to, or upon the
order of, the Fund all right, title and interest in and to all the Shares that
are being tendered hereby and that are being accepted for purchase pursuant to
the Offer (and any and all dividends, distributions, other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
May 26, 1999) and irrevocably constitutes and appoints the Depositary the true
and lawful agent and attorney-in-fact of the undersigned with respect to such
Shares (and any such dividends, distributions, other Shares or securities or
rights), with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest) to (a) deliver certificates
for such Shares (and any such other dividends, distributions, other Shares or
securities or rights) or transfer ownership of such Shares (and any such other
dividends, distributions, other Shares or securities or rights), together, in
either such case, with all accompanying evidences of transfer and authenticity
to or upon the order of the Fund, upon receipt by the Depositary, as the
undersigned's agent, of the purchase price, (b) present such Shares (and any
such other dividends, distributions, other Shares or securities or rights) for
transfer on the books of the Fund, and (c) receive all benefits and otherwise
exercise all rights of beneficial ownership of such Shares (and any such other
dividends, distributions, other Shares or securities or rights), all in
accordance with the terms of the Offer to Purchase.
The undersigned hereby represents and warrants that: (a) the undersigned has
full power and authority to tender, sell, assign and transfer the tendered
Shares (and any and all dividends, distributions, other Shares or other
securities or rights issued or issuable in respect of such Shares on or after
May 26, 1999); (b) when and to the extent the Fund accepts the Shares for
purchase, the Fund will acquire good, marketable and unencumbered title hereto,
free and clear of all liens, restrictions, charges, proxies, encumbrances or
other obligations relating to their sale or transfer, and not subject to any
adverse claim; (c) on request, the undersigned will execute and deliver any
additional documents deemed by the Depositary or the Fund to be necessary or
desirable to complete the sale, assignment and transfer of the tendered Shares
(and any and all dividends, distributions, other Shares or securities or rights
issued or issuable in respect of such Shares on or after May 26, 1999); and (d)
the undersigned has read and agreed to all of the terms of the Offer to Purchase
and this Letter of Transmittal.
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
certificated form, the certificate(s) representing such Shares must be returned
together with this Letter of Transmittal.
The undersigned recognizes that, under certain circumstances set forth in
the Offer to Purchase, the Fund may terminate or amend the Offer or may not be
required to purchase any of the Shares tendered hereby. In any such event, the
undersigned understands that certificate(s) for the Shares not purchased, if
any, will be returned to the undersigned at its registered address unless
otherwise indicated under the Special Delivery Instructions below. 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
owner thereof if the Fund purchases none of such Shares. The undersigned
understands that acceptance of Shares by the Fund shall constitute a binding
agreement between the undersigned 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 undersigned and mailed to the address indicated,
unless otherwise indicated 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.
2
<PAGE>
All authority conferred or agreed to be conferred in this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Shares tendered pursuant to the Offer may be withdrawn at any time prior to the
Termination Date in accordance with the procedure set forth in the Offer to
Purchase under "The Offer--3. Withdrawal Rights." After the Termination Date,
tenders made pursuant to the Offer will be irrevocable.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
Unless otherwise indicated herein under "Special Payment Instructions,"
please issue the check for the Purchase Price and/or return any certificates for
Shares not tendered or accepted for payment (and accompanying documents, as
appropriate) in the name(s) of the registered holder(s) appearing under
"Description of Shares Tendered." Similarly, unless otherwise indicated under
"Special Delivery Instructions," please mail the check for the Purchase Price
and/or return any certificates for Shares not tendered or 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 either the Special Delivery Instructions or the Special Payment
Instructions are completed (in which case a medallion guarantee is required (See
Instruction 1)), please issue the check for the Purchase Price and/or return
such certificates to the person or persons 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 so tendered.
The undersigned recognizes that the Special Payment Instructions and the Special
Delivery Instructions are NOT applicable to Shares tendered by book-entry
transfer, nor to uncertificated Shares held by the Fund's transfer agent
pursuant to the Fund's dividend reinvestment plan which may be tendered hereby.
<TABLE>
<S> <C>
- ------------------------------------------------ ------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(See Instructions 1, 5, 6, 7 and 10) (See Instructions 1, 5, 6, and 7)
To be completed ONLY if certificates for Shares
To be completed ONLY if certificates for Shares not tendered or not purchased and/or the check for
not tendered or not purchased and/or the check for the purchase price of Shares purchased are to be
the purchase price of Shares purchased are to be issued in the name of the undersigned, but sent to
issued in the name of and sent to someone other someone other than the undersigned, or to the
than the undersigned. undersigned at an address other than that shown
above.
Issue / / Check Mail / / Check
/ / Certificate to: / / Certificate to:
Name --------------------------------------------- Name ---------------------------------------------
(Please Print) (Please Print)
Address ------------------------------------------ Address ------------------------------------------
- -------------------------------------------------- --------------------------------------------------
(City, State, Zip Code) (City, State, Zip Code)
Complete Payer Substitute Form W-9
- --------------------------------------------------
(Taxpayer Identification (Social Security) Number)
By signing and completing the form above, under
the penalties of perjury, I/we certify that the
above tax identification or social security
number(s) is/are correct.
Note: Failure to complete and sign may result in
backup withholding of 31% of the payments due to
you. See Instruction 10.
</TABLE>
- --------------------------------------------------------------------------------
ODD LOTS
(SEE INSTRUCTION 12)
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially or of record an aggregate of not more
than 99 Shares. The undersigned either (check one box):
/ / Is the beneficial or record owner of an aggregate of not more than 99
Shares, all of which are being tendered; or
/ / Is a broker, dealer, commercial bank, trust company or other nominee that
(a) is tendering for the beneficial owner(s) thereof Shares with respect
to which it is the record holder, and (b) believes, based upon
representations made to it by such beneficial owner(s), that each such
person is the beneficial owner of an aggregate of not more than 99 Shares
and is tendering all of such Shares;
and, in either case, hereby represents that the above indicated information is
true and correct as to the undersigned.
- --------------------------------------------------------------------------------
3
<PAGE>
<TABLE>
<S> <C> <C>
- ------------------------------------------------------------------------------------------
SIGN HERE
IMPORTANT: COMPLETE AND SIGN THE SUBSTITUTE FORM W-9 HEREIN OR FORM W-8
(ENCLOSED) AS APPLICABLE (SEE INSTRUCTIONS 1, 5, 6, AND 11).
The Offer is hereby accepted in accordance with its terms
----------------------------------------------------------------------
----------------------------------------------------------------------
(SIGNATURES OF SHAREHOLDER(S))
Dated: _______________________________________________________ , 1999
(Must be signed by the registered holder(s) exactly as name(s) appear(s) on certificate(s)
for the Shares or on a security position listing or by person(s) authorized to become
registered holder(s) by certificate(s) and documents transmitted herewith. If signature is
by attorney-in-fact, executor, administrator, trustee, guardian, agent, officer of a
corporation or another person acting in a fiduciary or representative capacity, please
provide the following information. See Instruction 5.)
Name(s)_______________________________________________________________
----------------------------------------------------------------------
(PLEASE PRINT)
Capacity (Full
Title)_______________________________________________________________
Address_______________________________________________________________
----------------------------------------------------------------------
CITY STATE
CODE
Area Code and Telephone Number _________________________
Employer Identification or Social Security Number
_________________________
GUARANTEE OF SIGNATURE(S)
(See Instructions 1 and 5)
Authorized Signature(s)
----------------------------------------------
Name ---------------------------------------------------------------
(PLEASE PRINT)
Name of Firm -------------------------------------------------------
Address
-------------------------------------------------------------
----------------------------------------------------------------------
CITY STATE
CODE
Dated ______________________________________________________ , 1999
</TABLE>
4
<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 (a) if this Letter of Transmittal is signed by the
registered holder(s) of Shares tendered herewith (including, for purposes of
this document, any participant in the book-entry transfer facility of 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" above, or (b)
if such Shares are tendered for the account of a firm (an "Eligible
Institution") which is a bank, broker, dealer, credit union, savings association
or other entity which is a member in good standing of a Stock Transfer
Association 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
Investlink-TM- Program 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 the Offer to Purchase under "The Offer--4. Procedure for
Tendering Shares."
THE METHOD OF DELIVERY OF SHARE CERTIFICATES, THIS LETTER OF TRANSMITTAL AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER
FACILITY, 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 photocopy hereof bearing original signature(s) and any
required signature guarantees), and any other documents required by this Letter
of Transmittal 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
photocopy 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 above boxes is
inadequate, the necessary information should be listed on a separate schedule
signed by all of the required signatories and attached hereto.
4. PARTIAL TENDERS (NOT APPLICABLE TO SHAREHOLDERS WHO TENDER BY BOOK-ENTRY
TRANSFER). If fewer than all the Shares represented by any certificate
delivered to the Depositary are to be tendered, fill in the number of Shares
that are to be tendered in the box entitled "Number of Shares Tendered." In such
case, a new certificate for the remainder of the Shares represented by the old
certificate will be sent to the person(s) signing this Letter of Transmittal,
unless otherwise provided in the "Special Payment Instructions" or "Special
Delivery Instructions" boxes on this Letter of Transmittal, as promptly as
practicable following the expiration or termination of the Offer. All Shares
represented by certificates delivered to the Depositary will be deemed to have
been tendered unless otherwise indicated. If more than 3,011,714 Shares are duly
tendered prior to the expiration of the Offer (as extended), the Fund will
accept for payment 3,011,714 Shares from tendering stockholders, in accordance
with the terms and conditions specified in the Offer to Purchase, as follows:
(i) all Shares validly tendered before the Termination Date by any shareholder
who owns beneficially, as of the close of business on June 25, 1999, an
aggregate of fewer than 100 Shares ("Odd Lot Shares") and who tenders all of
such Shares and completes the box captioned "Odd Lots" on this Letter of
Transmittal and, if applicable, Notice of Guaranteed Delivery, will be
purchased; and (ii) other Shares validly tendered before the Termination Date
will be purchased on a pro rata basis (with appropriate adjustments to avoid
purchases of fractional Shares). Certificates representing Shares tendered but
not purchased will be returned promptly following the termination, expiration or
withdrawal of the offer, without expense to the tendering stockholder.
5. SIGNATURES ON LETTER OF TRANSMITTAL, AUTHORIZATIONS AND ENDORSEMENTS.
(a) 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) without alteration, enlargement or any
change whatsoever.
(b) 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.
(c) If any of the tendered Shares hereby are registered in different names
on several certificates, it will be necessary to complete, sign and submit as
many separate Letters of Transmittal as there are different registrations of
certificates.
(d) If this Letter of Transmittal or stock powers 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.
(e) 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. (SEE INSTRUCTION 1)
(f) If this Letter of Transmittal is signed by a person other than the
registered holder(s) of the certificate(s) listed, 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) appears on the certificate(s)
for such Shares. SIGNATURES ON SUCH CERTIFICATES OR STOCK POWERS MUST BE
GUARANTEED BY AN ELIGIBLE INSTITUTION. (SEE INSTRUCTION 1)
5
<PAGE>
6. TRANSFER TAXES. The Fund will pay any transfer taxes payable on the
transfer to it of Shares purchased pursuant to the Offer. If, however, (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.
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" on this Letter of
Transmittal must be completed.
8. IRREGULARITIES. 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 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.
NONE OF THE FUND, THE INVESTMENT ADVISER TO THE FUND, THE DEPOSITARY, THE
INFORMATION AGENT OR ANY OTHER PERSON IS OR WILL BE OBLIGATED TO GIVE ANY NOTICE
OF DEFECTS IN TENDERS, AND NONE OF THEM SHALL 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 Georgeson & Company, Inc., the
information agent for the Offer (the "Information Agent"), by telephoning
1-800-223-2064 toll-free. Requests for additional copies of the Offer to
Purchase and this Letter of Transmittal may also be directed to the Information
Agent. 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.
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 (i) 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 (ii) 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 Termination 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 such stockholder's
representation that (i) such stockholder has a net long position in the Shares
being tendered within the meaning of Rule 14e-4 promulgated under the Exchange
Act; and (ii) the tender of such Shares complies with Rule 14e-4.
11. BACKUP WITHHOLDING TAX. Each tendering U.S. Stockholder who has not
already submitted a correct, completed and signed Form W-9 to the Fund, or does
not otherwise establish an exemption from withholding, must notify the
Depositary of such stockholder's correct taxpayer identification number ("TIN")
(or certify that such taxpayer is awaiting a TIN) and provide certain other
information by completing and providing to the Depositary the Substitute Form
W-9 provided under "Important Tax Information" below. Failure either to provide
the information on the form or to check the box in Part 2 of the form may
subject the tendering stockholder to 31% federal income tax backup withholding
on the payments made to the stockholder (or other payee) with respect to Shares
purchased pursuant to the Offer. The box in Part 3 of the form 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 3 is checked
and the Depositary is not provided with a TIN within sixty (60) days, the
Depositary will withhold 31% on all such payments thereafter until a TIN is
provided to the Depositary.
Each tendering non-U.S. stockholder who has not already submitted a correct,
completed and signed Form W-8 to the Fund should complete the Form W-8 included
with this Letter of Transmittal and provide it to the Depositary.
IMPORTANT: THIS LETTER OF TRANSMITTAL, OR FACSIMILE HEREOF BEARING ORIGINAL
SIGNATURE(S), PROPERLY COMPLETED AND DULY EXECUTED, TOGETHER WITH ANY REQUIRED
SIGNATURE GUARANTEES, SHARES (IN PROPER CERTIFICATED OR UNCERTIFICATED FORM),
AND ALL OTHER REQUIRED DOCUMENTS MUST BE RECEIVED BY THE DEPOSITARY, OR A
PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY MUST BE
RECEIVED BY THE DEPOSITARY, ON OR PRIOR TO THE TERMINATION DATE.
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 such stockholder's
representation that the Shares being tendered represent Shares actually owned by
such stockholder as of the date of purchase of Shares pursuant to the Offer.
6
<PAGE>
IMPORTANT TAX INFORMATION
THE FEDERAL INCOME TAX DISCUSSION SET FORTH BELOW IS INCLUDED FOR GENERAL
INFORMATION ONLY. IT MAY NOT BE APPLICABLE TO NON-U.S. STOCKHOLDERS. ALL
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISERS AS TO THE SPECIFIC TAX
CONSEQUENCES TO THEM OF THE OFFER.
SUBSTITUTE FORM W-9 OR FORM W-8
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, each tendering U.S.
stockholder must provide the Depositary with such stockholder's correct TIN by
completing the Substitute Form W-9 set forth below. In general, if a stockholder
is an individual, the TIN is the Social Security number of such individual. If
the Depositary is not provided with the correct TIN, the stockholder may be
subject to a penalty imposed by the Internal Revenue Service. Certain
stockholders (including, among others, all corporations) are not subject to
these backup withholding and reporting requirements, but should nonetheless
complete a Substitute Form W-9 to avoid possible erroneous backup withholding.
For further information regarding backup withholding and instructions for
completing the Substitute Form W-9 (including how to obtain a TIN if you do not
have one and how to complete the Substitute Form W-9 if Shares are held in more
than one name), consult the enclosed Guidelines for Certification of Taxpayer
Identification Number.
In order for a non-U.S. stockholder to avoid 31% backup withholding, such
stockholder must submit a statement to the Depositary signed under penalties of
perjury attesting as to its non-U.S. status. Form W-8 and instructions for such
statement are enclosed for such stockholders.
CONSEQUENCES OF FAILURE TO FILE SUBSTITUTE FORM W-9 OR FORM W-8
Failure to complete Substitute Form W-9 or Form W-8 will not, by itself,
cause the Shares to be deemed invalidly tendered but may require the Depositary
to withhold 31% of the amount of any payments made pursuant to the Offer. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, the
stockholder may claim a refund from the Internal Revenue Service.
12. ODD LOTS. As described in the Offer to Purchase under "The Offer--1.
Number of Shares; Proration," the Fund will purchase Shares validly tendered and
not properly withdrawn prior to the Termination Date by any stockholder who owns
beneficially or of record an aggregate of not more than 99 shares (an "Odd Lot
Holder"). This preference will not be available unless the item in this Letter
of Transmittal captioned "Odd Lots" is completed.
TO BE COMPLETED BY ALL TENDERING REGISTERED
HOLDERS OF SECURITIES
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
PAYER'S NAME: BOSTON EQUISERVE
- -----------------------------------------------------------------------------------------------------------------------------------
Part 1: PLEASE PROVIDE YOUR TIN IN THE APPROPRIATE BOX AT Social Security Number
SUBSTITUTE RIGHT AND CERTIFY BY SIGNING AND DATING BELOW. or
FORM W-9 Employer Identification Number
--------------------------
-------------------------------------------------------------------------------------------------
Department of the Treasury NAME (if a joint account or you changed your name, see Guidelines)
Internal Revenue Service
CHECK APPROPRIATE BOX:
/ / Individual/Sole proprietor
/ / Corporation
/ / Partnership / / Other
------------------------------------------------------
BUSINESS NAME, if different from above (See Guidelines):
------------------------------------------------------
ADDRESS
------------------------------------------------------
CITY STATE ZIP CODE
Part 2--For Payees exempt from backup withholding, see the Important Tax Information above and
Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 enclosed
herewith and complete as instructed herein.
Part 3--CERTIFICATION--Under penalties of perjury, I certify that (i) the number shown on this
form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to
me and (ii) I am not subject to backup withholding because: (a) I am exempt from backup
PAYER'S REQUEST FOR TAXPAYER withholding; or (b) I have not been notified by the IRS that I am subject to backup withholding
IDENTIFICATION NUMBER (TIN) as a result of a failure to report all interest or dividends; or (c) the IRS has notified me that
AND CERTIFICATION I am no longer subject to backup withholding.
SIGNATURE ------------------ DATE ---------------
CERTIFICATION INSTRUCTIONS--You must cross out Item (ii) above if you have been notified by the
IRS that you are currently subject to backup withholding because of underreporting interest or
dividends on your tax return. If you are exempt from backup withholding, check the box in Part 5
below.
Part 4--AWAITING TIN / / Part 5--EXEMPT TIN / /
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE>
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU DO NOT
HAVE A TAXPAYER IDENTIFICATION NUMBER
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and
either (a) 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 (b) 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, 31% of all reportable payments due to me pursuant to the Offer will be
withheld until I provide a Taxpayer Identification Number to the payer and that, if I do not provide my
Taxpayer Identification Number within 60 days, such retained amounts shall be remitted to the IRS as backup
withholding.
---------------------------------------------------------- ------------------------------------------
SIGNATURE DATE
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: FAILURE TO COMPLETE THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER TO REPURCHASE. PLEASE
REVIEW THE ENCLOSED "GUIDELINES FOR CERTIFICATION OF TAXPAYER
IDENTIFICATION NUMBER OF SUBSTITUTE FORM W-9" FOR ADDITIONAL DETAILS.
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A MANUALLY SIGNED FACSIMILE THEREOF
(TOGETHER WITH CERTIFICATES FOR SHARES AND ALL OTHER REQUIRED DOCUMENTS) OR THE
NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
CLOSE OF REGULAR TRADING ON THE NYSE, ON JUNE 25, 1999 OR SUCH LATER DATE TO
WHICH THE OFFER MAY BE EXTENDED, AT THE APPROPRIATE ADDRESS SET FORTH BELOW:
<TABLE>
<S> <C> <C>
THE DEPOSITARY:
BOSTON EQUISERVE
FACSIMILE COPY NUMBER:
(781) 575-4826
CONFIRM BY TELEPHONE:
(781) 575-4816
FOR ACCOUNT INFORMATION CALL:
(800) 730-6001
BY OVERNIGHT, CERTIFIED OR
EXPRESS MAIL DELIVERY:
BY FIRST CLASS MAIL: BY HAND:
Boston Equiserve Boston Equiserve Securities Transfer &
Attn: Corporate Actions Attn: Corporate Actions Reporting Services, Inc.
P.O. Box 9573 40 Campanelli Drive c/o Boston Equiserve LP
Boston, MA 02205-9573 Braintree, MA 02184 100 William Street, Galleria
New York, NY 10038
</TABLE>
Any questions or requests for assistance or additional copies of this Letter
of Transmittal, the Offer to Purchase, the Notice of Guaranteed Delivery and
other documents may be directed to the Information Agent at its telephone number
and location listed below. Shareholders may also contact their broker, dealer,
commercial bank or trust company or other nominee for assistance concerning the
Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
GEORGESON & COMPANY INC.
WALL STREET PLAZA
NEW YORK, NEW YORK 10005
BANKS AND BROKERS CALL COLLECT:
(212) 440-9800
ALL OTHERS CALL TOLL-FREE:
(800) 223-2064
8
<PAGE>
NOTICE OF GUARANTEED DELIVERY
REGARDING THE OFFER BY
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
TO PURCHASE FOR CASH UP TO 3,011,714 ISSUED AND OUTSTANDING SHARES
AT 95% OF NET ASSET VALUE PER SHARE, AS DETERMINED BY THE FUND AS OF THE CLOSE
OF REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE ON JUNE 25, 1999 OR SUCH LATER
DATE TO WHICH THE OFFER IS EXTENDED (THE "TERMINATION DATE").
This form must be used to accept the Offer if a shareholder's certificates
for Shares are not immediately available or if time will not permit the Letter
of Transmittal and other required documents to reach Boston Equiserve, the
Depositary, on or before the Termination Date. Terms used in this form that are
not otherwise defined herein shall have the meanings specified in the Offer to
Purchase, dated May 26, 1999. This form may be delivered by hand, overnight
courier or mail to Boston Equiserve, at the address set forth below AND MUST
BEAR ORIGINAL SIGNATURES (NOT PHOTOCOPIES OR FACSIMILES). Tenders using this
form may be made only by or through a member firm of a registered national
securities exchange, or a commercial bank or trust company having an office,
branch or agency in the United States.
Depositary: Boston Equiserve
<TABLE>
<S> <C>
By Overnight Courier: By Hand:
Boston Equiserve Securities Transfer & Reporting Services,
Attn: Corporate Actions Inc.
40 Campanelli Drive c/o Boston Equiserve
Braintree, MA 02184 100 Williams Street, Galleria
New York, NY 10038
By First Class Mail:
Boston Equiserve
Attn: Corporate Actions
P.O. Box 9573
Boston, MA 02205-9573
</TABLE>
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 Emerging Markets Infrastructure Fund,
Inc. (the "Fund"), upon the terms and subject to the conditions set forth in its
Offer to Purchase, dated May 26, 1999, and the related Letter of Transmittal,
receipt of which are hereby acknowledged, the number of Shares specified below,
and all Shares that may be held in the name(s) of the registered holder(s) by
the Fund's transfer agent pursuant to the Investlink-TM- Program, in accordance
with the guaranteed delivery procedures set forth in the Offer to Purchase under
"The Offer--4. Procedures for Tendering Shares."
<TABLE>
<S> <C>
Number of Shares Tendered:
Certificate Nos. (if available): Name(s) of Record Holder(s):
- -------------------------------------------- --------------------------------------------
- -------------------------------------------- --------------------------------------------
Address:
--------------------------------------------
--------------------------------------------
--------------------------------------------
If Shares will be tendered by book-entry
transfer to The Depository Trust Company,
please check box: [ --]
DTC Participant Number:
------------------------------------
Area Code and Telephone Number:
-------------------------------
</TABLE>
The undersigned also tenders all uncertificated Shares that may be held in
the name(s) of the registered holder(s) by the Fund's transfer agent pursuant to
the Investlink-TM- Program.
<TABLE>
<S> <C>
Dated: , 1999 --------------------------------------------
Signature
</TABLE>
<PAGE>
GUARANTEE
The undersigned, a member firm of a registered national securities exchange,
or a commercial bank or trust company having an office, branch or agency in the
United States, hereby: (a) represents that the above named person(s) "own(s)"
the Shares tendered hereby 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 Boston Equiserve, the
Depositary, certificates representing the Shares tendered hereby, 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, and any
other required documents, within three business days after the Termination Date.
Name of Firm: ________________________
(Please Print)
Authorized Signature: ________________
Name: ________________________________
Title: _______________________________
Address: _____________________________
(Include Zip Code)
______________________________________
(Area Code and Telephone Number)
Dated:
- ----
- ---, 1999
<PAGE>
OFFER BY
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
TO PURCHASE FOR CASH
UP TO 3,011,714 ISSUED AND OUTSTANDING SHARES
AT 95% OF NET ASSET VALUE PER SHARE, AS DETERMINED
BY THE FUND AS OF THE CLOSE OF REGULAR TRADING ON
THE NEW YORK STOCK EXCHANGE ON JUNE 25, 1999 OR SUCH
LATER DATE TO WHICH THE OFFER IS EXTENDED.
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT THE CLOSE OF REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE,
ON JUNE 25, 1999, UNLESS EXTENDED (THE "TERMINATION DATE").
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE FUND'S
OFFER TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
MAY 26, 1999
TO BROKERS, DEALERS, COMMERCIAL BANKS,
TRUST COMPANIES AND OTHER NOMINEES:
We are enclosing herewith the materials listed below relating to the offer
of The Emerging Markets Infrastructure Fund, Inc., a Maryland corporation
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company (the "Fund"), to
purchase up to 3,011,714 of the Fund's shares of common stock, par value $0.001
(the "Shares") upon the terms and conditions set forth in its Offer to Purchase
dated May 26, 1999 and in the related Letter of Transmittal (which together
constitute the "Offer"). The price to be paid for the Shares is an amount per
Share, net to the seller in cash, equal to 95% of the net asset value per Share
as determined by the Fund as of the close of regular trading on the New York
Stock Exchange, on June 25, 1999, or such later date to which the Offer is
extended.
We are asking you to contact your clients for whom you hold Shares
registered in your name (or in the name of your nominee) or who hold Shares
registered in their own names. Please bring the Offer to their attention as
promptly as possible. No fees or commission will be payable to brokers, dealers
or other persons for soliciting tenders for Shares pursuant to the Offer. The
Fund will, however, upon request, reimburse you for reasonable and customary
mailing and handling expenses incurred by you in forwarding any of the enclosed
materials to your clients. The Fund will pay all transfer taxes on its purchase
of Shares, subject to Instruction 6, "Transfer Taxes," of the Letter of
Transmittal. However, backup withholding at a 31% rate may be required unless
either an exemption is proved or the required taxpayer identification
information and certifications are provided. See "The Offer--5. Certain Federal
Income Tax Consequences" in the Offer to Purchase, and "Instructions--11. Backup
Withholding Tax" in the Letter of Transmittal.
For your information and for forwarding to your clients, we are enclosing
the following documents:
1. A letter to Shareholders of the Fund from William W. Priest, Jr.,
Chairman of the Board of the Fund;
2. The Offer to Purchase, dated May 26, 1999;
3. The Letter of Transmittal for your use and to be provided to your
clients;
4. Notice of Guaranteed Delivery;
<PAGE>
5. Form of letter to clients which may be sent to your clients for whose
accounts you hold Shares registered in your name (or in the name of your
nominee); and
6. Return envelope addressed to Boston Equiserve, the depositary for the
Offer (the "Depositary").
The Offer is not being made to, nor will the Fund accept tenders from,
holders of Shares in any State or other jurisdiction in which the Offer would
not be in compliance with the securities or Blue Sky laws of such jurisdiction.
As described in the Fund's Offer to Purchase under "The Offer--4. Procedure
for Tendering Shares," tenders may be made without the concurrent deposit of
stock certificates if (1) such tenders are made by or through a broker or dealer
that is a member firm of a registered national securities exchange or a member
of the National Association of Securities Dealers, Inc. or a commercial bank or
trust company having an office, branch, or agency in the United States; and (2)
certificates for Shares (or a confirmation of a book-entry transfer of such
Shares into the Depositary's account at DTC (as defined in the Letter of
Transmittal)), together with a properly completed and duly executed Letter of
Transmittal, and any other documents required by the Letter of Transmittal, are
received by the Depositary within three business days after the Termination
Date.
As described in the Offer, the Fund will purchase all Shares from tendering
shareholders who own 99 Shares or less. Furthermore, if this tender is made by a
broker, commercial bank, trust company or other nominee for beneficial owner(s)
of Shares with respect to which it is the record holder, such broker, commercial
bank, trust company or other nominee must represent and warrant in the Letter of
Transmittal that it believes, based upon representations made to it by such
beneficial owner(s), that such person owns 99 Shares or less.
Neither the Fund, its investment adviser nor its Board of Directors makes
any recommendation to any shareholder as to whether to tender any Shares.
Additional copies of the enclosed material may be obtained from Georgeson &
Company, Inc., the information agent for the Offer (the "Information Agent") at
the appropriate address and telephone number set forth in the Fund's Offer. Any
questions you have with respect to the Offer should be directed to the
Information Agent at its address and telephone numbers set forth in the Offer.
Very truly yours,
THE EMERGING MARKETS
INFRASTRUCTURE FUND, INC.
By:
/s/ William W. Priest, Jr.
------------------------------------------------------------------------------
William W. Priest, Jr.
Chairman of the Board
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU OR
ANY OTHER PERSON THE AGENT OF THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.,
THE FUND'S INVESTMENT ADVISER, THE INFORMATION AGENT OR THE DEPOSITARY OR
AUTHORIZE YOU OR ANY OTHER PERSON TO MAKE ANY STATEMENTS OR USE ANY MATERIAL ON
THEIR BEHALF WITH RESPECT TO THE OFFER, OTHER THAN THE MATERIAL ENCLOSED
HEREWITH AND THE STATEMENTS SPECIFICALLY SET FORTH IN SUCH MATERIAL.
<PAGE>
OFFER BY
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
TO PURCHASE FOR CASH
UP TO 3,011,714 ISSUED AND OUTSTANDING SHARES
AT 95% OF NET ASSET VALUE PER SHARE, AS DETERMINED
BY THE FUND AS OF THE CLOSE OF REGULAR TRADING ON
THE NEW YORK STOCK EXCHANGE ON JUNE 25, 1999 OR SUCH
LATER DATE TO WHICH THE OFFER IS EXTENDED.
- --------------------------------------------------------------------------------
THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT THE CLOSE OF REGULAR TRADING ON THE NEW YORK STOCK EXCHANGE,
ON JUNE 25, 1999, UNLESS EXTENDED (THE "TERMINATION DATE").
- --------------------------------------------------------------------------------
THIS OFFER IS NOT CONDITIONED ON ANY MINIMUM NUMBER OF SHARES BEING
TENDERED, BUT IS SUBJECT TO OTHER CONDITIONS AS OUTLINED IN THE OFFER
TO PURCHASE AND IN THE LETTER OF TRANSMITTAL.
May 26, 1999
To Our Clients:
Enclosed for your consideration is the Offer to Purchase, dated May 26,
1999, of The Emerging Markets Infrastructure Fund, Inc., a Maryland corporation
registered under the Investment Company Act of 1940, as amended, as a
closed-end, non-diversified management investment company (the "Fund"), and a
related Letter of Transmittal (which together constitute the "Offer"), pursuant
to which the Fund is offering to purchase up to 3,011,714 of the Fund's
outstanding Shares of common stock, par value $0.001 (the "Shares"), upon the
terms and conditions set forth in the Offer.
The Offer to Purchase and the Letter of Transmittal are being forwarded to
you for your information only and cannot be used by you to tender Shares held by
us for your account. We are the holder of record of Shares held 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. The purchase price to be paid for the Shares is an amount per Share,
net to the seller in cash, equal to 95% of the net asset value per Share as
determined by the Fund as of the close of regular trading on the New York
Stock Exchange on June 25, 1999 or such later date to which the Offer is
extended. The current net asset value of the Fund is calculated each
business day and may be obtained by calling Georgeson & Company, Inc., the
Fund's Information Agent, toll free at (800) 223-2064.
2. The Offer is not conditioned upon any minimum number of Shares being
tendered.
3. Upon the terms and subject to the conditions of the Offer, the Fund
will purchase up to 3,011,714 Shares (representing 20% of the Fund's
outstanding Shares), validly tendered on or prior to the Termination Date.
The Fund will purchase all Shares from tendering Shareholders who own fewer
than 100 Shares. Shares tendered by shareholders owning more than 99 Shares
will be subject to proration if more than 3,011,714 Shares are tendered
pursuant to the Offer.
4. Tendering shareholders will not be obligated to pay brokerage
commissions or (subject to the provisions of "Instructions--6. Transfer
Taxes" in the Letter of Transmittal) stock transfer taxes on the purchase of
Shares by the Fund pursuant to the Offer.
5. Your instructions to us should be forwarded in ample time before the
Termination Date to permit us to submit a tender on your behalf.
An envelope to return your instructions to us is enclosed.
YOUR INSTRUCTIONS TO US SHOULD BE FORWARDED AS PROMPTLY AS POSSIBLE IN ORDER
TO PERMIT US TO SUBMIT A TENDER ON YOUR BEHALF IN ACCORDANCE WITH THE TERMS AND
CONDITIONS OF 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 making or
acceptance of the Offer would not be in compliance with applicable law.
Neither the Fund, its investment adviser nor its Board of Directors is
making any recommendation to any Shareholder whether to tender or refrain from
tendering Shares in the Offer. Each shareholder is urged to read and evaluate
the Offer and accompanying materials carefully.
<PAGE>
INSTRUCTIONS
The undersigned acknowledge(s) receipt of your letter, and enclosed Offer to
Purchase and Letter of Transmittal, relating to the offer by The Emerging
Markets Infrastructure Fund, Inc. to purchase up to 3,011,714 of its outstanding
Shares at a price equal to 95% of the net asset value per share, as determined
by the Fund as of the Termination Date.
This will instruct you to tender to the Fund the number of Shares indicated
below (which are held by you for the account of the undersigned), upon the terms
and subject to the conditions set forth in the Offer and in the related Letter
of Transmittal that you have furnished to the undersigned.
-------------------------------------------------------------------------------
AGGREGATE NUMBER OF SHARES TO BE TENDERED:
---------- SHARES
(ENTER NUMBER OF SHARES TO BE TENDERED.)
-------------------------------------------------------------------------------
ODD LOTS
This section is to be completed ONLY if Shares are being tendered by or on
behalf of a person owning beneficially or of record an aggregate of not more
than 99 Shares. The undersigned:
[ ] Is the beneficial or record owner of an aggregate of not more than 99
Shares, all of which are being tendered and hereby represents that the
information indicated below is true and correct as to the undersigned.
- --------------------------------------------------------------------------------
SIGNATURE BOX
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Signature(s))
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(Please print Name(s) and Address here)
- --------------------------------------------------------------------------------
(Area Code and Telephone No.)
- --------------------------------------------------------------------------------
(Taxpayer Identification (Social Security) Number)
-------------------------------------------------------------------------------
Date:
- ---------------------, 1999
2
<PAGE>
THE EMERGING MARKETS INFRASTRUCTURE FUND, INC.
c/o Credit Suisse Asset Management
One Citicorp Center
153 East 53rd Street
New York, New York 10022
Dear Shareholder:
The Emerging Markets Infrastructure Fund, Inc. (the "Fund") is offering to
purchase up to 3,011,714 shares of its outstanding shares of Common Stock, par
value $0.0001 per share (the "Shares"), at a price per Share, net to the seller
in cash, equal to 95% of the net asset value in U.S. Dollars ("NAV") per Share,
as determined by the Fund as of the close of regular trading on the New York
Stock Exchange on June 25, 1999 or such later date to which the offer is
extended, upon the terms and subject conditions set forth in the enclosed Offer
to Purchase and the related Letter of Transmittal (which together constitute the
"Offer").
THE OFFER EXPIRES AT THE CLOSE OF REGULAR TRADING ON THE NYSE, ON JUNE 25,
1999, UNLESS EXTENDED.
If, after reviewing the information set forth in the Offer to Purchase and
Letter of Transmittal, you wish to tender Shares for purchase by the Fund,
please contact your broker, dealer or other nominee to effect the tender for you
or, if you are the record owner of the Shares, you may follow the instructions
contained in the Offer to Purchase and Letter of Transmittal. Tendering
shareholders will not be 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; however, a broker, dealer or other
person may charge a fee for processing the transactions on behalf of
shareholders. Shareholders are not required to pay a service charge to the Fund
or to Boston Equiserve, the Depositary for the Offer, in connection with their
tender of Shares.
Neither the Fund, its investment adviser nor its Board of Directors is
making any recommendation to any holder of Shares as to whether to tender
Shares. Each shareholder is urged to consult his or her broker, investment
adviser or tax adviser before deciding whether to tender any shares.
The Fund's NAV on May 21, 1999 was $10.76 per Share. The Fund's NAV is
available at the Fund's website, reachable at www.cefsource.com. In addition,
during the pendency of the Offer, you may obtain the NAV for the Fund as of the
close of business on the previous business day by calling Georgeson & Company,
Inc., the information agent for the Offer, toll-free, at 1-800-223-2064 between
the hours of 9:00 a.m. and 5:00 p.m., New York City time, Monday through Friday
(except holidays). Requests for additional copies of the Offer to Purchase, the
Letter of Transmittal and any other tender offer documents may also be directed
to the Information Agent, toll-free, at 1-800-223-2064.
Should you have any other questions on the enclosed materials, please do not
hesitate to contact your broker, dealer or other nominee, or the Information
Agent, at the number set forth immediately above.
Yours truly,
/s/ William W. Priest, Jr.
William W. Priest, Jr.
Chairman of the Board
May 26, 1999
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER.
- -- Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number to
give the payer.
<TABLE>
<CAPTION>
- -----------------------------------------------------------
<C> <S> <C>
GIVE THE
SOCIAL SECURITY
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
- -----------------------------------------------------------
1. An individual's The individual
account.
2. Two or more individuals The actual owner of the
(joint account) account or, if combined
funds, any one of the
individual(s)(1)
3. Husband and wife (joint The actual owner of the
account) account or, if joint
funds, either person(1)
4. Custodian account of a The minor(2)
minor (Uniform Gift to
Minors Act)
5. Account in the name of The ward, minor or
guardian or committee incompetent person(3)
for a designated ward,
minor, or incompetent
person
6. a. The usual revocable The actual owner(1)
savings trust
account (grantor is
also trustee)
b. So-called trust The grantor-trustee(1)
account that is not a
legal or valid trust
under State law
7. Sole proprietorship The owner(4)
account
<CAPTION>
- -----------------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF --
<C> <S> <C>
- -----------------------------------------------------------
8. A valid trust, estate, The legal entity (Do
or pension trust not furnish the
identifying number of
the personal
representative or
trustee unless the
legal entity itself is
not designated in the
account title.)(5)
9. Corporate account The corporation
10. Religious, charitable, The organization
or educational
organization account or
an association, club,
or other tax-exempt
organization
11. Partnership account The partnership
held in the name of the
business
12. A broker or registered The broker or nominee
nominee
13. Account with the The public entity
Department of
Agriculture in the name
of a public entity
(such as a State or
local government,
school district, or
prison) that receives
agricultural program
payments
</TABLE>
<TABLE>
<C> <S> <C>
- -----------------------------------------------------------------
- -----------------------------------------------------------------
</TABLE>
(1) List first and circle the name of the person whose number you furnish. If
only one person on a joint account has a Social Security number, that
person's number must be furnished.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner. If the owner does not have an employer
identification number, furnish the owner's Social Security number.
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will be
considered to be that of the first name listed.
<PAGE>
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
PAGE 2
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number or Form W-7, Application
for International Taxpayer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service and apply for a
number.
To complete Substitute Form W-9, if you do not have a taxpayer identification
number, check the box in Part 3 of the Form. Generally, you will then have 60
days to obtain a taxpayer identification number and furnish it to the requester.
If the requester does not receive your taxpayer identification number within 60
days, backup withholding, if applicable, will begin and will continue until you
furnish your taxpayer identification number to the requester.
PAYEE EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include the
following:
- - A corporation.
- - A financial institution.
- - An organization exempt from tax under section 501(a), or an individual
retirement plan, or a custodial account under section 403(b)(7) if the account
satisfies the requirements of section 401(f)(2).
- - The United States, or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or any
subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or
agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof.
- - A dealer in securities or commodities registered in the U.S., the District of
Columbia or a possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payment of dividends and patronage dividends not generally subject to backup
withholding include the following:
- - Payment to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S. and
which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include the
following:
- - Payments of interest on obligations issued by individuals. NOTE: You may be
subject to backup withholding if this interest is $600 or more and is paid in
the course of the payer's trade or business and you have not provided your
correct taxpayer identification number to the payer.
- - Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- - Payments described in section 6049(b)(5) to non-resident aliens.
- - Payments on tax-free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
Exempt payees described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" IN PART II OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage dividends, that
are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6042, 6044, 6045, 6049, 6050A and 6050N.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. The IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Payers must generally withhold 31% of taxable
interest, dividends, and certain other payments to a payee who does not furnish
a taxpayer identification number to a payer. Certain penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject to a
penalty of $50 for each such failure unless your failure is due to reasonable
cause and not to willful neglect.
(2) FAILURE TO REPORT CERTAIN DIVIDEND AND INTEREST PAYMENTS.-- If you fail to
include a portion of an includible payment for interest, dividends, or patronage
dividends in gross income, such failure will be subject to a penalty of 20% on
any portion of an underpayment attributable to that failure unless it is shown
that you acted with reasonable cause and in good faith.
(3) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no imposition
of backup withholding, you are subject to a penalty of $500.
(4) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Willfully falsifying
certifications or affirmations may subject you to criminal penalties including
fines and/or imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE
SERVICE.
<PAGE>
Form W-8
(Rev. November 1992)
Department of the CERTIFICATE OF FOREIGN
Treasury STATUS
Internal Revenue
Service
- -------------------------------------------------------------------------
PLEASE PRINT OR TYPE THE FOLLOWING INFORMATION
- --------------------------------------------------------------------------------
NAME OF OWNER (If joint account, also give joint owner's U.S. TAXPAYER
name.) (See SPECIFIC INSTRUCTIONS.) IDENTIFICATION
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 PO box if mail is not delivered to street address.)
- --------------------------------------------------------------------------------
City, town or post office, state, and ZIP code (if foreign address, enter city,
province or state, postal code, and country.)
- -------------------------------------------------------------------------------
List account Account Account type Account Account type
information Number number
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.
- --------------------------------------------------------------------------------
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,
PLEASE estate, or trust).
SIGN / / For DIVIDENDS, I am not a U.S. citizen or resident (or I am
HERE 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 NOTED.)
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 31% of each payment or transaction. This is called backup withholding.
<PAGE>
Reportable payments subject to backup withholding rules are:
- -- Interest payments under section 6049(a).
- -- 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.
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.
IF YOU ARE: SHOW THE ADDRESS OF:
An individual Your permanent residence
A partnership or corporation Principal office
An estate or trust Permanent residence or principal
office of any fiduciary
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.
