SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/x/ Definitive Additional Materials
/ / Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
THE FIRST AUSTRALIA FUND, INC.
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(Name of Registrant as Specified In Its Charter)
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NEWS RELEASE
FOR IMMEDIATE RELEASE
Contacts:
Laurence Freedman/Brian Sherman Richard Strickler, EquitiLink USA
The First Australia Fund, Inc. 800-522-5465
011-612-9950-2888
http://www.equitilink.com
Rhonda Barnat/Mike Pascale, Abernathy MacGregor Frank
212-371-5999
FUND'S DIRECTORS STRONGLY URGE SHAREHOLDERS TO REJECT
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PROPOSALS OF SHORT-TERM FUND MARKET OPPORTUNISTS
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The First Australia Fund, Inc. Files Proxy Material for
April 23, 1999 Annual Meeting
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New York, NY, March 17, 1999 - The First Australia Fund, Inc. (AMEX: IAF, PCX:
IAF), a closed-end equity fund, announced today that it has filed definitive
proxy materials with the Securities and Exchange Commission for its April 23,
1999 Annual Meeting of Shareholders and has mailed the materials to its
shareholders.
In a letter to shareholders, Fund Chairman Laurence Freedman and President Brian
Sherman strongly urged shareholders to vote for the Fund's five nominees for
directors. "First Australia Fund is fortunate to be guided by an outstanding
group of Directors whose breadth of experience with the Australian and broader
world economies is unmatched. These business and community leaders are committed
to the best interests of all shareholders. However, short-term market
opportunists Deep Discount Advisors (DDA) and Ron Olin Investment Management
Company are seeking to replace these highly qualified board
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Page Two
members with their own nominees. While they claim to be independent, four out of
five are DDA employees," said Mr. Freedman.
Mr. Freedman said he was pleased that the Fund has received recognition from
Lipper for its five-year performance.
"Over the past six months, the IAF share price is up 53% and at the same time
the discount has narrowed, from as high as 28% to recently as low as 12.6%. Both
management and the Board continue to work hard at maximizing returns for
investors," Mr. Freedman said. "In addition to the 53% share price increase,
investors have also received two cash distributions over the period, totaling
40.5 cents per share paid out of income plus realized capital gains. The total
return to our shareholders over the past six months was over 63%."
[Editors note: This compares with the S&P 500 (including dividends reinvested)
of approximately 36% and the same number for the Australian All Ordinaries
Accumulation Index converted to U.S. Dollars.]
The Fund's letter to shareholders also recommends that shareholders vote against
the other proposals put forth by DDA - including a proposal that seeks to
terminate the Fund's investment manager, EquitiLink International Management
Limited, which the Board believes would radically change the investment
strategies of the Fund and negatively affect its value.
"DDA's harmful proposals are the latest in a systematic pattern of attack by
short-term opportunists on the closed-end fund industry that we believe can only
hurt the interests of shareholders and could dismantle an important vehicle for
long-term investment diversification into non-U.S. markets," said Mr. Sherman.
"These same people, with the same self-interested motives, are currently
conducting proxy solicitations at other closed-end funds. We urge our
shareholders to protect their own interests and vote for the Fund's five
nominees for directors and to vote against DDA's harmful proposals."
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Page Three
A copy of the letter sent to Fund shareholders is attached to this press
release.
The First Australia Fund, Inc. is a closed-end fund organized to provide
investors a vehicle for long-term appreciation and current income through
investment primarily in equity securities of Australian companies listed on the
Australian Stock Exchange. The Fund is managed by EquitiLink International
Management Limited and advised by EquitiLink Australia Limited. On January 31,
1999, 86.4% of the Fund's portfolio was held in industrial equities, which
includes the financial sector, 12.6% was held in resource equities and 1.0% was
held in cash. As of January 31, 1999, the Fund's total net assets amounted to
$154.4 million and the Fund's NAV was $8.98 per share. In December 1997, the
Board instituted a managed distribution policy. In 1998, 9% of the Fund's
rolling average of the prior four quarter-end net asset values was distributed
to shareholders. The Board will continue this distribution policy which provides
all shareholders with a very high cash distribution, around 12% per annum based
on recent share prices.
Recently, the Fund received a performance award ranking the Fund number one by
the Lipper Closed-End Fund Performance Analysis Service - Pacific Ex Japan Funds
- - for the five years ending December 31, 1998.
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