Press Release
[Aberdeen Logo]
FOR IMMEDIATE RELEASE
For More Information Contact:
Aberdeen Asset Management
Investor Relations
800-522-5465
InvestorRelations@aberdeen-asset.com
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ABERDEEN AUSTRALIA EQUITY FUND, INC. ANNOUNCES FAVORABLE
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IRS DETERMINATION REGARDING PROPOSED IN-KIND TENDER OFFER;
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DEFERRAL OF SETTING COMMENCEMENT DATE TO PERMIT
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PARTICIPATION BY ALL SHAREHOLDERS
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(New York, June 30, 2003) - On February 19, 2003, Aberdeen Australia Equity
Fund, Inc. (AMEX: IAF/PSE: IAF), a closed-end equity fund, announced its
intention to conduct an in-kind tender offer to repurchase up to 40% of the
Fund's outstanding shares at a price of 90% of the Fund's net asset value per
share. Shareholders redeeming shares would receive in-kind pro rata
distributions of the Fund's portfolio securities equal to no less than 90% of
the aggregate net asset value of the shares being redeemed. In the same
announcement, the Fund stated that it intended to submit a request for a private
letter ruling from the United States Internal Revenue Service ("IRS") regarding
the tax treatment of the in-kind tender offer.
The Fund is pleased to announce that it has received a favorable ruling from the
IRS that the Fund will not recognize gain or loss upon the distribution of stock
or other securities in redemption of its shares upon the request of a
shareholder pursuant to the proposed tender offer. The ruling ensures that
shareholders who do not participate in the tender offer would avoid realization
of long-term capital gains which the Fund may otherwise have had to recognize.
Shareholders who participate in the tender offer would recognize taxable gain or
loss upon receipt of the Fund's portfolio securities in the tender offer. Upon
the eventual sale or other taxable disposition of those portfolio securities, a
participating shareholder would recognize taxable gain or loss to the extent of
any appreciation or depreciation from the time of receipt in the tender offer.
The Fund is aware that Bankgesellschaft Berlin AG (the "Bank"), the beneficial
owner of 32% of the Fund's outstanding voting securities, is unable to
participate in the proposed in-kind tender offer without first obtaining
exemptive relief from the Securities and Exchange Commission. The Bank filed an
application for such exemptive relief with the Securities and Exchange
Commission on May 21, 2003.
The Fund's February 19, 2003 announcement of the proposed tender offer indicated
that the Fund's Board of Directors contemplated that the tender offer would
commence in June 2003. This announcement also indicated that the Fund's Board of
Directors would attempt to coordinate the timing of the tender offer to enable
all shareholders to participate in the tender offer. Accordingly, the Fund has
decided to defer setting the commencement date of the tender offer until a
determination has been made by the Securities and Exchange Commission with
respect to the Bank's pending application for exemptive relief.
This press release may contain certain forward-looking statements regarding
future circumstances. These forward-looking statements are based on the Fund's
current expectations and assumptions and are subject to various risks and
uncertainties that could cause actual results to differ materially from those
contemplated in such forward-looking statements. Potential risks and
uncertainties may include, but are not limited to, fluctuations in operating
results, market conditions and foreign exchange rates, and other risks and
uncertainties identified by the Fund from time to time in its filings with
the Securities and
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Exchange Commission. Actual results, events, and performance may differ.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Fund
undertakes no obligation to release publicly any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events. The
inclusion of any statement in this release does not constitute an admission by
Aberdeen Australia Equity Fund, Inc. or any other person that the events or
circumstances described in such statement are material.
This press release is for informational purposes only and is not an offer to
repurchase or the solicitation of an offer to sell any shares of Fund stock. The
solicitation of an offer to repurchase Fund stock will only be made pursuant to
a Repurchase Offer Statement and related material that the Fund will send to
shareholders upon commencement of the in-kind tender offer. Stockholders should
read those materials carefully because they will contain important information
including the various terms and conditions of the in-kind tender offer. The
Repurchase Offer Statement and related materials will be made available to all
stockholders free of charge. Stockholders will be also able to obtain the
Repurchase Offer Statement and related materials with respect to the tender
offer free of charge at the Securities and Exchange Commission's website at
www.sec.gov. The Repurchase Offer Statement and related materials may also be
obtained at no charge from the Fund as provided in the Repurchase Offer
Statement.
Would you like to receive this information electronically? Contact
InvestorRelations@aberdeen-asset.com
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