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THE BRAZIL FUND, INC.
(Name of Registrant as Specified in Its Charter)
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if other than the Registrant)
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[DEUTSCHE ASSET MANAGEMENT LOGO]
A Member of the Deutsche Bank Group
PRESS RELEASE
FOR IMMEDIATE RELEASE
FOR ADDITIONAL INFORMATION:
ROSALIA SCAMPOLI 212.250.5536, MEDIA
JONATHAN DIORIO 800.349.4281, INVESTORS
THE BRAZIL FUND, INC. UPDATES BRAZILIAN REGULATORY PROCESS FOR OPEN-ENDING;
PLANS CASH TENDER OFFER IF APPROVALS NOT OBTAINED BY MAY 1, 2006
NEW YORK, NY, January 11, 2006 -- The Brazil Fund, Inc. (NYSE: BZF) today
announced an update to the process for obtaining Brazilian Securities
Commission (CVM) approvals needed to permit the Fund to complete its previously
announced proposal to convert the Fund into an open-end investment company
through conversion of the Fund into a 2,689 Investor under Brazilian law.
On November 29, 2005, the CVM's board met to consider the Fund's open-ending
proposal. In minutes of that meeting released on January 5, 2006, CVM indicated
that it intends to consult with Brazil's Central Bank and Federal Revenue Office
regarding the Fund's proposal to convert into a 2,689 Investor and to open-end.
However, the CVM confirmed the Fund's ability to repatriate capital freely for
purposes of share redemptions and repurchases pursuant to the CVM's Resolution
No. 485/05, which the Fund received on July 26, 2005. The Fund expects the CVM's
consultation with the Central Bank to occur within the coming weeks.
The Fund believes that the CVM's interpretation of Resolution 485/05, and its
efforts to consult with other Brazilian regulators, are indicative of its
support for the open-ending proposal and also make possible a substantial return
of capital to shareholders prior to open-ending. The Fund intends to continue
active efforts to seek approvals from the CVM and from Brazil's National
Monetary Council and Federal Revenue Office for approvals required to convert
the Fund into a 2,689 Investor under Brazilian law and to open-end the Fund. The
Chairman of the Fund and other representatives of the Fund will meet with
Brazilian regulators this month in an effort to expedite the approvals required
for open-ending. The Fund believes it can obtain these approvals, although no
assurances can be given about whether or when they will be obtained. On January
13, 2006, the Fund will reconvene its special meeting of stockholders to
consider the open-ending proposal.
In the event that all regulatory and shareholder approvals required to convert
the Fund into an open-end investment company have not been obtained by May 1,
2006, the Fund intends to initiate a cash self tender offer for 50% of the
Fund's issued and outstanding shares of common stock in at a price per share
equal to 98% of the net asset value per share as of the day after the day the
offer expires. This tender offer would provide shareholders with a near-term
alternative source of liquidity for their investment in Fund shares and provide
additional value to shareholders.
In response to inquiries from institutional stockholders of the Fund, the Fund
also confirmed (i) that no action to change the sub-classification of the Fund
under the Investment Company Act of 1940 from closed-end to open-end or to amend
and restate the Fund's corporate charter will be taken prior to obtaining
Brazilian approvals required to open-end the Fund, and (ii) that, irrespective
of the outcome of the stockholder vote on the open-ending proposal, the Fund
will hold its next annual meeting of stockholders by the end of June 2006 unless
the open-ending proposal has been completed by then.
The Brazil Fund, Inc. is a non-diversified, closed-end investment company. The
Fund seeks long-term capital appreciation through investing primarily in equity
securities of Brazilian issuers. Its shares are listed on the New York Stock
Exchange under the symbol "BZF".
# # #
There can be no assurance that any action proposed or adopted by the Board will
reduce or eliminate the discount at which the Fund's shares trade. Investments
in funds involve risks. Additional risks are associated with international
investing, such as government regulations and differences in liquidity, which
may increase the volatility of your investment.
Investments in funds involve risks. Additional risks are associated with
international investing, such as government regulations and differences in
liquidity which may increase the volatility of your investment. Foreign security
markets generally exhibit greater price volatility and are less liquid than the
US market. Additionally, this fund focuses its investments in certain
geographical regions, thereby increasing its vulnerability to developments in
that region and potentially subjecting the fund's shares to greater price
volatility.
Closed-end funds, unlike open-end funds, are not continuously offered. There is
a one time public offering and once issued, shares of closed-end funds are sold
in the open market through a stock exchange. Shares of closed-end funds
frequently trade at a discount to net asset value. The price of the fund's
shares is determined by a number of factors, several of which are beyond the
control of the fund. Therefore, the fund cannot predict whether its shares will
trade at, below or above net asset value.
This announcement is not an offer to purchase or the solicitation of an offer to
sell shares of the Fund or a prospectus, circular or representation intended for
use in the purchase or sale of Fund shares.
Fund shares are not FDIC-insured and are not deposits or other obligations of,
or guaranteed by, any bank. Fund shares involve investment risk, including
possible loss of principal.
NOT FDIC/ NCUA INSURED MAY LOSE VALUE NO BANK GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY
SCUDDER INVESTMENTS IS PART OF DEUTSCHE ASSET MANAGEMENT WHICH IS THE MARKETING
NAME IN THE US FOR THE ASSET MANAGEMENT ACTIVITIES OF DEUTSCHE BANK AG,
DEUTSCHE BANK TRUST COMPANY AMERICAS, DEUTSCHE ASSET MANAGEMENT INC., DEUTSCHE
ASSET MANAGEMENT INVESTMENT SERVICES LTD., DEUTSCHE INVESTMENT MANAGEMENT
AMERICAS INC. AND SCUDDER TRUST COMPANY. (1/06 42797)