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THE BRAZIL FUND, INC.
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if other than the Registrant)
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Deutsche Asset Management [GRAPHIC]
A Member of the Deutsche Bank Group
Press Release
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FOR IMMEDIATE RELEASE
For additional information:
Rosalia Scampoli 212.250.5536, Media
Jonathan Diorio 800.349.4281, Investors
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THE BRAZIL FUND, INC. ANNOUNCES BRAZILIAN APPROVAL OF OPEN-ENDING
NEW YORK, NY, February 9, 2006 -- The Brazil Fund, Inc. (NYSE: BZF) today
announced that the Brazilian Securities Commission (CVM) has issued two
deliberations amending regulations under Brazil's Annex III to Resolution
1289/87 (Annex III) to enable the Fund to convert into and to operate as an
open-end investment company.
Representatives of, and counsel for the Fund, including its Chairman, traveled
to Brazil in late January to meet with the Chairman of the CVM and senior
officials of Brazil's Central Bank. Robert J. Callander, Chairman of the Fund's
Board, said, "We very much appreciate the support of the CVM in allowing the
Fund to open-end. The Board believes that open-ending will produce the best and
fairest result for the Fund and its shareholders."
Based on the CVM's deliberations and the advice of the Fund's Brazilian counsel,
the Fund believes it has now obtained all Brazilian approvals required to
convert the Fund and allow it to operate as an open-end fund.
On February 10, 2006, the Fund will re-convene the special meeting of its
stockholders to consider the open-ending proposal. The Fund's Board recommends
that stockholders vote FOR the open-ending proposal.
Subject to receipt of stockholder approval for open-ending, the Fund expects to
have all steps completed for open-ending and redemption of shares within four
weeks of the stockholders' meeting. Stockholders will be able to redeem their
shares at net asset value, less a redemption fee of 2% of the net asset value
applicable to shares outstanding on the conversion date that are redeemed during
the first six months after the conversion. The redemption fee will be paid
entirely to the Fund. Upon the conversion, the Fund's shares will be delisted
from the New York Stock Exchange.
In light of the receipt of all required Brazilian approvals for open-ending, the
Fund's Board of Directors does not intend to explore further the alternative
of a cash tender offer, which was mentioned in the Fund's announcement on
January 11.
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 trading on the Bolsa de Valores de Sao Paulo (Bovespa). 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.
The Fund focuses its investments in certain geographical regions, thereby
increasing its vulnerability to developments in that region. Investing in
foreign securities presents certain unique risks not associated with domestic
investments, such as currency fluctuation and political and economic changes and
market risks. This may result in greater share price volatility. 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.
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.