Taiwan Fund authorizes 10% repurchase program, mulls tender offer

By Toni Weeks

San Diego, Feb. 1 - The board of directors of the Taiwan Fund, Inc. has approved a discount management policy that authorizes the fund to repurchase up to 10% of its common shares each year.

According to a press release, the fund will repurchase its common shares in the open market on any day that the shares are trading at a discount of 9% or more from the net asset value the previous day and there is a daily average discount of 9% or more from net asset value over the five-day period ended the previous day.

The fund will repurchase its shares to the maximum permitted extent on each day that the shares are repurchased unless the fund's investment management determines that a repurchase would be detrimental to the fund and its shareholders.

Under the repurchase program, the fund is authorized to repurchase in each 12-month period ending Aug. 31 up to 10% of its common shares outstanding as of Aug. 31 the prior year.

This new repurchase program will replace the fund's existing program, under which the fund is required to consider the repurchase of its common shares in the open market if the discount exceeds 15%. During the current and last fiscal years of the fund, it did not repurchase any shares under the old program.

The discount management program is intended to enhance shareholder value. Repurchases made at a discount increase the net value per share of the remaining shares, the release noted.

The program will commence on the first day of the month after stockholders approve the arrangement.

The fund also said that its board of directors has approved in principle a one-time tender offer to repurchase up to 50% of its outstanding shares at 99% of net asset value following shareholder approval of the repurchase arrangement. If made, the tender offer will be made on the terms and conditions set by the board of directors.

The closed-end management investment company invests primarily in Taiwan equity securities. Its investment adviser is New York-based Martin Currie, Inc., who manages the portfolio along with APS Asset Management Pte. Ltd.

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