-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Up26ffweQaTREAVFOUf2X/GQvcvUWtXw46eK6oBLE37mTdSzZ3IswsOqs9vqheSg 8nWVavSMzrrRvK5M0c2VVA== 0000938077-99-000121.txt : 19990809 0000938077-99-000121.hdr.sgml : 19990809 ACCESSION NUMBER: 0000938077-99-000121 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19990802 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: PORTUGAL FUND INC CENTRAL INDEX KEY: 0000854580 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 510323965 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-40528 FILM NUMBER: 99675935 BUSINESS ADDRESS: STREET 1: C/O CREDIT SUISSE ASSET MANAGEMENT STREET 2: ONE CITICORP CENTER 153 E 53RD ST CITY: NEW YORK STATE: NY ZIP: 10022 MAIL ADDRESS: STREET 1: C/O CREDIT SUISSE ASSET MGMT STREET 2: ONE CITICORP CENTER 153 E 53RD STREET CITY: NEW YORK STATE: NY ZIP: 10022 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: DEEP DISCOUNT ADVISORS INC /NC/ CENTRAL INDEX KEY: 0000938077 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 561827546 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: ONE WEST PACK SQU STREET 2: SUITE 777 CITY: ASHEVILLE STATE: NC ZIP: 28801 BUSINESS PHONE: 7042741863 MAIL ADDRESS: STREET 1: ONE WEST PACK SQUARE STREET 2: SUITE 777 CITY: ASHEVILLE STATE: NC ZIP: 28801 SC 13D/A 1 Securities and Exchange Commission Washington, D.C. 20549 ------------------------------- SCHEDULE 13D Under the Securities Exchange Act of 1934 Amendment No.5 The Portugal Fund, Inc. - - ------------------------------------------------------------------------------ (Name of Issuer) Common Stock - - ------------------------------------------------------------------------------ (Title of Class of Securities) 737265108 - - ------------------------------------------------------------------------------ (CUSIP Number) Ralph W. Bradshaw c/o Deep Discount Advisors, Inc. One West Pack Square, Suite 777 Asheville, NC 28801 (828) 255-4833 - - ------------------------------------------------------------------------------ (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) August 2, 1999 - - ------------------------------------------------------------------------------ (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ] CUSIP No.: 737265108 13D Page 2 - - --------------------- -------- ========================================================================== 1 NAME OF REPORTING PERSON S.S. OR I.R.S. ID NO. OF ABOVE PERSON Deep Discount Advisors, Inc. =========================================================================== 2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ] OF A GROUP (b) [ ] =========================================================================== 3 SEC USE ONLY =========================================================================== 4 SOURCE OF FUNDS OO =========================================================================== 5 CHECK BOX IF DISCLOSURE OF LEGAL [ ] PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) =========================================================================== 6 CITIZENSHIP OR PLACE OF ORGANIZATION One West Pack Square, Suite 777 Asheville, NC 28801 =========================================================================== NUMBER OF | | SOLE VOTING POWER SHARES | 7 | 1089200 ============================================================================ BENEFICIALLY | | SHARED VOTING POWER 0 OWNED | 8 | ============================================================================ BY EACH | | SOLE DISPOSITIVE POWER 1089200 REPORTING | 9 | ============================================================================ PERSON | | SHARED DISPOSITIVE POWER 0 WITH | 10 | ============================================================================ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 1089200 ======================================================================= 12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ] (11) EXCLUDES CERTAIN SHARES ======================================================================= 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 20.4% ======================================================================= 14 TYPE OF REPORTING PERSON IA ====================================================================== CUSIP No.: 737265108 13D Page 3 - - --------------------- ---------- =============================================================================== 1 NAME OF REPORTING PERSON S.S. OR I.R.S. ID NO. OF ABOVE PERSON Ron Olin Investment Management Company =============================================================================== 2 CHECK THE APPROPRIATE BOX IF A MEMBER (a) [ ] OF A GROUP (b) [ ] ======================================================================== 3 SEC USE ONLY ====================================================================== 4 SOURCE OF FUNDS OO ====================================================================== 5 CHECK BOX IF DISCLOSURE OF LEGAL [ ] PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) OR 2(e) ====================================================================== 6 CITIZENSHIP OR PLACE OF ORGANIZATION One West Pack Square, Suite 777 Asheville, NC 28801 ===================================================================== NUMBER OF | | SOLE VOTING POWER SHARES | 7 | 665300 ===================================================================== BENEFICIALLY | | SHARED VOTING POWER 0 OWNED | 8 | ==================================================================== BY EACH | | SOLE DISPOSITIVE POWER 665300 REPORTING | 9 | ===================================================================== PERSON | | SHARED DISPOSITIVE POWER 0 WITH | 10 | ====================================================================== 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 665300 ===================================================================== 12 CHECK IF THE AGGREGATE AMOUNT IN ROW [ ] (11) EXCLUDES CERTAIN SHARES ========================================================================= 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 12.4% ======================================================================= 14 TYPE OF REPORTING PERSON IA ========================================================================= This Amendment No. 5 supplements and updates information in Item 4 and Item 5. ITEM 4. PURPOSE OF TRANSACTION THE BOARD REJECTS REGISTRANT'S INITIATIVES AND SUGGESTIONS The Issuer (the "Fund") issued a press release on July 30 announcing that it planned to present shareholders with an open-ending proposal containing a redemption fee and requiring a super-majority vote for approval. In spite of a "gentlemen's agreement" not to characterize Registrant's ideas in communications with shareholders, the Fund announced that Registrant had "recently expressed his opposition to open-ending the Fund." They failed to describe the reasons the Registrant was opposed to this particular open-ending proposal and the fact that the Registrant had not indicated opposition to a more effective and practical "merger" proposal that had been under consideration. REGISTRANT IN DISCUSSIONS WITH ISSUER Registrant was engaged in a proxy contest with the Fund when the Fund canceled the scheduled annual meeting of shareholders and announced that its Board was considering options to be presented by the adviser of the Fund to reduce or eliminate the discount at which the Fund's shares had been trading in the market. The Registrant was of the opinion at the time the meeting was canceled that the Registrant was likely to win the proxy contest and elect directors representing substantial shareholder interests who were more committed to enhancing shareholder value than candidates presented by the current Board. The Registrant was contacted by the Fund on or about July 8 to discuss the proposed options it was taking under consideration. Prior to engaging in the discussion, the Registrant suspended all its market activity in the Fund's shares and signed a confidentiality agreement which expired at noon on August 2. A meeting was held with the Fund's adviser and three of the six current directors at the offices of the Fund's adviser on July 13. At the beginning of that meeting, a "gentlemen's agreement" was reached between the Registrant and the other parties not to use ideas expressed and statements made during the meeting by the other side as a basis for attacking their positions in communications to shareholders. OPEN-ENDING OR MERGER OPTIONS PRESENTED BY THE FUND The two options presented by the Fund for consideration were "open-ending" and "merger." The open-ending would include a redemption fee to be paid by redeeming shareholders and would additionally allow the Fund to make "redemptions-in-kind" of the Fund's Portuguese securities to larger shareholders who redeemed. The merger involved an existing open-end fund acquiring the assets of the Fund and would permit the Fund's shareholders to hold shares of the open-end fund or redeem at full Net Asset Value (NAV) without any redemption fees. According to the Fund, the open-ending proposal would require approval of two-thirds of all outstanding shares of the Fund and the merger proposal would require approval of only a majority of shares. REGISTRANT OPPOSED TO OPEN-ENDING PROPOSALS WITH REDEMPTION FEES IMPOSED The Registrant indicated its opposition to the open-ending proposal, as presented, because it required shareholders not wishing to be in an open-end structure to pay a redemption fee to leave, it might force large shareholders to take considerable trouble and expense to sell Portuguese securities delivered via redemptions-in-kind, and because of the likelihood that the requisite two-thirds approval of all outstanding shares could not be achieved. Furthermore, the Registrant felt that the remaining assets likely to be left in the Fund after redemptions would not allow it to survive as a viable economic entity. The Registrant expressed its belief that the merger proposal was a far better choice if the Board was determined to dismantle the Fund in an effort to deliver shareholder value, but that more effective methods of maximizing long-term shareholder value existed other than the two limited options being considered. For example, the Registrant pointed out that another closed-end fund with which Registrant was involved, Clemente Strategic Value Fund, had restructured its Board nine months earlier and had shifted its focus to maximizing shareholder value by enhancing performance and buying large amounts of its own shares at a discount. From 10/6/98, immediately after the buyback program began, through 7/9/99, the Clemente fund share price increased +72%. This far surpassed U.S. and European market returns, where most of that fund's portfolio investments were concentrated. REGISTRANT DESIRED THAT MORE EFFECTIVE AND TIMELY MEASURES BE TAKEN The Registrant expressed its belief that the Board should be reconstituted to better reflect the interests of existing shareholders, that steps should be taken immediately to provide the flexibility for the Fund's adviser to improve performance, and that more practical and immediate steps should be considered by the Board to enhance long-term shareholder value and to reduce the Fund's discount to nominal levels. Presenting the shareholders with an "open-end" option that may well fail to pass the super-majority requirement imposed by the Fund could hurt the shareholders and cause the subsequent discount to widen dramatically. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The Fund's annual report, dated February 12,1999, states that, as of the close of business on December 31, 1998, there were 5,355,416 shares of Common Stock outstanding. The percentage set forth in this Item 5(a) was derived using such number. The Reporting Persons are the beneficial owners of 1,754,500 shares of Common Stock, which constitute approximately 32.8% of the outstanding shares of Common Stock. (b) Power to vote and to dispose of the securities resides with the Advisors. (c) Since the last filing, the following shares of Common Stock were traded in the open market: Date Number of Shares Price Per Share - - ------- -------------------------- --------------- 6/30/99 500 bought 14.4375 7/6/99 1300 bought 14.1875 7/7/99 600 bought 14.1875 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. Date: August 2, 1999 Deep Discount Advisors, Inc. By: /s/ Ralph W. Bradshaw ---------------------------- Name: Ralph W. Bradshaw Title: Secretary -----END PRIVACY-ENHANCED MESSAGE-----