Taiwan Fund to begin implementing 10% repurchase program in March

By Toni Weeks

San Diego, March 1 - The Taiwan Fund, Inc. will begin implementing its discount management policy in March, according to a press release.

As previously reported, the policy authorizes the fund to repurchase up to 10% of its common shares each year. It 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 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 ending the prior 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.

The 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 fund also reported in the release that its one-time tender offer to repurchase up to 50% of its outstanding shares at 99% of net asset value will be launched during the second calendar quarter of 2012.

The closed-end management investment company, which invests primarily in Taiwan equity securities, said that its stockholders voted on Feb. 23 to approve the proposed investment advisory and management agreement with New York-based Martin Currie, Inc., the fund's investment adviser, and with APS Asset Management Pte. Ltd., the fund's subadviser.

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