Securities Law & Instruments

Headnote

Cash issuer bid made by a company incorporatedunder the laws of the Cayman Islands -- Issuer bid comprisedof two tender offers and an on-market repurchase program - Issuerbid made in accordance with the laws of the United Kingdom,the rules and regulations of the London Stock Exchange and theListing Rules of the UK Listing Authority - De minimis exemptionsunavailable because the City Code on Take-Overs and Mergersdoes not apply to the bid - Issuer bid exempted from the issuerbid requirements of Part XX, subject to certain conditions.

Statutes Cited

Securities Act, R.S.O. 1990, c. S.5, as amended,ss. 93(3)(h), 95 to 100 and 104(2)(c).

Recognition Orders Cited

In the Matter of the Recognition of CertainJurisdictions Recognition Order (Clauses 93(1)(e) and 93(3)(h)of Act) (1997), 20 OSCB 1035.

IN THE MATTER OF

THE SECURITIES ACT,

R.S.O. 1990 CHAPTER S.5, ASAMENDED (the "Act")

AND

IN THE MATTER OF

THE THAILAND INTERNATIONALFUND LIMITED

 

ORDER

(Section 104(2)(c))

UPON the application (the "Application")of The Thailand International Fund Limited ("TIFL")to the Ontario Securities Commission (the "Commission")for an order pursuant to clause 104(2)(c) of the Act exemptingTIFL from the requirements of sections 95 through 100 of theAct (the "Issuer Bid and Take-over Bid Requirements")in connection with two proposed tender offers by TIFL to repurchaseapproximately 50% in the aggregate of its issued and outstandingparticipating redeemable preference shares (the "Shares")and the implementation by TIFL of an on-market repurchase programfor the ongoing repurchase of the Shares (collectively, the"Offer").

AND UPON considering the Applicationof TIFL and the recommendation of the staff of the Commission;

AND UPON TIFL having represented to theCommission that:

1. TIFL is incorporated under the CompaniesLaw (Cap. 22) of the Cayman Islands and the Shares arelisted only on the London Stock Exchange (the "LSE")(although TIFL Shares are also held in a depositary programwhereby International Depositary Receipts are issued by adepositary, Sogès Fiducom S.A. of Brussels, Belgium,some of which are held through Euroclear Bank S.A./N.V. andClearstream International Limited).

2. TIFL is not a reporting issuer under thesecurities legislation of any province or territory in Canadaand none of the Shares of TIFL are listed for trading on anyCanadian stock exchange.

3. As at September 22nd, 2003,TIFL had 7,500,002 Shares issued and outstanding.

4. The principal object of TIFL is to carryon the business of an investment company and it has soughtto fulfil long-term capital appreciation of its assets byinvestment in Thailand with a structure providing for TIFLto invest through the Thailand International Fund ("TIF"),a closed-end domestic fund established in Thailand and regulatedby the Securities and Exchange Commission of Thailand ("SEC"),which enables TIFL to enjoy the status of a local investorin the Thai market, free of certain restrictions applicableto foreign investors. TIFL's sole investment is as the soleunit-holder of TIF.

5. The Shares have, as with other closed-endedemerging market funds, increasingly tended to trade at a significantdiscount to net asset value per share. The average discountover the last five years has been 23.46% and over the lasttwelve months has been 18.2%.

6. The board of directors of TIFL believesthat the majority of its shareholders do not wish to holdShares for the longer term and continue their exposure tothe Thai market. Accordingly, the necessary submissions tothe SEC concerning TIF have been made to permit the phasedopen-ending of TIF so that the board of directors of TIFLmay redeem units of TIF to make available the proceeds ofredemption in cash to fund the repurchase of Shares underthe Offer. In addition, TIF will make a special dividend paymentto TIFL which will also be used to finance the Offer.

7. The proposed Offer is an all-cash offerand will consist of two tender offers by TIFL to repurchasethe Shares and the implementation by TIFL of an on-marketrepurchase program as follows:

(a) the first tender offer by TIFL to acquireat least 20% of its issued and outstanding Shares held byeach TIFL shareholder (a "Shareholder") is anticipatedto open on October 7th, 2003 (or as soon as practicablethereafter) and to close on or about December 10th,2003;

(b) the second tender offer by TIFL to acquireat least 30% of its issued and outstanding Shares held byeach Shareholder prior to the first tender offer is anticipatedto open and close approximately twelve months after thefirst tender offer; and

(c) an on-market share repurchase programto be implemented by TIFL to repurchase Shares on an ongoingbasis in accordance with the applicable rules of the LSEand the UK Listing Authority for such repurchases.

8. The Offer is conditional and will not proceedunless:

(a) the resolutions at TIFL's ExtraordinaryGeneral Meeting to be held on or about November 3rd,2003 are duly passed authorizing TIFL to take all stepsnecessary to make the Offer and to amend TIFL's Articlesof Association in order to facilitate the repurchase ofShares in accordance with the Offer; and

(b) valid tenders for at least 75,000 Shares(representing 1% of the existing issued Shares) have beenreceived by the close of the first tender offer (on or aboutDecember 10th, 2003).

9. The offer prices will be determined asfollows:

(a) the repurchase price per Share for thefirst tender offer will be a cash amount equal to the USdollar amount received by TIFL in respect of the redemptionof 20 percent of the units of TIF less expenses apportionedon a pro rata basis divided by 1,500,000, being 20percent of the total number of Shares in issue (roundeddown to the nearest whole number) rounded down to the nearestwhole cent;

(b) the repurchase price per Share for thesecond tender offer will be determined by the same methodas used for the first tender offer, on a date to be determinedapproximately twelve months after the first tender offer;and

(c) under the rules of the LSE, the maximumnumber of Shares which may be repurchased under the on-marketshare repurchase program will be equal to 14.99% of theShares following completion of the first tender offer andthe maximum price that may be paid by TIFL will be 105%of the average mid-market price of the Shares over the fivetrading days immediately preceding the day on which thepurchase is effected. Any purchase of Shares will be madein the market for cash at prices below the prevailing assetvalue per share.

10. The Offer is being made in compliancewith the laws of the United Kingdom, the rules and regulationsof the LSE and the Listing Rules of the UK Listing Authorityand not pursuant to any exemption from such requirements.

11. The City Code on Take-Overs and Mergers(the "City Code") does not apply to the Offer becausethe City Code only applies to listed companies that the Panelon Takeovers and Mergers considers to be resident in the UnitedKingdom. TIFL is not such a company.

12. As at September 22nd, 2003,there were 5 Shareholders whose last address as shown in thebooks of TIFL is in Ontario (collectively, the "OntarioShareholders") holding in the aggregate 10,000 Shares,representing 0.1333% of the issued and outstanding Shares.

13. The Offer is being made on the same termsand conditions to the Ontario Shareholders as it is beingmade to Shareholders resident in the United Kingdom.

14. Insofar as the Offer is made to the OntarioShareholders, the Offer may be construed as a direct issuerbid within the meaning of subsection 89(1) of the Act andsection 92 of the Act.

15. Although the Commission has recognizedthe laws of the United Kingdom for the purposes of clauses93(1)(e) and 93(3)(h) of the Act where a take-over bid orissuer bid complies with the requirements of the rules ofthe City Code and is not exempt therefrom, TIFL cannot relyupon these exemptions because the City Code does not applyto TIFL.

16. All materials relating to the Offer whichare provided to Shareholders resident in the United Kingdomwill be concurrently sent to Ontario Shareholders and filedwith the Commission.

AND UPON the Commission being satisfiedthat to do so would not be prejudicial to the public interest;

IT IS ORDERED pursuant to clause 104(2)(c)of the Act that in connection with the Offer, TIFL is exemptedfrom the Issuer Bid and Take-over Bid Requirements, providedthat:

(a) the Offer and any amendments thereto aremade in compliance with the laws of the United Kingdom, therules and regulations of the LSE, the Listing Rules of theUK Listing Authority and the laws of the Cayman Islands andnot pursuant to any exemption from such requirements; and

(b) all materials relating to the Offer andany amendments thereto that are sent by or on behalf of TIFLto the Shareholders resident in the United Kingdom are alsoconcurrently sent to Ontario Shareholders and copies of suchmaterials are filed with the Commission.

October 3, 2003.

"Robert L. Shirriff"
"Robert W. Davis"