Aberdeen Asset Management
New York, December 19, 2005 -- Aberdeen Australia Equity Fund, Inc. (IAF) (PSE), a closed-end equity fund, announced today that it will pay a special distribution of US 16 cents per share, in addition to its regular quarterly distribution of US 29 cents per share, on January 13, 2006 to all shareholders of record as of December 30, 2005 (ex-dividend date December 28, 2005). The special distribution is comprised entirely of long-term capital gains for the fiscal year ended October 31, 2005. The regular quarterly distribution of US 29 cents is comprised of US 27.9836 cents of long-term capital gains and US 1.0164 cents of net investment income.
The Fund has a managed distribution policy of paying quarterly distributions at an annual rate, set once a year, that is a percentage of the rolling average of the Fund's prior four quarter-end net asset values. In March 2005, the Board of Directors determined that the rolling distribution rate would be 10% for the 12 month period commencing with the distribution payable in April 2005. This policy will be subject to regular review by the Fund's Board of Directors. The distributions will be made from current income, supplemented by realized capital gains and, to the extent necessary, paid-in capital.
For the 12 months to November 30, 2005, the Fund has paid total distributions amounting to US $1.05 per share.
The Fund is subject to U.S. corporate, tax and securities laws. Under U.S. tax accounting rules, the amount of distributable income for each fiscal period depends on the actual exchange rates during the entire year between the U.S. dollar and the currencies in which Fund assets are denominated, and on the aggregate gains and losses realized by the Fund during the entire year. Therefore, the exact amount of distributable income for each fiscal year can only be determined as of the end of the Fund's fiscal year, October 31. However, under the U.S. Investment Company Act of 1940, the Fund may be required to indicate the sources of certain distributions to shareholders.
Any estimated distribution composition may vary from quarter to quarter because it may be materially impacted by future realized gains and losses on securities and fluctuations in the value of the currencies in which Fund assets are denominated.
In January 2006, a Form 1099 DIV will be sent to shareholders, which will state the amount and composition of distributions paid during 2005, and provide information with respect to their appropriate tax treatment. Qualifying U.S. taxpayers are generally entitled to a foreign withholding tax credit on distributions received. Shareholders will be informed as to the exact amount of the tax credit shortly after the end of the tax year.
The Fund is managed by Aberdeen Asset Management Asia Limited and advised by Aberdeen Asset Management Limited. The Fund's shares trade on the American Stock Exchange and the Pacific Stock Exchange under the symbol "IAF".
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