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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
(Amendment No. )
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO
RULE 13d-2(a)
The Mexico Fund, Inc.
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(Name of Issuer)
Common Stock, par value $.01 per share
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(Title of Class of Securities)
592835102
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(CUSIP Number)
Barry M. Olliff
c/o City of London Investment Management Company Limited
77 Gracechurch Street, London, UK EC3V 0AS
+44 207 711 0771
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
March 24, 2009
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(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(e), (f) or (g), check the following box [_].
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act.
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(Page 1 of 10 Pages)
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CUSIP NO. 592835102 13D PAGE 2 of 10
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
City of London Investment Group PLC, (CLIG) a company incorporated
under the laws of England and Wales.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [_]
(B) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,076,863
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,076,863
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,076,863
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.00%
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14 TYPE OF REPORTING PERSON*
HC
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CUSIP NO. 592835102 13D PAGE 3 of 10
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1 NAME OF REPORTING PERSONS
S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
City of London Investment Management Company Limited (CLIM), a
company incorporated under the laws of England and Wales.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [_]
(B) [_]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e)
[_]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
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NUMBER OF 7 SOLE VOTING POWER
SHARES 3,076,863
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BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY 0
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EACH 9 SOLE DISPOSITIVE POWER
REPORTING 3,076,863
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PERSON 10 SHARED DISPOSITIVE POWER
WITH 0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,076,863
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
[_]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
17.00%
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14 TYPE OF REPORTING PERSON*
IA
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CUSIP NO. 592835102 13D PAGE 4 of 10
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ITEM 1. SECURITY AND ISSUER.
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This statement relates to the shares of common stock, par value $.01
per share (the "Shares"), of The Mexico Fund, Inc.. (the "Fund"). The
principal executive offices of the Fund are located at c/o Decher LLP,
attn. Sander M Bieber Esquire, Asst. Sec., 1775 I Street, Suite 1100,
NW, Washington, DC 20006-2401 (202-261-7941).
ITEM 2. IDENTITY AND BACKGROUND.
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(a). This statement is being filed by City of London Investment Group
PLC ("CLIG") and City of London Investment Management Company Limited
("CLIM," and together with CLIG, the "Reporting Persons").
(b). The business address and principal executive offices of CLIG are
77 Gracechurch Street London, EC3V 0AS England. The directors and
executive officers of CLIG, their business addresses and present
principal occupation or employment are set forth on Annex A attached to
this Schedule 13D. The business address and principal executive offices
of CLIM are 77 Gracechurch Street London, EC3V 0AS England. The
directors and executive officers of CLIM, their business addresses and
present principal occupation or employment are set forth on Annex A
attached
(c). The principal business of CLIG is serving as the parent holding
company for the City of London group of companies, including CLIM. CLIM
is an emerging markets fund manager which specializes in investing in
closed-end investment companies and is a registered investment adviser
under Section 203 of the Investment Advisers Act of 1940. CLIM is
controlled by CLIG. CLIM is principally engaged in the business of
providing investment advisory services to various public and private
investment funds, including The Emerging World Fund ("EWF"), a Dublin,
Ireland-listed open-ended investment company, Emerging Markets Country
Fund ("GEM"), a private investment fund organized as a Delaware
business trust, Investable Emerging Markets Country Fund ("IEM"), a
private investment fund organized as a Delaware business trust,
Emerging Free Markets Country Fund ("FREE"), a private investment fund
organized as a Delaware business trust, The EM Plus CEF Fund ("PLUS"),
a private investment fund organized as a Delaware business trust, GFM
(Institutional) Emerging Markets Country Fund ("GFM"), an open-ended
fund organized under the laws of the Province of Ontario, Global
Emerging Markets Country Fund Cayman ("CEM"), an open-ended fund
organized under the laws of Cayman Monetary Authority and fifteen
unaffiliated third-party segregated accounts over which CLIM exercises
discretionary voting and investment authority (the "Segregated
Accounts"). EWF, GEM, IEM, FREE, PLUS, GFM and, CEM, are collectively
referred to herein as the "City of London Funds."
(d). None of the Reporting Persons has, during the last five years,
been convicted in any criminal proceeding.
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CUSIP NO. 592835102 13D PAGE 5 of 10
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(e). None of the Reporting Persons has, during the last five years,
been a party to any civil proceeding commenced before a judicial or
administrative body of competent jurisdiction as a result of which it
or he was or is now subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities
subject to, federal or state securities laws or finding any violation
with respect to such laws.
(f). City of London Investment Group PLC, (CLIG) and City of London
Investment Management Company Limited (CLIM) are companies incorporated
under the laws of England and Wales.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATIONS.
--------------------------------------------------
Beneficial ownership of the Shares to which this statement relates was
acquired by the Reporting Persons with invested capital of the City of
London Funds and the Segregated Accounts. The aggregate purchase price
of the 3,076,863 Shares beneficially owned by the Reporting Persons was
$72,288,469, inclusive of brokerage commissions. The aggregate purchase
price of the 222,321 Shares owned directly by EWF was $4,568,995,
inclusive of brokerage commissions. The aggregate purchase price of the
542,378 Shares owned directly by GEM was $14,266,357, inclusive of
brokerage commissions. The aggregate purchase price of the 542,919
Shares owned directly by IEM was $14,794,646, inclusive of brokerage
commissions. The aggregate purchase price of the 35,775 Shares owned
directly by GFM was $775,310, inclusive of brokerage commissions. The
aggregate purchase price of the 537,769 Shares owned directly by FREE
was $14,172,914, inclusive of brokerage commissions. The aggregate
purchase price of the 30,607 Shares owned directly by PLUS was
$341,939, inclusive of brokerage commissions. The aggregate purchase
price of the 1,165094 Shares owned directly by the Segregated Accounts
was $23,368,308, inclusive of brokerage commissions.
ITEM 4. PURPOSE OF TRANSACTION.
----------------------
The Reporting Persons believe the Board of Directors of the Fund are
not acting in shareholders' best interests by proposing to eliminate
the Fund's in-kind repurchase offer and that the Board has failed to
take meaningful actions to permanently reduce or eliminate the
substantial and persistent discount to net asset value ("NAV") at which
the Fund's shares have been trading. The Reporting Persons have no
present plans regarding any proposals but have undertaken this filing
to be open and to convey our views to a wider audience and fellow
shareholders.
On March 23, 2009, CLIM sent a letter to the Chairperson of the Board
of Directors of the Mexico Fund. Inc., (the "Fund"). In this letter
CLIM communicated its continuing concerns regarding the discount at
which the Fund's shares trade to NAV following the rights issue in 2007
and the more recent actions of the Board regarding the Managed
Distribution Plan. The foregoing description of the letter is not
intended to be complete and it is qualified in its entirety by the
complete text of the letter, which is filed as Exhibit A hereto as
incorporated herein by reference.
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CUSIP NO. 592835102 13D PAGE 6 of 10
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ITEM 5. INTERESTS IN SECURITIES OF THE ISSUER.
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(a) and (b). As of the date hereof, CLIG, through its control of CLIM,
and CLIM, in its capacity as investment adviser to the City of London
Funds and the Segregated Accounts, have voting and dispositive power
with respect to all 3,076,863 Shares owned directly by the City of
London Funds and the Segregated Accounts, representing approximately
17.00% of the 6.174 million Shares outstanding as of December 30, 2008,
as reported by the Fund. As of the date hereof, EWF, GEM, IEM, GFM,
FREE, PLUS, and the Segregated Accounts owned directly 222,321,
542,378, 542,919, 35,775, 537,769, 30,607,and 1,165,094Shares,
respectively, representing approximately 1.23%, 3.00%, 3.00%, 0.20%,
2.97%, 0.17% and 6.44%, respectively, of the 18.100 million Shares
outstanding as of February 28, 2009, as reported by the Fund.
(c). Information with respect to all transactions in the Shares
beneficially owned by the Reporting Persons that were effected during
the past 60 days is set forth below:
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TRADE NUMBER OF TRANSACTION CLIG TRADE
DATE SHARES TYPE FUND PRICE
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1/23/2009 6,367.00 BUY FREE 13.1371
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1/29/2009 8,300.00 BUY ACCOUNT 13.1333
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1/30/2009 7,800.00 BUY ACCOUNT 12.9804
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2/2/2009 195.00 SELL CEM 12.8600
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2/3/2009 86,400.00 BUY ACCOUNT 13.2726
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2/3/2009 51,410.00 BUY FREE 13.2726
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2/4/2009 25,000.00 BUY ACCOUNT 13.7500
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2/10/2009 11,177.00 BUY ACCOUNT 13.7324
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2/10/2009 4,300.00 BUY GFM I 13.7324
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2/11/2009 8,300.00 BUY ACCOUNT 13.7000
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2/18/2009 2,600.00 BUY ACCOUNT 12.3000
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2/26/2009 1,800.00 BUY ACCOUNT 11.2000
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2/27/2009 5,300.00 BUY ACCOUNT 11.0291
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3/2/2009 36,226.00 BUY ACCOUNT 10.3720
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3/2/2009 19,507.00 BUY PLUS 10.3720
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3/3/2009 11,200.00 BUY ACCOUNT 10.3819
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3/10/2009 30,000.00 SELL ACCOUNT 10.7123
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3/11/2009 15,600.00 BUY EWF 11.0878
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3/17/2009 23,200 SELL EWF 11.9454
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3/17/2009 53,350 SELL ACCOUNT 11.9454
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CUSIP NO. 592835102 13D PAGE 7 of 10
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
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TO SECURITIES OF THE ISSUER.
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Except as set forth in Item 4 of this Schedule 13D, none of the
Reporting Persons has any contract, arrangement, understanding or
relationship (legal or otherwise) with any person with respect to any
securities of the Fund including, but not limited to, any contract,
arrangement, understanding or relationship concerning the transfer or
the voting of any securities of the Fund, joint ventures, loan or
option arrangements, puts or calls, guaranties of profits, division of
profits or losses, or the giving or withholding of proxies.
ITEM 7. MATERIALS TO BE FILED AS EXHIBITS.
---------------------------------
See Letter dated March 24, 2009 attached hereto as Exhibit A.
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.
Dated: March 24, 2009
CITY OF LONDON INVESTMENT
GROUP PLC
/s/ Barry M. Olliff
-----------------------------------------
Name: Barry M. Olliff
Title: Director
CITY OF LONDON INVESTMENT
MANAGEMENT COMPANY LIMITED
/s/ Barry M. Olliff
-----------------------------------------
Name: Barry M. Olliff
Title: Director
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CUSIP NO. 592835102 13D PAGE 8 of 10
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ANNEX A
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DIRECTORS AND EXECUTIVE OFFICERS
The names of the directors and executive officers of CLIG and their business
addresses and present principal occupation or employment are set forth below. If
no business address is given, the business address of such director or executive
officer is c/o City of London Investment Group PLC, 77 Gracechurch Street,
London EC3V 0AS, England.
Andrew Davison Chairman
Barry Olliff Chief Executive Officer
Douglas Allison Finance Director
Omar Ashur Non-Executive Director
Allen Bufferd Non-Executive Director
David Cardale Non-Executive Director
Thomas Griffith Chief Operating Officer
George Robb Non-Executive Director
Carlos Yuste Business Development Director
The names of the directors and executive officers of CLIM and their business
addresses and present principal occupation or employment are set forth below. If
no business address is given, the business address of such director or executive
officer is c/o City of London Investment Management Company Limited, 77
Gracechurch Street, London EC3V 0AS, England.
Barry Olliff Chief Investment Officer
Douglas Allison Finance Director
Jeremy Banister Director
Martin Garzaron Director
Clayton Gillece Director
Thomas Griffith Director
Michael Russell Director
Valerie Tannahill Director
Christopher Weaver Director
Carlos Yuste Director
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CUSIP NO. 592835102 13D PAGE 9 of 10
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EXHIBIT A
Mr. Emilio Carrillo Gamboa March 23, 2009
THE MEXICO FUND, INC. - REGISTERED OFFICE
1775 I Street, N.W.
Suite 1100
Washington, D.C., 20006-2401
USA
PRIMARY RESIDENCE
Blvd. Manuel Avila Camacho No. 1, Ste. 609
Polanco 011009, Mexico, D.F.
Mexico
Dear Mr. Gamboa,
Thank you for your response to our letter dated February 27, 2009. It is
unfortunate that our letter arrived shortly after the Fund issued its recent
press release regarding the next repurchase offer. Our view remains, however,
that the Fund's discount to Net Asset Value is too wide. The proposal by the
Board to eliminate the in-kind repurchase offer will likely cause the Fund's
shares to further underperform relative to its Net Asset Value and will thus be
detrimental to all share holders.
We have been patiently working with the Fund's Board for some time. On August 2,
2007, we wrote to express our concern regarding the transferable rights offer
the Board approved which resulted in issuance of new shares at a significant
discount to the fund's Net Asset Value. The result of share issuance was
dilution of the Net Asset Value by 5.5%. In addition, our letter suggested there
was never sufficient demand for a rights offering to be conducted. The 52-week
average discount to Net Asset Value for shares of Mexico Fund Inc. was 11.5%
prior to the rights offering announcement, which was significantly wider than
its peers at the time. The average discount to Net Asset Value since conducting
the rights offering has been consistently in excess of 14%, with the shares
trading as wide as a 25% discount.
Your response to our letter on August 21, 2007 assured City of London, as a
shareholder, that the Board had called upon the advice of the Fund's investment
adviser and legal counsel, including the independent Directors' independent
counsel, and had relied upon the Directors' substantial business judgement in
all of its actions. Further you assured us that the Board had never taken action
that would have a detrimental impact upon the Fund's stockholders.
In September 2008, the Board approved a Managed Distribution Plan to pay
quarterly cash distributions to stockholders of 3% of the fund's Net Asset Value
per share as of the end of the previous calendar year, an Net Asset Value of
$37.64 as of July 31, for an equivalent of at least 12% of NAV per year. In
December, the Board changed the terms of the plan to reduce
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CUSIP NO. 592835102 13D PAGE 10 of 10
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from 12% to 10% of the Net Asset Value the amount of annual distributions the
fund will pay shareholders with the first of the changed payments being made in
April based upon an Net Asset Value as of December 31, 2008 of $16.98. Prior to
paying any further distribution, the Board announced a further reduction in the
quarterly distributions to a fixed dollar amount of $0.10, close to a one half
of one percent distribution based upon the Net Asset Value at the end of the
fiscal year. Even adjusting for market decline, this represented only a three
quarters of one percent (0.75%) distribution.
Since the rights offering in April 2007, the Board has authorised and completed
three in-kind repurchase offers, with the fourth and potentially final
repurchase offer under the repurchase program occurring in April of this year.
The repurchase offers have been inadequate, with 35.64% of shareholders having
tendered shares during September 2007 in-kind repurchase, 31.98% having tendered
during March 2008, and then 31.18% during the last in-kind repurchase in October
2008. Each tender has been to buy back only 5% of outstanding shares of common
stock.
In April 2007, the Board issued an additional 5,021,908 shares at a significant
discount to net asset value. Since the share issuance, the Board has authorised
the repurchase of 2,956,814 through the in-kind share repurchase program, and
will buy back a further 905,614 shares in April, which will total 3,861,828
shares having been bought back by the company. Combined with the issuance of
shares through the dividend reinvestment program the fund remains significantly
too large.
With the discount to net asset value persistently close to its widest range in
over seven years, the Board's decision to withdraw the in-kind repurchase offer
is detrimental to shareholders. The recent press release states the Board
believes that eliminating the in-kind repurchase program will allow the Board
greater latitude to evaluate and pursue actions that will more effectively
reduce the discount like the Managed Distribution Plan. The Board has failed to
explain how a 0.75% quarterly distribution will narrow the discount from 18%.
City of London continues to hold the belief that the Board needs to immediately
address the problem of excess supply in order to significantly and permanently
reduce the discount at which the Fund's shares trade to net asset value back
much closer to parity. If the Board's objective in proposing to eliminate the
in-kind repurchase is to more effectively reduce the Fund's trading discount,
then City of London suggests the Board inform shareholders openly and publicly
of their intentions. While we have no present plans or proposals on the issue,
we may look to act in the future if the Board does not demonstrate the necessary
commitment to managing this Fund.
Yours sincerely,
Michael Sugrue
Portfolio Manager, City of London Investment Management Company Limited