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Korea Equity Fund, Inc. Announces Discount Management Plan

^{Published on 2010-06-03 14:10:28 - Market Wire}
 

NEW YORK, NY--(Marketwire - June 3, 2010) - Korea Equity Fund, Inc. (NYSE: [ KEF ]) (the "Fund") announced today that its Board of Directors (the "Board") has instituted a Discount Management Plan since, from time to time, the Fund's shares trade at a discount. This Plan will consist of an open-market share repurchase program and a tender offer component, as described below, that remain in effect for the time period announced by the Fund.

In accordance with the Discount Management Plan, the Board has authorized an initial repurchase in the open market of up to 5% of its shares of common stock currently outstanding during the period from July 1, 2010 until October 31, 2010. The Fund's shares are listed on The New York Stock Exchange. The Fund will repurchase shares at open market share prices that represent a discount from their net asset value. The share repurchase program is intended to enhance shareholder value, since repurchases made at a discount from net asset value have the effect of increasing the net asset value per share of the Fund's remaining outstanding shares.

The amount and timing of repurchases will be governed by guidelines adopted by the Board and implemented by the Fund's officers under the Board's oversight. There is no assurance that the Fund will purchase shares at any specific discount levels or in any specific amounts or on any specific dates during the period specified above. Following the expiration of the initial repurchase period, the Board will evaluate any discount from net asset value at which the Fund's shares are trading. From time to time, the Board may authorize further share repurchases if it determines that the repurchases are in the Fund's best interests but the Fund is under no obligation to do so. The Fund will announce the amount and dates of any such further share repurchases.

The tender offer component of the Discount Management Plan is intended to become effective in the event that the Fund's shares trade at a significant discount following the initial open market repurchases. Following the end of the initial share repurchase program, if, beginning on November 1, 2010 the Fund's shares trade at a volume-weighted average discount of 15% or more from the Fund's net asset value over a rolling eight-week period, the Board intends to commence a tender offer for 10% of the Fund's outstanding shares. The tender offer price will be a percentage of the per share net asset value of the Fund on the date on which the tender offer expires. The Board will announce a pricing formula at the time the tender offer is announced, but the Board expects that the price will be at least 95% of the Fund's net asset value per share on the day the tender offer expires.

The Board may, in its sole discretion, authorize one or more additional tender offers if it determines that a subsequent offer is in the Fund's best interests. However, the Board is under no obligation to authorize any such offer. The Fund's ability to launch any tender offer, including the offer during the period specified above, and the timing of such an offer are subject to legal requirements, and there can be no assurance that the Fund will complete a tender offer.

The Board may revise the terms of the Discount Management Plan or terminate such Plan if it determines such action is in the best interests of the Fund.

The Fund invests primarily in the securities of companies domiciled in Korea and is designed for investors seeking long-term capital appreciation. The manager of the Fund is Nomura Asset Management U.S.A. Inc., which is based in New York. Nomura Asset Management U.S.A. Inc. is a subsidiary of Nomura Asset Management Co., Ltd., which is one of the largest investment advisory companies in Japan in terms of assets under management and which serves as the Investment Adviser to the Fund.