TCRAP_Public/000125.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                      A S I A   P A C I F I C

            Tuesday, January 25, 2000, Vol. 3, No. 17


* C H I N A  &  H O N G  K O N G *

CENTRESIGN COMPANY LTD: Facing winding up petition
CHEUNG WAH DEVELOPMENT: Sold for backdoor listing,Web use
CHUN TAI HOLDINGS: Trading suspension sought
DICKSON SHIP SUPPLIES LTD: Facing winding up petition
EAGLE FIELD INT'L LTD: Facing winding up petition
EVERGOOD TRAVEL LTD: Facing winding up petition
HANLUCK INVESTMENTS LTD: Facing winding up petition
HAPPY TUNE INDUSTRIES LTD: Facing winding up petition
HENACE LTD: Facing winding up petition
NATURAL DEVELOPMENT (HK)LTD: Facing winding up petition
TECH MILE ELECTRONICS LTD: Facing winding up petition
TOP MAN INT'L TRADING LTD: Facing winding up petition
WAI MING OPTICAL CO.LTD: Facing winding up petition

* I N D O N E S I A *

DHARMALA GROUP: In debt-deal talks with IBRA
PT ASTRA INTERNATIONAL: Gives acquisition update to JSE
PT ASTRA INTERNATIONAL: New bidder emerges

* J A P A N *

MAZDA MOTOR CORP.: Loss-cutting from currency fluctuations
MITSUBISHI CORP.: Indicted on price-fixing scheme
TOBU RAILWAY CO.: To book 100-130 Bln yen bad-asset losses
TOKYO KASEIHIN CO.:In bankruptcy,claims maybe irrecoverable

* K O R E A *

DAEWOO GROUP: Temporary pact with foreign creditors reached
DAEWOO GROUP: Tentative deal may speed up workout programs
DAEWOO HEAVY INDUS.: Signs MOU with creditors on debt rehab
DAEWOO MOTOR CO.: Signs MOU with creditors on debt rehab
HANBO IRON & STEEL: Final sale pact to be inked this week
KOREA EXCHANGE BANK: Expects to post 1999 loss
KOREA INVESTMENT TRUST CORP.: Plans to rid problem-asset

* P H I L I P P I N E S *

BW RESOURCES CORP.: Stock price falls to eight-month low
MARIWASA GROUP: Gets $15M refinancing
NATIONAL STEEL CORP.: Russian steel giant eyes company
PHILIPPINE NAT.BANK: It,other state firms to be auctioned
SHEMBERG MARKETING CORP.: Creditors agree on rehab terms
VICTORIAS MILLING CO.: Tells SEC about 5 interested bidders

* S I N G A P O R E *

CLOB INT'L.: Cash offer made to break Clob shares deadlock
CLOB INT'L: SIAS says latest Clob offer's unsatisfactory
DBS GROUP HOLDINGS: Thai results to have little impact
UNITED OVERSEAS BANK: Thai results to have little impact
WASSALL ASIA PACIFIC: Narrows annual loss

* T H A I L A N D *

FINANCE ONE: Charges to be filed against firms,ex-execs
INT'L ENGINEERING PLC: KTB loan guarantee approved
ONPA INT'L: Three ex-execs face illegal trading charges
PIZZA PCL: Cutting ties with U.S.'s Tricon Restaurants
TISCO FINANCE: Posts largest loss in its history

C H I N A  &  H O N G  K O N G

CENTRESIGN COMPANY LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 15 on the petition of
Cooperative Centrale Raiffeisen-Boerenleenbank B.A.
(Rabobank Nederland), Singapore Branch for the winding up
of Centresign Company Limited.  A notice of legal
appearance must be filed on or before March 14.

CHEUNG WAH DEVELOPMENT: Sold for backdoor listing,Web use
Softbank Corp., Japan's Internet colossus, said it agreed
to buy a majority stake in a Hong Kong-listed garment maker
and dyestuffs distributor, Cheung Wah Development Co. Ltd.,
to turn the firm into an Internet investment vehicle.

The acquisition, which sent Cheung Wah's shares soaring
more than sevenfold, gives Softbank a publicly listed
company on Asia's second-biggest stock market for fund
raising and investing, as well as a larger footprint in
China. The deal comes two days after Softbank agreed to
lead a syndicate investing US$20 million in Hong-based Web-
site operator Corp.

Cheung Wah, a family-owned and largely unprofitable garment
maker and dye distributor, posted a loss of HK$10.3 million
(US$1.3 million) in the six months ended Sept. 30, compared
with earnings of HK$364, 000 during the same period a year
earlier. Its long-term debt was HK$14.6 million at the end
of March. Softbank paid 18 Hong Kong cents each for 1.15
billion new shares in Cheung Wah.

Shares of Cheung Wah soared HK$8.47 to HK$9,80 on Thursday
after news of the acquisition was published in a legal
notice. Softbank shares fell 5.5% to 85,900 yen
(US$815.38), a drop of 5,000 yen.

Softbak said it would pay HK$207,5 million (US$26.7
million) in cash for a controlling 61.5%stake in Cheung
Wah, which will be renamed Softbank Investment
International (Strategic) Ltd.

In November, Softbank made its first investment in the
greater China region, purchasing a 5% stake in, a technology acquisition consultancy in
Hong Kong, to help it find new Internet investment
opportunities throughout Asia. Softbank President Masayoshi
Son predicted last month that China will have more Internet
users by 2005 than the U.S. or Japan, making the world's
most populated nation an integral part of Softbank's
efforts to quadruple its global technology investments.

Analysts said Thursday's announcement represented
Softbank's attempts to regionalize its fund-raising and
investment activities, with a long-term view on the
potentially lucrative China market. By raising funds in
Hong Kong, Softbank can also avoid selling stakes in its
overseas holdings to fund new Asian investments. Profits
realized from such sales can face a combined 60% tax rate
imposed by the U.S. and Japan.

"If you seriously want to penetrate the China market you've
got to be there, you've got to have a physical presence,"
said Pete Hitchen, vice president and regional Internet
analyst for Salomon Smith Barney Ltd. in Singapore. "It's
good business sense for them to decentralize their fund-
raising and investment activities."

Softbank touts a market capitalization of about US80
billion and a US$33 billion porfolio of investments in some
200 technology companies world-wide, including Yahoo! Inc.,
in which it is the largest shareholder. The company says it
plans to increase the number of its investments to 800
within the next five years.

Softbank's backdoor listing, so-called because such moves
allow companies to secure a public listing with minimal red
tape, mirrors a similar deal two weeks ago by Hikari Tsuhin
Inc., Japan's second-largest Internet company. Hikari
acquired 51% of battery maker Golden Power International
Holdings Ltd. for US$108 million. Pacific Century
Cyberworks, a Hong Kong company run by Richard Li, also
acquired 20% of the company, which was renamed Hikari
Tsushin International Ltd.

Hikari Tsushin still has the jump on Softbank in greater
China. In the past six months, the company has invested
more than US$130 million in Hong Kong to expand its
business interests in Asia, which represented about 30% of
the company's investment last year.  Softbank officials
said that although the Cheung Wah transaction was still
subject to shareholders' approval, they hoped the company
would soon expand into electronic commerce and other
Internet-related activities.

"In the future, the businesses of the company will also
diversify into investment into companies conducting
Internet and internet-related activities as well as
investing in the providing consultancy services to off-line
businesses in the Asia-Pacific region, which either are
converting or have the potential to convert themselves into
online businesses," said Joseph Tong, associate director of
Softbank Investment International (Strategic) Ltd. "We have
been looking at opportunities in China for some time."

Mr. Tong said Softbank currently has no plan to redirect
the fixed assets of Cheung Wah, nor to inject any of
Softbank's existing assets or businesses into the Hong Kong
company. Cheung Wah's board of directors is expected to
change upon completion of the deal in mid March, with
Softbank's executive vice president and chief financial
officer, Yoshitaka Kitao, expected to become its executive
chairman. Softbank Director Junichi Goto will be appointed
president of board for the new company, Mr. Tong added.

Analysts in Hong Kong said they expected more Internet
investment vehicles to gain listings this year through
either the "back door" or through initial public offerings
on Hong Kong's new Growth Enterprise Market, a Nasdaq-
inspired second board for technology companies. (The Asian
Wall Street Journal  21-Jan-2000)

CHUN TAI HOLDINGS: Trading suspension sought
Chun Tai Holdings Ltd has requested trading in its shares
be suspended pending announcement on winding-up petitions
against the company, rescue proposals and the status of its
financial position, the Stock Exchange of Hong Kong said.
Chun Tai last traded at 0.40 hkd, up 0.11 or 37.93 pct.
(AFX News Limited  21-Jan-2000)

DICKSON SHIP SUPPLIES LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 15 on the petition of
Good Prominent Fire Safety Company Limited for the winding
up of Dickson Ship Supplies Limited.  A notice of legal
appearance must be filed on or before March 14.

EAGLE FIELD INT'L LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 16 on the petition of
Kincheng Banking Corporation for the winding up of Eagle
Field International Limited.  A notice of legal appearance
must be filed on or before February 15.

EVERGOOD TRAVEL LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 16 on the petition of
New Astor Travel Service Limited for the winding up of
Evergood Travel Limited.  A notice of legal appearance must
be filed on or before February 15.

HANLUCK INVESTMENTS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 16 on the petition of
The Industrial and Commercial Bank of China for the winding
up of Hanluck Investments Limited.  A notice of legal
appearance must be filed on or before February 15.

HAPPY TUNE INDUSTRIES LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 9 on the petition of
Dragon Best Garments Limited for the winding up of Happy
Tune Industries Limited.  A notice of legal appearance must
be filed on or before February 8.

HENACE LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 16 on the petition of
Lau Ming Shum for the winding up of Henace Limited.  A
notice of legal appearance must be filed on or before
February 15.

NATURAL DEVELOPMENT (HK)LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 16 on the petition of
Tetra Pak China Limited for the winding up of Natural
Development (HK) Limited.  A notice of legal appearance
must be filed on or before February 15.

TECH MILE ELECTRONICS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for February 9 on the petition of
The Hongkong & Shanghai Banking Corporation Limited for the
winding up of Tech Mile Electronics Limited.  A notice of
legal appearance must be filed on or before February 8.

TOP MAN INT'L TRADING LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 1 on the petition of The
Daiwa Bank Limited for the winding up of Top Man
International Trading Limited.  A notice of legal
appearance must be filed on or before February 29.

WAI MING OPTICAL CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for March 22 on the petition of
Cheung Sin Tai for the winding up of Wai Ming Optical
Company Limited.  A notice of legal appearance must be
filed on or before March 21.


DHARMALA GROUP: In debt-deal talks with IBRA
The Indonesian Bank Restructuring Agency expects to reach a
deal with the Dharmala Group on its 2.68 trln rupiah in
debt by April, the agency's loan workout division head
Andreas Bunanta said.

"A memorandum of understanding will be finished only by
about April because there are many subsidiaries," Bunanta
told a news briefing.

In background papers provided at the briefing, IBRA said
Dharmala had many interparty transactions.  "There are even
indications that part of the loans were used to buy shares
of subsidiaries when those subsidiaries held rights issues
and the new shares could not be absorbed by the market,"
IBRA said.  (AFX News Limited  21-Jan-2000)

PT ASTRA INTERNATIONAL: Gives acquisition update to JSE
PT Astra International Tbk, has been working not only with
IBRA and its Investor Group (the Newbridge Asia/Gilbert
Global Equity investor group), but also with its legal
advisors, to establish a reasonable basis for the conduct
of due diligence in connection with the proposed
acquisition of Astra shares by the investor group. Astra's
legal advisors are Freshfields, Shearman & Sterling and
Makes & Partners.

In This regards, Astra has fully considered the issues
raised by the investor group, and the steps that need to be
taken in order to protect the interest of the various
stakeholders in the Astra Group.

Astra recognizes that through the sale of Astra shares
which are under IBRA's control, IBRA will always seeks to
protect the national interest, both short term interest
such as meeting Indonesia' fiscal budget but also the long
term interests such as to preserve Astra as a national

Under Indonesia law and international standards, Astra is
not obliged to provide access to non public and
confidential information to parties who wish to purchase
existing shares of Astra in a secondary market transaction,
however large transaction might be. Astra is prepared to
provide selected documents and information requested by
investor group. Astra cannot provide information pertaining

- Pro forma financial statements
- New product development
- Pricing strategy and costing
- Information which would breach its confidentiality
obligations to existing business partners. The data has
been ready for due diligence by the investor group since
December 20, 1999.

Astra group will continue to co-operate with IBRA and
potential investors, but without violating Astra's existing
commitments to third parties, including its major business
partners. Understandably, there are also practical
limitations to provide large amount of data, as Astra is a
large group. There is also the need for some of Astra's
proprietary information to remain strictly confidential in
order to protect Astra's long term business interest.
(Jakarta Stock Exchange  21-Jan-2000)

PT ASTRA INTERNATIONAL: New bidder emerges
A second bidder has emerged for the Indonesian government's
stake in PT Astra International, the country's largest auto

According to a letter sent by Credit Lyonnais Securities
(Asia) Ltd. to the head of the Indonesian Bank
Restructuring Agency, the unidentified investor is prepared
to pay a premium over IBRA's minimum asking price of 3,750
rupiah (52 cents) per share for the government's 40% stake
in Astra.

However, the letter noted the difficulty in pressing ahead
with a firm bid because the agency had named a U.S.
consortium led by Newbridge Capital and Gilbert Global
Equity Partners as the preferred bidder.

"The only obstacle to our client making a firm offer and
proceeding with a transaction . . . is the current
uncertainty as to the disposal process," Richard Taylor,
Credit Lyonnais Securities managing director, said in the

Mr. Taylor declined to comment on the letter or on the
Astra bid when asked by Dow Jones Newswires.  IBRA is
having a problem completing the sale of the Astra stake,
which is one of its prime assets. Last month, the U.S.
consortium complained that Astra's management "continued to
obstruct the due diligence and other related processes
necessary to complete the transaction."

In response, IBRA has moved to unseat the company's
management because of what it charges are attempts by
Astra's directors to impede the bidding process. IBRA,
which controls the government's shares, said it has
requested shareholders on Feb. 8, when it will propose a
new slate of directors and commissioners. Speaking at a
news briefing Wednesday, IBRA's new chairman, Cacuk
Sudarijanto, said the agency is determined to oust Astra
managers who aren't cooperating with the due diligence
process. (The Asian Wall Street Journal  20-Jan-2000)


MAZDA MOTOR CORP.: Loss-cutting from currency fluctuations
The president of Mazda Motor Corp. said the Japanese auto
maker is looking at different ways to make its business
less subject to currency fluctuations including possibly
using Ford Motor Co.'s production facilities in Europe.

Mazda posts a loss of about three billion yen ($28.5
million) on an operating profit level for every one yen
appreciation against the dollar, said a spokesman for the
company.  Fields said Mazda needs to make a decision in the
"short term" on what to do in order to make its business
less vulnerable to the currency market.

Europe is an important market for Mazda, along with Japan
and North America. Mazda doesn't have any vehicle
production operations in Europe.  In 1999, Mazda's sales in
Europe rose 1.3% to 241,000 vehicles, climbing for the
fourth straight year. Mazda was the leading Japanese auto
maker in major European markets like Germany and Austria
that year. (The Asian Wall Street Journal  21-Jan-2000)

MITSUBISHI CORP.: Indicted on price-fixing scheme
A U.S. grand jury indicted Mitsubishi Corp. of Japan and a
former executive at Ucar International Inc. as part of the
U.S. government's investigation into alleged price-fixing
in the graphite-electrodes market.

In an indictment unsealed in U.S. District Court in
Philadelphia, Justice Department officials alleged for the
first time that Mitsubishi was involved in a four-year plot
to firm up and hold prices for one of the key ingredients
used by steel manufacturers to produce certain types of
sheet metal and related products.

The continuing investigation, which the government said has
generated more than $300 million in criminal fines, focused
on the sale of electrodes used by minimill operators to
heat their furnaces in order to shape metal.  Mitsubishi
said it is "very disappointed' with the Justice Department
action and that its denies that charges against it. (The
Asian Wall Street Journal  21-Jan-2000)

TOBU RAILWAY CO.: To book 100-130 Bln yen bad-asset losses
Tobu Railway Co. (9001) plans to post 100-130 billion yen
in losses in the fiscal year through March from writing off
bad assets held by about 150 group firms and reorganizing
money-losing businesses, The Nihon Keizai Shimbun learned

Its subsidiary Tobu Department Store Co. suffers 50-55
billion yen in unrealized loss on Tokyo property that it
bought from its nonbank subsidiary Yamate Corp., which is
now under special liquidation. The site has a market value
of about 20 billion yen and a book value of 70-75 billion

Tobu Railway will set up a firm to manage the group's real
estate holdings, as Tobu Department is not able to write
off the latent loss on its own. Tobu Department will
transfer the property to the new company, and Tobu Railway
will provide shares with latent profits as donations to
offset latent loss on the property.

Tobu Railway also plans to set up a firm to integrate the
operations of most of the group's 14 hotels, which are
currently owned by different concerns and managed by
different firms. Tobu Railway plans to sell some hotels,
which is expected to mark a loss of about 30 billion yen.
(Nikkei  22-Jan-2000)

TOKYO KASEIHIN CO.:In bankruptcy,claims maybe irrecoverable
Recently, Tokyo Kaseihin Co., Ltd., a company having
transactions with The Dai-Ichi Kangyo Bank, Ltd., filed for
bankruptcy with the Tokyo District Court. Notice is hereby
given that, owing to the filing for bankruptcy, the
possibility has arisen that certain claims against Tokyo
Kaseihin Co., Ltd., may become irrecoverable.

On January 20, 2000, Tokyo Kaseihin Co., Ltd filed for
bankruptcy with the Tokyo District Court. Its
representative is Mr. Isao Hirose and its total amount of
claims include loans of Y3.9 billion. An appropriate amount
of collateral has been secured against the afore-mentioned
claims.  (Regulatory News Service  21-Jan-2000)


DAEWOO GROUP: Temporary pact with foreign creditors reached
After months of tortuous talks, the government and foreign
creditors of the Daewoo Group have reached a temporary
agreement on the recovery of debts from the failed

The Corporate Restructuring Coordination Committee (CRCC)
and the steering committee of foreign creditors agreed
Saturday that foreign creditors would retrieve an average
of 39 percent to 40 percent of their non-guaranteed loans
to Daewoo Corp. and three other major units, CRCC head Oh
Ho-keun said.

The deal, sealed in Hong Kong after two days of
negotiations, will cover $4.84 billion in unguaranteed
debts owed by Daewoo Corp., Daewoo Motor Co., Daewoo
Electronics Co., Daewoo Heavy Industries Inc. and their
overseas subsidiaries, said Oh, who represented the
government in the talks. Daewoo's foreign debt totals $6.75

"Under the agreement, Daewoo's domestic creditors will buy
the unguaranteed loans from foreign creditors at the
agreed-upon rate," Oh said. "But we have to persuade
individual foreign creditors to participate in the debt
buyout program since it is a tentative agreement."

The CRCC said foreign creditors would be able to recover
32.3 percent of their loans to Daewoo Corp., the group's
flagship and trading arm, and its overseas units. Foreign
creditors would retrieve 35 percent of their unguaranteed
loans to Daewoo Motor and Daewoo Electronics, and 67
percent for Daewoo Heavy Industries.

For foreign loans borrowed by the three units' overseas
subsidiaries, debt recovery ratios of 31.5 percent and 95
percent would be applied. The overseas operations will be
classified into eight groups.  Domestic creditors will
jointly set up a special-purpose corporation to buy
Daewoo's unguaranteed foreign debt, while the state-
financed Korea Asset Management Corp. will in turn buy the
debt at market price, the CRCC said.

The CRCC also agreed with the steering committee to make
interest payments of $130 million dollars on Daewoo's
foreign borrowings, which has been overdue since Daewoo's
12 units were put under debt workout programs in August
last year.  Under the agreement, domestic creditors will
submit details of a debt rescheduling plan to foreign
creditors by mid-February, who will then decide whether to
accept them by mid-March.

Between mid-February and mid-March, the government and
domestic creditors may stage overseas road shows if
necessary to persuade foreign creditors to take part in the
debt buyout agreement.  The domestic creditors will then
make the cash payment, estimated at $1.9 billion, to
Daewoo's foreign creditors at the end of March or early

The agreement represents a watershed in the settlement of
Daewoo's foreign debt. During the five months of debt
rescheduling talks, foreign creditors claimed they were
being treated unfairly, while the government threatened to
force Daewoo Corp. into court receivership unless a deal
was struck swiftly.

Last month, the government proposed that domestic creditors
buy foreign debts of the four Daewoo units for 34 percent
per every dollar of debt, but foreign creditors demanded 59
cents. Softening their stance, however, the foreign
creditors recently offered to accept 45 cents.  Daewoo,
once the nation's second largest conglomerate, collapsed
under around $77 billion in debts in July last year, which
had been run up through excessive borrowing and business
expansion.  (Korea Herald  24-Jan-2000; Korea Times,
Digital ChosunIlbo  23-Jan-2000)

DAEWOO GROUP: Tentative deal may speed up workout programs
The tentative agreement between the government and foreign
creditors on the buyout of Daewoo Group's foreign debt is
expected to accelerate the workout programs for the group's
12 units.

The conclusion of the deal is also likely to help stabilize
domestic financial markets and boost Korea's external
credibility, analysts said.  They cautioned, however, that
several obstacles still have to be overcome on the way to a
complete resolution of Daewoo's foreign debt problem since
the temporary deal has yet to win approval from each
foreign creditor.

The implementation of the rehabilitation plans for the 12
Daewoo subsidiaries - including its four key affiliates -
has been delayed due foreign creditors' refusals to
participate.  An official at a domestic creditor bank said
that in the wake of the deal, Daewoo's domestic creditors
will be able to wrap up the signing of the workout programs
with the group's units at an early date.

The domestic creditors have so far agreed with 10 Daewoo
units on rehabilitation plans but they have yet to sign
agreements with Daewoo Corp. and Daewoo Electronics Co.
"By signing workout programs with the remaining two Daewoo
units, domestic creditors will be able to double their
efforts to sell off the Daewoo firms or normalize their
operations," he said.

Domestic creditors are expected to convert the debt of
Keangnam Enterprise, Ltd. into equity Tuesday, while
pushing for workout programs for other Daewoo units as
planned, including the extension of fresh loans, he added.
The conclusion of the debt buyout deal is also expected to
contribute to stabilizing the domestic financial markets
and promoting foreign investor confidence in the Korean

Hampered by the Daewoo crisis, the domestic financial
markets, especially the bond market, have been in trouble
for months with long-term interest rates surging to more
than 10 percent.  Investment trust companies (ITCs), which
are heavily exposed to Daewoo's unsecured bonds, have been
in a financial bind, while the government has decided to
inject huge amounts of public funds into the nation's two
largest trusts - Korea Investment Trust Co. and Daehan
Investment Trust Co.

Early next month, local ITCs are feared to experience a
rush of cash calls for funds invested in bonds issued by
Daewoo units. On Feb. 8, individual and corporate investors
in Daewoo bonds will be permitted to redeem 95 percent of
the face value of their investments as opposed to the
current 80 percent.

"The Daewoo crisis has been the biggest threat to the
stability of the domestic financial market," a senior
official at the Financial Supervisory Commission (FSC)
said. "With the conclusion of the debt buyout deal,
however, the financial markets will be able to regain

Starting this week, financial market indicators, such as
interest rates and stock prices, should take a turn for the
better, which will help boost the nation's external
credibility, he said.  Despite such optimism, some analysts
warn that the Daewoo crisis is not over and many problems
have yet to be solved.

For one thing, they said, the agreement between the
government and the steering committee of foreign creditors
has yet to be approved by each of the 200 foreign lenders.
"The deal will become effective if 90 percent of the
foreign creditors give the green light to it," said Oh Ho-
keun, head of the Corporate Restructuring Coordination

In addition, the temporary deal does not cover Daewoo's
guaranteed debts, amounting to over $1.3 billion, or its
borrowing from foreign individual lenders.  Daewoo will
have to roll over the guaranteed debt and negotiate with
each individual foreign lender to extend the maturity of
their loans, estimated at $1.1 billion, the analysts said.
(Korea Herald  24-Jan-2000)

DAEWOO HEAVY INDUS.: Signs MOU with creditors on debt rehab
DAEWOO MOTOR CO.: Signs MOU with creditors on debt rehab
Daewoo Motor Co Ltd and Daewoo Heavy Industries have signed
a memorandum of understanding on corporate/debt
restructuring with their creditors, Korea Development Bank

Under the memorandum, Daewoo Heavy will be divided into
three separately listed companies engaged respectively in
ship building, machinery production and Daewoo Heavy's
other operations.  The assets and liabilities will be
broken down with the ship building and machinery units
retaining assets and liabilities pertaining only to their
own operations while the third company will assume Daewoo
Heavy's remaining assets, which are mostly non-performing,
an official from Korea Development Bank said.

Preferential interest rates will be applied to the debts of
the new companies: the ship building company will pay basic
rates minus 3 pct, while the machinery company will pay
basic rates minus 4.5 pct, the official said.  "This
measure is aimed at improving the financial and profit
structures of the ship building and machinery units," he

The creditors will extend 147.5 bln won to Daewoo Heavy
Industries, of which 55 bln won will be used as operating
capital and 92.5 bln won will be used for trade finance,
the official said.

Daewoo Motor will receive 521 bln won in operating capital,
a Hanvit Bank official said.  Separately, Daewoo
Electronics Co Ltd is expected to sign a debt restructuring
memorandum with its creditors this week.  At 11:11 am,
Daewoo Heavy was up 10 won at 835 and Daewoo Electronics
was up 15 at 378,550.  (AFX News Limited  21-Jan-2000)

HANBO IRON & STEEL: Final sale pact to be inked this week
Five-months of negotiations to sell Hanbo Iron and Steel
Co. has reportedly come to an end, with creditors of the
bankrupt steelmaker planning to sign a formal contract with
the Nabors Consortium of the United States this week.

Creditor bank sources said yesterday that they have
concluded the legal work that preceded the signing of a
formal contract and both sides agreed to complete the deal
before Wednesday.

"We have already agreed upon an acquisition price and other
major issues, but several complicated legal issues
remained," said a Korea First Bank official, explaining the
delay in finalizing the deal.

Last month, creditors of the failed steelmaker reached an
agreement in New York with representatives from the Nabors
Consortium.  "We have ironed out major differences during
talks last week," said a Nabors official. "We decided to
sign the main contract early next week-Wednesday at the

The signing of a contract would end talks that began in
July of last year, when the Nabors Consortium was given
exclusive negotiator status to acquire Hanbo Iron and
Steel, which went bankrupt in January of 1997.  A sale
price of $480 million has been mentioned. However, the
price is significantly lower than a previous offer by
Dongbu Steel last year.

The bankrupt steelmaker has made efforts to restart
production since late last year. A steel plant owned by
Hanbo in Tangjin, central Korea, is capable of producing
1.8 million tons of hot coils annually and the company has
been working on plans to restart the facilities there.
Hanbo officials estimate that it would cost around 100
billion won to restart production at the Tangjin hot coil
plant. (Korea Herald  24-Jan-2000)

KOREA EXCHANGE BANK: Expects to post 1999 loss
Korea Exchange Bank expects to post a 1999 net loss of 650
billion won ($576.8 million), because of "aggressive
provisioning" for its exposure to Daewoo Group, and "other
problematic credits."

Excluding the provision, the bank expects operating income
of 1.1 trillion won in 1999.  Korea Exchange Bank said it
estimates its capital adequacy ratio to have been around
10.5% at the end of 1999.  In 1998, the bank reported a net
loss of 843.5 billion won. Its capital adequacy ratio was
8.1% at the end of 1998.

During the second half of 1999, the bank said it set aside
1.5 trillion won in provisions, bringing its full-year
provision charge to 2.1 trillion won, and the total balance
of its loan-loss reserve account to 2.8 trillion won. More
than 1.3 trillion won of the 1999 provisions related to
Daewoo Group exposure, the bank said. (The Asian Wall
Street Journal  20-Jan-2000)

KOREA INVESTMENT TRUST CORP.: Plans to rid problem-asset
Troubled Korea Investment Trust Corp. (KITC), the nation's
largest investment trust company, will try to clear its
trust business of all problem assets by June this year to
facilitate the transformation into becoming a stock
brokerage, the company's new president said yesterday.

Lee Jong-nam, who was recently inaugurated as president,
said he will normalize the debt-ridden company's management
by 2005.  In a ceremony held to unveil a new management
strategy, Lee declared that he will eliminate 4.3 trillion
won worth of bad assets in the company's trust operation by
June. He said the bad assets on trust accounts held by
investors will be transferred to the company's own

To cover the losses incurred, Lee said he will raise 4.7
trillion won by selling Daewoo Group bonds to Korea Asset
Management Corp. and receive equity investment from Korea
Development Bank, its major shareholder.  The new president
said he will also seek to attract foreign equity investment
in cooperation with KDB.

Lee said KITC will become a brokerage firm in the second
half of the year, with the fund operation division to be
spun off into an investment trust management firm.  Lee
also promised to strengthen the supervision of asset
management to recover investor confidence.

The trust corporation is seeking registration with the
KOSDAQ market next year on the back of a continued
improvement in profitability, Lee said. (Korea Herald  21-


BW RESOURCES CORP.: Stock price falls to eight-month low
Stock market investors dumped BW Resources Corporation
shares yesterday in the aftermath of the Securities and
Exchange Commission (SEC) chairman's statement under oath
the other day indicating that President Estrada may have
meddled in the investigation on the gaming firm's stock
price movements last year.

The price of the BW stock tumbled yesterday to an eighth-
month low of 7.40 Philippine pesos (PhP) at the close of
trading. Compared to its level the day before, the BW price
yesterday was down 21% or PhP2, even hitting a low of
PhP7.30 at one point.

In a Senate inquiry held at the Philippine Stock Exchange
(PSE) the other day, SEC chairman Perfecto Yasay, Jr. said
he received calls from President Estrada concerning BW. Mr.
Yasay claimed he was contacted four times in November by
the President himself.  Mr. Yasay said that in one of these
calls, Mr. Estrada cited that businessman Dante Tan was "a
victim" in the decline in the BW price, having supported
the price of BW allegedly with millions of pesos.

The conflict between Mr. Estrada and the head of SEC, the
government agency overseeing the securities industry, has
apparently rattled stock market participants.

"It's not doing us any good," said Irving Ackerman, one of
the earliest members of the Makati Stock Exchange and
president of I. Ackerman & Co., Inc. "The perception is
negative. It is showing we haven't gotten our act
together which is not good for the country and the
(Philippine) stock market."

"The President is accused of a very serious we
speak, thousands of speculators and investors are losing
their shirts (due to declines in stock prices)," Mr.
Ackerman said of the selldown on BW yesterday.

But with optimism, the stock market veteran said foreigners
may look at prospects in the Philippine stock market as
prices touch lows.  "Time is a great healer...perhaps when
the market is so low even foreigners would look and see how
cheap stocks are doing," Mr. Ackerman said.

A ranking official at a top brokerage firm, meanwhile, said
Mr. Yasay's statements put the President's credibility and
that of Mr. Yasay on the line.  "Clients get nervous
because they think: Is the government playing favorites? It
shows cronyism is alive and kicking," the source said.
"Where will it all end? Will it end with a severe penalty
on BW, or a bigger investigation on the Office of the
President or end with the resignation (of Mr. Yasay)? This
is like a soap opera people are watching," the source

Analysts agree that what needs to be addressed to revive
the market is political confidence.  "It's anybody's guess
(when the market will start picking up). It's a hard
call. New blood in the cabinet is encouraging but (people)
want reinforcement. We are not seeing concrete evidences
(of economic reforms)," Neil Sinha, research head at
France-based SG Securities Phils. Inc., said.

For its part, BW is confident it will emerge with a "clean
bill of health" after the investigation, but not entirely
unscathed.  "If it's going to be based on merits, records
which no one can tamper with, then we are confident
that...the investigation will show there was no
wrongdoing," Jose Salvador Rivera, Jr., BW corporate
secretary told reporters yesterday.

"The fact that we have immediately complied with
requirements, we are confident (that) we are not hiding
anything... We are confident we'll come out of this with a
clean bill of health. It's just that this new issue, the
allegation of chairman Yasay...we were surprised,
flabbergasted," he said.

Mr. Rivera clarified that Mr. Tan holds a minority stake in
BW and denied that the President and his kin have holdings
in BW.  "Mr. Tan is not the majority shareholder... at most
he holds substantial shares, not majority. He does not even
hold as a block the highest percentage of shares. My
records indicate maybe 17% to 20%, but he is not majority,"
Mr. Rivera said.

"The President has no personal holdings. He has no interest
in the company whatsoever. That's why we were quite
surprised by the statement of Mr. Yasay of the President
intervening for and in our behalf. The President would have
no interest in such a thing," Mr. Rivera said.

Mr. Rivera said the investigation has cast the shadow of
doubt on the company.

"It is to our best interest that it (the PSE and Senate
probe) be finished as soon as possible because we have
nothing to hide. The main issue is whether there was fraud
committed in what happened. We are concerned with politics
muddling the issue," Mr. Rivera said.

What would restore the confidence in the company, said Mr.
Rivera, are the company's projects despite the drop in its
share prices.  (Business World  21-Jan-2000)

MARIWASA GROUP: Gets $15M refinancing
The Mariwasa Group of Companies, a leading ceramic tile
manufacturer in the country, has received a $15-million
long-term loan from the multilateral International Finance
Corp. (IFC).

The loan facility consisted of a $12-million senior term
loan and a $3-million subordinated loan. Proceeds of the
loan will be used to partially fund the financial and
operational streamlining of Mariwasa, including the
retirement of the group's short-term debt, and the
restructuring of its long-term loans.

"The loan facility awarded to Mariwasa is in line with
IFC's response to the Asian crisis," IFC chief of mission
Vipul Prakash said.  "IFC is trying to assist strong,
viable businesses to hurdle the `bumps' caused by the
financial crisis."

"With this facility and the restructuring of its debt,
Mariwasa will be in a stronger financial position to take
advantage of the recovery of the ceramic-tile sector,"
Prakash said.

A member of the World Bank Group, IFC is the largest
multilateral source of funding for the private sector in
developing countries. In line with its mission to promote
private sector investment, IFC helps beneficiary-
governments address mass poverty. It mobilizes capital in
the international financial markets and provides technical
assistance and advice to governments and businesses.

On the other hand, the Mariwasa Group, composed primarily
of Mariwasa Manufacturing, Incorporated and Mariwasa Siam
Ceramics, Incorporated has consistently maintained a
dominant share of the local market due to its quality
craftsmanship, wide selection of designs and strong
distribution network.

All AsiaCapital and Trust Corp. was appointed as financial
advisor of the group's debt. A leading diversified
financial institution established in 1979, All AsiaCapital
has grown to become a major institution with investments
and businesses in investment banking, trust and investment
services, financing, credit card services, venture capital
investment, strategic investments, stockbrokerage,
insurance, pre-need, mutual fund, and thrift banking.
(The Philippine Star  21-Jan-2000)

NATIONAL STEEL CORP.: Russian steel giant eyes company
The second biggest steel manufacturer in Russia has teamed
up with local downstream producers of steel products in a
bid to acquire the National Steel Corp. (NSC) and reopen it
for commercial production of steel products.

According to an industry source, downstream producers have
started negotiating with the Russian company to determine
the terms of the partnership and make a bid or strike a
joint-venture with the current owners of the NSC, Hottick
Holdings Inc. of Malaysia.

The company was identified as Novoliptetsk Iron and Steel
Corp. (NISC) and according to the source, it has begun
conducting a due diligence review of NSC to determine its
actual prospects and rehabilitation requirements.

Novolipetsk is one of Russia's top 20 corporations but it
is facing financial difficulties at home. It was abandoned
by American investors, including financier George Soros,
since Washington started clamping down on Russian steel
imports last year.

In tying up with Novolipetsk, PSRMA said this would ensure
NSC of reliable and cheaper supply of slabs, a major raw
material. Slab is a major cost factor of NSC which imports
90 percent of its total slab requirement. By eliminating
this cost disadvantage, PSRMA and Novolipetsk are
optimistic that NSC can produce competitively priced hot
rolled coils, cold rolled coils and tinplate.

Among the interested buyers of NSC, only PSRMA and other
downstream steelmakers (belonging to the Association of
Philippine Steel Mills and Filipino Galvanizers Institute)
have offered to resuscitate the company's operations even
without government protection in the form of higher tariffs
and import quotas. PSRMA and the downstream steelmakers
have committed to acquire all of NSC's output before
importing their remaining requirements from abroad.

Despite having a superior offer, the downstream steel
industry is still considered dark horse in the bidding for
NSC since Cathay Pacific Steel Co. is considered as the

Capasco is owned by presidential adviser on iron and steel
John Ng and banker Benjamin Chua who are both close allies
of taipan Lucio Tan. The beer and tobacco tycoon revealed
that he has a majority interest in Philippine National Bank
which, as the biggest creditor of NSC, has a major say on
who gets NSC.

With the backing of the government., PNB and other creditor
banks have moved to foreclose on NSC's assets because of
the steel giant's failure to meet mounting interest rate

But NSC's controlling shareholder, Hottick Investments-
Renong Bhd. of Malaysia, has obtained a temporary
restraining order stopping the bidding of NSC's assets and
it has applied for a debt rehabilitation program with the
Securities and Exchange Commission.

The government and the banks want a new investor in NSC who
will pump in new cash of $130 million to reopen its Iligan
steel plant (which has been shut down since November last
year) and strengthen its operations to compete with foreign
steelmakers. The government, which is blaming the
Malaysians' mismanagement for NSC's woes, was even willing
to impose barriers to protect the local steel industry in
order to drum up interest in NSC.

The PSRMA and its Russian partner will have to compete with
another local group led by Cathay Pacific Steel Co.
(Capasco) which has made representations to the government
that they are considering the acquisition of NSC's assets
and reopening the business as a new company. Downstream
producers were originally planning to wait for NSC's
creditors to put the company's assets on the block, saying
that without its non-viable operation, the company can
reopen and operate with a profit.

However, Hottick had filed a petition for the suspension of
debt payments before the Securities and Exchange Commission
(SEC), halting the bidding procedures and suspending all
claims on NSC pending the resolution of its request for the
appointment of a rehabilitation receiver.

In the meantime, government said it is preparing a package
of support measures designed to help NSC get back on its
feet.  Under consideration are plans to impose quantitative
restrictions on the importation of steel billets, hot
rolled coils and rolled coils which the NSC produces and
sells to local downstream users.

The package also includes the waiver of some government
fees and charges, continued tariff protection against
competing imports and other forms of assistance.

The source did not specify how much NISC is willing to
infuse into NSC but the Department of Trade and Industry
had earlier estimated that it would need $130 million in
fresh capital to resume operations and recover from its
collapse. As creditors ruled out debt restructuring for
NSC, government said that unless the company was able to
close a deal with a new partner, its days were numbered and
it would have to be liquidated ultimately. (The Philippine
Star, Philippine Daily Inquirer  21-Jan-2000)

PHILIPPINE NAT.BANK: It,other state firms to be auctioned
The Estrada administration will go after former officials
of the Philippine National Bank (PNB) who approved billions
of pesos worth of behest loans, even as it readies the
auction of its 30% stake in the bank.

"We will show you how PNB was abused in terms of non-
performing loans and behest loans and so many kinds of
loans. And we will show you all the records," President
Estrada told reporters in MalacaĄang.

But Finance Secretary Jose T. Pardo, who is currently
looking into the books of PNB and has uncovered the behest
loans, did not say how much "losses" PNB incurred due to
these non-performing loans and behest loans.

The President's statement came on the heels of plans for
the scheduled sale of the government's remaining stake in
PNB from which it hopes to raise 7 billion Philippine pesos
($0.172 billion at PhP40.682 = $1). Mr. Pardo, who was
present during Mr. Estrada's press briefing, said the PNB
shares will be sold as a single block in an auction or open
bidding in April or May.

This would mean Chinese-Filipino business tycoon Lucio Tan,
whom Executive Secretary Ronaldo B. Zamora earlier
confirmed to have acquired a 47% to 48% stake in PNB, can
acquire the government's share.

"We will open it (the auction) to the public. Nobody can
stop anybody," Mr. Estrada said, adding that Mr. Tan
acquired his stake in PNB through the stock market.

Asked about concerns raised by the World Bank about Mr.
Tan's entry into PNB, Mr. Estrada replied, "Where did you
hear that? We must be thankful that Lucio Tan came in
because nobody would like to buy the shares, which have
been on the stock market for a long time."

Depicting Mr. Tan as PNB's savior, Mr. Estrada then
proceeded to point out that PNB was "abused" by officers
under the previous administration. He cited as example the
PhP4.5-billion ($0.11-billion) loan granted to businessman
Ramon J. Jacinto to develop a property in Makati and
another multi-million peso loan to the cash-strapped
National Steel Corporation.

The loan to Mr. Jacinto's RJ Ventures Realty & Holdings
Corp. was used to acquire a 8,000-square meters PNB
property in Makati City (central Metropolitan Manila) in
1996.  The President said the public must know that PNB was
bled dry during the previous administration. "I think the
public deserves to know that...It's documented," Mr.
Estrada said.

But when he asked Mr. Pardo whether the losses reached
between PhP30 billion ($0.737 billion) to PhP40 billion
($0.983 billion), Mr. Pardo replied, "Hindi naman ho (Not
really, sir). There are receivables that are now being
looked at, but they seem to be collateralized. I don't have
the latest figures."

Mr. Pardo said he is scheduled to meet today with the PNB
board to discuss the behest loans. He said the Committee on
Privatization will also meet today to discuss the
privatization of PNB.  Aside from PNB, the government also
plans to privatize the Post Office complex that would
include the Philippine Postal Corp. and the Postal Savings

Executive Secretary Ronaldo B. Zamora, who was also present
during the President's briefing said the government expects
to raise between PhP20 billion ($0.492 billion) to PhP30
billion ($0.737 billion) from the sale of government assets
this year.

The amount, Mr. Zamora said, will hopefully be enough to
cover the revenue requirements to finance this year's
budget, which Congress has yet to approve.

Mr. Zamora said the first to go of the government's assets
is the Philippine Phosphate Fertilizer Corp. (Philphos), of
which MalacaĄang hopes to raise between PhP20 billion
($0.492 billion) to PhP30 billion ($0.737 billion) in
additional revenues. Another PhP10 billion ($0.246 billion)
will come from the scheduled sale of the government's stake
in Manila Electric Co. Also set to be privatized are the
Philippine National Construction Corp., Radio Philippines
Network Channel 9 and the National Power Corp.

Mr. Pardo also said the government hopes to dispose of
these assets before November when the term of the Committee
on Privatization and the Asset Privatization Trust expires.
(Business World  21-Jan-2000)

SHEMBERG MARKETING CORP.: Creditors agree on rehab terms
After three years of negotiations, Shemberg Marketing Corp.
and its creditor banks have reached an agreement to
rehabilitate the company through a debt-to-equity swap and
restructuring of the rest of its 3.2-billio-peso (US$78.7
million at PhP40.682:US$1) loans.

Four of the 14 creditor banks -- Equitable PCI Bank, Land
Bank of the Philippines, United Coconut Planters Bank and
Solid Bank -- signed the agreement with Shemberg and the
Dakay Group of Companies last January 11 in Manila.

Shemberg chief executive officer Benson Dakay said he
expects the rest of the creditor banks to sign the
agreement before the end of this month because Mr.
Villaraza has assured that he will push for the approval of
the rehabilitation plan.

Practically all the banks have approved the rehabilitation
plan but are just waiting for the formal approval by their
respective boards of directors, Mr. Dakay said, referring
to Far East Bank, Bank of Philippine Islands, Urban Bank,
Metropolitan Bank and Trust Co. Bank, Philippine National
Bank and other smaller banks.

If signed by the other creditor banks by the end of
January, Mr. Dakay said the rehabilitation plan starts next
month with a grace period of two years wherein the company
is required only to remit interest payments.

Of the PhP3.2-billion outstanding loans, around PhP2
billion ($49 million) was made by Shemberg while around
PhP1 billion ($24.6 million) went to the non-seaweed
concerns of the Dacay Group of Companies. There are about
10 other companies under the Dacay group, including
Rockland, Shaldan, Mackie Industries, Benson Industries
(Lion-Tiger mosquito coil) and Cebu Polymer.

The rehabilitation plan, to be implemented in the next 10-
12 years, calls for the following:
˙ reduction of outstanding loans by 35% within 24 months
from effectivity of agreement;
˙ conversion of 45% to 50% of the unsecured portion of the
loan (which comprises about 30% of the total loan amount)
to equity in Shemberg plants in Mandaue City and Mactan
island in Cebu and in Zamboanga City;
˙ restructure of the remaining loan amount, after the
reduction and conversion to equity;
˙ interest rates based on Phibor; and
˙ deferment of accrued interest from the last quarter of
the second year to the last quarter of the eighth year.

The reduction of the loans will be done through: dacion en
pago involving non-operating assets of the Dacay group;
purchase of zero coupon bonds by any of the borrowers;
negotiated sales for cash to third parties; properties
owned by the companies and sureties; and advances or
infusion of new equity by existing stockholders or
strategic investors.

There will be no change in management. Mr. Dakay said he
will continue to function as CEO although the creditor
banks will appoint a debt service account officer aside
from the comptroller.

Another feature of the plan is the establishment of a
collateral trust account to pool all mortgaged properties
of the companies. This will be managed by Equitable
PCIBank.  Mr. Dakay is optimistic that Shemberg, the
country's biggest carrageenan exporter, will be able to
turn around its performance even before the 10-year period
is over. He noted that seaweed sales in 1999 grew by 5% to
$22.02 million because of an increase in revenues from pet
food and food-grade semi-refined carrageenan.

Production in the Mandaue, Mactan and Zamboanga plants went
up by 48% from 1,950 metric tons in 1998 to 2,903 metric
tons in 1999.  Capacity utilization of all three seaweed
processing plants under Shemberg Marketing went up to 61%
last year from a low of 37% in 1998, when the company was
crippled by a protracted labor conflict.

Losses due to the labor strike in 1998 were estimated at
PhP8 million ($196,000) because the company failed to meet
orders for food-grade semi-refined carrageenan.  Mr. Dakay
also pointed out that there is enough volume of raw
seaweeds now and enough credit support.

Shemberg was among the first Cebu companies to encounter
serious financial troubles due to the 1997 currency crisis
that was compounded by a labor problem and scarcity of raw
seaweeds. (Business World  21-Jan-2000)

VICTORIAS MILLING CO.: Tells SEC about 5 interested bidders
The management committee (mancom) of ailing sugar miller
Victorias Milling Co. (VMC) has filed the list of five
companies which have signified interest in acquiring
majority control over the cash-strapped sugar firm.

In a manifestation submitted to the Securities and Exchange
Commission (SEC) yesterday, the VMC mancom said "in
accordance with the bidding guidelines and timetable for
implementation of such," five companies have already
expressed interest to participate in the bidding process.
Companies that have submitted their letters of intent
include: listed firms JG Summit Holdings, Inc., and
Alliance Global Group, Inc. (AGGI); agribusiness firms
Cargill Philippines, Inc. and Binalbagan Isabela Sugar Co.
(Biscom); and RCBC Capital Corp. AGGI is 35%-owned by
George Yang's Yorkshire Holdings, Inc. Mr. Yang is the
franchise holder of McDonald's Philippines.

AGGI manufactures glass containers for food and beverage
products including Pepsi-Cola, Cosmos, Pop Cola, Ginebra
and Datu Puti. JG Summit, parent firm of food company
Universal Robina Corp. is also said to make a bid for
53.35% of VMC. Cargill Philippines, Inc., a subsidiary of
Cargill USA, is a multinational firm engaged in coconut oil
production, seed production, research and commodity

Biscom is owned by sugar baron and singer Jose Mari Chan.
RCBC Capital Corp is a subsidiary of Rizal Commercial
Banking Corp. The winning bidder will secure a controlling
53.35% majority stake in the firm, leaving existing
shareholders with a minority stake. The mancom told the SEC
that it will announce the list of qualified bidders on
February 3. (Business World  21-Jan-2000)


CLOB INT'L.: Cash offer made to break Clob shares deadlock
Continental Edge, a closely held company controlled by
Malaysian real estate developer Khalil Akasah, has offered
a plan to free US$3.8 billion of Malaysian shares trapped
on Singapore's Clob exchange.

Continental's plan, submitted to Singapore authorities this
week, is the latest in a string of proposals aimed at
breaking the 16-month impasse.  As part of the offer,
Continental was offering to buy the shares in cash at
discounts of between 3.5 per cent and 10 per cent of
present market values, a Continental executive said.

Deutsche Bank was advising Continental, he said.  Clob
investors would receive an initial payment of up to 15 per
cent of the purchase price.  Continental said it would pay
the balance when it sold the shares on the Kuala Lumpur
Stock Exchange over 12 months. The closing date for
acceptance by investors is February 28.

Clob was set up by Singapore in 1991 to let the island's
investors trade Malaysian shares without paying fees to
Malaysian brokerages.  The exchange was paralysed in 1998
when the Kuala Lumpur exchange said it would not recognise
shares traded on Clob. That left 170,000 investors holding
about $3.8 billion of stocks they could not sell.

Since then, United Engineers (Malaysia), Bintang Melewar
and Effective Capital have submitted proposals to free the
shares.  Mr Khalil was a special assistant to the late
Abdul Razak, the country's second prime minister. (South
China Morning Post, Singapore Business Times  21-Jan-2000

CLOB INT'L: SIAS says latest Clob offer's unsatisfactory
The Securities Investors Association of Singapore (SIAS)
has said that the latest offer to resolve the 18-month Clob
impasse -- that by Malaysian company Continental Edge to
buy over the 18 billion Malaysian ringgit (S$8 billion)
worth of shares at a discount of 3.5 to 10 per cent -- was
not comprehensive and therefore unsatisfactory.

The association says it has not received the latest
proposed offer by Continental Edge, a company controlled by
Khalil Akasah, and therefore its initial comments were
based on newspaper reports.  Khalil Akasah was once the
special assistant to Malaysia's second prime minister Tun
Abdul Razak.

Continental Edge is said to have offered to make an initial
payment of up to 15 per cent of the purchase price with the
balance to be paid at the end of 12 months and after it
sells the shares.  In a press statement yesterday, the SIAS
expressed its reservations on Continental Edge's offer.

"Firstly, we are not aware what the benchmark on which the
15 per cent is based. Secondly, it is not clear what 'up to
15 per cent' means. Does it mean that there are situations
when Clob investors will not be paid the full 15 per cent?
Thirdly, CE can sell 'during' the 12-month period but will
only pay Clob investors at the 'end' of the 12-month
period. For example, if sale takes place on the first
month, payment will only be made after the 12th month.

"Fourthly, Clob investors are not advised as to when the
completion date is. It appears that the completion date can
be as late as June 2000 which means that Clob investors
will have to wait another 12 months before receiving
payment.  This is unsatisfactory as it would in fact mean
Clob investors will have to wait 18 months altogether
without having the benefit of timing the sale," SIAS
pointed out to its members.

It also warned Clob investors that the offer requires
investors to wait as long as 18 months, that the shares are
being purchased at a discount and "comes with no guarantees
of performance and without official endorsement by the
relevant authorities in Malaysia".

It is not known if the Singapore Exchange has received the
offer from Continental Edge.  Meanwhile, the Singapore
Exchange has yet to send out Effective Capital's formal
offer to Clob's 172,000 investors.  Under the offer,
Effective Capital will migrate the RM18 billion worth of
securities to the investors' individual accounts with the
Malaysian central depository over an 18-month period.

Effective Capital is planning to hold briefing sessions on
its offer for investors, with the first one to be held next
Thursday evening at the Putra World Trade Centre in Kuala
Lumpur. (Singapore Business Times  22-Jan-2000)

DBS GROUP HOLDINGS: Thai results to have little impact
UNITED OVERSEAS BANK: Thai results to have little impact
Although the 1999 results of their Thai bank units make
headline fodder, the actual impact on DBS Group Holdings
and United Overseas Bank (UOB) is not expected to be
significant, other than to highlight again the wisdom of
the Singapore banks' acquisition strategies.

It also puts the spotlight on how the two banks regard
their Thai cousins.  In DBS' case, it made a credible
effort to explain DBS Thai Danu Bank's (DTDB) results while
UOB kept mum.  Yesterday, DBS' 50.3 per cent-owned DTDB
posted full-year loss of 13 billion baht (S$584 million)
versus 9.1 billion baht previously as it made more
provisions and write-offs, totalling 9.4 billion baht, for
bad loans, up from seven billion baht previously.

UOB's 75 per cent-owned UOB Radanasin Bank on the other
hand reported net profit of 10.1 billion baht, likely to be
the result of a reversal of provisions taken in the
previous year. It had a 17 billion baht loss in 1998.
Efforts to get a clarification from UOB were unsuccessful.
DTDB's results were pretty much in line with expectations,
even raising hopes that it has finally licked its bad loans
portfolio into shape as full-year provisions were similar
to those reported in the third quarter.

A DBS spokesman told BT: "The reported losses at DTDB are
in line with our expectations and reflect our continuing
work with DTDB management to return the bank to operating
profitability as early as possible. The need for additional
provisions for DTDB at DBS Group level is being reviewed,
and as in past periods, we expect to continue our
conservative approach to provisioning policy."

DBS' cumulative specific provisions against DTDB in 1998
totalled 25 billion baht, well exceeding the full amount
that is required by end-2000 under the Bank of Thailand's
guidelines of 21.7 billon baht.  Tony Raza of Prudential-
Bache Securities reckons DTDB's pre-provisions losses came
to 3.5 billion baht or $150 million, so DBS' share should
come up to only about $75 million. Mr Raza does not expect
DTDB's provisions of 9.5 billion baht to flow through to

As Tay Chin Seng of ING Barings noted, full-year income for
DBS is expected to be $2 billion coming from its POSBank
earnings and all the other domestic driven earnings, which
should swamp DTDB's pre-provision losses.

"At this stage, DBS' foreign acquisitions are not
accretive; Kwong On may just net off DTDB," he said. DBS
took a 65 per cent stake in Hongkong's Kwong On Bank at the
end of 1998.

UOB, obviously taking no comfort from UOB Radanasin's 10
billion baht profit merely reported a statement of income.
Net interest and dividend income came to a loss of 1.3
billion baht while total non-interest expenses toted up to
another two billion baht.  Analysts figured UOB Radanasin's
10 billion baht profit to be a one-off event from a write
back following the sale of its non-performing loans to
the Thai Ministry of Finance.

"Where is the consistent income flow?" Mr Tay asked.

UOB bought the Thai bank last November on a clean slate for
15.1 billion baht. The actual cost will be reduced to only
6.5 billion baht after the central bank's Financial
Institutions Development Fund (FIDF) buys Radanasin's bad
debts from UOB later this year.

Much management time and effort will have to be sunk in
before the Thai bank -- the smallest in the country -- can
rebuild its loan portfolio to make a meaningful
contribution to UOB's bottom line, Mr Raza said.  DBS
yesterday closed 80 cents down at $21.90 while UOB fell 20
cents to $14. (Singapore Business Times  22-Jan-2000)

WASSALL ASIA PACIFIC: Narrows annual loss
Wassall Asia Pacific's turnover for 1999 improved 6.7 per
cent to $25.6 million while net loss was trimmed to $1.3
million from $5 million in the previous corresponding

Loss per share was 2.3 cents, down from 8.7 cents before.
The company saw significant improvements in margins due to
better product mix and better margin from the Middle
East/Africa market. The effects of rationalisation and
cost-cutting measures implemented during the year also
contributed towards the improved results. Wassall said that
whether the group returns to profitability in the current
year will depend largely on the level of recovery in the
Asian market. As before, no dividend was recommended.
(Singapore Business Times  22-Jan-2000)


FINANCE ONE: Charges to be filed against firms,ex-execs
Four companies and three individuals will be charged in the
Finance One embezzlement case, the commander of the
Economic Crime Investigation Division said.

Facing charges are Ekaparp Co, Ruam Boriharn Turakij Co,
Nakornthon Bank, Siam City Bank, Apichart Jutrakul, Prapote
Chumwattana and Vichai Srisawai, Pol Maj-Gen Chatchaval
Suksomchit said.  Ekaparp and Ruam Boriharn Turakij were
subsidiaries of Finance One. The case involves bills of
exchange issued by the subsidiaries and sold to Nakornthon,
Siam City Bank and Credit Agricole Indosuez, which were
then resold to Finance One.

A report into Credit Agricole Indosuez, a foreign bank, has
been delayed on questions about jurisdiction, but Pol Maj-
Gen Chatchawal said this did not mean a lack of evidence.
Police were also likely to act against three former
executives of Nakornthon, Banque Indosuez and Siam City now
at the Bank of Thailand. They are Kitti Patpong-pibul,
former head of Nakornthon; Chakthip Nithibhon, former head
of Banque Indosuez; and Kietchai Sophastienphong, a former
senior vice president of Siam City Bank.

All three have denied any wrongdoing. A central bank
inquiry has cleared the officials of illegal actions.
Rathakorn Nimwatana, assistant central bank governor, said
regulators would take disciplinary action only once a
formal suit was filed by the Attorney-General's Office.

"The findings of the police and those of the central bank
differ," said Mr Rathakorn. "The police have wider powers
of investigation."

Paitoon Kijsamrej, president of Siam City Bank, said a
charge was only an accusation, and a verdict against a
company brought only a fine.  "Trading in these notes is
part of normal banking. Siam City Bank trades many lots,"
he said.

Executives at Standard Chartered Nakornthon declined to
comment.  Two former Finance One executives, Termchai
Pinyawat and Samran Kanok Wattanawan, have been prosecuted
to date in the 2.1-billion-baht case, with a trial
beginning on Jan 28.  Pin Chakkapak, former president of
Finance One, is fighting extradition in England. (Bangkok
Post  21-Jan-2000)

INT'L ENGINEERING PLC: KTB loan guarantee approved
Shareholders of International Engineering Plc yesterday
gave retroactive approval to their company's guarantee of
1.17 billion baht borrowed by the M Group from Krung Thai
Bank. However, the Securities and Exchange Commission said
the shareholders' decision would not let IEC president
Suradej Mukayangoon off the hook.

Mr Suradej approved the guarantee without the shareholders'
consent in 1996.  The SEC has filed a criminal suit against
Mr Suradej, charging him with falsifying documents and
dishonestly performing his duty.

"The legal action (against Mr Suradej) will continue and
the shareholders' approval will not affect the case," said
Nataya Niyamanusa, assistant director of the secretary-
general's office at the SEC.

IEC declined to disclose details of the shareholders'
meeting yesterday, beyond saying that the guarantee had
been approved.  The shareholders had been summoned to a
meeting on the issue late last month but those attending
fell short of a quorum.

In 1996, IEC guaranteed 1.17 billion baht borrowed by the M
Group, a subsidiary of the Manager Media Group and
affiliate of IEC.  About six months ago, one of IEC's small
shareholders complained to the SEC that the guarantee had
not been disclosed to IEC shareholders and the Stock
Exchange of Thailand.

The company was unable to give the SEC an explanation.
Investigations found that Mr Suradej had allegedly
falsified the minutes of a shareholders' meeting by
including the approval of the guarantee. The SEC began
proceedings against Mr Suradej and ordered the company to
take corrective action.

Monthep Klungsomboon, vice-president for corporate
communication at IEC, said the shareholders' decision
yesterday ended the issue as far as the company was
concerned. Charges against Mr Suradej were "his personal
affair and, as the case is still pending, Mr Suradej is
still regarded as the company's president".

"Meanwhile, we will now be able to concentrate on our
business and other problems," Mr Monthep said. He added
that IEC owed creditors 3.2 billion baht and had been
ordered by the court to reach a settlement. The firm had
lodged an appeal.

Ms Nataya said the shareholders' decision meant IEC now
shouldered the burden of guaranteeing the M Group's loan,
which had been classified as non-performing by Krung Thai
Bank.  As well, the M Group faced a bankruptcy suit, filed
by Siam City Bank, for defaulting on payment of 141 million
baht. The case is pending in the court. (Bangkok Post  22-

ONPA INT'L: Three ex-execs face illegal trading charges
The Securities and Exchange Commission has filed criminal
charges of insider trading against three former executives
of Onpa International Plc, a manufacturer of cassette tapes
and compact discs.

This action marks the first time that the current insider
trading rules would be subject to court scrutiny.  The
suspects are Viroj Preechawongwaikul, Supaporn
Preechawongwaikul and Sawang Preechawongwaikul, whom the
SEC has accused of using their positions to benefit from
inside information relating to the sale of shares in Onpa
between Feb 3 and 27, 1998.

In its statement, the SEC said it has filed criminal
charges against the three suspects over allegations that
they violated Articles 241 and 246 of the SEC Act.
Against Viroj, Supaporn and Sawang, the SEC said the three
had been found to sell Onpa shares totalling 7,291,400
units between Feb 3 and 27, 1998, using insider information
to benefit themselves.

Onpa's share price fell sharply from Bt33.75 on Feb 3 to
Bt23.25 on Feb 27 -- a downward adjustment of almost 30 per
cent -- as a result of the selling pressure from the three

Article 241 of the SEC Act prohibits any individual from
using sensitive insider information that has not yet been
made public to benefit from stock trading or to result in a
significant change in the share prices. A violation of this
law is subject to a prison term of not more than two years
or a fine amounting to twice the sum gained as a result of
the insider trading.

During the period, Onpa was facing financial difficulty,
having to allocate Bt514.9 million in provisions for the
falling prices of its inventory. This deteriorating
financial position would have had a significant impact on
Onpa's financial statement for 1997 and consequently on the
movement of its stock price.

"This is a clear violation of Article 241 of the SEC Act,"
the watchdog said.

Both Viroj and Supaporn have also been accused of violating
Article 246 of the SEC Act. They allegedly sold stocks
without appropriate public disclosure.  Article 246
requires individuals to report to the SEC every time they
buy or sell 5 per cent or more shares of a company.  The
three executives were not available for comment yesterday.

As per the Thai criminal justice system, police will summon
the suspects for interrogation and gather more information
before deciding whether the case should be passed on to the
public prosecutors. Then the public prosecutors will
determine whether the case should be taken to the Criminal

The filing of insider trading charges against Onpa's former
executives marks for the first time that the eight-year old
watchdog has resorted to legal action.  In all previous
cases, the SEC filed charges of stock market manipulation
against the suspects, some of whom are still tied up in the
slow-moving judicial system.

The most controversial action took place in 1992. Charges
of stock manipulation were filed against Song
Watcharasriroj, a big-time stock trader, who was accused of
manipulating stocks of the Bangkok Bank of Commerce. The
case was taken to each of the three courts before Song was
declared not guilty, marking a major setback for the SEC.

Last year, however, the SEC fined executives of the now
defunct Union Asia Finance Plc and Thai Telephone and
Telecommunication a total of Bt200 million on charges of
insider trading. Union Asia Finance and TT&T agreed to the
settlement to prevent the matter from being taken to court.
The names of the accused were not made public. But from
this year, the commission will announce the names of any
individuals found to have violated the SEC regulations on
insider trading or other regulations. (The Nation, Bangkok
Post  21-Jan-2000)

PIZZA PCL: Cutting ties with U.S.'s Tricon Restaurants
Tricon Restaurants International of the US and its Pizza
Hut franchisee in Thailand are parting after a bitter
public feud over fees and competitive brands. Pizza Pcl,
Thailand's largest restaurant operator, said it would re-
brand its more than 100 domestic Pizza Hut outlets instead
of paying a higher fee.  (South China Morning Post  20-Jan-

TISCO FINANCE: Posts largest loss in its history
Tisco Finance Plc expects to return to profitability this
year after registering a net loss of Bt4.47 billion, due to
provisioning requirements, in 1999, the largest loss since
it was set up.

Pliu Mangkornkanok, managing director of TISCO, is
confident that the firm's earnings this year will return to
the black as last year it posted an operating profit of
Bt605 million vis-y-vis a Bt2.33 billion loss in the
corresponding period of the previous year.

The optimistic forecast is based on setting aside excess
provisioning for possible loan losses and better ability of
the debtors to repay loans, he said.  The company has
already set aside Bt5.247 billion, accounting for 128 per
cent of the distressed assets -- far above the 100 per cent
reserves required by the Bank of Thailand (BOT).

The full provisioning reserves are to meet the government's
requirement after the company's decision in the mid-1999 to
voluntarily take part in the Bt300-billion government
assistance scheme to raise tier-one capital.  As a result,
TISCO last year posted a net loss of Bt4.47 billion -- the
highest loss since the firm was set up. In 1998, the figure
stood at Bt3.85 billion.  After full provisioning, TISCO's
capital-adequacy ratio (CAR) remained solid at 14 per cent.

The company raised Bt6 billion last year, half of which was
injected by the government in return for a 42.84-per-cent
equity stake and the balance was pumped in by its major
existing shareholders and a new strategic partner.
Southeast Asia Investment Holding Group Co Ltd, a unit of
China Development Corp of Taiwan, is TISCO's new partner.
It holds a stake of 15.71 per cent and has the right to
purchase the Thai finance firm's preference shares from the
Finance Ministry to double its shareholding.

Pliu predicted that around Bt1 billion in bad debts would
be repaid and booked in this year's results. The projected
amount is part of Bt6.75 billion in loans which have been
written off since the end of 1999.

In 1999, TISCO successfully restructured loans totalling
Bt9.38 billion, of which Bt3.32 billion was proactive
restructuring and Bt6.06 billion was restructuring of non-
performing loans. The balance of loans amounted to Bt5
billion, or 19 per cent of the company's outstanding
credit.  Pliu said that the firm would not set up an asset-
management company (AMC) since non-performing loans (NPLs)
have declined significantly to a manageable level.

"TISCO believes that NPL management by itself would be more
efficient and cost effective than that managed by an AMC,"
he added. (The Nation  21-Jan-2000)

S U B S C R I P T I O N  I N F O R M A T I O N

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, Feliz Ordona and
Cristina Pernites, Editors.

Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the
publishers.  Information contained herein is obtained from
sources believed to be reliable, but is not guaranteed.

The TCR -- Asia Pacific subscription rate is $575 for 6
months delivered via e-mail. Additional e-mail
subscriptions for members of the same firm for the term of
the initial subscription or balance thereof are $25 each.
For subscription information, contact Christopher Beard at

                *** End of Transmission ***