TCRAP_Public/000128.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

            Friday, January 28, 2000, Vol. 3, No. 20

                                     Headlines


* C H I N A  &  H O N G  K O N G *

HUGE CHINA DEVELOPMENTS: Proposes restructuring
STIME WATCH INT'L HOLDING: Proposes restructuring
PETROCHINA: Gov't denies its IPO for debt relief
TSE SUI LUEN JEWELLERY: Makes status report to HKSE
WIN SUCCESSFUL SECURITIES: Defaulted on trades


* I N D O N E S I A *

PT KALBE FARMA: Secures debt-rehab deal


* J A P A N *

MARUETSU INC.: To post 32B Yen special loss on share sale
NEW JAPAN SECURITIES CO.: To take $42M special loss
NIPPON CARBON: Incurs 700M Yen loss in FY99
NIPPON CREDIT BANK: Gets four bids for
NISSAN MOTORS: Thousands rally against job cuts


* K O R E A *

BOSUNG INT'L: Nara Banking troubles bring it down
DAEWOO GROUP: Workout committee to oversee rehab
DAEWOO MOTOR: Creditors may split company up before sale
DAEWOO MOTOR: To be sold with Ssangyong Motors
DAEWOO MOTOR: Fresh funds to come before auction
SAMSUNG MOTORS: Renault acquisition runs into difficulty
SSANGYONG MOTORS: To be sold with Daewoo Motor


* M A L A Y S I A *

BERJAYA GROUP: Stock falls on news of PM's health
RENONG BHD: Stock falls on news of PM's health
TIME ENGINEERING: Stock falls on news of PM's health
TIME ENGINEERING: Asks for protection extension
TIME ENGINEERING: Creditors accept plan to list Time dotCom
UNITED ENGS. MALAYSIA: Stock falls on news of PM's health


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

BW RESOURCES CORP.: New Zealand firm to increase stake
CONNELL SECURITIES INC.: SEC names liquidator
NATIONAL POWER CORP.: Gov't may assume its bad assets
NATIONAL STEEL CORP.: Seeking debt-to-equity swap
PHILIPPINE LONG DIST.TEL.CO.: To absorb unpaid bills
PHILIPPINE NAT.BANK: Bad debt level worsens


* T H A I L A N D *

CHRISTIANI AND NIELSEN: To issue debentures under rehab
KRUNG THAI BANK: To restructure Bt170 bn in debts
NS ELECTRONICS BANGKOK: UBS gets 67% stake in debt deal
PADAENG INDUSTRY PLC: Wait for concession raises op costs
SIAM CEMENT: To issue more bonds to retire foreign debt


==============================
C H I N A  &  H O N G  K O N G
==============================

HUGE CHINA DEVELOPMENTS: Proposes restructuring
STIME WATCH INT'L HOLDING: Proposes restructuring
-------------------------------------------------
The respective boards of directors of Stime Watch
International Holding Limited (Incorporated in Bermuda with
limited liability)
and Huge China Developments Limited (Incorporated in the
British Virgin Islands with limited liability) reported to
the Stock Exchange of Thailand that completion of the
Subscription Agreement and the Compromise Agreement have
taken place, and that the Capital Reduction has become
effective. The Prospectus relating to the Rights Issue and
the Bonus Issue of New Warrants will be despatched on
Wednesday, 26 January 2000.

This announcement is made further to the announcements
dated 16 October, 4 November, 6, 24 and 29 December 1999
and 22 January 2000 relating to the Restructuring Proposal
(the "Announcements"). Details regarding among other
things, the Capital Reduction, the Subscription, settlement
of secured and unsecured Bank Indebtedness, the Whitewash
Waiver, the Creeper Authorization, the Rights Issue and the
Bonus Issue of New Warrants have been contained in the
circular of the Company dated 30 December 1999 relating to
the Restructuring Proposal (the "Circular"). Unless
otherwise defined, terms used in this announcement shall
have the same meanings as defined in the Circular.

The respective boards of directors of the Company and Huge
China are pleased to announce that completion of the
Subscription Agreement and the Compromise Agreement have
taken place today and that the Capital Reduction has become
effective today.  The prospectus ("Prospectus") containing
further information and the expected timetable regarding
the Rights Issue and the Bonus Issue of NewWarrants,
together with copies of the provisional allotment letter
and the form of application for excess Rights Shares, will
be despatched to shareholders of the Company on Wednesday,
26 January 2000.  (Hong Kong Stock Exchange 26-Jan-2000)

PETROCHINA: Gov't denies its IPO for debt relief
------------------------------------------------
A high-level government official has brushed aside rumours
that the upcoming overseas listing of PetroChina, a unit of
China National Petroleum Corp (CNPC), is mainly to raise
money to pay off bad debts and compensate laid off workers.

"Such talk has no basis," said Minister of the State
Economic and Trade Commission Sheng Huaren.  "I can say
with certainty that the outside view of CNPC represents a
misunderstanding of the situation."

Rumours have circulated that as much as 70 per cent of the
capital raised by PetroChina's listing would be used to
help pay for the estimated one million laid-off workers and
bad debts held by the parent company.  Mr Sheng sought to
reassure overseas investors by saying the company would
publish a statement before the listing.  He said the
company, with a relatively small workforce, had few
liabilities and generated high returns.

Last year, CNPC earned 17 billion yuan (about HK$15.88
billion) in profit.  The dual listing of PetroChina in the
United States and Hong Kong, scheduled for shortly after
the Lunar New Year, is expected to raise between US$5
billion and $7 billion.  A successful listing would help
drive the restructuring of state-owned enterprises (SOEs).

This year is the last in Premier Zhu Rongji's three-year
drive to bring the bulk of loss-making state enterprises
back into the black.  Mr Sheng believed the mainland would
be able to carry out the objective before the end of the
three-year deadline.  He said all sectors, with the
exception of coal and national defence, had returned to
profitability or increased earnings in the past year.

He added profits of state-owned industrial enterprises were
expected to have reached 90 billion yuan last year, up 70
per cent from 1998.  Beijing closed 31,000 small coal mines
in the past two years and plans to reduce output further
this year.  One of the more ambitious programmes to help
turn around SOEs is a debt-for-equity swap scheme launched
last October.  However, none of the 78 agreements or
letters of intent signed between SOEs and asset-management
companies have been approved.

"The current agreements are only frameworks because more
specific questions have yet to be agreed upon by the SOEs
and the asset-management companies," Mr Sheng said.

The 601 enterprises chosen from more than 2,000 that
applied for the swap are more than 459.6 billion yuan in
debt. The 78 preliminary agreements signed involve
enterprises with combined debts of 112.2 billion yuan.
(South China Morning Post  26-Jan-2000)

TSE SUI LUEN JEWELLERY: Makes status report to HKSE
---------------------------------------------------
Reference is made to the announcement made by Tse Sui Luen
Jewellery (International) Limited (Incorporated in Bermuda
with limited liability) ("the Company") dated 10th May,
1999 concerning recent developments at that time regarding
the Company and its subsidiaries (the "Group") and
confirming that the Group was then continuing to comply
with its obligations to pay interest as it fell due under
its banking facilities but that it had been relying on the
support of its bankers as regards such of its obligations
to repay principal as had fallen due after 31st March,
1999.

In that announcement, the Company also made reference to
the 22,220 preference shares of US$1,000 each in the
capital of the Company (the "Preference Shares") and
disclosed that one of the events entitling early redemption
of the Preference Shares was the non-payment of borrowings
by the Group when due.

The Directors, though Peter Lee Yip Wah, Company Secretary
therefore considered that the circumstances evidencing an
early redemption event were disclosed in that announcement.
The Company also confirmed that it had not received any
notice alleging the occurrence of an early redemption event
and that it would make an announcement upon the receipt of
any such notice. The Directors were then of the view that
the occurrence of an early redemption event under the terms
of the Preference Shares might have an adverse impact on
the Company.

By a notice dated 12th May, 1999, the holder of the
Preference Shares stated its requirement to redeem the
Preference Shares, alleging that the Company was unable to
pay its debts as they fell due. The notice was deemed
served on 13th May, 1999. At a meeting held on 13th May,
1999, such holder orally withdrew that notice following
representations by the Company that the Company would not,
in accordance with relevant laws, be permitted to finance a
lawful redemption in view of its financial position as
disclosed in its public announcement dated 10th May, 1999.

The holder of the Preference Shares confirmed such
withdrawal by notice in writing dated 14th May, 1999 based
on the understanding that the Company would, amongst other
things, keep it informed on a timely basis of the Company's
financial position, any debt rescheduling or restructuring
plans and any introduction of a new investor.

The Directors did not either announce or notify the Stock
Exchange of the existence of the early redemption notice at
that time for three reasons. The first was that the
redemption notice was effective only for a few hours. The
second was that the Directors did not consider that an
announcement that a notice had been served and withdrawn
was information which would have better enabled investors
and shareholders to appraise the position of the Group. The
third was that, as the notice was withdrawn on the same day
as it was served, the essential consequence of the notice
(namely a potential obligation on the Company to redeem the
Preference Shares) did not on that day materialise, so that
the decision not to announce was consistent with the
Company's previous confirmation that the service of any
effective redemption notice would be announced.

Nevertheless, the Stock Exchange has indicated that it
considers that the failure to announce was contrary to the
statement in the 10th May, 1999 announcement and may have
been a breach by the Company of its general disclosure
obligation under paragraph 2 of the Listing Agreement and
has reserved the right to take disciplinary action against
the Company and its Board of Directors.  In circumstances,
as these matters were disclosed to the Company's
shareholders and optionholders by its letter to them dated
13th January, 2000, the Directors consider it appropriate
that they be the subject of this announcement.

Since the withdrawal of the redemption notice in May 1999,
no further redemption notice has been served by the holder
of the Preference Shares. The Company believes that the
holder of the Preference Shares would wish to redeem its
shares if and when the Company becomes permitted to do so
or alternatively to restructure its investment in the
Company. The Company will issue a further announcement
regarding this matter as and when appropriate. Shareholders
of the Company and investors are advised to exercise
extreme caution when dealing in securities of the Company.
(The Stock Exchange of Thailand  26-Jan-2000)

WIN SUCCESSFUL SECURITIES: Defaulted on trades
----------------------------------------------
Win Successful Securities defaulted on settlement of share
trades, according to Hongkong Clearing.  Following
allegations the company's owner stole client assets,
Hongkong Clearing said yesterday it was closing out Win
Successful's stock positions.

"The final figure of the defaults has yet to be reached," a
spokesman said.

Albert Au Wai-man, owner of Win Successful Securities, was
detained by police, according to sources.  A police
spokesman confirmed the arrest of a man in charge of an
unnamed securities company in Central. Police yesterday
arrested another man suspected to be connected with false
accounting.

Ninety-three Win Successful Securities' clients alleged
they did not receive shares or money from the brokerage
after buy or sell transactions through the company, a
police spokesman said yesterday.  The clients' alleged
losses amounted to $34 million, the spokesman said.

The claims against Win Successful Securities could be a
financial burden on Hong Kong Exchanges and Clearing
(HKEC), when it was formed later this year, analysts said.

"[HKEC] might have to cover a large part of the claims, as
the Government relaxed the compensation rules for the
collapse of brokerage CA Pacific in 1998," one analyst
said.

In the CA Pacific case, the Government increased the
compensation cap limit of $8 million on claims by clients
of a collapsed brokerage in order to pay a maximum of
$150,000 for each claimant.  Meanwhile, Institute of
Securities' Dealers chairman Chen Po-sum said investors
could avoid defaults by securities companies by opening
their own accounts at the clearing house.

"Long-term investors with no need for margin lending should
consider this." (South China Morning Post  26-Jan-2000)


=================
I N D O N E S I A
=================

PT KALBE FARMA: Secures debt-rehab deal
---------------------------------------
Indonesia's PT Kalbe Farma (JSX:KLBF) has secured an
agreement from 50 of its creditors to restructure its debts
of US$ 220 million.

The pharmaceutical company signed the agreement with its
creditors, mostly foreign banks in Singapore, late last
year, a company spokesman said. The creditors agreed to a
5-year extension of debt repayments with an annual
interest of 2.5% above SIBOR (Singapore Bank Offered Rate)
to be paid every quarter.

The agreement allowed the management to concentrate on the
business operation, the spokesman said.  Kalbe Farma and
its subsidiaries succeeded in increasing sales by 68% in
the first nine months of 1999 to US$ 11.9 million compared
with the same period in the previous year.  The company
reported a 73% rise in operating profit to Rp153 billion
(US$ 21.04 million) in the first half of 1999 partly
attributable to rupiah appreciation against the U.S.
dollar.  (Asia Pulse  24-Jan-2000)


=========
J A P A N
=========

MARUETSU INC.: To post 32B Yen special loss on share sale
---------------------------------------------------------
Maruetsu Inc. (8178) will post for the year ending February
about 32 billion yen in extraordinary loss from the sale of
most of its holding of Daiei Inc. (8263) shares, the
supermarket chain operator said Tuesday.

The company decided to book the loss in the current fiscal
year before a market-price accounting method for assets is
introduced in fiscal 2000.  The company saw unrealized loss
on its securities holdings expand to 37.4 billion yen in
the first half ended Aug. 31, due to falls in Daiei share
prices. For the full year, it projects paper loss of 6.5
billion yen on its equity holdings.

Maruetsu sold 18 million Daiei shares for about 8 billion
yen. The sale is equal to 85% of its total equity stake in
Daiei. However, Maruetsu President Kazuo Kawa said, "Within
a few days, we will buy back the same amount of Daiei
shares as we sold, because we believe it is important to
maintain our partnership with Daiei on product purchase and
distribution."

For fiscal 1999, the company expects 14.95 billion yen in
parent-only net loss, and 16.55 billion yen in consolidated
net loss.  Maruetsu expects to maintain dividend payments
of 12 yen per share for the year, despite the red ink,
company officials said.  On Tuesday, the stock price of
Daiei finished at 458 yen. Maruetsu's books record the
shares as being worth an average of 2,251 yen. (Nikkei  25-
Jan-2000)

NEW JAPAN SECURITIES CO.: To take $42M special loss
---------------------------------------------------
New Japan Securities Co. said it will take a special loss
of 4.41 billion yen ($42 million) for the year ending March
31, after 309 employees, or about 8% of total workers,
accepted its voluntary retirement offers.

Despite the special loss, the company said the early
retirement program offered between Dec. 20 and Jan. 14 will
lower the company's monthly labor expenses by about 130
million yen. As of Dec. 31, the company had 3,882 workers.

The early retirement offers came as part of the company's
cost-cutting measures ahead of its merger with Wako
Securities Co., scheduled for April.  The company also said
it will impose about a 5% reduction in salaries of
management-level workers effective this month, which will
lead to an additional monthly reduction in labor expenses
by about 23 million yen. (The Asian Wall Street Journal
25-Jan-2000)

NIPPON CARBON: Incurs 700M Yen loss in FY99
-------------------------------------------
Nippon Carbon Co. (5302) announced on Tuesday a 700 million
yen pretax loss for the fiscal year ended December 1999,
compared with a 1.1 billion yen profit a year earlier.

The red ink reflected weak domestic demand for the firm's
mainline artificial graphite electrodes and deteriorating
export profitability amid the yen's steep rise.  Nippon
Carbon recorded a 1.4 billion yen net loss for the term,
compared with a 600 million yen profit a year earlier. It
will cancel its dividend payment for the first time in two
years because the net loss has exceeded the previously
forecast 90 million yen. (Nikkei  26-Jan-2000)

NIPPON CREDIT BANK: Gets four bids for
--------------------------------------
The government's commission handling banking reforms has
received four bids to take over the failed Nippon Credit
Bank (NCB).

The Financial Reconstruction Commission "has received bids
from four parties but given the fact that negotiations are
still under way, we are not commenting on who the
individual bidders are", an official said yesterday.  The
official would not confirm a Financial Times report saying
insurance giant American International Group (AIG) and
United States investment bank Lehman Brothers could be
among the four.

The paper reported that AIG and Lehman were holding
informal discussions about a possible joint bid for NCB.
But "their chances of formalising any agreement now looked
increasingly difficult" since the Japanese commission had
determined tomorrow as the deadline for bids to be
submitted, the paper said.

The official declined to comment on the reported deadline
but said authorities "have already entered the stage of
making comparisons" on the bids.

"Since there were some unclear points in the proposals, the
commission has sent out queries and is expecting answers to
them by the end of this week," he said.

Lehman in Tokyo refused to comment yesterday, and an NCB
spokesman also declined to confirm the identity of the
bidders. (South China Morning Post  26-Jan-2000)

NISSAN MOTORS: Thousands rally against job cuts
-----------------------------------------------
Thousands of trade-union members have marched through Tokyo
protesting against huge job cuts by Nissan Motor.
The company is struggling to regain profitability under the
guidance of French partner Renault.

About 5,000 people from across the country joined the two-
kilometre march to Nissan's headquarters in Ginza, central
Tokyo, to demand that Japan's second biggest car-maker
scrap its drastic restructuring plan, organisers said.

"Review the restructuring plan, stop cutting jobs and
protect the local economy," read one banner.

Only about 40 Nissan workers took part. A Nissan-only group
of unions, representing the bulk of Nissan workers, stayed
away.  The Nissan unions, which belong to the Japanese
Confederation of Trade Unions, the biggest grouping of
trade unions, have said they do not oppose the
restructuring.

"Today's protest has nothing to do with Nissan's unions," a
Nissan spokesmansaid. "We have been talking with the unions
and are working to ensure that employees affected by the
factory closure are given transfers to other jobs."

At the rally, union leader Yoji Kobayashi accused Nissan's
chief operating officer, Carlos Ghosn, brought in last year
from Renault and known as "the cost-killer" of taking the
lead in slashing Nissan's work force.

"The restructuring plan worked out by Carlos Ghosn is wrong
. . . and it will fail. We must quash that plan," he said.
"Nissan was born in Japan and therefore Nissan must not
become subordinate to Renault."

Banners carried by protesters read: "Carlos Ghosn, go back
to France!"

The protest was organised by the 1.5 million-strong
National Confederation of Trade Unions, which is affiliated
with Japan's Communist Party.  Prodded by Mr Ghosn, Nissan
said in October it would slash its work force by 14 per
cent, or 21,000 people, during the next three years under a
one trillion yen (about HK$73.63 billion) cost-cutting
plan.  The protesters are angry about the shutdown in March
next year of the 3,100-employee Murayama assembly plant.
(South China Morning Post  26-Jan-2000)


=========
K O R E A
=========

BOSUNG INT'L: Nara Banking troubles bring it down
-------------------------------------------------
Bosung International, the majority shareholder of Nara
Banking Corp., the merchant bank ordered by the government
to suspend its operations, declared bankruptcy Monday.

Bosung International's main line of business is clothing,
with such name brands as 'Roll Roll,' 'Cool Dog,' and it is
listed on the KOSDAQ. The firm declared bankruptcy after it
was unable to honor a W2.7 billion bill on Saturday. Bosung
International said it petitioned for court mediation Monday
and will declare the results of its application as soon as
they are known.

Meanwhile, the KOSDAQ announced that all transactions of
Bosung International stocks have been suspended from Monday
to Wednesday.  That left the rest of the Bosung Group
without one of their main funding sources, while some units
faced calls on promissory notes worth up to $2.8 million.

"Bosung could be one of many victims as it is unclear how
much Daewoo Group exposure other financial institutions and
companies have," Lee Keunmo, research head at Good Morning
Securities, said.  "As far as Daewoo problems are
concerned, the worst is not over."

On Monday, Bosung International, Jual International and
Youthdesk, three Bosung clothing-makers and distributors,
declared themselves insolvent and said they might file for
receivership.  The announcement came after the over-the-
counter Kosdaq exchange suspended trade in Bosung
International until today.

Korean authorities have tried to downplay the Daewoo-
related problems at Bosung and Nara.  Uhm Rak-yong, a vice-
finance and economy minister, said on Monday that Nara's
problems were not likely to be duplicated among other
merchant banks, because they were less exposed to Daewoo.

But Daewoo has more than 10,000 creditors - including small
businesses and contractors - and the government admitted
that Ssangyong Group, a mid-sized Korean conglomerate,
would face losses equivalent to its 13.98 per cent stake in
Nara.

Ssangyong denied it was expecting a big blow as its stake
in Nara Investment Banking was made in an equities swap
between the two companies.

"We don't see any major losses from our investment in Nara
as it will be offset by Nara's capital investment in
Ssangyong Cement," Lee Sang-chan, a spokesman for Ssangyong
Cement Industrial, said.

Authorities have been shoring up other parts of the economy
to prevent any other Daewoo-related problems.  On Monday,
the government unveiled a plan to help investment trusts
exposed to Daewoo, ensuring they have up to 36.2 trillion
won on hand to repay customers who can withdraw up to 95
per cent of their Daewoo-invested funds from February 8.

Nara itself has argued it is unfairly becoming a victim of
Daewoo's problems.  The company alleges it was merely the
middleman in loans made to Daewoo on behalf of investment
trust companies side-stepping restrictions on lending to a
single borrower. Investment trusts should be demanding
their money back from Daewoo, not Nara, the company added.
(Digital Chosun  25-Jan-2000, South China Morning Post  26-
Jan-2000)

DAEWOO GROUP: Workout committee to oversee rehab
------------------------------------------------
The Financial Supervisory Commission said it is considering
a proposal to set up a Daewoo Workout Committee to
supervise Daewoo Group's restructuring and lead the process
of selling off its troubled subsidiaries, including Daewoo
Motor Co Ltd and Daewoo Electronics Co Ltd.

The committee, made up of Daewoo Group and creditor bank
representatives, will also coordinate creditors' demands
and facilitate the debt rescheduling process for the group,
FSC chairman Lee Yong-keun was quoted as saying by his
spokesman Kim Young-jae.

Lee said in a meeting with Daewoo creditors that new money
provided toward a debt restructuring so far accounts for
less than 10 pct of the amount originally planned and that
creditors should help the Daewoo units improve their value
and profits in a more active manner.

With the completion of talks with foreign creditors over
the debt buyout proposal, the domestic creditors of Daewoo
Corp will soon put into action the workout plan for the
company, he said.  Daewoo Motor chairman Oh Ho-geun is
likely to chair the committee, the Yonhap News Agency
reported.  (AFX News Limited  27-Jan-2000)

DAEWOO MOTOR: Creditors may split company up before sale
--------------------------------------------------------
Daewoo Motor's creditors may split the car-maker,
separating the car and commercial vehicle business, making
it easier to sell the debt-ridden company, main creditor
Korea Development Bank revealed.

Daewoo Motor's car unit, South Korea's second-largest,
would become a stand-alone company, leaving its commercial
vehicle unit under Daewoo Motor, a KDB spokesman said. The
spokesman denied a local report that creditors have already
set up sales plans for Daewoo Motor and affiliate Ssangyong
Motor. (South China Morning Post  26-Jan-2000)

DAEWOO MOTOR: To be sold with Ssangyong Motors
SSANGYONG MOTORS: To be sold with Daewoo Motor
-----------------------------------------------
The Korea Development Bank (KDB), the lead creditor for
Daewoo Motor, made a proposal Monday to other Daewoo Motor
creditors to sell the ailing auto firm and Ssangyong Motor
in a joint package.

KDB plans get rid of all the outstanding debts of the two
companies and turn them into one single "clean company."
Whichever company wins the bid would take over Daewoo
Motor's passenger car division and all of Ssangyong Motor,
issuing new common shares under a new company name. Daewoo
Motor will send out letters inviting bids for the two
companies to 10 local and foreign auto makers, including
General Motors, Ford Motor and DaimlerChrysler.  (Digital
Chosun  25-Jan-2000)

DAEWOO MOTOR: Fresh funds to come before auction
------------------------------------------------
South Korean creditor banks said Wednesday they would
inject fresh funds into Daewoo Motor Co. to rehabilitate
the ailing firm before selling it off through an
international auction.

The injection of extra funds is part of the government's
debt restructuring scheme for the insolvent Daewoo Group,
an official at prime creditor Korea Developmment Bank said.
"The debt workout is necessary in order to get a more
favorable offer from a potential buyer," he said.

The scheme involves debt-equity swaps worth 1.5 trillion
won (1.3 billion dollars), the issue of 7.3-trillion-won
convertible bonds and 900 billion won in fresh operational
capital.  Along with interest rate reductions, creditors
have also promised to provide 2.35 billion dollars in trade
finance.

The debt rehabilitation scheme was drawn out five months
ago, but its implementation had been delayed by disputes
between local and foreign creditors.  In a crucial deal
last week, however, foreign creditors agreed to take part
in debt buyout plans for the ailing conglomerate. The deal
marked a watershed in settling the debt crisis that
engulfed Daewoo, once touted as the country's second
largest conglomerate and a powerhouse of the Asian economic
"miracle" of the early 1990s.

Daewoo Motor has been put up for sale through a limited
international auction. Local creditors believe Saturday's
agreement will boost the auto unit's auction price.
(Agence France Presse  26-Jan-2000)

SAMSUNG MOTORS: Renault acquisition runs into difficulty
--------------------------------------------------------
French auto giant Renault SA's bid to take over South
Korea's ailing Samsung Motors Inc. has run into trouble
over a price dispute, reports and bank officials said
Wednesday.

"Renault's due diligence survey is still underway. But the
most important point now is how to set the price of Samsung
Motor," Hanvit Bank spokesman Park Kwang-Suk said.

Consulting firms, Banque Paribas and US-based KPMG, have
completed their evaluation work on Samsung Motors,
officials said.  But the spokesman declined to confirm
local newspaper reports that the company's value had been
estimated at one trillion won (888 million dollars).
"We cannot disclose any figures pending negotiations with
Renault."

Industrial sources, however, told AFP that the two sides
were optimistic they will be able strike a bargain by
April.  The reported worth of Samsung Motor, the troubled
unit of South Korea's leading Samsung Group, is more than
twice Renault's reported offering price.  The French auto
giant has yet to officially present its terms, but reports
here said it had indicated it would offer only 400 billion
won for a stake of around 70 percent, with Samsung
retaining up to 30 percent.

A Renault delegation led by Vice President Jean-Marc Lefeu
visited South Korea last week to discuss Renault's possible
acquisition of Samsung Motor, which was put into
liquidation under the weight of 4.3 trillion won in debt.
The Samsung Group has promised to clear a considerable
portion of the firm's liabilities.  But sources familiar
with the low-profile negotiations here said talks were
progressing well and that Renault's acquisition of the firm
stood a chance of succeeding by April.

"The deal between Samsung and Renault is now moving very
fast and there is a good chance that a deal can be
concluded within two months if they can iron out the
details in time," an industrial source familiar with the
talks said.  "The real question now is agreement on a sale
price, but given the pressure on the government to settle
the issue ahead of the general elections in April, I
think they might well strike a bargain."

Renault hopes the deal will give the French car giant a
foothold in the inaccessible but booming Korean car market
which could see it take a five to 10 percent market share,
reports have said.  In addition, Renault may later consider
exporting some of the locally produced cars to Japan --
where the French firm maintains a 36.8 percent stake
in Nissan Motors -- to save on labour costs, another source
suggested.

Samsung, which produced only one saloon model, started up
with Nissan's technology in early 1998 at the height of
South Korea's economic crisis and has seen sales of only
50,000 units.  It has a production capacity of 240,000
units a year, but now only turns out just 2,000 a month.

In a separate deal, Renault VI president Patrick Faure said
earlier that the heavy vehicle unit was holding talks with
Samsung with a view to taking a stake in Samsung's truck
division.  Faure told the French newspaper Le Monde: "At
the end of 1999 we began talks with Samsung but these
discussions are being held independently of those under
way between Renault and the car subsidiary of the South
Korean group.

"The situation is different from that of cars: the truck
subsidiary is not bankrupt.  The interest for us is to
penetrate an extremely closed market which has very
promising potential."   (Agence France Presse  26-Jan-2000)


===============
M A L A Y S I A
===============

BERJAYA GROUP: Stock falls on news of PM's health
RENONG BHD: Stock falls on news of PM's health
TIME ENGINEERING: Stock falls on news of PM's health
UNITED ENGS. MALAYSIA: Stock falls on news of PM's health
---------------------------------------------------------
Politically well-connected stocks came under sudden heavy
selling pressure yesterday on unsubstantiated rumours about
the health of Malaysian Prime Minister Mahathir Mohamad,
who is now on vacation in the Caribbean.

The collapse of the counters dragged the market benchmark
down from its high of over 960 points in the morning.  By
day's end, the Kuala Lumpur Stock Exchange Composite Index
was down
11.11 points, or 1.2 per cent, at 940.95 points.

"I heard something about Dr Mahathir's health," said a
remisier with a local house. And the boss of a small
brokerage said: "Some investors are concerned about his
health but I think there are people who want to buy cheap."
Counters in the sprawling Renong group, which is closely
linked to the dominant political party United Malays
National Organisation, underwent a roller-coaster ride in
the final hour of trade.

The share price of Renong, controlled by Halim Saad who was
once a trustee of Umno's vast assets, plunged 32 sen or
10.5 per cent to 2.74 Malaysian ringgit.  It had earlier
traded to a high of RM3.22.

Similarly, Renong's other companies -- 37 per cent owned
United Engineers Malaysia and 47 per cent owned Time
Engineering -- suffered the same setback.  UEM shed 20 sen
to close at RM7.95 against its day's high of RM8.65.

Although Time Engineering will unveil its debt
restructuring plan today, the counter tumbled 60 sen to
RM3.08. The counter has been rising sharply on expectations
that creditors will endorse its proposal.

Berjaya Group, majority owned by tycoon Vincent Tan who is
a close associate of Dr Mahathir, was also knocked in late
trading. It closed seven sen lower at 95 sen from its high
of RM1.04.

The 74-year-old Malaysian leader is an experienced
horseback rider, and despite his age, goes riding at
Berjaya's equestrian club on the outskirts of Kuala Lumpur
quite regularly.  The Prime Minister's Office told BT that
it was not true that Dr Mahathir
had fallen from his horse while on the first leg of his
vacation in Argentina.  Another aide reportedly said that a
security officer from the elite Unit Tindakan Khas
accompanying Dr Mahathir fell from his horse.  (Singapore
Business Times  27-Jan-2000)

TIME ENGINEERING: Asks for protection extension
-----------------------------------------------
Time Engineering Bhd yesterday confirmed that an
application had been made to the court for an extension of
the Section 176 protection accorded to it.

In a statement to the Kuala Lumpur Stock Exchange, the
company said it was now awaiting the final decision from
the court on the matter.  Section 176 accords legal
protection for companies in financial difficulties from
their creditors.  Time Engineering's protection expires at
the end of the month.

"We wish to inform you that Time Engineering Bhd and nine
of its subsidiaries, which are under Section 176 court
protection, have made an application for extension of the
restraining order, which is due to expire on Jan 28, 2000.
The application is currently pending in court," it said.

Time Engineering was responding to a KLSE query on news
reports of its proposed restructuring.  The company in the
statement also said the affidavit in support of the
application to extend Section 176 included reference to an
alternative restructuring proposal, which had been
discussed widely in the media.

Renong Group's executive chairman Tan Sri Halim Saad when
approached yesterday declined to give any comment on the
matter. He was approached by reporters at Nikko Hotel in
Kuala Lumpur after delivering a paper on the proposed
restructuring to local fund managers.  Time Engineering is
46.8 per cent owned by the country's largest industrial
company, Renong Bhd.

Meanwhile, Reuters quoted a Time Engineering official as
saying that the Corporate Debt Restructuring Committee
(CDRC) met major creditors of Time Engineering yesterday to
get their support for an extension of creditor protection.
(New Straits Times  26-Jan-2000)

TIME ENGINEERING: Creditors accept plan to list Time dotCom
-----------------------------------------------------------
Most creditors of the Time Engineering group have accepted
its offer to settle its debts through a listing of its
subsidiary Time dotCom Bhd, Star Business was told
yesterday.

This nails the lie to the contrary that spread like
wildfire in the market yesterday, triggering a plunge in
the share prices of the Renong/Time Engineering group of
companies which in turn dragged the KLSE Composite Index
(CI) down by 11 points to 940.

Sources close to Renong said the creditors had given a firm
undertaking to Time through its lawyers that they would
support the Corporate Debt Restructuring Committee (CDRC)
brokered deal to list Time dotCom.

There is, however, a problem with the holders of Time
Engineering bonds worth RM950mil. They are anxious to
redeem their bonds since they are not benefiting from the
sharp increase in the company's share price. (Renong shares
are used as security for the bonds.)

"The CDRC scheme offers a sweetener to the bondholders but
the bondholders don't want to wait. . .they want more than
what has been offered by the CDRC," said a source.  "The
issue is how much is enough," the source said, adding that
the bondholders should let Time restructure its debts so
that value could be created.  "For value to be created,
Time must be given time," he said.

The source pointed out that if the court allowed Time's
application to extend the restraining order on creditors
under Section 176 of the Companies Act by a further three
to six months, there was nothing much the bondholders could
do to obstruct the debt restructuring proposals.  The court
is also expected to decide today on one of the two options
presented by the CDRC to help Time restructure its RM4.8bil
debt (plus interest).

The first option is to sell Time to the highest bidder,
which is Singapore Technologies Telemedia Pte Ltd (STT).
The alternative is to list Time dotCom in an exercise that
would include the issue of shares to creditors and the
entry of a major foreign shareholder.

Time shareholders could look forward to a portion of Time
dotCom's initial public offering (IPO) as they may be
eligible for a portion of the shares.

Yesterday the KLSE saw wild swings in trading after a
series of vicious rumours hit the market.  Particularly
affected were the shares of the Renong/Time Engineering
group of companies which have seen a fantastic rise in
price during the past month.  Some market operators
attributed the rumours to some foreign hedge funds who are
said to be trying to push the market down to give them a
lower cost entry.

"Some foreign funds have not yet entered the market and
they are annoyed that the CI has surged to nearly 1,000
points, making it very expensive for them to enter before
the reinstatement of Malaysia in the Morgan Stanley
Capital International (MSCI) indices," a senior stockbroker
said.

The CI was moving up steadily to 960 points when the
rumours hit the market. One rumour had it that a senior
Malaysian politician was grievously ill while another
rumour was that Time creditors would reject its debt
restructuring plans.  Both rumours were unfounded. But they
caused panic selling in the market in the last hour of
trading yesterday.

"It was a roller-coaster ride in the last hour with panic
selling by the small punters. Most of them were at a loss
as to what was happening," said a dealer.

He added that many market players who had bought in the
morning and sold out in the afternoon would have taken
heavy losses.  "We have not seen such a dramatic scenario
for a long time," the dealer said, adding that there was
also a strong element of profit-taking yesterday.

Time-Warrant soared by a further 47 sen to a high of RM2.37
during the day, but all was lost in a matter of minutes.
The counter briefly hit limit-down and closed 24 sen lower
at RM1.66.  Renong rose to an intra-day high of RM3.22 up
16 sen from Tuesday's closed and then plunged to close at
RM2.74 for a loss of 32 sen.  Time fell 60 sen to RM3.08
after reaching a high of RM4, Intria Bhd was down 16 sen to
RM1.07 after a high of RM1.27, while Renong-W rose 7 sen to
close at RM1.61 after a high of RM2.25.

"The Time issue should not affect the whole market; there
are some very good stocks to buy," said OCBC Securities
(Melaka) Sdn Bhd head of research Franklin Tan.  He expects
the market to recover today.

Meanwhile, Time said in a statement to the KLSE that its
application for an extension of the Section 176 restraining
order was intended to secure more time for it and the CDRC
to present their case to the creditors.

"The debt restructuring plan has been developed by the CDRC
which was set up by the government to facilitate the
restructuring of companies. CDRC has been working closely
with Time and its creditors to develop a scheme.  If the
debt restructuring plan is acceptable and proceeds
accordingly, all creditors, both local and foreign, will
recover 100% of their debts. This could be achieved without
any capital reduction exercise and will also create better
value for the shareholders," Time said. (The Star  27-Jan-
2000)


=====================
P H I L I P P I N E S
=====================

BW RESOURCES CORP.: New Zealand firm to increase stake
------------------------------------------------------
New Zealand-based investment firm Savoy Group is reportedly
planning to increase its current $10-million investment in
BW Resources Corp. (BWRC) to $50 million given the gaming
stock's current weakness in the market.

BWRC closed 8.20 Philippine pesos (PhP) yesterday, down 24%
from PhP10.75 the other day, reportedly affected by news
that President Joseph Estrada will not run after Macau
casino mogul and BWRC chairman Stanley Ho who threatened to
pull out investments in the Philippines.

"There's no better time to do it (increase investments)
than now," said Savoy chief executive officer and BWRC
vice-chairman Jihong Lu.

The company is applying for an increase in authorized
capital stock to PhP3.5 billion (US$86.6 million at
PhP40.436:US$1). As such, PhP2 billion ($49.5 million) will
represent at least 57% of the entire company stock.  The
market capital is the measure of a company's size in terms
of price and the number of outstanding shares. This is a
far cry from the company's market capitalization of PhP30
billion ($741.9 million) in October on news of Mr. Ho's
investment in the company.

"We are not interested in control. We want to build and
support the company. We are long-term investors. We will
back Dante (Tan)," Mr. Lu said.

At the same time, Mr. Lu also disclosed that Savoy is also
negotiating with listed property developer Fil-Estate for a
possible partnership in the infrastructure sector.  The
Savoy Group is an investment firm based in New Zealand with
$2 billion in total assets spread all over New Zealand,
Australia, Asia, China and the US. It has interests in the
property, technology and financial services sectors.

"We have been working right now with Fil-Estate for the
past six months. We have clear interest in infrastructure
development and we believe Fil-Estate will provide us with
a good platform," Mr. Lu said.

Sources said Savoy is seriously looking at the Metro Rail
Transit project for a possible investment. The MRT
consortium has yet to complete several phases of the
project, including the linkup of the MRT to the line 1 of
Light Rail Transit (LRT) as well as the construction of the
Alabang connection.

Sources also said Savoy may also be interested to partner
with Fil-Estate for the PhP18-billion ($445 million)
Manila-Calabarzon Express Commuter Railway project which
will be spearheaded by the Ayala group. (Business World
26-Jan-2000)

CONNELL SECURITIES INC.: SEC names liquidator
---------------------------------------------
The Securities and Exchange Commission (SEC) has approved
the recommendation of the Philippine Stock Exchange (PSE)
to appoint Avelino Cruz, a legal counsel of the ACCRA law
office, as liquidator of bankrupt brokerage house Connell
Securities Inc.

The PSE made the recommendation after the corporate
watchdog denied its request for the withdrawal of its
appointment as liquidator of Connell Securities.  The PSE
did not want to act as liquidator of Connell, citing
possible conflict of interest since it is one of the
creditors of the brokerage house.  The PSE said the
liquidator will assume the responsibility of applying the
proceeds of the sale of Connell's board seat and to pay all
obligations in accordance with all creditors. (The
Philippine Star  27-Jan-2000)

NATIONAL POWER CORP.: Gov't may assume its bad assets
-----------------------------------------------------
The newly created Economic Coordinating Council (ECC) is
eyeing reduced power rates through a scheme in which the
government relieves the National Power Corp. (Napocor) of
its bad assets.

In its recent meeting, the ECC studied a Department of
Energy (DoE) suggestion that the government absorb
Napocor's PhP150-billion (US$3.71 billion at PhP40.436:$1)
worth of non-performing assets incurred in the attempt to
generate more power during the early 1990s when much of
Luzon suffered from frequent power outages.

Trade and Industry Secretary Manuel A. Roxas II told
reporters yesterday that the proposal would result in a
10%-15% cut in power rates both for residential and
industrial users.  The proposal is up for further
discussion in the next ECC meeting headed by President
Estrada, Mr. Roxas added.

Napocor incurred these bad assets out of contracts with
independent power producers (IPPs). These are referred to
as "stranded costs" since these contracts or loans have
become liabilities in view of the country's increased power
supply.  These liabilities have remained outstanding and
there are moves to renegotiate the contract with the aim
of, among others, reducing the supply capacity of IPPs or
changes in these contracts' operation and maintenance.

Mr. Roxas explained the scheme would free Napocor from its
current obligations and the firm could then pass on the
"savings" to consumers through reduced power rates.
The proposal is expected to elicit concerns it will
exacerbate the budget deficit. However, Mr. Roxas said this
can be offset by prospects that it "will generate greater
economic activity" because reduced rates can lower
production costs of Philippine industries.

The ECC has the following members: Mr. Roxas, Finance
Secretary Jose T. Pardo, Executive Secretary Ronaldo
Zamora, Budget Secretary Benjamin Diokno, Agriculture
Secretary Edgardo Angara, Socioeconomic Planning Secretary
Felipe Medalla, and Bangko Sentral (Central Bank) Governor
Rafael Buenaventura. (Business World  26-Jan-2000)

NATIONAL STEEL CORP.: Seeking debt-to-equity swap
----------------------------===------------------
National Steel Corp, which was granted a 30-day reprieve
from servicing 16.1 billion pesos (S$671 million) of debts,
said all of its bank loans, or four fifths of its total
debt, must be converted into equity so that the nation's
largest steelmaker can return to profit.

The Securities and Exchange Commission (SEC) has barred
creditor banks, such as Philippine National Bank and Land
Bank of the Philippines, from seizing National Steel's
assets after it granted the manufacturer the temporary
reprieve. The SEC meets Feb 16 to evaluate National Steel's
proposed rehabilitation plan.

In that plan, National Steel said it can make money in the
next six years if creditors agree to its proposals and the
government freezes the current tariff for raw materials and
finished products for five years. National Steel said it
can pay all remaining obligations if creditors also agree
to other conditions such as a two-year suspension of debt
payments.

National Steel, which shuttered operations in November,
partly due to imported cheap steel products, said it could
earn 614 million pesos this year and 1.1 billion pesos in
2005.  To achieve that, the steel company wants trade
creditors to forgive a fifth of its 400 million pesos trade
payables and have the balance paid in three years free of
interest.

The steelmaker also wants to write off half of the 408
million pesos it owes to the government and service the
balance for five years free of interest. These arrangements
will allow it to service the 953 million pesos it owes to
various bondholders and foreign lenders.

National Steel told the SEC that it also needs a new
investor to pump in US$130 million (S$219 million) during
the next two years aside from providing the company with a
US$50 million suppliers credit to import slabs.  PNB, with
a 5.6 billion peso exposure, is National Steel's biggest
creditor followed by Banque Indosuez with 1.6 billion pesos
and Land Bank with 1.2 billion pesos. (Singapore Business
Times  27-Jan-2000)

PHILIPPINE LONG DIST.TEL.CO.: To absorb unpaid bills
----------------------------------------------------
Dominant carrier Philippine Long Distance Telephone Company
(PLDT) and Philippine Telegraph and Telephone Corp. (PT&T)
had agreed to absorb the estimated P500 million in
uncollected bills from subscribers who used the 1041 access
code in making long-distance calls.

The 1041 was the access code of PLDT subscribers to PT&T's
inter-exchange carrier (IXC) facility.  It is facility that
transmit long-distance calls from one telephone company to
another.  PLDT vice president for carrier relations Alfredo
Carrera said last month, PLDT and PT&T agreed to divide the
losses after collection efforts for the 1041 access code
failed.

PLDT was supposed to receive around P300 million and PT&T,
around P200 million.  Carrera said that subscribers would
not want to pay because they thought the 1041 access is for
free. It is the fault of the carriers as billings for 1041
were long overdue.  He said PLDT and PT&T collection team
was only able to collect five percent of the total bill for
the long distance calls.

The collected amount was divided 60-40 between PLDT and
PT&T -- the revenue-sharing scheme for national long-
distance calls.  Carrera explained that since its was not
clear between PLDT and PT&T on who will bill subscribers,
it took the two telecoms companies several months before
the subscribers were actually billed.  By then, the 1041
bills have accumulated and subscribers refused to pay,
Others even cut their lines. (Asia Pulse  25-Jan-2000)

PHILIPPINE NAT.BANK: Bad debt level worsens
-------------------------------------------
Philippine National Bank's non-performing loan ratio
deteriorated further in the fourth quarter to a high of 29
percent from 26 percent in the third quarter, the bank's
published statement of condition as of Dec. 21, 1999
showed.

In the statement, PNB said its total non-performing loans
amounted to P34.9 billion while its loans, discounts and
advances amounted to P98.33 billion.  The bank's statement
also showed that its total amount of real and other
property owned or acquired grew 33 percent to P20.59
billion as of Dec. 21 from P15.125 billion the quarter
before.

The NPA and NPL levels of PNB are the highest among its
peer banks.  As of December, the bank's total amount of
classified loans and other risk assets reached P76.7
billion.  The bank's statement also showed that a total of
P43.73 billion in taxpayers' money was deposited in PNB by
government.

The group of taipan Lucio Tan, who is also chair of the
debt-ridden and ailing Philippine Airlines Inc., recently
took over the PNB board.  Last December, Tan and his three
other nominees were elected to the 11-member PNB board.

The government, despite still having a 30-percent stake and
six board members in the bank, gave up management control
of the bank over a week ago by allowing Feliciano Miranda,
one of Tan's nominees, to be elected president and chief
executive.  Miranda replaced Benjamin Palma-Gil, one of the
government's representatives who will remain as director of
the bank.

Two executives working with other companies of Tan were
likewise elected to top posts in PNB.  As of Dec. 21, PNB
has total capital funds of P23.24 billion and total assets
of P216.66 billion.  The government is set to sell its
remaining 30-percent stake in PNB by April this year.
(Philippine Daily Inquirer  26-Jan-2000)


===============
T H A I L A N D
===============

CHRISTIANI AND NIELSEN: To issue debentures under rehab
-------------------------------------------------------
Christiani and Nielsen Plc's board of directors has
approved the issue of Bt345.54 million in new debentures
and a Bt230.36 million capital increase via the issue of
new common shares to current debenture holders to fulfil
its debt restructuring plan.

According to a filing with the Stock of Exchange of
Thailand (SET), CNT's board approved issuance of 345,537
unsubordinated, unsecured debenture units at Bt1,000 face
value and 23.04 million common shares at Bt10 par value a
share. (The Nation  27-Jan-2000)

KRUNG THAI BANK: To restructure Bt170 bn in debts
-------------------------------------------------
With a target of restructuring Bt170 billion of bad debts
this year, Krung Thai Bank expects to realise pre-
provisioning profits for the first since 1996, the bank's
president Singh Tangtatswas said.

The profit forecast should become fact even before an asset
management company is set up, added Pongsathorn Siriyodhin,
a KTB senior executive vice president.

"If an AMC is set up this year, the bank's performance
would be even better," he added. Besides the debt
restructuring target of Bt170 billion, Pongsathorn added
that the bank expects a healthier performance by
improving the quality of non-performing loans (NPLs),
reducing operating costs, and seeking more fee-based
income.

"We are confident that we can restructure as much as Bt170
billion of NPLs," said Dusit Tengniyom, who is also a
senior executive vice president.

Last year, the bank restructured NPLs worth Bt127.35
billion, compared to the target of Bt100 billion. In the
fourth quarter of last year alone, KTB completed debt
restructuring of Bt71.6 billion, Bt40 billion of which was
loans extended by First Bangkok City Bank (FBCB) -- which
was integrated into KTB in late 1996.

Singh said that at the end of last year, the bank's non-
performing loans totalled Bt590 billion, or 57 per cent of
all loans, compared to a June peak of Bt630 billion.  The
reduction in the number of NPLs as well as financial
assistance from the government, enabled the bank to set
aside 80 per cent of required provisions against its own
non-performing loans of Bt183 billion. Total provisions
including those for NPLs from First Bangkok City Bank
reached Bt266 billion.

At the end of last year, the bank's capital adequacy ratio
was 15 per cent. Singh added that the bank expected lending
growth this year of between 3.5 and 5 per cent. As of the
end of last year, the bank's total lending was reported at
Bt935 billion, down 2.34 per cent year-on-year.

Pongsathorn added that the bank expects to reduce its NPLs
to less than 30 per cent of outstanding loans by the end of
this year.  He said KTB's fee-based income in 1999 had
increased by 30 per cent from the year earlier.

"We expect fee-based income this year to rise by the same
amount as last year," he said, not giving details of how
this would be achieved.

The bank is also in the process of reducing operating
costs. Since November last year the bank aimed to close 36
branches nationwide in order to reduce operating costs.
Singh said he expected KTB to have 650 branches, including
the yet-to-be-set-up "cash shop" branches at the end of
this year.  The bank recently set up an early retirement
programme called the "Mutual Separation Programme" and at
least 2,300 staff took redundancy under the programme. At
present, the bank has around 15,000 staff nationwide. (The
Nation  27-Jan-2000)

NS ELECTRONICS BANGKOK: UBS gets 67% stake in debt deal
-------------------------------------------------------
UBS Capital BV, the investment banking unit of
Switzerland's UBS Bank, will take over a 67 per cent stake
in NS Electronics Bangkok (1993) Ltd (NSEB) as part of the
debt restructuring programme that the integrated circuit
assembly firm signed with its creditors yesterday.

Following two years of intensive negotiation, NSEB signed
the final Bt3.44 billion debt agreement with 13 financial
institutions -- the Industrial Finance Corporation of
Thailand, Bangkok Bank, Bank Thai, Krung Thai Bank,
Standard Chartered Nakornthon Bank, Siam Commercial Bank,
Bank of Nova Scotia, Deutsche Bank, Standard Chartered,
Sumitomo, AIG Finance, Asia Recovery Management and Siam
Sanwa Industrial Credit.

Established as the first integrated circuit assembly plant
in Thailand by US firm National Semiconductor Corp in 1973,
NSEB was later acquired by a group of Thai investors,
comprising Charn Usawachoke and leading Thai business
families, including Wanglee, Leeswadtrakul, Boonsoong and
Phornprapha.

Under yesterday's agreement:

* Existing NSEB shareholders will dilute their combined
holding in the firm to less than 10 per cent, while the
creditors will convert Bt991 million of the debts into a
23.3 per cent stake.

* UBS Capital will inject US$50 million to take a 67 per
cent stake.

* NSEB will implement a 13-fold recapitalisation to raise
its registered capital from Bt280 million to Bt3,627
million on Jan 28.

Cash proceeds from the private placement of shares by UBS
will be used to repay debts of Bt826 million to creditors
and for much-needed capital expenditure. NSEB will expand
its annual production from 1,100 units last year to 1,400
units this year and to 1,700 units in 2001.

"As a result of the debt restructuring, the company could
save more than 73.3 per cent (Bt200 million) in interest
expenses annually. Furthermore, the company's sound
financial position is immediately realised," NSEB said.

No write-off of existing capital is planned.  NSEB's
restructured debts include Bt2.48 billion of direct loans
and Bt962 million of loan guarantees.  Forty per cent
(Bt991 million) of the total direct loans will be converted
to ordinary shares at Bt20 apiece, and Bt661 million debt
will be rescheduled to five-year loans at the average
minimum lending rate. The creditors will get immediate
repayment of the balance of direct loans.

Of the Bt962 million guarantee obligations, half will be
converted to shares at Bt30 apiece and the other half will
be restructured to seven-year unsecured convertible debt at
3 per cent interest rate for the first five years and 6 per
cent for the last two years. Conversion price is Bt70 per
share. It is redeemable by NSEB at any time without early-
redemption/prepayment penalty.

NSEB said UBS Capital intends to participate in the board
of directors and reserves the right to appoint one officer
as the chief of internal audit for the company. The
existing management team will be retained with full
authority and responsibility, it said.

A general meeting of shareholders is planned next month to
appoint new board directors.  The company will issue 1:1
stock rights to existing shareholders, totalling 28 million
shares at Bt20 apiece. UBS will buy US$50 million worth of
new NSEB shares at Bt10 apiece.  The debt restructuring
agreement was signed at the Bank of Thailand, as the deal
was reached under the supervision of the central bank's
Corporate Debt Restructuring Advisory Committee. (The
Nation  27-Jan-2000)

PADAENG INDUSTRY PLC: Wait for concession raises op costs
---------------------------------------------------------
The slow process of obtaining a new zinc mining concession
has put Padaeng Industry Plc on edge as further delays will
affect its production costs, a senior executive says.

The uncertainty over the new concession has persisted for
almost two years as the Industry Ministry has yet to submit
the issue to the cabinet for consideration.  "The officials
work at a snail's pace," said the executive.

Western Metals last year used the delay as an excuse to
lower its profile in Padaeng. The Australian miner bought
only 6.5 million new shares of Padaeng, retaining only a
4.33% stake, instead of purchasing 81.6 million shares as
originally agreed.

Padaeng, the country's sole zinc-smelter operator, applied
for the new concession in 1998 to mine zinc ore on a new
tract adjacent to its existing ones in Mae Sot, Tak
province.  As the new tract is located in a grade A
watershed, the ministry is concerned that the approval may
trigger protests by conservationists.

The new mine, covering 300 rai, would enable Padaeng to
produce 138,000 tons of zinc ore and earn 6.455 billion
baht, with the government collecting 161 million baht in
royalties.  Padaeng said it badly needed the new mining
area because ore deposits in the existing zones were being
depleted. As well, the ore content in the areas had
dwindled to 15%. However, the new concession would offer
35% ore content, a viable level. If no new concession was
allowed, Padaeng would have to shoulder higher production
costs.

A senior official of the Department of Mineral Resources
said the department had approved Padaeng's request for the
concession, primarily for technical and economic reasons,
and had submitted it to Industry Ministry for further
approval.  Ore underneath the existing mines is gradually
shifting to the adjacent area where Padaeng is seeking the
new licence. If no approval is given, Padaeng believes its
long-term production will not be worthwhile, according to
the official.

Furthermore, the department's approval was also based on
economic reasons as demand for zinc was rising and the
company's production would help reduce the country's trade
deficit, he said.  The company is also seeking new
strategic partners to boost its liquidity and expand its
business. (Bangkok Post  27-Jan-2000)

SIAM CEMENT: To issue more bonds to retire foreign debt
-------------------------------------------------------
Encouraged by the success of its first Bt50-billion
debenture issue, the country's leading conglomerate Siam
Cement Plc yesterday announced it would issue another batch
of baht-denominated debentures worth no more than Bt50
billion. The company wants to refinance its remaining
US$1.8-billion foreign debt.

Investors reacted to the news by dumping Siam Cement
stocks, pushing its price down Bt16 to Bt628 at the close
of trading yesterday.  An informed source at the company
said Siam Cement decided to issue the bonds now because the
debt instrument market is favourable.

"The market is still open for us, so we should reap the
benefits from this opportunity to refinance our (foreign)
debts into baht with a longer maturity period," the source
said.

Siam Cement is one of a few Thai companies able to raise
funds through debt instruments. Last year, the company
issued Bt50-billion debentures to bring down its foreign
debt, which had reached US$4 billion at its highest point

"The debenture issue is not meant to replace the Bt30-
million capital increase plan, which was cancelled due to a
lower-than-expected price offering in September last year,
but to refinance our offshore debts," she said.

In a filing to the Stock Exchange of Thailand, Siam Cement
said the debentures will not be without warrants and could
be issued in either one lot or in a series of placements.
The debentures, with a maximum maturity of 20 years, could
be offered to the public, through private placements,
and/or specific institutional investors, it said.

The company's board has yet to determine the coupon rates
of the debentures, saying market conditions at the time of
each issue would be considered to determine the rate. The
massive fund raising needs the approval of shareholders who
are to meet on March 29.

The company said that the bonds will not be convertible
into equity and will not be sold along with equity
warrants.  However, other details, such as the interest
rate it will pay, the date it will sell the bonds and the
target investors, have not yet been settled, the company
added.

"The long maturity implies that the group has well outlined
its long-term funding need," said Lec Sicoivit, senior vice
president of Asset Plus Securities Ltd. "Siam Cement is
also confident that investors have a good perception
towards the company and its financial position."

In the year ended in September, Siam Cement cut its foreign
currency debt to about US$2.5 billion (S$4.2 billion), or
less than half of its total debt from 80 per cent.  The
company said that it aimed to eventually cut its foreign
debt to one-third of total debt because about one third of
its sales are denominated in US dollars.  Paring back
overseas debt has been a priority for Siam Cement since the
Asian crisis erupted in 1997, when the devaluation of the
Thai currency magnified the cost of repaying the company's
debt in local terms.

An analyst at Merrill Lynch Phatra Securities Co Ltd said
the new debenture issue was to reduce the debt of the
country's largest cement operator to a manageable level.
Although the cost of the debenture issue is expected to be
close to the rate of its current foreign debts, London
Interbank Offering Rate (Libor) plus 1 per cent, Siam
Cement would benefit from a lower risk and longer repayment
period.

His prediction is based on an average interest rate offered
for the first Bt50 billion debentures at between 8 per cent
and 10 per cent.  Another analyst at a foreign brokerage
firm said Siam Cement should issue the debentures within
the first six months of this year as domestic interest
rates are likely to rise in the second half of the year.

Normally, as deposit rates rise, debentures' yields
decline.  "I believe that domestic deposit rates are near
to touching bottom," he said. The lowest savings rate now
stands at 2.5 per cent. (The Nation, Singapore Business
Times  27-Jan-2000)


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