TCRAP_Public/000207.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

            Monday, February 7, 2000, Vol. 3, No. 26


* C H I N A  &  H O N G  K O N G *

HOPEWELL HOLDINGS: Long-term credit rating downgraded

* I N D O N E S I A *

ASTRA INT'L: IBRA opens 2nd bidding for its 45% stake
PT BANK CENTRAL ASIA: Ibra to chase assets of bank owners

* J A P A N *

NISSAN DIESEL MOTOR: To issue securities, get fresh credit
NISSAN MOTOR CO.: Pushes forward with restructure plans
NKK GROUP: To cut 4,000 jobs, debts in process
TAIYO VINYL CORP.: Speeding up restructuring

* K O R E A *

DAEWOO MOTOR CO.: Requests for proposals go out this week
KOOKMIN LIFE INS.: Initial bidding to begin this week

* M A L A Y S I A *

AVENUE ASSETS BHD: To reducing debt burden via sale
LAND & GENERAL: Aims to finalise debt revamp scheme soon

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

MONDRAGON INT'L PHILIPPINES: Banks start asset-acquisition
NATIONAL STEEL CORP.: Gov't asks Spanish group to invest
UNIWIDE GROUP: Investors' entry hinges on debt rehab
UNIWIDE GROUP: Creditor bucks sale of subsidiary Paragon
VICTORIAS MILLING CO.: Two sugar millers in bidding

* T H A I L A N D *

ASIA FINANCE SYNDICATE: Lawsuits could to block repayment
ATEC COMPUTER: Loses court battle over illegal software
BAN CHANG PLC: Facing bankruptcy after creditor sues
BANGKOK BANK: To stay in red this year
BANGKOK METROPOLITAN BANK: Ex-execs criminally charged
SSP GROUP: Plans to focus solely on steel production
SSP GROUP: Somsak seeks deal with HEI
VANACHI GROUP: Reports debt-rehab progress to SET

C H I N A  &  H O N G  K O N G

HOPEWELL HOLDINGS: Long-term credit rating downgraded      
Standard & Poor's (S&P) has cut its long-term corporate
credit rating on Hopewell Holdings and maintained a
negative outlook on the company, citing weak operating
results and low internal liquidity.

The company operates the Guangzhou-Shenzhen Superhighway.
The ratings agency also lowered its rating on US$600
million in Hopewell unsecured senior notes, which are due
in 2004 and 2007. Hopewell chairman Sir Gordon Wu Ying-
sheung said he was not concerned by the rating

"Standard & Poor's decision reflects purely short-term
considerations," he said. "Hong Kong is now on the road to
recovery, and we can also look forward to China's
forthcoming entry to the WTO which will further boost
economic activity. Our cash flows will increase
dramatically when the superhighway project loan is totally

Both sets of ratings were reduced from BB to BB minus,
while the ratings on the notes were removed from
CreditWatch with negative implications and the notes'
outlook was revised to negative. S&P said Hopewell's
downgrade reflected weak operating results, low internal
liquidity, continued capital expenditure and GS
Superhighway's interest obligations.

It said the cash from the company's operations in 1999 was
insufficient to cover scheduled interest repayments and its
available cash balance continued to decline over the past
year. Hopewell's commitment to develop its mainland
infrastructure portfolio had also stretched its financial
resources to capacity, it said.  The agency expressed
concern Hopewell's obligation to cover the interest
payments on the GS Superhighway could be extended beyond
2002 if the yuan was devalued or the toll road under-
performed for any reason.

"Weaker than anticipated toll-road performance would reduce
projected cash flow. This would also prolong the GS
Superhighway's reliance on Hopewell for interest payments,"
it said.

However, the agency said traffic growth on the Superhighway
was expected to remain robust and the venture also had an
experienced management team.

"Strong traffic growth over the foreseeable future and a
planned 15 per cent toll increase on the superhighway in
2001 are expected to lend stability to Hopewell's financial
performance," the agency said.

Sir Gordon said that given an expected improvement after
2002 - the year the project-level bank debt on the
superhighway is repaid - holders of the $600 million
unsecured senior notes should feel very secure in their

"S&P's negative outlook relates to the continuation of the
economic recovery and Hopewell does not share those
concerns," he said.

He said Hopewell had recently secured a Bank of China
guarantee to replace an earlier arrangement with the
collapsed Guangdong International Trust and Investment Corp
for a shortfall guarantee facility covering the highway.  
(South China Morning Post  04-Feb-2000)


ASTRA INT'L: IBRA opens 2nd bidding for its 45% stake
The Indonesian Bank Restructuring Agency (IBRA) opened on
Friday the second round of bidding for its 45 percent stake
in publicly listed auto giant PT Astra International.

IBRA chairman Cacuk Sudarijanto said that the agency
expected to be able to make a short list of between three
to five quality investors on Feb. 23, and to close the sale
on March 25.

"They will have to submit their final bids on March 20, and
we'll choose the investor on March 25. This is the deadline
for the money to go into the government coffers to help
finance the current state budget," Cacuk told reporters at
a press conference.

Separately, President Abdurrahman Wahid said in Bonn,
Germany, that the agency must sell its Astra portfolio
immediately.  "I demand that (Astra) be sold immediately to
the highest price bid," he said during a gathering with
German businessmen. Abdurrahman has been on a two-week
international tour since last week.

IBRA is targeted to raise some Rp 17 trillion in the
current fiscal year ending March 31. The agency has so far
raised more than Rp 12 trillion through asset sales and
loan recovery.  IBRA has earlier said that it expects to
raise at least Rp 2 trillion from the Astra sale. Cacuk
expected the agency to sell the Astra shares at around Rp
4,000 each.

IBRA initially owned a 40 percent stake in Astra. But Cacuk
said that he was informed by his staff on Thursday that
they actually control 45 percent or about 1.04 billion
shares, which were traded late on Thursday at Rp 3,700, up
Rp 100 from the previous day's close.  

"The other 2 percent is still being pledged (by IBRA's
debtors) to other parties. I won't mention names," he said.

IBRA received the Astra shares from several powerful
businessmen to repay the debts of their banks to the
government.  Asked if IBRA would sell all of its 45 percent
stake, he said: "Yes, all of it."

The Astra sale has been plagued by controversy. IBRA
initially appointed a consortium of investors led by U.S.
Newbridge Capital and Gilbert Global Equity Partners as the
preferred bidder for Astra with a floor price of Rp 3,750
per share.  But after a row with Astra's Rini Soewandi-led
management team, IBRA announced earlier this week that its
exclusive agreement with the Newbridge/Gilbert consortium
had expired since the consortium failed to provide a 30
percent down payment by the Monday deadline.

"The bid is now open to other investors, and I'm optimistic
that there will be more interested parties," Cacuk said,
dismissing concerns that the failure with the
Newbridge/Gilbert consortium would discourage other

He said during a presentation this week in London that many
investors have expressed their interest in Astra.  Cacuk
acknowledged that more than 30 investors have already
applied to the agency to join the bidding for Astra.  "But
we want a quality investor," he said.

France-based Lazard FrSres & Co., Philippine businessman
John Gokongwei's JG Summit Holdings Inc., and savvy
American financier George Soros are all reportedly
interested in Astra.  Cacuk also dismissed suggestions that
the Newbridge/Gilbert consortium bid was canceled because
of corruption.  "I can assure you that there's no
corruption involved," he said.

Asked if the agency would continue with its plans to
dismiss current Astra management, Cacuk said: "It will
depend on the results of the upcoming shareholders

Astra is scheduled to hold a shareholders meeting on
Tuesday. IBRA has threatened to dismiss Rini Soewandi on
grounds that her management team obstructed the Astra sale
by neglecting to provide necessary information to the
Newbridge/Gilbert consortium during a due diligence
process.  Rini has rejected the obstruction charges on the
basis of Astra's obligation to comply with Bapepam, the
Capital Market Supervisory Agency.  Astra is one of the
high profile deals to be made by IBRA in the first quarter
of this year.

Meanwhile, Finance Minister Bambang Sudibyo installed three
new senior officials at IBRA earlier in the morning. Arwin
Rasyid, previously a deputy chairman, has been promoted to
senior vice chairman, the second top position at the agency
which was left vacant after Cacuk was promoted to chairman
earlier this year.  Mahmudin Yassin, a former senior
official at the ministry of finance, has been appointed as
deputy chairman overseeing the asset management investment
which is responsible for asset disposal. Mahmudin replaces
Farid Harianto, who has been demoted to an expert from IBRA

Former vice president of publicly listed Bank Universal,
Jerry Ng, has been appointed to head the agency's bank
restructuring affairs. Jerry replaces Pande Lubis.
Although Pande has been implicated in the high profile Bank
Bali scandal, some have suggested that Farid should also be
held responsible for the scandal.  Risk management affairs
is now handled by Chandra Purnama, previously the card
center division head of state-owned Bank BNI. (The Jakarta
Post  05-Feb-2000)

PT Bakrie Sumatra Plantations said it is provisioning for
losses totalling 110 bln rupiah after the company's
overseas rubber trader, the Lewis and Peat Group, went

"The total loss to PT Bakrie Sumatra Plantations as a
result of this provisioning is 110 bln rupiah which will be
reflected in the company's 1999 financial statement,"
Bakrie Sumatra said in a statement.

It said Lewis and Peat's Singapore, London and Connecticut
offices filed for bankruptcy late last year after a 180 mln
usd trade finance facility arranged by Rabo Bank was cut
off on Oct 31.  The banking syndicate providing the loan
also included PT Bank Negara Indonesia (New York) and PT
Bank Rakyat Indonesia (London).

"The total amount of the facility used according to the
available limits as of end-October was 63 mln usd," the
company said.

Bakrie Sumatra said it is allowing for 60 bln rupiah in
investment losses in Lewis and Peat and 50 bln rupiah for
operational expenses through loans, upfront payments and
other transactions with the trading company. The company
said that while the closure of Lewis and Peat will mean
lower consolidated sales, the company's profit ratio should
improve.  (AFX News Limited  03-Feb-2000)

PT BANK CENTRAL ASIA: Ibra to chase assets of bank owners
The Indonesian Bank Restructuring Agency (Ibra) vowed to
chase personal assets of the owners of banks that tapped
US$19 billion (S$32.2 billion) of central bank aid, an
official of the bank rescue agency said.

Bank Indonesia lent about 70 per cent of the money to four
banks to prevent them from collapsing as depositors
clamoured to withdraw funds and non-performing loans
swelled at the height of Indonesia's financial crisis
in 1997 and 1998.  While the government has seized an
equivalent amount of the aid through asset swaps, it now
wants to reevaluate those assets to make sure they cover
the amount owed.

It's focusing on the major shareholders of the Salim
group's PT Bank Central Asia, the Gajah Tunggal group's PT
Bank Dagang Nasional Indonesia, Usman Admadjaja's PT Bank
Danamon and Bob Hasan's PT Bank Umum Nasional. In August
1998, BCA and Danamon were nationalised and BDNI and Bank
Umum Nasional were closed.

"It's clear that the banks' owners must be responsible and
we will chase their assets to repay the liquidity support,"
Ade Sumantri Slamet told, the bank agency's deputy chairman
told reporters at Parliament.

The agency's drive comes as the State Audit Agency plans to
investigate the aid loans to the banks after an initial
audit showed that as much as 58 per cent of the money may
have been lent improperly. Satrio Budihardjo Joedono,
chairman of the state audit body, said the new probe will
seek to trace whether the cash was used as intended by the

Since the original settlement in September 1998, the Salim
group has pledged more assets after it was discovered the
group's debt was bigger than initially thought. The group
has had to give up shares in about 100 companies.  Gajah
Tunggal's Nursalim also has to stump up more cash and
assets after some of his assets -- namely PT Dipasena, a
shrimp farming company -- turned out to be worth less than
thought, an Ibra official said.

The bank agency is trying to hire experts in asset tracing
and forensic accounting to help it trace the personal
assets to help recoup the US$85 billion it will cost the
government to fix the nation's banks. (Singapore Business
Times  04-Feb-2000)


NISSAN DIESEL MOTOR: To issue securities, get fresh credit
Nissan Motor Co Ltd said it, Renault SA and four creditor
banks have reached a basic agreement on a rescue package
for Nissan Diesel Motor Co Ltd.

Under a tentative agreement, Industrial Bank of Japan Ltd,
Fuji Bank Ltd, Asahi Bank Ltd and Yasuda Trust and Banking
Co Ltd will jointly arrange securitisation of Nissan
Diesel's Ageo plant, to help it generate cash flow to
further proceed with restructurings.  Financial details are
subject to further negotiations, a Nissan spokeswoman said.

The creditor banks have also agreed to establish a four-
year commitment line in which Nissan Diesel will be
permitted to borrow up to 200 bln yen in total.

Nissan Diesel itself will issue some 5 bln yen in
convertible securities to strengthen financial positions.
Nissan Diesel said it will begin supplying its ZD brand
engines, with engine displacement of 3,000 ccs to Renault
and its truck division Renault Vehicules Industriels SA.
ZD engines are now used in Nissan's recreational vehicles
as such El Grande and Terrano.

The company also said it will also supply its F23 Atlas
trucks with carrying capacity of 2.2-3.5 tons and F41
trucks with capacity of 6.5-7.6 tonnes to Renault/Mack
group for distribution outside Japan.  A company spokeman,
however, declined to discuss the likely scale of supplies,
adding that "all details are subject to ongoing  

In return, Renault will supply its Master small-sized
commercial vans to Nissan Diesel for distribution through
Nissan Diesel's sales channel in Japan to help boost sales
volumes.  Nissan said it will also extend "strong support"
to help Nissan Diesel reinforce its management and
finances, which includes secondment of some of Nissan's
staff to Nissan Diesel.

Nissan Diesel itself said it is expected to unveil a
medium-term restructuring plan as early as April, aiming
for a return to profitability in the year to March 2002.
A Nissan Diesel spokesman said he expects the planned
securitization of its Ageo plant to "generate significant
amount of cash flows" for the company.  However, he
declined to disclose the book value or the original
purchasing cost of the Ageo plant.

"What we can say is the plant is very old and cheaply
built. So you can make significant money out of it," he
said. The Ageo plant began operations on May 1962.  (AFP-
Extel News Limited  04-Feb-2000)

NISSAN MOTOR CO.: Pushes forward with restructure plans
Nissan Motor Co. (7201) is moving closer to achieving its
target of cutting interest and labor costs with
negotiations on the sale of its aerospace unit in their
final stages.

But with a gloomy profit outlook for the auto industry, the
company faces a long and difficult road to a full
turnaround.  Chief Operating Officer Carlos Ghosn made
three pledges when he came to Nissan from Renault:

First, the company would post consolidated profits in the
fiscal year ending March 2001.  Second, he would cut
interest-bearing liabilities in half by the end of fiscal
2002 to 700 billion yen on a consolidated basis.  Third,
the operating margin on consolidated sales would exceed
4.5% in fiscal 2002.

If the sale of the aerospace division goes through, it will
help Nissan achieve the first two of these targets.  But
the third goal is likely to remain elusive, given the
moribund state of the new car market. On Feb. 2, while
declining to reveal the actual amount, Nissan said
consolidated operating profit for fiscal 1999 would come in
below the 90 billion forecast at the interim settlement.

Now that Nissan is close to achieving the major tasks it
set itself by shedding unneeded assets and businesses, the
focus of its restructuring efforts will center on revamping
its mainstay auto business. (Nikkei  03-Feb-2000)

NKK GROUP: To cut 4,000 jobs, debts in process
Japan's second-largest steelmaker said Thursday that it
would eliminate 12 percent of its worldwide work force over
the next three years as it struggles to cut costs.

It's part of a larger plan to reduce consolidated interest-
bearing debt by 400 billion yen to 1.2 trillion yen over
the three years ending fiscal 2002. The integrated
steelmaker also wants to raise group crude-steel output
from about 19 million tons to some 20 million tons over the
same period.

"Our company's balance-sheet strength is lagging (behind
other steelmakers), and our market valuation is low," NKK
President Yoichi Shimogaichi said, stressing the importance
of both business growth and financial targets. "If we don't
resolve these issues, our future will not be prosperous,"
he added.

NKK Corp. said it would eliminate 4,000 jobs by the
financial year that ends March 31, 2003, reducing the total
number of its employees to 29,000.  The company said the
restructuring would help it return to profitability and
fulfill its aim of repaying $3.7 billion of its $14.8
billion of debt during the same period.

"It is difficult to continue in this day and age without
raising the market's view of your company," said Yoichi
Shimogaichi, president of NKK, in explaining the need for
the new plan.

NKK said it expected to report a group pretax profit of
$148.1 million in the current financial year, and profits
of $833.3 million by the year ending in March 2003. NKK's
shares fell 2.8 percent Thursday, to 70 yen (64.6 cents).
Outside of Japan, NKK has a factory in Thailand and a
subsidiary in Indiana. It has not yet decided where to make
the job cuts, a spokesman said.

Under the blueprint, NKK will pay down debt by tapping into
free cash flow. The company aims to boost consolidated
pretax profit to 90 billion yen in fiscal 2002, from the 16
billion yen projected for the current fiscal year.

The bigger profits, combined with asset sales, are expected
to generate a free cash flow of 400 billion yen over the
three-year period. The entire stream of available cash will
be channeled to pay down debt. Parent-only debt is expected
to shrink from 990 billion yen to 700 billion yen.

At the same time, NKK plans to fully exploit production
resources at both domestic and foreign group firms to
generate growth in output. As part of that effort, it also
wants to strengthen its ties with Argentina's Techint
Group, with which it formed an alliance last year. Techint
Group is the world's leading producer of seamless pipe.
(The International Herald Tribune, Nikkei  04-Feb-2000)

TAIYO VINYL CORP.: Speeding up restructuring
Polyvinyl chloride resin producers, including Japan's
largest maker Taiyo Vinyl Corp., are accelerating
reorganization to boost performance in the relatively
unprofitable field.

Taiyo Vinyl, with cumulative losses exceeding 14 billion
yen, will be rebuilt under the leadership of Tosoh Corp.
(4042), Tosoh and the two other chemicals makers with which
it jointly owns the firm formally announced Thursday. Taiyo
Vinyl will be liquidated at the end of March and
reestablished April 1. The new firm, which will do business
under the same name, will be owned 68% by Tosoh and 16%
each by Mitsui Chemicals Inc. (4183) and Denki Kagaku Kogyo
KK (4061). Currently, Tosoh and Mitsui each hold 37% stakes
in the firm and Denki Kagaku owns 26%.

Mitsubishi Chemical Corp. (4010) and Toagosei Co. (4045)
announced the same day details of a plan to integrate their
PVC resin and materials operations in a new firm to be set
up in April.  Chisso Corp. has also said it will cut back
on PVC operations. (Nikkei  03-Feb-2000)


DAEWOO MOTOR CO.: Requests for proposals go out this week
The office in charge of Daewoo Motor's sell off is planning
to send out a request for takeover proposals this week,
after the Financial Supervisory Commission (FSC) and the
creditor banks of Daewoo Motor endorse a sell-off schedule.

According to sources in the local auto industry and the
creditors group Sunday, Daewoo group is expected to set up
a corporate restructuring committee to oversee the sell-off
of various group subsidiaries. If time permits, the
committee is expected to forward a request for takeover
proposal to foreign firms interested in taking over Daewoo

Industry sources say the restructuring committee is certain
to invite GM and Ford to submit takeover proposals. The
same sources added, however, that the committee has not yet
decided whether to invite other firms interested in taking
over Daewoo, including other foreign firms like
DaimlerChrysler and Volkswagen.

It also remains to be seen whether interested local
organizations like Hyundai Motor and the Korea Federation
of Small Business (KFSB) are invited to submit bids.
Hyundai Motor has expressed interest in taking over Daewoo
Motor's Polish plant and the KFSB recently announced its
intention to try taking over Daewoo Motor as part of a
consortium of parts suppliers and other investors.

The Daewoo creditors plan to conclude the selection of the
priority candidate in March or April with an intention to
wrap up the sale by June.  (Digital ChosunIlbo, Korea Times  

KOOKMIN LIFE INS.: Initial bidding to begin this week
An initial round of bidding for the takeover of Kookmin
Life is due to begin this week, with the actual appointment
of a preferred company for sell-off negotiations expected
by February 25.

The Financial Supervisory Service (FSS) said it will
receive letters of intent from potential buyers by Feb. 9
and bid proposals by Feb. 22. A preferred buyer will be
selected from among the candidates by Feb. 26. The FSS
wants conclusion of a final agreement by the end of March.

The government has set the minimum price for Kookmin Life
at 100 billion won. In case of the top five chaebol groups,
they are required to abide by the 200 debt-to-equity target
and carry out their capital structure improvement accords
with their main creditor banks.

After last year's talks with New York Life failed, the
government decided to open up the bidding process. The
Financial Supervisory Commission (FSC) said Sunday that it
would be accepting letters of intent from prospective
bidders up to Wednesday, with the deadline for purchase
proposals set for February 22. Industry sources say that
currently, two local life insurance firms, SK and
Yongpoong, have been moving ahead with plans to take part
in the bidding.  (Digital ChosunIlbo 06-Feb-2000, Korea
Herald  07-Feb-2000)


AVENUE ASSETS BHD: To reducing debt burden via sale
Pantai Holdings Bhd, which holds 28% of Avenue Assets Bhd
(formerly known as PhileoLand Bhd) said Avenue Assets' sale
of property assets this year would lead to a big reduction
in the latter's heavy debt position.

Pantai Holdings, executive chairman Mokhzani Mahathir said:
"We hope Avenue Assets' borrowings could be reduced to
RM150mil from RM500mil currently within the next six months
through bigger property divestments."

He told reporters after Pantai's EGM in Kuala Lumpur
yesterday that "talks are on-going with some companies to
divest these properties, apart the sale of some buildings

The EGM was called to consider the acquisition of a 28.15%
equity interest in Avenue Assets.  Last year, Pantai
announced the acquisition of 16.78% of Tongkah Holdings Bhd
for RM108.7mil and the ratification of a purchase of 28.15%
in Avenue Assets for RM222.1mil.  The two acquisitions were
made by Maxgold Investments Group Ltd and Glossmere
Investments Ltd respectively. These two companies are
wholly owned by a subsidiary of Pantai.

"Our next move will be to fully realise investments in
Avenue Assets and Tongkah made prior to the economic
crisis," said Mokhzani who is also Tongkah executive
chairman and chief executive officer.

On Pantai's performance, Mokhzani said the company was
expecting better results this year compared to last year.

"We expect hospital and support services to contribute
significantly to our turnover," he added.

He said Pantai planned to expand to other parts of the

"We have been studying Johor for quite sometime," Mokhzani
said. He added that: "Pantai is not just looking at
specialist hospitals but other healthcare-related business
outside the Klang Valley." (The Star  04-Feb-2000)

LAND & GENERAL: Aims to finalise debt revamp scheme soon
Land & General Bhd (L&G) expects its debt restructuring
proposals to be finalised in the next three months.
The company said in a statement to the KLSE that it was
working with trade creditors, bank lenders and advisers to
finalise the proposals.

It said that as a result of the economic downturn, it had
been faced with a tight cash-flow position which had
impaired its ability to service its debts.  As of Sept 30,
1999, L&G said, it owed about RM787mil to bank lenders.

It is now working with bank lenders to restructure and
reschedule RM529mil of its existing loans/facilities and
the bank lenders' proposal does not involve any "haircut"
or write-off of amounts that L&G owes them.

The company said it was also exploring various proposals to
settle the amounts due to its trade creditors, which
amounted to about RM100mil, as oft Sept 30, 1999.  The
trade creditors' proposal involved mainly the extension of
repayment period as well as issuance of equity as part
payment to some of the creditors of the L&G group's
property development subsidiaries, for about RM58mil.

L&G said it was also proposing to restructure its 4.5% Euro
convertible bonds (ECBs) via a combination of equity and
equity-linked instruments and cash payment.  Based on the
current outstanding ECBs of US$64mil, L&G will have to pay
out about US$83.7mil (RM318mil), if all the ECBs are to be
redeemed in 2001.

L&G is also proposing to finance the redemption of the
redeemable preference shares (RPS) in Bandar Sungai Buaya
Sdn Bhd through a combination of cash payment, issuance of
equity and set-off with properties of the L&G group. The
company also intends to embark on an asset disposal
programme to raise cash for the group. It plans to sell off
its non-core assets and focus on property development.

In a separate statement, L&G also proposed to issue up to
58,152,400 new shares or representing 11.61% of its issued
and paid-up capital at Dec 31, 1999.  The new shares will
be issued to certain contractors and consultants of L&G
subsidiaries Bandar Sungai Buaya, Lembah Beringin Sdn Bhd
and Sri Damansara Sdn Bhd.

The new shares are payment for work completed and certified
and as payment for future works to be completed and/or
certified.  The maximum number of 58,152,400 new shares was
arrived at based on the total amount of debt of
RM58,152,400 that is proposed to be settled with the
contractors and consultants, and the minimum issue price of
RM1 per new L&G share. (The Star  04-Feb-2000)


MONDRAGON INT'L PHILIPPINES: Banks start asset-acquisition
Major creditor banks of Mondragon International
Philippines, Inc. (MIPI) have started to acquire major
assets of the Mimosa Leisure Estate in Clarkfield, Pampanga
as payment for the company's six-billion-peso (US$147.6
million at PhP40.65:US$1) loan obligations.

However, MIPI president Jose Antonio Gonzalez is not about
to give up, adding that funding from a US-based trust fund
is forthcoming by the end of the month.  In an interview,
outgoing Clark Development Corp. (CDC) president Rufo
Colayco yesterday told BusinessWorld MIPI creditors have
notified the state agency of their plans to "take over" the
Holiday Inn hotel and the Regency Casino.

Likewise, CDC has received an offer from the Bank of
Commerce for the purchase of the 36-hole golf course within
the leisure estate. The bank is reportedly representing an
investment client which it did not identify.

"It is now up to the new administration to decide. They
have to put the estate in the hands of a private sector
group who has the capability to finance the further
development of the estate," Mr. Colayco said.

He added that given the job it generates, it is to the best
interest of Clark that the Regency Casino be reopened at
the soonest possible time.  Meanwhile, Mr. Gonzalez said
its creditors could not possibly take over Mimosa, saying
the case is still being litigated and that "the decision
(on CDC's takeover) is not yet final."

"There are 20 creditor banks that have banded together to
sue any party that will attempt to lease any other portion
of the Mimosa Estate in order to protect their interests.
Therefore, in addition to the estate being not divisible
since the ongoing litigation precludes such a division),
this effort will prevent any lease from being consummated,"
Mr. Gonzalez said, referring to banks with a total exposure
of PhP150 million ($3.7 million) and whose loans to MIPI
are either unsecured or semi-secured.

Mr. Gonzalez also reiterated that a $200-million fund will
be remitted to the company between February 20 to the first
week of March. He said the amount will allow the company to
pay the creditor banks and government institutions such as
the Bureau of Internal Revenue (BIR), the Philippine
Amusement and Gaming Corp. (Pagcor) and CDC.

MIPI earlier said the money should have been in last
January.  Last December, CDC took over the 215-hectare
leisure estate for the second time after MIPI failed to pay
its PhP325-million ($8 million) rental payments.  The
renegotiated contract -- signed on July 28 -- requires MIPI
to pay arrears in six tranches beginning August. MIPI was
also required to provide CDC a letter of credit from bank
creditors to guarantee payments will be made. However, none
of these was delivered and as such gave the state agency
the right to take over the place. (Business World  04-Feb-

NATIONAL STEEL CORP.: Gov't asks Spanish group to invest
Government is asking a group of Spanish investors to
consider National Steel Corp. (NSC) as a possible
investment venture in the Philippines, along with shoes
manufacturing, agro-processing and power generation.

Meeting with the Spanish business and trade delegation that
accompanied the visiting Queen of Spain, Trade Secretary
Manuel Roxas II said the group had expressed interest in
exploring possible business ventures in the Philippines.
Roxas said the Philippines could take advantage of its
strategic position as a gateway to Asia and an ideal place
for investments for companies wishing to establish their
presence in the region.

According to Roxas, the Department of Trade and Industry
(DTI) has suggested NSC as a possible venture for Centunion
Corp., a member of the delegation.  NSC is being packaged
to attract foreign investors as part of its rehabilitation

Roxas said other sectors in which Spanish businessmen may
invest are shoes manufacturing and agro-processing. He
expressed optimism that the delegation would seriously
consider these sectors for future investments.  Also in the
delegation and representatives from Banco Bilbao Viscaya
(BBV) who are looking at a possible shipbuilding venture.

"We can not reveal the location but the company has in fact
begun studying specific factors like technical skills and
manpower, power supply and other production-related
concerns," Roxas said.

Roxas said the Swiss giant Asea Brown Boveri is also in the
delegation and is looking at further investments in power
generation. ABB has already undertaken a power-generation
project involving a diesel-fueled power barge that supplies
supplementary power to Mindanao.

"Our distinct advantage is our ample supply of skilled and
English-speaking manpower," Roxas said. "Investors
appreciate this, they come here despite our obvious
limitations in infrastructure."

Latest figures from the Philippine Economic Zone Authority
(PEZA) indicate that investments by export-oriented
companies shot up by 162 percent this month, from P793
million in January 1999 to P2.085 billion this January.
The biggest investment worth P670 million came from San
Technology, a 100-percent Japanese-owned company at the
Cavite Economic Zone. The company registered a new project
involving the manufacture of magnetic voice coil motor for
computer hard disks and pager of cellular phones.

The second biggest investment came from Cypress
Semiconductor Philippines, a 99.98-percent American-owned
company which launched a new project for the manufacture of
fine pitch/flexible ball grid array.  PEZA also reported
the registration of E. Telecare International Inc., a
P437.2-million enterprise located at Eastwood City
Technology park. (The Philippine Star  05-Feb-2000)

UNIWIDE GROUP: Investors' entry hinges on debt rehab
British retail group Kingfisher Plc. and French chain
Casino are reportedly interested to invest in cash-strapped
Uniwide Group of Companies on one condition -- the group
has to be debt-free.

BusinessWorld learned yesterday that Uniwide's management
is fast-tracking the implementation of the group's
rehabilitation plan since the two foreign investors will
not submit their respective proposals unless the local
retail chain has significantly reduced its obligations,
estimated to reach 11.1 billion Philippine pesos (US$273
million at PhP40.65:US$1).

The group's debts have piled up to PhP11.1 billion. Of this
amount, PhP6.95 billion ($170.9 million) is owed to 13
creditor banks. Loans from the banks have maturities
ranging from 1998 up to 2003.  Sources identified the two
interested investors as Kingfisher and Casino, two of
Europe's largest retail firms, instead of The Carrefour
Group which was earlier rumored to be signing a deal with
Uniwide owner Jimmy Gow.

In an interview with BusinessWorld, a company source
neither confirmed nor denied talks with the two foreign
groups, saying the management is bound by a confidentiality
agreement executed with the prospective investors.

"We are bound by a confidentiality agreement and until we
have received a firm proposal from them, we cannot disclose
anything. Nothing official is out yet from the
receivership. But they're (investors) just awaiting the
implementation of the rehab plan which we are about to
complete," the source said.

The source said earlier that the foreign firms have
completed due diligence studies on the Uniwide Group and
have moved on to a more serious level of discussions with
the management.  The source, however, said it will be up to
the Securities and Exchange Commission to immediately
implement the rehabilitation plan which requires the group
to settle its obligations with creditors through debt-for-
asset arrangement.

To date, Uniwide has already settled debts owed to East
Asia Capital Corp. (PhP60.4 million) and United Coconut
Planters Bank (PhP1.044 billion).  The source added that in
a week's time the prospective partners will be submitting
their respective proposals which could spell the fate of
the Uniwide Group that has long been suffering from
ballooning debts.

British firm Kingfisher is one of Europe's largest non-food
retailers with focus on markets centered on the home and
family. The company operates principally through its
European businesses namely, DIY (Do It Yourself) and
Electricals and its UK High Street general merchandise

The company owns Woolworths, Superdrug and Chartwell Land -
- which is one of UK's largest specialist retail property
companies -- as well as home improvement chains in Britain
and France. It has expanded in Asia through Kingfisher Asia
in Hong Kong and is set to open a satellite office in
Shanghai. Through its 2,700 stores in 13 countries, the
company posted sales of $12.09 billion in 1988.

French chain Casino, on the other hand, is mainly a food
retailer but is also involved in selling hardware, clothing
and other goods at its hypermarkets. The group has recently
moved into Taiwan and Thailand after setting up shop in
Poland, Argentina and Uruguay.  The foreign group was also
responsible in helping Thailand's Big C -- the biggest
hypermarket operator in the said country -- to rehabilitate
when it experienced financial troubles.

The Uniwide Group has been negotiating individually with
creditor banks for a debt-for-asset swap deal to wipe off
loans.  In the latter part of December last year, Uniwide
Sales Realty and Resources Corp. (USRRC) paid off its
PhP1.044-billion ($25.7 million) obligation to United
Coconut Planters Bank via real estate properties.

USRRC is 98% owned by listed holding firm Uniwide Holdings,
Inc. (UHI).  UHI likewise entered into a memorandum of
agreement with East Asia Capital Corp. early this week for
the settlement of its PhP60.4-million ($1.5 million) debt
through a similar arrangement.

Earlier, two prospective local investors were rejected by
the Uniwide. El Shaddai leader Mike Velarde and his group
had offered PhP900 million ($22 million) in exchange for a
majority stake in the retail warehouse clubs of UHI.

The sources said the Gow family and the receivership
committee junked Mr. Velarde's proposal because it was
"extremely low."  The Gows also "rejected" Rizal Commercial
Banking Corp.'s (RCBC) bid for the acquisition of Uniwide
Sales Warehouse Club, Inc. (USWCI). The Gow family has 100%
ownership in USWCI.

RCBC and holding firm House of Investments offered about
PhP1.8 billion ($44.3 million) to PhP2 billion ($49.2
million) for USWCI. The proposal consisted of between PhP1
billion ($24.6 million) and PhP1.2 billion ($29.5 million)
in cash, with the remaining in the form of a debt write-
off. (Business World  04-Feb-2000)

UNIWIDE GROUP: Creditor bucks sale of subsidiary Paragon
The Philippine Bank of Communications (PBCom), one of the
creditors of cash-challenged Uniwide Group of Companies, is
opposing the sale of First Paragon Corp. (FPC) for P145
million to I Mart International Corp. (I Mart).

FPC, one of the subsidiaries of Uniwide, is set to close
the sale on Feb. 7 coinciding with the expiration of the
third 60-day debt relief given to the retail and property
group.  In its comments submitted to the SEC, PBCom said
the sale is not valid because the bank's approval was never
sought and its conditions, ignored. At the same time, the
sale, if it pushes through, will violate Section 4 of the
Bulk Sales Law.

PBCom said it informed the SEC on Oct. 15, 1999 that it was
giving its consent to the sale, but wanted certain
conditions to be integrated into the terms of the sale.
However, it never got a response from the SEC nor from
Uniwide's interim receivership committee. Instead, Uniwide
chairman Jimmy Gow went ahead with the sale last Dec. 9,
1999 which the SEC approved last Dec. 20.

PBCom said that upon looking at the MOA between FPC and I
Mart, it was clear that not one of its conditions were
considered.  These include: withdrawal of the pending
petition for declaration of a state of suspension of
payments in respect of FPC, simultaneous with the execution
of any document evidencing the proposed sale; all proceeds
from the sale be held in escrow subject only to the rights
of PBCom as direct creditor to receive payment on FPC
obligations, and no disposition of such proceeds be made
from the escrow account except upon mutual consent of all
FPC creditors.

Moreover, PBCom said its rights and interest as FPC's
direct creditors should be preferred over any accommodation
or third-party guarantee which may have been granted by FPC
or any other claim by FPC affiliates.  PBCom added the sale
also violated the Bulk Sales Law which requires advance
written disclosure to creditors by delivering a sworn
statement of listing of assets and credits, and the pro-
rate application of the proceeds to bonafide claims of the
seller, mortgagor, transferor or assignor.

This provision also means the release of the escrow fund in
favor of the PBCom and USWCI as the only creditors of FPC.
The sale of FPC is part of a three-pronged recovery plan
for Uniwide which calls for an immediate equity infusion in
the retail business, dacion en pago of non-operating assets
and restructuring of remaining liabilities.  FPC is one of
Uniwide subsidiaries. It owns and operates 44 retail stores
called Uniwide Family Store with various leased areas in
Luzon. (The Philippine Star  04-Feb-2000)

VICTORIAS MILLING CO.: Two sugar millers in bidding
Sugar mills Central Azucarera de Don Pedro (CADP) and
Central Azucarera de la Carlota (CAC) may still invest in
cash-strapped Victorias Milling Co.(VMC).  Financial firm
RCBC Capital Corp., one of two companies which prequalified
for an auction of new VMC shares, has managed to convince
the two mills to participate in the bidding process as

A CADP official told BusinessWorld the two mills will post
a bid as a group once they finally decide to participate in
the auction scheduled for March 20.  It was also revealed
that the Yuchengcos are not themselves interested in

RCBC Capital Corp. has signified its intent to participate
in the auction in behalf of CADP.  The sources said if RCBC
Capital succeeds in getting the controlling 53.35% of VMC,
CADP will become the most dominant sugar miller in the
country. The Roxas-owned sugar miller also now owns Central
Azucarera de la Carlota in Negros Occidental.

VMC's creditor banks will bid out 567 million new shares at
a floor price of 567 million Philippine pesos (US$13.9
million at PhP40.65:US$1).

CADP senior vice-president for finance Asuncion S. Aguilar
yesterday said RCBC Capital has been able to win over CADP
and CAC as its partners in a share auction which will give
the winner a 53.35% stake in VMC.

"We have a close relationship with banks. Actually, there
were several parties which approached us in the past but
among them it was RCBC which came through," Ms. Aguilar
said in a telephone interview.

Among the financial firms which have approached the Roxas-
owned mills, she said, RCBC Capital has been the most
persistent in convincing CADP and CAC to participate in the
auction as RCBC Capital's investment partners. RCBC
Capital, incidentally, also has a 10% stake in CADP.

"And since VMC and CADP are both in sugar, we agreed to
take a serious look (at VMC to check) if there's something
for us here," Ms. Aguilar told BusinessWorld.

Ms. Aguilar said their mills and RCBC Capital will conduct
a due diligence audit on VMC and eventually post a bid "as
a group," if they finally decide to do so.  "We will do it
as a group whether it will be RCBC's name or CADP's name
which will appear in the auction," she said.

She stressed, however, that the group's decision to
eventually pursue an investment in VMC will all depend on
the results of their due diligence audit of VMC.

"It depends on the due diligence really because before we
submit our final bid, we'd want to know what's happening to
the company. We'd like to look at it first to examine if an
investment in VMC will be good for us," Ms. Aguilar said.

The due diligence audit, which will cover VMC's finances
and operations, will be done by the three companies to
determine the feasibility of buying into VMC which is
considered the country's largest sugar mill.  Out of five
firms which formally expressed interest in VMC, only two
companies -- RCBC Capital and agribusiness multinational
Cargill Philippines, Inc. -- prequalified for the auction

In a previous interview, a CADP official said VMC's debt
and the prevalence of sugar smuggling has made capital
infusion into the company economically unviable.  VMC's
original debt stood at PhP6.6 billion ($162.4 million) but
PhP1.5 billion ($36.9 million) out of its total liabilities
has already been converted into equity for the firm's
creditor banks.

Ms. Aguilar, however, said CADP and CAC will give VMC a
second look, saying a merger with VMC will help the
industry cope with increased trade liberalization.

"We're seeing a consolidation in the industry. The moment
is right for the industry to change face in the midst of
globalization... We feel that we can play a major role by
correcting whatever defects the industry has especially in
terms of efficiency but we cannot do it alone," she said.

A Negros Occidental-based sugar-cane planter, who requested
not to be named, said CADP and CAC's purchase of a majority
stake in VMC will allow the Roxas family to become the
country's biggest sugar miller.  The planter source said
the merger will allow the Roxas family to produce close to
30% of the country's overall raw sugar output. VMC alone,
which is considered the country's largest sugar mill,
accounts for 12% of the country's raw sugar production.

VMC is capable of processing 12,000 to 14,000 metric tons
of sugarcane daily. CADP and CAC, on the other hand, are
able to process daily 10,000 MT and 11,000 MT of cane,
respectively. (Business World  04-Feb-2000)


ASIA FINANCE SYNDICATE: Lawsuits could to block repayment
Loopholes in the FRA Act threaten to undermine the entire
process of repaying creditors of the 56 defunct finance
companies, following a civil suit filed by a creditor
against Asia Finance Syndicate.

The Financial Sector Restructuring Authority is due to
begin repaying creditors after liquidating assets in the
next few months.  Most creditors of the finance companies
have signed contracts with the FRA to abide by its
repayment procedures.

But one creditor of Asia Finance Syndicate, one of the 56
firms, also filed a suit late last year with the Civil
Court even after agreeing to follow the procedures.

The FRA was concerned that this would place other creditors
who had agreed to comply with the authority's claims
settlement process at a disadvantage.  The FRA filed a
bankruptcy suit two weeks ago against Asia Finance
Syndicate to allow the court to settle claims and suspend
other legal actions against the firm.

On Wednesday, the Central Bankruptcy Court declared Asia
Finance Syndicate bankrupt, putting the company into
receivership. Montri Chenvidyakarn, FRA secretary-general,
said the action was necessary to prevent similar suits
being filed against other suspended finance companies.

In the case of Asia Finance Syndicate, all creditors would
now have to submit their claims with the court within two
months, even if they had already registered with the FRA.
Dr Montri said the FRA was ready to assist creditors in
filing their claims with receivers of the Legal Execution

"The civil case filed against Asia Finance Syndicate
involved debt of around 10 million baht," he said.
"Another 17 companies were preparing to also file suit, for
debt about 140 million. If the FRA didn't file for
bankruptcy, the result would have been that the creditors
who did file suits would have gained an advantage,
receiving full payment for their claims, in addition to a
share from the FRA," he said.

Dr Montri blasted the actions as taking unfair advantage of
other creditors who had complied with the rules and
contract terms of the FRA process.  Asia Finance Securities
has assets of about 2.4 billion, with outstanding
liabilities of about 7.4 billion baht owed to 85 creditors,
largest being the FRA holding around 95% of total claims.

Dr Montri said the legal process would cause final
repayment to creditors to be delayed by up to two years, as
documents would have to be re-examined by receivers. In
contrast, creditors under the FRA process are expected to
be repaid by June.

"Creditors of the finance companies do have the right to
sue. The purpose and goal of the FRA was to ensure
repayment as quickly as possible, to help foster recovery,"
Dr Montri said.  "But it's beyond our power to prevent
this, since the laws don't prohibit creditors from taking
civil action even after they have accepted the conditions
of the FRA process."
Another four or five creditors are reportedly preparing
similar suits against other finance firms under the
Financial Sector Restructuring Authority's supervision.
The FRA says it will file bankruptcy against any other
finance companies which have creditors filing civil suits,
ultimately resulting in years of delay before final payment
can be made.

In any case, payment to creditors of the proceeds raised to
date will proceed over the next six months, after which the
Financial Sector Restructuring Authority will file suit to
close the finance companies permanently. The FRA has raised
186 billion baht from asset auctions held over the past two
years, representing some 28% of the total outstanding
principal balance of assets.  Dr Montri said the Financial
Sector Restructuring Authority would begin repaying
creditors of two firms, Royal International and Muang Thong
Trust, in March. (Bangkok Post  04-Feb-2000)

ATEC COMPUTER: Loses court battle over illegal software
The Criminal Court has found ATEC Computer, a well-known
computer-system manufacturer, guilty of loading its
machines with illegal software.  The case is considered as
the first instance where the world's largest software
developer, Microsoft, has gone after a local computer
manufacturer demanding severe penalties.  

The Criminal Court fined ATEC Computer Bt400,000 for
copyright violation. A company director received an
additional one-year suspended jail sentence and a fine of
Bt200,000. The salesman responsible for selling the
computer installed with the unlicensed Microsoft software
was punished with a nine-month suspended jail sentence and
a fine of Bt150,000.  The total fines amounted to

Microsoft law and corporate affairs legal officer Kenny
Cheung said that the stiff penalties were needed to deter
software infringement in Thailand.  "This is a very large
fine imposed by the court involving computer software. It
will leave no doubt in the minds of illegal software
dealers that they will face stiff penalties for copyright
violations in Thailand,'' Cheung said.

ATEC Computer was caught loading unauthorised copies of
Microsoft software on computers and selling them to the
consumers without the appropriate documentation, license
agreements, original disks or manuals.  Nithiphat
Limwanichart, general manager of ATEC Computer said that
the announcement from Microsoft at this time has had a
negative effect on the company's reputation because it is
in the process of appealing to the US Supreme Court. So, it
is not acceptable to speak about the case in public.

"I think that any announcement should be withheld until
after the Supreme Court makes the final judgement,"
Nithiphat said.

According to Cheung, not only were consumers cheated out of
the genuine software, but also honest dealers, trying to
develop a successful business legally, ended up shouldering
higher costs because of dealers selling illegal software.

"Unless decisive action is taken against illegal software
dealers, they will continue to sell unauthorised software
and make it very difficult for local developers and dealers
of genuine software to compete in the Thai market.  Strict
protection and respect for copyright is a critical factor
in the healthy development of the Thai software industry,''
he said.

Cheung believes that copyright owners and local
distributors have seen some positive developments in the
information technology sector in Thailand recently, which
will have positive effects for the economy in the long-

"While there is an unacceptably high piracy rate of over 80
per cent, we have seen increased efforts by Thai
enforcement agencies to crack down on piracy," he said.
"As illustrated in this case, there has been greater
efficiency in processing cases coming before the courts in
Thailand and an increase in the level of fines imposed
against copyright offenders."

This is the second significant court ruling against ATEC
Computer and follows two years of comprehensive
investigation and legal action. The case resulted from the
Dealer Test Purchase Program (DTPP) conducted in February
1997, after which Microsoft filed two private criminal
actions against ATEC Computer.

The second case has already been concluded in the Central
Intellectual Property and International Trade Court where
ATEC Computer and a director were fined in excess of Bt1
million in May 1999. (The Nation  05-Feb-2000)

BAN CHANG PLC: Facing bankruptcy after creditor sues
After failing to repay a creditor owed Bt36 million, Ban
Chang Plc and its major shareholder Pairote Piempongsant
face a bankruptcy lawsuit.

In its affidavit, Siam Sanwa Industrial Credit Plc (SICCO)
identified Ban Chang, Pairote and Prayoon Chindapradit as
responsible for the debt. Pairote is the founder, president
and a major shareholder of the debt-ridden company. Prayoon
is an authorised director.  Ban Chang's debts snowballed
due to the slump in the property market and a business
strategy that concentrated mostly on the eastern seaboard.
It owes creditors a total of Bt4 billion. The company is
now in the process of rehabilitating itself.

In 1996, Ban Chang borrowed Bt25 million from SICCO. After
Ban Chang didn't repay the debt, SICCO took the company to
civil court. On Dec 30, 1997, the court ordered the three
debtors to repay the debt and set the interest rate at13.75
per cent per annum.

"The case is brought to the bankruptcy court because the
defendants failed to repay debts in accordance with the
civil court's order made on Dec 30, 1997," SICCO said in
its affidavit.

Ban Chang used land and buildings in Rayong as collateral
for the loan. Under the loan contract, SICCO can force a
sale of the land if repayment is not made. If the proceeds
from the sale are less than the debt, the three defendants
have to pay the shortfall, according to the contract.

As the three have not yet repaid the debts, SICCO is
pressuring the company to sell the property, which is
valued at Bt13 million. The property is still unsold, it
said.  SICCO submitted two requests to the company to sell
the land, but had not received a response, the finance
company said.

As Ban Chang has not yet submitted financial statement for
1998 to the Commerce Ministry, the defendants are
considered bankrupt, said SICCO, which asked the court to
place the assets of the three defendants in receivership.
The most recent financial statement of Ban Chang was for
the first nine months of 1997. The company lost Bt1.43
billion, according to that statement.

Since 1996, Ban Chang has put development projects on hold
and sold many stakes in affiliates and other companies. To
survive, the company initiated a programme to develop and
sell projects quickly. The projects were offered cheaply
but the proceeds could not cover the huge debts incurred
from the company's massive expansion during the property
market boom.

Four years ago, Ban Chang was in a very different position.
It was a large property developer focused mainly in Rayong
province. It anticipated huge profits from the eastern
seaboard development project.  The Central Bankruptcy Court
has scheduled the first hearing for Feb 11. (The Nation  

BANGKOK BANK: To stay in red this year
Bangkok Bank chairman Chatri Sophonpanich said yesterday
the bank will not return to profitability this year, but
operating performance is encouraging and the bank should
break even by the end of the year.

His comments came a day after Thai Farmers Bank (TFB)
president Banthoon Lamsam said he is confident his bank
will return to profit this year.  Chatri said BBL would
increase its provisioning to cover all of its
non-performing loans (NPLs) later this year in line with
central bank requirements.

"The bank cannot avoid losses this year because of non-
performing loans, which are a major burden for the bank in
terms of loan-loss provisions. But the number of non-
performing loans are falling due to the significant
progress being made in debt-restructuring and write-offs,"
he said.

According to a recent filing to the Stock Exchange of
Thailand, BBL's net losses last year totalled Bt60.1
billion against losses of Bt49.5 billion the year before.
Fitch IBCA, the London-based rating agency, predicted that
TFB will be the only Thai bank to show a net profit this
year, while others continue to suffer the need to build
reserves against problem loans.

"In our view, it (TFB) has been the most proactive in
dealing with the crisis," said Vincent Milton, Fitch
associate director responsible for risk assessment of the
Thai banking sector. "All the others will report net

Milton painted bright future prospects for the bank, noting
that it has already met full provisioning requirements
after raising almost Bt100 billion in fresh capital, but
the other seven big banks need a total of US$3.5 billion
(Bt129.5 billion) to deal with bad loans from the Asian
financial crisis.  As of the end of last year, problem
loans in the Thai banking system stood at Bt1.98 trillion
or 38.2 per cent of total credits. Milton is now in
Thailand to meet bank executives ahead of a ratings review
in March.

"TFB stands out. It is fully provisioned in line with our
projected loan losses so its capital adequacy should be OK.
It is the only large bank in such a position and the only
one we see reporting a net profit for this year," he added.

Milton also praised TFB's decision to ask Goldman Sachs and
GE Capital to help run an asset management company to
manage its non-performing loans (NPLs), an innovation that
he said would be watched closely by other banks.  Fitch
IBCA put TFB on "Rating Alert Positive" this week, giving
notice that it was likely to raise its individual rating
for TFB from its current level of D/E in the next few

Milton said the two other biggest Thai commercial banks,
BBL and Siam Commercial Bank (SCB), had also made progress
towards re-capitalisation but both needed to set aside
further huge sums to cover non-performing loans. Milton
said BBL needed to set aside at least Bt26 to Bt30 billion
more in provisions.

"We would be surprised if its earnings can get anywhere
close to that figure, so it will report a net loss for this

For SCB, he said he had "some concerns" about the level of
the bank's proactive debt restructuring.  "There is some
downside risk for SCB. We would expect another net loss for
this year," he added.

The other two large Thai banks, Thai Military Bank (TMB)
and Bank of Ayudhya (BAY), had made less progress with re-
capitalisation and managing their bad loan portfolios and
both needed to set aside further provisions against bad
loans. (The Nation  05-Feb-2000)

BANGKOK METROPOLITAN BANK: Ex-execs criminally charged
Two former Bangkok Metropolitan Bank executives have been
formally charged by police with breaching banking and stock
exchange laws.

Former bank president and Thailand Board of Trade chairman
Vichien Tejaphaibul and former bank executive director
Panya Tantiyawarong were yesterday charged with having
violated the Bank of Thailand and Stock Exchange of
Thailand laws during the period leading up to the bank's
bad debt crisis, police said.   

Panya denied the charges and was released on Bt700,000
bond.  Police have unsuccessfully sought Senate permission
to proceed with legal action against Vichien, who is a
senator, during the present session of Parliament. (The
Nation  05-Feb-2000)

SSP GROUP: Plans to focus solely on steel production
SSP group has decided to focus only on steel production and
plans to discard its non-core businesses, according to the
company Executive Chairman and Chief Executive Somsak

SSP Group conceded that during the economic boom, the
company made several unwise investments, venturing into
businesses in which it had no expertise. The hard lessons
of the past have led the company to focus on its core
business--steel production, Somsak said.

"Steel manufacturing was one of our forte with over 40
years of experience, and we will continue to keep it as
well as the related production companies," said Somsak.

He said SSP produced roughly 4.5 million tonnes of steel
product annually; most of it was for local consumption.
However, with the new direction, SSP aims to increase
exports by $300 million in three years.  In addition, he
said the company planned to reshape its steel-related
businesses such as construction and property development.

As part of the new strategy, the company had sold part of
its health care interest in Vejsawad Hospital, Srisiam
Hospital, Chularat Hospital Center and Public Health and
Environment.  Meanwhile, Felex Hotel, one of SSP's
subsidiaries, was also under restructuring process with the
possibility of joint venture with new partners, he said.

He denied that the conglomerate's decision to change
business course had anything to do with last year's
bankruptcy lawsuit, filed by HEI Thailand Group, SSP's
partner in Siam Power Generation Co. The lawsuit, he
continued, was not involved with financial matters but was
only a dispute regarding ownershi stakes in the power

The conflict began when SSP signed a deal to buy 12 percent
stake in financially ailing Siam Power from HEI Group,
which owns 36 percent stake in the power company. (Business
Day  04-Feb-2000)

SSP GROUP: Somsak seeks deal with HEI
Somsak Leeswasditrakul, chairman and chief executive of SSP
Group, is stepping up efforts to seek a compromise over a
bankruptcy suit filed by HEI Thailand (Rayong) Co, his
business partner in a power plant joint venture.

He said that failure in negotiations for the acquisition of
a 12% stake in Siam Power Generation Co, from HEI Thailand,
was a major reason behind the suit.  HEI holds a 36% share
in Siam Power Generation, a subsidiary of the SSP Group,
under a joint-venture agreement made on June 12, 1998.
The failure in the talks was attributed to different views
over share prices.

"HEI wants to sell shares at a price based on the current
baht value while our group wants to use the price in the
original agreement. Neither one of us wants to bear foreign
exchange losses which have occurred," Mr Somsak said.

Although the suit was already filed, the negotiations were
under way, said Mr Somsak, adding that he believed an
agreement would be finally reached.  In the suit filed late
last year, HEI told the Bankruptcy Court that Mr Somsak did
not comply with the joint venture agreement to establish a
450-megawatt power plant in Rayong. The non-compliance
caused 342 million baht in damages to the company, HEI

HEI wanted to sell its 12% stake in Siam Power Generation
after the SSP Group decided to reduce production capacity
from 450 megawatts to 300 megawatts.  But Mr Somsak said a
decrease in public demand for electricity consumption, due
to the economic crisis, made it necessary for the
production capacity reduction by Siam Power Generation.

The suit is the second bankruptcy case involving Mr Somsak.
In September last year, Siam Syntech Construction Plc, an
SSP subsidiary, was sued by Nakornthon Leasing for
bankruptcy over its failure to settle a debt of 46 million
baht.  Recently, the Central Bankruptcy Court dismissed the
suit, noting Siam Syntech was not insolvent.

Tony Chan, executive director of Siam Syntech Construction,
said the company was in the process of debt restructuring
under the supervision of the central bank's corporate debt
restructuring advisory committee.  Siam Syntech was also
restructuring its management team to boost work efficiency.

Mr Chan said creditors currently resorted to the bankruptcy
law despite the fact that debtors were able to repay the
money.  He added that in his opinion, creditors should, in
the first instance, file a suit against debtors in the
Civil Court.  The Central Bankruptcy Court should be a last
resort if debtors are proven unable to repay debt.

Businesses under the SSP Group umbrella include those
involved in steel production, property development, hotels,
hospitals, construction, electricity generation, and
commerce.  Mr Somsak conceded that his group had
diversified into various businesses since 1997 but now had
trouble in some businesses in which it had insufficient
expertise.  Because of this, the group had decided to
concentrate on steel production, he said.

"Steel production is a core business we have engaged in for
more than 40 years. So from now on, we will give an
emphasis to the steel business and other related areas."

Steel production capacity, under the SSP Group, totals
around 4.5 million tons annually, most of which is
exported.  For the construction and property development
business, Siam Syntech Construction would act as a core
unit to speed up restructuring operations.  

For the hotel business, the group would try to streamline
the operations of eight hotels it owns through Felix Hotel
and Resorts and would later seek new partners.  The group
plans to sell shares of all hospitals it owns including
Vejsawad, Srisiam, Chularat and the Public Health and
Environment Hospital. (Bangkok Post  04-Feb-2000)

VANACHI GROUP: Reports debt-rehab progress to SET
According to Vanachai Group Public Company Limited and
subsidiaries, through Mr.Wanthana Jareonnawarat, Director,
company consisted of Particle Planner Co.,Ltd.,Vanachai
Chemical Industries Co.,Ltd.and VanachaiPanel Industries
Co.,Ltd. have negotiated for debt restructuring with the
financial institute creditor of company and subsidiaries
company consisted of Thai Military Bank Public Company
Limited, Bangkok Bank Public Company Limited, Krung Thai
Bank Public Company Limited, Thai Farmer Bank Public
Company Limited, The Industrial Corporation of Thailand and
DBS Thai Danu Bank Public Company Limited, And agreed to
sign in debt restructuring contract on December 29,1999

The creditor has agreed with favourable in conditions of
debt payment to debtor, and to be postponed the payment
period of credit. Also, summarized in conditions of debt
payment as contract as followings:

1. The long term debt burden of company and subsidiaries
company before debt restructuring on December 29, 1999

1.1 The debt burden - old
(Thousand Baht)
Principal Accrued interest Total
Vanachai Group Public Company Limited
and subsidiaries company
- Thai Military Bank 2,142,487 177,264 2,319,751
- Bangkok Bank 1,291,008 195,689 1,486,697
- Krung Thai Bank 678,908 115,298 794,206
- Thai Farmer Bank 893,182 227,516 1,120,698
- IFCT 678,908 115,298 794,206
- DBS Thai Danu Bank 580,793 132,334 713,127
Total 6,265,286 963,399 7,228,685

1.2 The debt burden according with debt restructuring
(Thousand Baht)
Principal Reduced Accrued interest Total
Vanachai Group Public Company Limited
and subsidiaries company
- Thai Military Bank 2,142,487 120,980 2,263,467
- Bangkok Bank 1,291,008 133,297 1,424,305
- Krung Thai Bank 678,908 85,967 764,875
- Thai Farmer Bank 893,182 176,715 1,069,897
- IFCT 678,908 85,967 764,875
- DBS Thai Danu Bank 580,793 101,060 681,853
Total 6,265,286 703,985 6,969,272

2. On the signature of debt restructuring contract date ,
Company and subsidiaries
company has paid the principal and accrued interest as
(Thousand Baht)
Principal Accrued interest Total
Vanachai Group Public Company Limited
and subsidiaries company
- Thai Military Bank 159,092 - 159,092
- Bangkok Bank 95,865 - 95,865
- Krung Thai Bank 50,413 - 50,413
- Thai Farmer Bank 6,908 64,182 71,090
- IFCT 50,413 - 50,413
- DBS Thai Danu Bank 43,127 - 43,127
Total 405,818 64,182 470,000

3. The balance of long term debt burden after the signature
of debt restructuring contract date

(Thousand Baht)
Debt restructuring
Debt burden Part no1 Part no2 Part no3 Part no4 Part no5
Vanachai Group Public Company Limited
and subsidiaries company

- Thai Military Bank 2,104,375 104,933 1,658,620 219,841
60,490 60,490
- Bangkok Bank 1,328,440 63,230 999,442 132,471 66,649
- Krung Thai Bank 714,462 33,251 525,582 69,663 42,983
- Thai Farmer Bank 998,807 46,889 741,149 98,235 56,267
- IFCT 714,462 33,251 525,582 69,663 42,983 42,983
- DBS Thai Danu Bank 638,726 28,446 449,625 59,595 50,530

Total 6,499,272 310,000 4,900,000 649,468 319,902 319,902

Conditions of debt restructuring (by sumarized) with
regarding the principal of loans and interest.

Part no.1 The principal of loan amounts - Vanachai Group
Public Company Limited will be 310,000 Thousand baht
increase capital and issued newly-ordinary share amount
31,000,000 Share price 10 baht/ share to the creditors. For
bringing the sales of share to pay the creditors (to
completely operated within March 1, 2000)

Before December 30, 2002 The Vanachai Group of
Companyco.,Ltd. and/or Mr. Sompon Sahavat (Major
Shareholder/Repurchaser) which is the creditors have agreed
of buying the ordinary share from the creditors at 10
baht/share included with increasing payment at MLR (average
of Thai Military Bank , Bangkok Bank and IFCT) of credit
amount 80 M.Baht since, the creditors have paid the capital
increase until the buying return date of ordinary share
from the creditors or buying return at average value which
price are valuable

Part no.2 The principal of loan amount - Change to be long
term loans, which pay to the 4,900,000 Thousand baht
creditors within 12 years (at the end of every quarter)
since January 1, 2000
Interest rate is MLR (average of Thai Military Bank,
Bangkok Bank and IFCT)

Part no.3 The principal of loan amount - Changing to be
long term loans, which pay to 649,468 Thousand baht the
creditors within 14 years since December 29, 1999 by
divided the principal of loans payment to be 6 times
according to the schedule and credit amount as follow:

1st 107,373 Thousand baht due date of loan
payments on June 30, 2011
2nd 107,373 Thousand baht due date of loan
payments on December 31,2011
3rd 119,143 Thousand baht due date of loan
payments on June 30, 2012
4th 119,143 Thousand baht due date of loan
payments on December 31, 2012
5th 98,219 Thousand baht due date of loan
payments on June 30,2013
6th 98,217 Thousand baht due date of loan
payments on December 31, 2013

1st year interest rate is 9.5% and 2nd year onwards is
10.4025% with accrued interest not later than one year the
accrued interest has to add into the principal imediately.
By suppose to be the principal payment and interest payment
as same the interest rate as stated above until the
principal payment has completely.

Part no.4 Reduced accrued interest - To be paid within
December 15,2014
amount 319,902 Thousand baht

Part no.5 Reduced accrued interest - The creditors have
agreed to reduce debt for
amount 319,902 Thousand baht the debtor on the signature of
debt restructuring contract date.

In condition of, If the debtor breaks the contract the
creditors have full authorized to cancell the condition of
reduced interest and to ask for full amount interest
payment.  (Stock Exchange of Thailand  01-Feb-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
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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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