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     T R O U B L E D   C O M P A N Y   R E P O R T E R

                           A S I A   P A C I F I C

            Tuesday, February 8, 2000, Vol. 3, No. 27

                                    Headlines


* I N D O N E S I A *

BANK CENTRAL ASIA: Says it will repay $3.4B in loans
PT ASTRA INT'L: Tuesday meeting may become showdown
PT ASTRA INT'L: IBRA under pressure to sell stake by April
PT BUNAS FINANCE INDONESIA: Disclosure of Information


* J A P A N *

NCR JAPAN LTD.: To report likely pretax loss for year
NISSAN DIESEL: Unveils more restructure details


* K O R E A *

KOREA DEVELOPMENT LEASING CORP.: IFC backs debt restructure


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

BW RESOURCES CORP.: SEC move on stock deals probe awaited
GLOBE TELECOMS GMCR: Pre-paid charging scheme to be probed
ISLA COMMUNICATIONS: Globe wants capital hike pre-merger
PACIFIC LENDERS INC.: Diores collared on fraud cases
PHILIPPINE NAT.BANK: Gov't may seek local audit too
SMART COMMUNICATIONS: Pre-paid charging scheme to be probed
UNIWIDE SALES WHSE.CLUB: French firm buys controlling stake
VICTORIAS MILLING CO.: Cargill, RCBC group shortlisted


* T H A I L A N D *

KRUNG THAI BANK: Chief admits bad debts, dirty hands
NAKORNTHAI STRIP MILL: FRA sells shares for B125.28m
THAI AIRWAYS INT'L: Signs guarantees for new Boeings
THAI BARODA INDUSTRIES: New ordinary shares sold in rehab
THAI MILITARY BANK: Regroups in 12 new divisions
TK GROUP LAND: Haggling with creditors


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

BANK CENTRAL ASIA: Says it will repay $3.4B in loans
----------------------------------------------------
Indonesia's giant Bank Central Asia (BCA) has said it will
eventually be able to repay 3.4 billion dollars in
emergency central bank liquidity loans, the Antara news
agency said Sunday.

"BCA has relatively improved. At the close of 1999 it had a
surplus of some 200 billion rupiah ($266 million)," Antara
quoted BCA president director D.E. Setijoso as saying.

Setijoso however gave no timeframe for the return of the 26
trillion rupiah to the central bank.  The Indonesian Bank
Restructuring Agency (IBRA) took over 92.8 percent of BCA,
once Indonesia's largest private bank owned by the Salim
(Liem Sioe Liong) group, in 1998 after a run on the bank by
panicked depositors as the whole banking system foundered
under the impact of the crisis.

But on Thursday the Jakarta Stock Exchange gave the green
light to the bank to list itself on the Stock Exchange,
saying the move was warranted by its year-end results.

"Bank Central Asia has principally met all the requirements
to list its shares at the Jakarta Stock Exchange, except on
the requirement that it has recorded operating profit and
net profit for at least two consecutive years," a statement
issued by the exchange said.

Despite booking an operating loss and a net loss in 1998
"it was found that the cause of the losses ... was due to
the economic crisis which was faced by almost all
companies, not only in Indonesia, but in Asia as well," it
said.

The exchange quoted a BCA letter as saying the bank's
planned public offering would "help accelerate national
economic recovery which ultimately would help speed up
(corporate) debt payments to IBRA.

The letter added: "Bank Central Asia's privatisation is
expected to improve the bank's performance. This should
also help speed up the recovery of bank activities in
Indonesia in general, which ultimately will have a positive
impact on the real economy (manufacturing and industry
sector)."

On Friday Setioso told a parliamentary financial committee
that the bank's assets are currently worth about 93
trillion rupiah, and it expected a substantial increase in
earnings in 2000.

"Our aim is to make BCA a local bank that can compete with
foreign banks," Setiyoso said.  "But this objective does
not rule out the possibility for foreign banks to purchase
a stake in BCA," he was quoted as saying by AFX-Asia, an
AFP financial affiliate. (Business Day  07-Feb-2000)

PT ASTRA INT'L: Tuesday meeting may become showdown
---------------------------------------------------
Tuesday's extraordinary general meeting of PT Astra
International's shareholders is shaping up to be a showdown
between the Indonesian Bank Restructuring Agency (IBRA) and
the Astra management led by Rini Soewandi.

IBRA, which claims to own 45 percent of the country's
largest automobile company, will push ahead with its
proposal to unseat Rini in a final bid to speed up the sale
of its Astra stake before the end of next month.  But some
analysts say the replacement of Astra management could
speed up IBRA's sale of its Astra shares but at a lesser
price as investors' interests might be dampened by the
appointment of a new management team with an unknown track
record.

They said IBRA might find it hard to convince other
shareholders of the merits of a massive management shake-up
at a time when the company is enjoying a robust recovery.
At the meeting, the Rini Soewandi-led management will
likely flaunt its impressive performance record in leading
the company through a critical period in 1998 when the
Astra share price plunged to as low as Rp 225 under the
weight of the economic crisis and political uncertainty.
Astra shares are currently hovering at Rp 3,700.

Astra, which reported a net profit (unaudited) of more than
Rp 808 billion (US$109 million) last year, against a net
loss of over Rp 1.9 trillion in 1998, is also one of the
few Indonesian companies to succeed in gaining foreign
creditors' trust for restructuring $1 billion in debts.
But a change in management tops the meeting agenda as IBRA
blamed the failure of its previous deal with an American
investor group led by Newbridge Capital/Gilbert Global on
the uncooperative attitude of Astra management.

Goei Siauw Hong, Head of Research at securities company PT
Nomura Indonesia, said IBRA would easily gain majority
votes for its proposal for a management shakeup because
Rini, who became Astra chief executive officer (president)
in June, 1998, was popular among creditors and bankers but
not among Astra shareholders.

"I think Rini is not working for the shareholders, and the
Astra management has not been as transparent as it often
claims," Hong said.

Hong cited the recent sale of Astra Securities and several
other questionable transactions with companies controlled
or affiliated with politically powerful businessman Mohamad
Bob Hasan in 1997.

"We do not know until now what was the sale price of Astra
Securities company," he added.

Hong said Astra's management created suspicion when it
resisted the due diligence process that would have been
executed by Newbridge/Gilbert as part of its deal with
IBRA.  Newbridge/Gilbert did not have a problem with the
confidentiality agreement demanded by Astra, except that it
unusually contained an "indemnity clause" which the
investor group could not accept, Hong added.

"The investor group was afraid Astra management would have
used a nominee to sue the investor consortium later on
based on that indemnity clause," he said.

But Hong also admitted that even if some irregularities
were found in a due diligence investigation, they might
involve just one or two hundred billions of rupiah which
are relatively not significant for a company of Astra's
size.  Another analyst, Arif Arryman from ECONIT research
institute, said it would be an enormous scandal if the
rights of IBRA, as the holder of 45 percent stake in Astra,
were not be honored at the Astra shareholders meeting on
Tuesday.

"The sale of Astra shares is greatly important to support
the state budget and to restore IBRA's credibility in
wooing back foreign investors to accelerate the country's
economic recovery," Arryman said.

In December, IBRA chose Newbridge/Gilbert as the preferred
bidder for its Astra stake, but the American investor group
failed to conclude a definitive agreement by the end of the
exclusivity period on Jan.31.  Newbridge/Gilbert has blamed
Astra management for obstructing a due diligence
investigation, but Astra management flatly rejected the
allegation saying that it simply asked for a
confidentiality agreement to protect Astra and the
interests of shareholders and to indemnify Astra directors
against legal consequences for disclosing proprietary
information.

IBRA decided last week to terminate its controversial
agreement with Newbridge/Gilbert and opened a competitive
bid that offers a fair opportunity to all interested
investors. (The Jakarta Post  07-Feb-2000)

PT ASTRA INT'L: IBRA under pressure to sell stake by April
----------------------------------------------------------
The Indonesian Bank Restructuring Agency (IBRA) is under
pressure to sell its 40% stake in automaker PT Astra
Internasional (JSX:ASII) before the end of March, an IBRA
official said.

IBRA needs to raise Rp17 trillion (US$ 242 million) in
fresh funds to cover budget gaps for the current fiscal
year ending on March 31, said Arwin Rasyid, deputy chairman
of IBRA. Some of the funds are expected to be generated by
the sale of the 40% Astra stake. "We are running against
time," Rasyid said.

The process of selling the shares suffered a setback after
the cancellation of an agreement with Newbridge Capital and
Gilbert Global Equity Partners, which previously were given
the status of preferred bidders.  The agreement was revoked
as the US investment companies failed to come up with a
fixed price until the agreement ended on January 31.

IBRA, therefore, has invited new bidders interested in the
40% stake. So far 30 investors have indicated interest "but
until now only three or five of them are serious," Arwin
said.  "Hopefully a short list could be announced this
month and we would be ready to have the final bidding," he
added.  (Asia Pulse  03-Feb-2000)

PT BUNAS FINANCE INDONESIA: Disclosure of Information
-----------------------------------------------------
PT Bundas Finance Indonesia Tbk reported to the Jakarta
Stock Exchange that: 1. According to IBRA, total of
transferred company's debt to IBRA is Rp 95.683.109.424,-,
USD 19,000,000 and DM 8,000,000. Those debts represented +
14% from total of the company's debt to creditor.
Recently, company has been waiting the approval from the
company's creditors of proposal of the company's debt
restructuring.

The steps which will be conducted by company, besides
waiting the approval from creditors is giving a further
explanation regarding proposal of debt restructuring to the
creditors who had not given yet their approval.  Besides
that, the proposal of the Company's debt restructuring was
approved by shareholders and the company's independent
shareholders in the Extraordinary Shareholder Meeting
conducted on 27 January 2000.

2. The company had signed Letter of Commitment and
undertaking dated 21 June 1999.

PT Bunas Finance Indonesia Tbk released the announcement as
per Yose Rizal, Head of Listing Division and Bambang
Aribowo, Pjs. Head of Trading Division. (Jakarta Stock
Exchange  03-Feb-2000)


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

NCR JAPAN LTD.: To report likely pretax loss for year
-----------------------------------------------------
NCR Japan Ltd. (TSE:6953) is likely to report a pretax loss
of 1.2 billion yen for the fiscal year ended December, the
company announced Wednesday, a slight improvement on the
year-earlier 1.9 billion yen pretax loss.

A higher ratio of profitable products among sales figures
and reduced personnel costs are credited with the smaller
loss.  An extraordinary profit of 12 billion yen from the
sale of its head office should help the manufacturer of
electronic business equipment post a net profit of 7
billion yen, compared with a net loss of 9.2 billion yen in
fiscal 1998.

Sales appear to have fallen 22% to 71.2 billion yen, down
about 10% in real terms after factoring out the transfer of
some automated teller machine operations. Sales to the
distributing industry are expected to show increases, but
the figures will reflect reduced equipment purchases by
financial institutions due to the Y2K problem.

NCR Japan is to be delisted on June 30 following a takeover
bid by the U.S. parent company.  (Asia Pulse  03-Feb-2000)

NISSAN DIESEL: Unveils more restructure details
-----------------------------------------------
Nissan Motor has unveiled the most detailed picture yet of
its restructuring plan for Nissan Diesel, centred around a
four-year credit line and a joint distribution arrangement
with alliance partner Renault.

Nissan and Renault, which owns 36.8 per cent of the
carmaker and 22.5 per cent of Nissan Diesel, the commercial
vehicles arm, will oversee a plan to raise funds through
asset securitisation, the sale of marketable securities and
bond issuance.

The plan is aimed at bolstering the finances of the
troubled truck group, which had interest-bearing
liabilities of �500bn ($4.66bn) as of last March, and
soothing market concerns about its future. Nissan Diesel's
share price has almost halved over the past year.

At the core of the multi-pronged plan is a four-year,
�200bn credit line arranged by agroup of four banks
including the Industrial Bank of Japan and Fuji Bank. The
move affirms the banks' commitment to supporting Nissan
Diesel, considered one of the critical elements to the
success of the alliance with Renault.

Renault has said that any collaboration with Nissan Diesel
would hinge on a debt restructuring programme. In securing
the credit line, Nissan has essentially secured the co-
operation of Renault VI, the French carmaker's truck unit.

The banks will also oversee the securitisation of Nissan
Diesel's plant in Ageo, outside Tokyo. Nissan said the
truckmaker would sell marketable securities and issue a
convertible bond worth about �5bn.

The timing of the issue was not clear. However, Nissan said
last December it expected the bond and other measures to
result in a total cash injection into the truckmaker worth
nearly �10bn.  But the announcement left several questions
unanswered. Renault and Nissan have hinted at co-operation
on purchasing - one of the largest potential areas of
synergy - as well as distribution and marketing, but this
was not mentioned.

It was also unclear how Nissan Diesel, which is expecting
�21bn in net non-consolidated losses in the year to end-
March, would tackle other problems such as those in its
heavily indebted domestic dealership network.

Analysts said the scheme was clearly an effort to support
Nissan Diesel in an extremely tough market. Peter Boardman,
analyst at Warburg Dillon Read, said that while Nissan
Motor's credit exposure to its truck arm was only �36bn,
Nissan Diesel would need to think of ways to raise sales.
Other analysts warned this was unlikely to be easy.
(Financial Times  07-Feb-2000)


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

KOREA DEVELOPMENT LEASING CORP.: IFC backs debt restructure
-----------------------------------------------------------
Korea Development Leasing Corporation is to restructure
debts equivalent to $3bn with the help of a $68m investment
from the International Finance Corporation, the private
sector investment arm of the World Bank.

The IFC said the arrangement would be the first voluntary
out-of-court restructuring of a South Korean non-bank
financial institution since the financial crisis erupted in
1997.

Orix, the Japanese leasing and financial company, is to
join in the scheme by subscribing to a Won80bn convertible
bond. It has also helped Korea Development Leasing to
revamp its management team and bring internal controls,
disclosure and transparency up to international standards.
The capital infusion, which will leave Orix and IFC holding
about 30 per cent of the company's equity, will enable the
debt to be restructured through a partial write-off of
principal, debt/equity conversion and rescheduling of debt
payments. The company declared a debt moratorium in 1998.

The IFC said its investment would include a Won20bn
convertible bond, a stand-by by loan of up to $30m for its
own account and a syndicated loan of up to $20m. (Financial
Times  07-Feb-2000)


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

BW RESOURCES CORP.: SEC move on stock deals probe awaited
---------------------------------------------------------
The Philippine Stock Exchange (PSE) will not divulge its
findings on gaming firm BW Resources Corporation and
trading on its stock unless the corporate watchdog
Securities and Exchange Commission (SEC) takes the first
step.

As of noon yesterday, PSE chairman Trinidad Y. Kalaw said
after a hearing on BW Resources at the Senate that the PSE
has yet to receive the report of its Compliance and
Surveillance Group.  "I wish I knew what the findings
(are)...(but) I don't have the slightest idea," she said.

Ms. Kalaw heads the Business Conduct and Ethics Committee
(BCEC), the special committee composed of PSE member
brokers which will decide on the case. She said the BCEC
will meet "anywhere between (yesterday) and Thursday" to
discuss the results.  BusinessWorld learned that the PSE's
fact-finding body is hastening its report which it will
submit today at the earliest.

Meanwhile, the Senate committee on banks will analyze the
computer disks containing broker-to-broker transactions
involving BW Resources Corp. shares even as the PSE winds
up its own investigations.  The nine diskettes earlier
submitted by the PSE could help the committee reach a
conclusion on possible insider trading and price fixing.

On the other hand, the SEC has tapped the expertise of a
foreign consultant firm to aid in the investigation of
stock market trades involving BW Resources.  Joseph R.
Schenk, financial markets advisor of Accelerating Growth
Investment and Liberalization with Equity (AGILE), took his
oath during yesterday's Senate investigation. He may be
called upon by the SEC once it begins a separate
investigation.  The PSE has until February 10 to submit its
report before SEC starts its own investigation.

"My assistance is not necessarily binding at all. They have
to make the decision," Mr. Schenk told BusinessWorld after
the hearing.

PSE president and chief executive officer Jose Luis. U
Yulo, Jr., on the other hand, refused to be interviewed
after the Senate hearing, fending off questions with a curt
"No comment!"

Under PSE rules, Mr. Yulo gets first crack at reading the
report which he will then forward to the BCEC for action
and disposition. The BCEC, in turn, will furnish the SEC
with the findings, together with its decision and
recommendations.

BusinessWorld learned that some brokers involved in the
case could be cited for price manipulation "in varying
degrees" which include wash sales or artificial transfer of
ownership of shares.

"Yes...anywhere from monetary (fines) to expulsion from the
exchange," Ms. Kalaw replied when asked if the PSE will
impose sanctions on wash sales.

The PSE, however, would be helpless should the violations
involve "third parties" or clients and investors. Ms. Kalaw
said the stock exchange's jurisdiction is limited to
brokers and listed companies.  BusinessWorld learned that
two local brokers are affiliated with directors of BW
Resources are said to be in hot water, although the
exchange refused to confirm nor deny this.

BusinessWorld was also learned that a ranking official of a
brokerage firm and a BW Resources official are likely to be
the sacrificial lambs and take the blame for a number of
brokers. But this could not be independently confirmed
either.

During yesterday's Senate hearing, committee chairman Raul
S. Roco sought the assistance of experts from the SEC for
the analysis of the data.

"The accountants and technicians will have to go through
the maze of papers...And then we will identify whether the
transactions were done by the same people or not," Mr. Roco
told reporters after the hearing.

The senator said a number of accounts have to be identified
to determine owners of BW Resources shares of stock who
benefitted most in the matched transactions from June to
October 1999.

"If we find out that they are all legitimate transactions,
then there is nothing to worry about. But if...there were
fraudulent transactions to increase the price -- regardless
of who suffered, whether you lost or made money -- that is
beside the point," Mr. Roco said.

He noted something "unusual" about BW Resources trades in
June, August, September and October 1999. "In June, for
instance, 450 million shares were sold. And almost all of
it were transacted...You can see that in August and
September, major volumes were (transacted) when there were
announcements of possible new investors," Mr. Roco noted.

By October, total outstanding shares of BW Resources stood
at 1.65 billion, he added.

Documents submitted by the SEC to the Senate committee show
that as of last Oct. 15, Megaworld Properties, Inc. was the
No. 1 stockholder with 1.2 billion shares, followed by PCD
Nominee Corp. with 346.8 million shares.  Presidential
friend Dante Tan was third with 76 million shares of
stocks, followed by PCCI Securities Brokers Corp. with 13.2
million shares.

The other major shareholders were Eastern Securities
Development Corp., with one million shares; Equitiworld
Securities, Inc., 500 million; PLLIM Investments, Inc.,
483.3 million; Keysdale Trading Corp., 455 million; Pablo
M. Silva, 437.5 million; Agricultural Research Farms, Inc.,
320.4 million; G.A. Machineries, 298.6 million; Fausto
Preysler, Jr., 275 million; Gerardo C. Garcia, 250 million;
Virginia, Inc., 220.3 million; Edu Chiu, 200 million; Pedro
O. Valdez, 183.1 million; F.E. Zuellig, 157.5 million;
Southern Fishing Venture, 150.9 million; and Philip Lim,
147.8 million.

SEC records show the top 20 BW Resources stockholders
controlled 1.641 billion of its total 1.65 billion stocks
as of last Oct. 15.  Meanwhile, AGILE has served as a
consultant of the SEC in several policy matters such as in
the drafting of its corporate recovery program and the
provisions in the proposed Revised Securities Act.

Earlier, it also advised the SEC that the Securities
Clearing Corporation of the Philippines (SCCP) should be
given a permanent license to operate, at a time when the
corporate watchdog was planning to issue another temporary
permit and operate alongside a bank which will also be
authorized to settle PSE trades.  It had also served as a
consultant of the PSE on matters pertaining to "governance
and clearing."

At the Senate hearing, Mr. Schenk assured there would not
be any conflict even if his group is a consultant of both
organizations, saying they both have the mandate "to
protect investors."

"Many of the tests that we're performing right now are
either for SEC or PSE. After we complete (the study), we
present it to whoever gave us the job and only after they
are approved will they go to the other organization," he
said. "I don't think there's a real conflict; there may
only be differences in opinion," he added. "(For example)
the self regulatory organization (SRO) status which we are
working on right now -- we prepared one group of procedure
for the SEC and then we will try to bring the two together
so that they'll agree on what to finalize."

He added the group's study on PSE's SRO status will be out
within the month.  Mr. Roco earlier said the PSE and the
SEC should set parameters to the SRO status of the exchange
to avoid stepping on each others' toes, as was the case in
the BW Resources investigation.

"This inquiry has made me realize that the PSE is so
divided...and therefore the SRO is in limbo. And unless we
solve that, your SRO status may be very difficult. It must
be shown to the public and to the lawmakers that there is a
potential of redeeming credibility of the market through
this effort," Mr. Roco said.

PSE received its SRO status last June 1998. As SRO, the PSE
has authority to police its own members. (Business World
08-Feb-2000)

GLOBE TELECOMS GMCR: Pre-paid charging scheme to be probed
SMART COMMUNICATIONS: Pre-paid charging scheme to be probed
-----------------------------------------------------------
The Senate is set to investigate the charging schemes of
Smart Communications, Inc. and Globe Telecoms GMCR, Inc. in
light of complaints made by pre-paid card users of
unexplained losses of call time.

Senator Ramon B. Magsaysay, Jr., who is seeking the Senate
inquiry, claimed to have received complaints on the
companies' billing procedures.  Telecommunications
commissioner Joseph Santiago confirmed in a radio interview
earlier the problems faced by pre-paid cardholders.

Mr. Magsaysay, who is trade and commerce committee
chairman, cited the inability of Globe subscribers to send
text messages after their balance goes below 50 Philippine
pesos (PhP). The solon also questioned the policy of both
cellular phone firms of imposing expiration dates in the
use of their prepaid cards.

"Currently, there are no set rules for prepaid phone card
services of our telecommunications companies who are, in
effect, free to adopt their own existing rates (and)
charging procedures... This should not be the case," he
said.  "The Senate would like to find out the matrix of
practices in the prepaid industry, that directly affect the
increasing number of users who do not want to be burdened
by billing statements," he added.

Mr. Santiago earlier explained that since the pre-paid card
system is relatively new, the National Telecommunications
Commission has yet to issue rules on their sale and use.
The commission has ordered telecommunications companies to
submit their billing procedures for pre-paid subscribers.

Mr. Magsaysay said his committee would conduct the
investigation jointly with the public services committee
chaired by Senator Vicente C. Sotto III.  For their part,
the mobile phone firms have already submitted their
respective position papers to the NTC concerning the
agency's directive for them to explain their policies on
charging pre-paid card users.  (Business World  08-Feb-
2000)

ISLA COMMUNICATIONS: Globe wants capital hike pre-merger
--------------------------------------------------------
Globe Telecom Inc. said yesterday Isla Communications Inc.-
-with over P400 million in debts--should be recapitalized
before the two phone firms could merge by the end of the
year.

"It will require capitalization considering Islacom's
debts. Hopefully, within the month, we will be able to
determine the final price for the share swap agreement for
the merger as well as the amount necessary for
recapitalization (for Islacom) before the end of this
month," Globe chief finance officer Gil Genio said.

Globe had hoped to close a merger with Islacom before the
end of 1999 following the acquisition by its parent firm,
Ayala Corp., of a controlling stake in Islacom through
Visay-Tech Inc.

"However, it seems that the last 10 percent of the work
takes up 90 percent of the time," said Genio.

He said negotiations were taking time because of the
difficulty in determining the ownership structure of the
merged entity, with Ayala, and Globe's and Islacom's
foreign partners, Singapore Telecom International and
Deutsche Telekom AG, as major stockholders.

"The merger will be a 100-percent share swap deal. There
are still negotiations going on for the final price (for
the share swap)," said Genio.

In November last year, Globe and Islacom announced that
they would execute a "definitive merger agreement" by the
second quarter of next year to form the sixth largest
telecom company in Asia in terms of market capitalization.
Ayala, SingTel and Deutsche Telekom have already signed an
agreement outlining the basic terms of the merger.

"Under the preliminary terms, Globe Telecom will issue new
common shares to Deutsche Telekom and will issue new
preferred shares to a company that will be 60 percent owned
by Ayala, 20 percent by SingTel and 20 percent by Deutsche
Telekom," Globe said in a disclosure to the Philippine
Stock Exchange.

Since April last year, when Ayala bought a controlling
stake in Islacom, Globe and its foreign partner, SingTel,
have been holding talks with Deutsche Telekom.  Industry
sources earlier said Deutsche Telekom, the third largest
telecommunications company in the world after NTT Mobile
Communications Network Inc. of Japan and AT&T Corp. of the
United States, wanted to have a larger share of the maximum
40-percent foreign ownership limit.

Pending the conclusion of merger talks between them, Globe
and Islacom will remain separate entities but will start
coordinating their operations.  Globe said a merger with
Islacom would result in the Philippines' eighth largest
company in terms of market capitalization with $1.8
billion.

Globe is currently the country's dominant digital mobile
phone operator.  Islacom is the second largest digital
cellular phone operator, with more than 100,000 cellular
subscribers. It is also the dominant local exchange carrier
in the Visayas, with 175,000 fixed line subscribers.
Globe rose as much as 16 percent to 12.75 pesos, its
highest level since July 26, on optimism that its popular
text messaging service will help boost the number of its
subscribers this year.

"That was a delayed reaction to its subscription numbers
last week," said Russell Ong, an analyst at Anscor-Hagedorn
Securities Inc.

Last Monday, Globe said it became the second mobile phone
company in the country to sign up one million subscribers,
closing the gap with main rival Smart Communications Inc.,
which had 1.025 million users at the end of 1999.  Almost
4.8 million Globe shares changed hands, more than 45 times
its six-month daily average of 106,000 shares. (Philippine
Daily Inquirer  08-Feb-2000)

PACIFIC LENDERS INC.: Diores collared on fraud cases
----------------------------------------------------
Luck finally ran out for businessman Luis "Chito" Diores
Jr. After almost a year of tracking him down, the National
Bureau of Investigation (NBI) 7 arrested Diores inside the
rented house of a friend, Vina Consul, in Nonoc Homes
Subdivision in Talisay at 5:15 p.m. yesterday.

NBI agent Linley Gabo and special investigation Arnel Pura
led the team that surrounded the residence before they
closed in on Diores, son of a former Cebu city vice mayor.
No bail was recommended for Diores who is facing several
cases for large-scale estafa and violation of the Anti-
Bouncing Checks Law.

More than 300 investors lost between P300 million and P800
million in lifetime savings and retirement benefits.
Regional Trial Court Judge Ramon Codilla issued the arrest
warrant for Diores and Korean national Soo Nam Michael Lee,
president of Pacific Lenders Inc.

Gabo said Diores, a lawyer, tried to sneak out at the back,
but returned when he saw an enforcer waiting for him. Gabo
said he found Diores inside a cabinet.  NBI 7 Director
Ramon Duyongco said they had been looking for Diores since
last July.  Diores said he was not trying to avoid arrest.
He said he just came from Davao city yesterday.

Last year, he said, he went to Manila to confer with his
lawyers. He has been in Talisay since, except for that trip
to Davao.  Diores was the executive vice president of
investment firm Pacific Lenders before it collapsed in
1998.  Small investors, including farmers, retirees,
teachers and government employes, have asked President
Estrada to help them recover their lifetime savings.

They put their money in Pacific Lenders with the promise
that they would get high returns for their investment.
The company issued them post-dated checks for the interest
their money will earn.  However, when they renewed their
investment in 1997, the bank no longer honored the checks
because the Pacific Lenders' account was closed.

Diores practised law from 1981 to 1991 when he met Lee, who
invited him to serve as one of the officers of Pacific
Lenders.  He accused the Korean of fleeing with company's
records and most of the money.  Records at the Securities
and Exchange Commission show that the lending firm has a
total debt of P240 million, consisting of loans and
placements.

Under its articles of incorporation, Pacific Lenders was
only supposed to engage in the lending business.  Diores
remains in NBI custody. (Sun Star  05-Feb-2000)

PHILIPPINE NAT.BANK: Gov't may seek local audit too
---------------------------------------------------
The results of an audit of the finances of Philippine
National Bank are worrying the Department of Finance that
it is re-evaluating if the findings of US firm Price
Waterhouse were attuned to local auditing standards.

Finance Secretary Jose T. Pardo said he had sought the help
of other economic managers to help the finance department
come up with better alternatives to best dispose of the
government's remaining 30-percent stake in PNB.  Pardo
specifically noted the loan-loss provision in the PNB audit
that was significant enough to affect the valuation of the
company.

"Foreign firms have a different standard of auditing and we
may have to check with the Bangko Sentral ng Pilipinas
whether the loan-loss provisions are valid," said Pardo.

The finance secretary, however, declined to reveal the
amount of the loan-loss provision or other salient portions
of the audit that Price Waterhouse has already submitted to
the board of PNB.  The recently published but unaudited
financial statement of PNB for 1999 could give the
government P7.28 billion for its 30-percent share from an
earlier estimate of P6.2 billion.

"We would have a series of meetings so we could have
different opinions on how best to dispose of PNB given the
findings in the audit."

PNB's bad loans, based on its report, had worsened to 29
percent of total loan portfolio from 26 percent in the
third quarter of 1999. Total non-performing loans had
amounted to P34.9 billion.  PNB's bad loans were way above
the industry average of 14.6 percent of total loan
portfolio as of November last year.

The DOF said the government was thinking of selling PNB to
financial investment groups if a block sale to a strategic
partner failed. Taipan Lucio Tan had indicated his interest
in the government's remaining 30-percent stake in PNB to
boost his holdings to 80 percent.

PNB is also saddled with the burden of behest loans from
the previous administration. Its strength, however,
includes a retail network and a large chunk of the
lucrative remittance business of Filipino overseas workers.
(Philippine Daily Inquirer  07-Feb-2000)

UNIWIDE SALES WHSE.CLUB: French firm buys controlling stake
-----------------------------------------------------------
French retailer Casino Group has come to the rescue of
cash-strapped warehouse club operator Uniwide Sales
Warehouse Club, Inc. (USWCI), agreeing to purchase a
controlling stake in the company for an undisclosed amount.

The management of Uniwide Holdings, Inc. yesterday
disclosed the French retail chain is interested in saving
one of its ailing subsidiaries by infusing much-needed
capital. This confirms an earlier BusinessWorld report
about the planned entry of the Casino Group.

Assets to be acquired by the French group include 10
hypermarkets or warehouse-type discount stores worth four
billion Philippine pesos (US$98.8 million at
PhP40.537:US$1), one distribution center and five real
estate projects. Eight of the hypermarkets are located in
Metro Manila with an average area of 10,000 square meters.
The real estate projects, on the other hand, will be used
for future expansion.

Last Friday, the two retail companies entered into an
agreement involving Casino's purchase of majority interest
in USWCI currently held by the Gow family. The deal,
endorsed by the interim rehabilitation receiver appointed
by the Securities and Exchange Commission (SEC), is
expected to be finalized in the second quarter of the year.

"The Philippines, with its population of over 78 million
inhabitants and rising GDP (gross domestic product)
prospects in the context of a rebound of the Asian
economies, presents an attractive market which until now
has been closed to foreign retailers. With the soon to be
enacted amendments in the Retail Trade Law allowing the
entry of foreign investors, Casino will become the leading
retailer in the country," the two retailers said in a joint
disclosure dated Febuary 4.

Casino is mainly a food retailer 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
French retailer was also responsible in helping Thailand's
Big C -- the biggest hypermarket operator in Bangkok -- get
back on its feet when it experienced financial troubles.

Under the agreement, Casino will only infuse its investment
once USWCI's assets have been restructured and transferred
debt-free. The agreement will also be subject to the
approval and implementation of the Uniwide Group's revised
rehabilitation plan which will be submitted to the SEC next
week.

Casino said it will forge an alliance with a local group to
help in the development of USWCI's hypermarket operations.
The company's present management, however, will be retained
although the French firm will bring in some of its
retailing experts.

At least PhP12 billion ($296 million) in sales is expected
to be generated once the Group's restructuring has been
completed by 2001. Uniwide disclosed the figure is close to
the PhP14.6-billion ($360 million) sales posted by USWCI
during its last year of normal operations.  Uniwide also
said at least PhP1 billion ($24.7 million) will be invested
in the first two years for store refurbishment and
improvements.

Uniwide's management is now fast-tracking the settlement of
USWCI's obligations with creditors through debt-for-asset
arrangement. To date, the group has already paid debts owed
to East Asia Capital Corp. (PhP60.4 million) and United
Coconut Planters Bank (PhP1.044 billion).

The group's total obligations have piled up to PhP11.1
billion ($273.8 million). Of this, PhP6.95 billion ($171.4
million) is owed to 13 creditor banks. Loans from the banks
have maturities ranging from 1998 up to 2003.

Meanwhile, bending the maximum number of days allowed for
temporary debt reprieve under the one-month old rules on
corporate recovery, the Securities and Exchange Commission
(SEC) extended for the fourth time yesterday, the debt
moratorium earlier granted to the Uniwide Group of
Companies.

An SEC official requesting anonymity said "strictly
speaking, Uniwide should not be granted the (60-day)
extension. However, we cannot be too strict about the 180-
day (maximum) time period. What is more important is that
they (Uniwide) have promised to submit on February 11, a
revised rehabilitation plan that would hopefully save the
company."

Last week, the Gow-owned group asked the corporate
regulator to extend for another 60 days or until April 7,
its earlier order suspending all claims against the
company. The said debt moratorium was set to lapse
yesterday.

According to Uniwide, the extension of the debt moratorium
will give its creditors more time to assess the revised
corporate recovery plan to be submitted this week.
Moreover, the beleaguered retail chain said the 60-day
reprieve will enable the SEC to carefully assess the firm's
viability and prospects of recovery.

For his part, SEC chairman Perfecto R. Yasay, Jr. said the
Commission granted the 60-day extension because of the
encouraging entry of foreign investors in the company. The
Gow-owned firm first sought reprieve from the corporate
overseer in June last year, after failing to meet payment
for its PhP11.1-billion debt.

Earlier, the cash-strapped firm submitted its petition for
debt payment suspension saying that debt suspension would
give Uniwide "ample time to work out the final terms of
their rehabilitation plan ... and enable them to continue
with their operations unimpeded and free from interference
from their creditors."

The Uniwide Group is composed of Uniwide Sales, Inc.,
Uniwide Holdings, Inc., Naic Resources & Development Corp.,
Uniwide Sales Reality & Resources Corp., First Paragon
Corp., and Uniwide Sales Warehouse Club Inc.  Uniwide is
currently seeking new capital infusion of PhP1.5 billion
($37 million), of which PhP1 billion will be used to
replenish stock at its stores, while the remaining PhP500
million will be used for capital expenditures.

The SEC source said, however, Uniwide has expressed plans
of increasing the required capital infusion. The amount
however, has yet to be disclosed. (Business World  08-Feb-
2000)

VICTORIAS MILLING CO.: Cargill, RCBC group shortlisted
------------------------------------------------------
Listed sugar refiner Victorias Milling Co. (VMC) has
shortlisted two out of five groups which have earlier
expressed interest in acquiring a majority stake in the
company.

In a disclosure, VMC informed the Philippine Stock Exchange
(PSE) that its management committee has formally closed the
pre-qualification process for the bidding of 53% of the
company's capital stock.  It declared agribusiness firm
Cargill Philippines, Inc. and the consortium of RCBC
Capital Corp. of the Yuchengcos and Central Azucarera Don
Pedro (CADP) as pre-qualified bidders "after submission of
pre-qualification documents and compliance with the terms
of reference."

VMC has given these firms the go-signal to conduct due
diligence on the company.  Earlier, the ailing sugar miller
was able to attract five prospective investors. Aside from
the two, those who submitted their letters of intent were
JG Summit Holdings, Inc. of the Gokongwei group, Alliance
Global Group, Inc. (AGGI), and Binalbagan Isabela Sugar Co.
(Biscom).

A subsidiary of Cargill USA, Cargill Philippines is a
multinational firm engaged in coconut oil production, seed
production, research and commodity trading.  The Roxas-
owned CADP is seen to become the biggest sugar miller in
the country should it get the controlling stake in VMC.
CADP also owns Central Azucarera de la Carlota in Negros
Occidental.

Under the rehabilitation plan of the sugar refiner, its
creditor banks will auction off 567 million new VMC shares
to raise at least 567 million Philippine pesos (US$14
million at PhP40.537:US$1) in fresh capital.  Earlier,
VMC's liabilities stood at PhP6.6 billion ($162.8 million).
However, PhP1.5 billion ($37 million) of these has been
converted into equity. (Business World  08-Feb-2000)


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

KRUNG THAI BANK: Chief admits bad debts, dirty hands
----------------------------------------------------
Singh Tangtatswas, Krung Thai Bank president, has shocked
bank investors once again.  He said last week that the
country's largest-capitalised stock, that is Krung Thai
Bank, theoretically should have been expunged from the
stock market for rules violations a long time ago.

In fact, he is right. Krung Thai Bank breached a listing
rule stipulating that listed companies must be owned at
least 10 per cent by individual shareholders to prevent
collusion among major shareholders and the management.
Krung Thai Bank has obviously breached the rule. The bank
is 97-per cent owned by the Financial Institutions
Development Fund, the rescue arm of the Bank of Thailand.
The bank's management now led by Singh was handpicked by
Finance Minister Tarrin Nimmanahaeminda.

This is a true collusion for minor shareholders had no part
in the bank's management strategy.  Despite these facts,
Krung Thai Bank is still tradable on the bourse thanks to
the relaxation from the stock exchange.  In another
shocker, Singh compared bad debts to excrement. Everyone
knows by common sense that bankers loath bad debts but no
one believed Singh would hate them this much.

"Transferring bad assets formerly belonging to (the now
defunct) First Bangkok City Bank as ordered by the
Financial Institutions Development Fund is like giving
excrement to the Krung Thai Bank," he said the same day.

He complained that the excrement from First Bangkok City
Bank got Krung Thai Bank's hands dirty.  He furthered
commented that one of the bank's hands will be clean enough
to eat food only when some of the non-performing loans are
transferred to a soon-to-be-established asset management
company.  (The Nation  07-Feb-2000)

NAKORNTHAI STRIP MILL: FRA sells shares for B125.28m
----------------------------------------------------
The Financial Sector Restructuring Authority (FRA) has sold
seven lots of securities to four bidders for 125.28 million
baht.

The securities had been pledged as collateral for margin
loans from some of the 56 closed finance companies, and
were auctioned on Thursday. Twelve bidders submitted bids
for 10 of the 11 lots put up for auction. Unsold securities
will be auctioned on Feb 10.

The securities sold were: 540,700 shares of Asian Seafoods
Coldstorage for 22 baht each; 191,200 shares of Capital
Nomura Securities for 42.66 baht each; 6.49 million shares
of Hemaraj Land and Development for 10.48 baht each;
744,800 shares of NEP Realty and Industry for 5.25 baht
each; 1.13 million shares of Nakornthai Strip Mill for 3.28
baht each; 3.16 million shares of Safari World for 7.84
baht each; and 1.07 million shares of TCJ Motor for 4.33
baht each. (Bangkok Post  05-Feb-2000)

THAI AIRWAYS INT'L: Signs guarantees for new Boeings
----------------------------------------------------
Thai Airways International yesterday signed guarantees for
a 12-year, $537 million loan to buy five Boeing jets.

The agreements were signed in London with the US Export-
Import Bank and Britain's Export Credits Guarantee
Department.  Barclays Bank will provide the credit to pay
for one 747-400 and four 777-300 Boeing jets ordered by
Thai Airways.  The financing arrangement is the largest of
its kind ever undertaken by Thailand.

Under the agreements, the US Exim Bank will guarantee
repayment of loans for the five Boeings and the four
General Electric engines installed on the 747-400.
(Bangkok Post  05-Feb-2000)

THAI BARODA INDUSTRIES: New ordinary shares sold in rehab
---------------------------------------------------------
Thai Baroda Industries has reported the sale of ordinary
shares of the company as part of its debt restructuring as
follows:

Transaction Date : December 17, 1999
Transaction Asset : New Ordinary Shares of Thai Baroda
Industries Co., Ltd .
Objective : Debt Restructure
Type of Business : Manufacture and Distribute Nylon Tyre
Cord (N-6)
Registered Capital : 905,000,000 Baht
Paid-Up Capital : 905,000,000 Baht
Number of Shares : 9,050,000 Shares
Par Value : 100 Baht per Share
Type of Transaction : SCB invested in new ordinary shares
of Thai Baroda Industries Co., Ltd.

Type of Transaction Par Value Number of Shares Value of
Transaction
                (Baht) (Shares) (Baht)
Ordinary Shares 100.00 2,414,000 241,420,000

Proportion : After this transaction, SCB will maintain its
investment proportion of 30.99% in Thai Baroda Industries
Co., Ltd .
Expected Return:  Dividend
Source of Fund:  Working Capital
Transaction Size: 0.79% of Net Assets
Relationship:  Mr. Sataporn Jinachitra and Mr. Silpajai
Kharuharatana are board of Directors of Thai Baroda
Industries Co., Ltd. and also Executive Committee of The
Siam Commercial Bank Public Company Limited. (Stock
Exchange of Thailand  04-Feb-2000)

THAI MILITARY BANK: Regroups in 12 new divisions
------------------------------------------------
Thai Military Bank has made a major organisational change,
aiming to streamline operations in anticipation of greater
competition.

The bank's board of directors approved the promotion of 12
executives, effective from Feb 1.  It regrouped its
businesses into 12 divisions led by Thanong Bidaya,
president and chief executive officer. Akadej Bijaphala is
a director and senior executive vice-president, and Montri
Visoldilokpun is first executive vice-president.

The divisions under Mr Akadej are financial management and
international banking operations, large-account loans,
credit supervision, headquarters credit extension,
marketing and planning, and headquarters credit business
development.

Mr Montri oversees administration, metropolitan and
provincial branches, metropolitan and provincial credit
business development, and the technology and banking
division. (Bangkok Post  07-Feb-2000)

TK GROUP LAND: Haggling with creditors
--------------------------------------
Some borrowers from now-defunct finance houses are unhappy
with their new creditors. Most borrowers of the 56 closed
finance companies would probably agree that settling their
debts was fairly easy.  They escaped many of the ructions
between other borrowers and their creditor banks and
finance houses.

Loans and other assets of the troubled companies have been
auctioned by the Financial Sector Restructuring Authority
over the past two years at discounts as high as 80% of
their outstanding value.  Successful bidders, which
included some of the biggest financial institutions in the
world such as GE Capital and Lehman Brothers, have in turn
opened negotiations on debt settlement with borrowers.

Discounts of up to 50% are not unheard of, with compromise
benefiting both sides.  But even two years after the first
assets were sold, some borrowers remain locked in disputes
with their new creditors.

Chanapas Petchdamrongsakul, vice-chairman of TK Group Land,
provides an example. The company borrowed about 300 million
baht, including interest, from Sitca Finance.  After TK
repaid about 100 million baht, Sitca was suspended by the
authorities in 1997 and, in the uncertainty, TK ceased its
repayments.

In August 1998, Sitca's loans were sold by the FRA to GE
Capital, part of a larger loan portfolio purchased by the
giant US financial services firm.  GE Capital Alliance, a
subsidiary of GE Capital, wanted to settle the loans at
around 70-80% of the outstanding balance, compared with the
20% at which it bought the assets from the FRA, according
to Mr Chanapas.

However, the sticking point wasn't so much price, he said,
but rather GE's refusal to allow transfer of properties
sold to customers until final talks were completed.

"GE Capital wants too much of an advantage, too much profit
even after considering that the FRA sold the country's
assets at a low price," Mr Chanapas complained.

He said GE Capital, in calculating its offer price to
settle the debt, relied on its own cashflow projections to
determine how well TK Group Land would perform over the
next several years.

"They think I can sell 200-300 square wah in the first
year, then 4-5 rai in later years. But our company has no
idea whether we can do this, given that it will take years
before the property market recovers," Mr Chanapas said.

GE's refusal to allow deed transfer to customers has caused
some of the 30 buyers to back out of agreed sales contracts
with TK.  Some buyers are threatening to sue, citing the
company's failure to transfer ownership after the
downpayment had been made, Mr Chanapas said.

TK has two property developments totalling 160 rai and
consisting of detached houses, land and townhouses on Rama
II Road in Bangkok.  The company estimates the projects
together are worth about 1.2 billion baht, with about 30%
of the planned construction completed.

Mr Chanapas said interest in the properties had increased
as economic prospects improved, but customers fled after
finding out about the firm's difficulties in transferring
ownership because of its dispute with GE.

"I won't give up on these projects. The problems I face
have been encountered by many others as well. But no one is
willing to help ... they just allow foreigners to take
advantage of us."

An executive of GE Capital said negotiations with customers
were made on a business basis, and the company did not seek
to take undue advantage. "Customers save as well since we
are willing to negotiate. The customer wants the best out
of us, too." (Bangkok Post  07-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

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