TCRAP_Public/000216.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

            Wednesday, February 16, 2000, Vol. 3, No. 33


* C H I N A  &  H O N G  K O N G *

FORM HOLDINGS LTD: To wind up 3 of its subsidiaries
PETROCHINA: Faces tough test in share sale

* I N D O N E S I A *

BANK NEGARA INDONESIA: Reshuffles its management

* J A P A N *

FUJI CORP.: To post 4.3B Yen special loss  
NAGASAKIYA: Files for reorganization
NAGASAKIYA: Situation drives investors away
NIPPON CREDIT BANK: FRC set to okay consortium takeover
NISSAN DIESEL: Begins rebuilding job
NISSAN MOTOR: To sell defense division to IHI
SHOEI CO.: First-ever Japanese hostile takeover bid fails
TOMEN CORP.: Asks banks for debt waiver
TOMEN CORP.: Situation drives investors away

* K O R E A *

DAEWOO GROUP: Gov't to inject W5.9Tril. to cover bonds

* M A L A Y S I A *

INTRIA BHD: UEM Is High Bidder for control

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

PHILIPPINE AIR LINES: Lease accord with local carrier ok'd
RURAL BANK OF STA.TERESITA: Ex-mayor charged with graft
UNIWIDE GROUP: To present new rehabilitation program

* S I N G A P O R E *

CLOB INT'L: S'pore, KL parties plan revised solution

* T H A I L A N D *

FAR EAST ADVERTISING: Posts annual loss                     
MDX PLC: Posts first-half losses despite profitable 2Q     
SEAMICO SECURITIES: Denies incurring loss  
SIAM CEMENT PLC: To cull warehouses in streamlining drive
TANAYONG: Posts 9-month loss
TELECOM ASIA: Debt restructure to be completed next month
THAI PETROCHEMICAL INDUS.: Bitter hearing looms
THAI PETROCHEMICAL INDUS.: Court ruling may be delayed
THAI PETROCHEMICAL INDUS.: Creditors seek chief ouster
THAI WAH PCL LTD.: Reports debt rehab progress to SET
THAI WAH PLC: Creditors approve debt plan
TOTAL ACCESS COMMOS.: Telstra negotiating for 25% stake

C H I N A  &  H O N G  K O N G

FORM HOLDINGS LTD: To wind up 3 of its subsidiaries
Form Holdings Ltd said it plans to wind up three of its
subsidiaries - Form Music Publication (HK) Ltd, Form
Records (Taiwan) Ltd and Form-BBM Thailand Co Ltd.

In a statement, it said it has taken steps to appoint a
liquidator for Form Music and Form Records.  The company is
currently in talks with various parties to appoint new
distributors for its products in both Hong Kong and Taiwan.
In addition, the company is also taking steps to place
Form-BBM Thailand under liquidation.

It is currently exploring various options available with
regards to the group's business in Thailand.  The
liquidation of the three subsidiaries is not expected to
have any material impact on the earnings and net tangible
asset backing per share of the Group for the current
financial year.  (AFX News Limited  14-Feb-2000)

PETROCHINA: Faces tough test in share sale
Petrochina, a unit of China's biggest oil company, faces a
tough job convincing investors to buy US$7 billion (HK$54.6
billion) of its shares as it starts the country's most
ambitious attempt yet to sell assets.  

Oil prices are set to fall, analysts say, and fund managers
are more interested in technology stocks than companies
like the unit of China National Petroleum Corp (CNPC).
PetroChina's production costs are also far higher than
United States rivals.

"To be honest, I can't think of any selling points for
PetroChina," said Aaron Pong, a director at RBC Investment
Management (Asia). He said it was one of those stocks which
"do not pay a high enough dividend to be considered a safe
haven or provide strong enough earnings growth to be
counted as sexy."

The share sale, however, is seen as crucial to China's
attempts to reform inefficient state-owned enterprises as
it opens to foreign competition and moves to join the World
Trade Organisation. It will also set the stage for two more
oil company sales this year.  PetroChina is the largest
company in China based on revenue and is the fourth largest
oil company globally in terms of proven reserves or
production, according to a Goldman, Sachs & Co research

"This is one of the biggest stock listings coming out of
China," said Charlotte Wun, a fund manager with Royal Bank
of Canada Investment Asia, RBC's Singapore counterpart.
"They won't want this to go wrong."

China National Offshore Oil Corp, the nation's biggest
offshore oil producer, shelved a US$2.5 billion stock sale
last October due to "adverse market conditions," and plans
to make another attempt later in the year.  China
Petrochemical Group, the nation's largest refiner, also
plans to sell as much as US$8 billion of stock this year.

PetroChina has an advantage, being first. With more sales
coming to the market, investors may be wondering "if the
market will have the appetite for three Chinese oil
companies," said Flavia Cheong, a fund manager at Aberdeen
Asset Management Asia.

Still, it is going to be hard to convince fund managers of
the merits of a company which - like many mainland state-
owned enterprises - is heavily overstaffed and whose
production costs are high by international standards.
CNPC, PetroChina's parent, is China's largest state
enterprise with 1.5 million staff. To streamline its
operations, PetroChina agreed to take just 480,000 of the
group's employees, Goldman said. Still, that's many times
the staff of comparable companies such as ENI of Italy,
which has about 79,000, and Petrobras of Brazil, with about

PetroChina's crude oil production cost averaged about $9.70
a barrel in 1998, according to a study by Kleinwort Benson
Securities. In the US, the average cost of crude oil
production is just under $5 per barrel, according to WTRG
Economics, an energy consultancy, which surveyed 24 oil
companies there.  What's more, oil prices are poised to
fall after doubling to $29 a barrel since early last year.
That will crimp earnings.

"We think oil prices will settle at between US$13 and US$17
in the long-run," said Vipin Ahuja, an oil analyst with
Kleinwort Benson Securities in Singapore. "Valuing any oil
company's assets beyond that amount would be unwise."

PetroChina had 10.8 billion barrels of proven crude oil
reserves and 729 billion cubic metres of natural gas
reserves as of September 1999, said Goldman. This is worth
about $407 billion based on recent oil prices.  Some US
investment funds may also avoid PetroChina for political
reasons because its parent CNPC is involved in an oil
project in Sudan, a country subject to American sanctions.

The California Public Employees Retirement System, the
biggest US pension fund, already said it won't invest in
PetroChina, according to the Asian Wall Street Journal.
Still, the company's rich oil reserves are a draw:
PetroChina controls all China's onshore oil businesses in
the northern half of the world's most populated nation and
the country's largest oilfield, Daqing, which accounts for
about half its crude oil production.

"We need to look outside the hi-tech and the (so-called)
hot sectors," said Francis Wong, a fund manager at American
Express Asset Management. His company would be interested
in buying PetroChina's shares if "its valuation is
attractive," he said.

PetroChina is expected to have earned about 21 billion yuan
(HK$19.73 billion) in 1999, and will earn 36 billion yuan
in 2000, said Goldman. Its 1999 profits accounted for about
30 per cent of all profits from China's 500 biggest state
companies.   PetroChina - a company created to hold the
core operations of China's No 1 oil company - earned 16
billion yuan in 1998, down 47 per cent from a year before,
as oil prices dropped, Goldman said.

The company started talking to investors yesterday, with
full-scale presentations scheduled to begin on February 28
and trading to commence in Hong Kong and New York on March
23, according to investors. Goldman, Sachs & Co and China
International Capital Corp are handling the sale.

CNPC and PetroChina will share the proceeds from the sale,
according to a preliminary listing document which did not
spell out the split between the two companies. CNPC will
use the money for staff retraining and severance pay while
PetroChina will spend the funds on financing expansion and
repaying debt.

PetroChina has already postponed its presentations to
investors by several days to satisfy inquiries by the US
Securities and Exchange Commission on the use of the money
raised, its accounting treatment and other issues. (Hong
Kong Standard  15-Feb-2000)


BANK NEGARA INDONESIA: Reshuffles its management
Publicly listed state Bank Negara Indonesia (BNI)
reshuffled its management on Monday, appointing a new
president and chief commissioner, paving the way for its
costly recapitalization.

The bank's shareholders ousted Widigdo Sukarman as BNI
president at an extraordinary shareholders meeting,
replacing him with the bank's planning director Saifuddien
Hasan.  The shareholders also removed four other directors
as well as two commissioners, including chief commissioner
Arie Soelendro. The bank appointed Zaki Baridwan, an
assistant to the rector of Gadjah Mada University, as chief

Replacing BNI's management is a condition for its
recapitalization in the government's agreement with the
International Monetary Fund (IMF).  Newly appointed BNI
president Saifuddien said the recapitalization cost of BNI
was expected to rise to about Rp 60 trillion (US$8.3
billion) from the original projection of Rp 52.8 trillion.

"I hope the recapitalization of BNI can be conducted soon
because the later the recapitalization is materialized, the
larger the recapitalization cost will be," Saifuddien said.

Under its agreement with the IMF, the government will
release the first tranche of its recapitalization bonds by
March 31.  The bonds, however, will be released only after
the new management signs performance contracts with the
government, expected by Feb. 29, after which Germany's
Commerzbank AG will be brought in as an adviser to help
implement the bank's business plan.

Commerzbank AG will work with BNI to improve governance,
risk management and assess nonperforming loans. Wolfgang
Rohde from the German bank has joined the Indonesian bank's
board of commissioners.  The issuance of the remaining
tranche of recapitalization bonds will follow the
completion of the 1999 year-end financial audit, and
implementation of the bank's business plan, expected by
June 30.

The recapitalization of BNI, as well as other state banks,
has been delayed by the emergence of the high-profile Bank
Bali scandal and more recently the Texmaco case.  BNI has
especially been faulted for extending a huge Rp 9.6
trillion in loans to one business group, textile
conglomerate Texmaco Group.

Following the emergence of the Texmaco case, the government
-- as the bank's majority shareholder -- called Monday's
extraordinary shareholders meeting to unseat Widigdo and
his management team.

In addition to Saifuddien, BNI's shareholders also retained
Binsar Pangaribuan on the bank's board of directors. Other
directors are all new faces, but all from within the bank.
They are Mohammad Arsjad, former head of the bank's
strategic planning division; Eko Budiwiyono, former head of
the treasury division; Agoest Subhektie, head of the
internal supervision division; Rachmat Wiriaatmadja, former
head of the international division; and Suryo Sutanto,
former head of the technology information division.

Market watchers said it was unclear as to whether
appointing a new president and other directors from within
the bank would meet the requirements of strengthening the
management, as required by the IMF.  Equity banking analyst
Lin Che Wei from Socgen-Crosby Indonesia said that ideally,
the shareholders appoint an outsider to lead BNI so that he
or she would not face any psychological barrier to root out
corrupt practices within the bank, especially following the
emergence of the Texmaco case.

Nevertheless, he said, the reshuffle would at least give
impetus to the increasing transparency at the bank. He
expects the market will be neutral to the management
change.  "Pak Saifuddien must prove to the market that he
is a reformer and is willing to take drastic moves to clean
up the bank," he said.

BNI's stock price closed unchanged on Monday at Rp 300 a
share. (Jakarta Post  15-Feb-2000)


FUJI CORP.: To post 4.3B Yen special loss  
Fuji Corp. (8860) will adopt the market-based valuation
method for real estate slated for sale and financial
products in the year ending March, leading it to likely
book an extraordinary loss of 4.3 billion yen, company
sources said Monday.

The medium-size builder of single-family homes and
condominiums expects to post a 1.8 billion yen net loss. It
earlier estimated 470 million yen in profit.  The company
aims to clear away bad assets and rebuild its financial
position while demand for its mainstay housing is

Under guidelines drafted by the Japanese Institute of
Certified Public Accountants, starting in fiscal 2000,
companies will be required to record real estate for sale
at a loss when the value has fallen by 50% or more from the
purchase price. Fuji will go further and assess all
properties for sale under the market-value method to
eliminate unrealized losses.

The company held 25.4 billion yen worth of real estate for
sale as of Sept. 30, for which it will post a latent loss
of about 4.2 billion yen, the sources said.  Fuji estimates
it holds financial products, centering on golf-course
memberships, that carry about 100 million yen in unrealized
losses. The market-price method of valuation for financial
products is expected to be introduced in fiscal 2000, but
Fuji will adopt it ahead of schedule.  (Nikkei  14-Feb-

Nagasaki Daiichi Credit Cooperative has filed for
bankruptcy with the Nagasaki prefectural government, which
in turn has appointed receivers.

The government announced that all deposits will be fully
protected and the credit cooperative will operate as usual
until its business is sold to another institution. Based on
the government report, the credit cooperative had
liabilities exceeding assets by 1.75 billion yen as of
March 31, 1999.

Although much of its loans to local real estate companies
that were extended in 1988-1991 went sour, regulators
pointed out that the lender had failed to classify such
nonperforming loans as irrecoverable when it self-assessed
its assets. (Nikkei  14-Feb-2000)

NAGASAKIYA: Files for reorganization                       
Mid-sized supermarket chain operator Nagasakiya said Sunday
it has filed for reorganization.  The parent company
reports 303.9 billion yen in total debt, with 52.4 billion
yen of that amount guaranteed. Including debts at
affiliated companies, the group has 432.4 billion yen in

The company said it will continue to operate its 95 stores.
The move comes after the company said earlier this month
that it would suffer a significantly larger-than-expected
net loss of 18.1 billion yen in the fiscal period ending
Feb. 29, 2000.  The loss will cause the company's net worth
to fall to negative 16.5 billion yen at the fiscal year

The four companies filed for court protection from
creditors under the corporate rehabilitation law,
effectively declaring bankruptcy.  The three junior firms
in the group had combined liabilities of 128.5 billion yen.

Of the 128.5 billion yen, 113.7 billion yen was incurred by
Tokyo-based property developer Nagasakiya Estate and 8.3
billion yen by Kanazawa Nagasakiya, a supermarket operator
in central Japan. The rest of the 6.5 billion yen was
attributed to Seiro Nagasakiya, operating also in central

Debt incurred by the parent Nagasakiya is the largest for a
single Japanese retailer. Nagasakiya slipped into financial
difficulty due to excessive investments during Japan's
"bubble" speculative boom of the late 1980s and the
subsequent prolonged economic slump.

"Real-estate purchases for opening stores and investment in
large amusement facilities and their operations were
massive in the so-called bubble economic period," the firm
admitted.  "Excessive interest payment burdens for those
investments pressured the company management.  After the
collapse of the bubble economy, consumer spending slumped
for a long period and customer numbers and the amount of
their spending slowed down," it said, adding that a price
war with rival retailers had also hurt business.

Dai-Ichi Kangyo Bank is ask-only at 896 yen after it said
it has extended a total 107.6 billion yen in loans to
Nagasakiya and its group companies such as Nagasakiya
Estate, some or all of which may become uncollectable. The
bank said, however, that its earnings outlook for the
current fiscal year ending March 31 won't be affected.  

Nagasakiya started as a clothing retailer in 1948 and its
sales reached 437.44 billion yen in its peak year to
February 1992. Annual sales fell to 314.46 billion yen by
the year to last February.

Nagasakiya said last week it would suffer a parent net loss
of 23.9 billion yen in the year to this month, instead of
an earlier forecast profit of 200 million yen.  The stock
of Nagasakiya dived last week, ending on Thursday at 77 yen
against 133 yen on Friday the preceding week.

The parent firm is capitalised at 11.79 billion yen and
employs about 12,200 people, including 9,570 part-timers at
95 stores across the country.   (Nikkei, South China
Morning Post  14-Feb-2000)

NAGASAKIYA: Situation drives investors away
TOMEN CORP.: Situation drives investors away
With the collapse Sunday of supermarket operator Nagasakiya
and the announcement last Tuesday by trading house Tomen
Corp. (8003) that it was asking creditors to forgive 200
billion yen in debt, Tokyo Stock Exchange investors are
increasingly wary of buying shares which cost under 100

Tomen's debt-forgiveness request to financial institutions
and Nagasakiya's filing at the Tokyo District Court for
protection from creditors to whom it owes some 300 billion
yen have left investors worried.

Investors rushed to dump the stock of Nagasakiya, which was
placed on liquidation post at the TSE Monday. It failed to
change hands, however, ending the day ask-only, being
quoted at 30 yen below Thursday's close, the largest daily
drop permitted for the share.  The company announced Feb. 7
it had a negative net worth. The next day, its share price
fell below 100 yen and continued falling on Wednesday and

As trading reopened on Monday after Friday's holiday, many
low-priced issues slipped. Ichida suffered the largest
percentage drop on the first section of the TSE, closing
down 15 yen at 63 yen.  A whopping 145 issues hit their
lowest level since the start of 1999, the highest number
since the 148 issues that hit their 1999 low on Dec. 21.

Another factor pushing investors away from low-priced
issues is the growing pressure on companies to unwind their
cross-shareholdings ahead of the end of the fiscal year in

"Investment trust managers are not buying low-priced
issues, which are being pulled down by the unwinding of
cross-shareholdings," said a trader at the Tokyo branch of
Paribas Capital Markets Ltd. (Nikkei  14-Feb-2000)

NIPPON CREDIT BANK: FRC set to okay consortium takeover
The Financial Reconstruction Commission has decided to have
a consortium of Softbank Corp. (9984), Orix Corp. (8591),
and Tokio Marine & Fire Insurance Co. (8751) take over the
temporarily nationalized Nippon Credit Bank, The Nihon
Keizai Shimbun learned Monday.

A formal decision is due as early as this month. NCB has
been under state control for 14 months and the FRC wants to
complete a contract for the handover by the end of March.
The consortium won as a result of a long-term business plan
that calls for a reborn NCB to provide financing to start-
up firms, sources said.

Under the deal, the consortium will pay 1-10 billion yen to
the Deposit Insurance Corp. to acquire all the common
shares of NCB. The group will also pump about 100 billion
yen into the bank, while the government will provide an
infusion of more than 200 billion yen in public funds
through a purchase of preferred stock in NCB.

In exchange for government support, the Softbank-led group
will have NCB continue to provide financing to the bank's
ailing borrowers.  NCB had 3.19 trillion yen of liabilities
in excess of assets as of Sept. 30. Unrealized gains on
securities holdings are estimated to trim the public cost
of disposing of the bank to just under 3.1 trillion yen.
The public is expected to have to cough up an additional
80-90 billion yen during the handover of NCB. (Nikkei  15-

NISSAN DIESEL: Begins rebuilding job
After a lengthy period of inaction, Nissan Diesel Motor Co.
is finally taking steps toward restructuring.  Nissan Motor
Co., the largest shareholder of Nissan Diesel along with
Renault SA, reached agreement with the French carmaker and
major banks, including Industrial Bank of Japan, over
measures to restore the operations of the Saitama
Prefecture-based truck and bus manufacturer.

The reconstruction program has been mapped out after many
twists and turns since May 1998, when a takeover by then-
Daimler-Benz AG of Germany was widely expected but failed
to materialize. The measures announced on Feb. 4 include:
supply of Nissan Diesel engines to Renault; sales of Nissan
Diesel light trucks by Renault; and the setting of a four-
year commitment line by the main banks and securitization
of the Ageo Plant of Nissan Diesel.

The truck maker will hammer out a new business plan by the
end of April and tackle rehabilitation on its own. The
results of the plan will hinge on whether the company will
be able to mend the way it operates.

Nissan Motor and the truck maker's four main banks haggled
fiercely until the beginning of December over the
restructuring measures. In an Oct. 1 statement to the
press, Nissan President Yoshikazu Hanawa said the automaker
had begun negotiations with financial institutions to get
their long-term support to the financial improvement of
Nissan Diesel.

That, however, turned out to be a complete surprise to the
banks. Nissan Motor and Nissan Diesel had injected 85
billion yen ($780 million) into Nissan Diesel Motor Sales
Co. and its regional affiliates by September. Officials
from IBJ said that since the banks helped the companies
raise the funds, financial institutions should not have to
offer further support.

If mishandled, the issue of Nissan Diesel, which could post
negative net worth on the consolidated balance sheet in the
current business year, would develop into a management
problem for Nissan itself. Last year Renault clearly stated
it had no intention of forming close relations with Nissan

There could be no possibility of business cooperation with
Nissan Diesel until it improves its financial standing,
Renault Chairman Louis Schweitzer said in October.  The
aggravation of Nissan Diesel's financial situation is the
result of slack corporate governance of group companies,
some analysts say. Nissan sent its officials to the truck
maker as presidents for 38 years, while its directors were
all dispatched from Nissan and its main banks.

The negotiations between Nissan and IBJ over the
reconstruction of Nissan Diesel reached a deadlock. What
changed the situation was a change in the policy of
Renault.  The French automaker hinted at the possibility of
cooperation with Nissan Diesel in early February.

However, the prospects for Nissan Diesel remain gloomy in
the extreme. The domestic market for 4-ton and larger
trucks has shrunk to around half its peak. Four truck
makers are battling for share in a market with annual sales
of about 100,000 trucks.

In addition, Nissan Diesel's attitude toward marketing is
still cavalier, competitors claim. Although its group
interest-bearing liabilities stand at some 500 billion yen,
roughly double annual sales, "the company is still trying
to sell to customers with whom we refuse to deal because of
the difficulty in collecting accounts receivable," said a
senior official at a rival truck maker.

Some industry observers say it is conceivable that
DaimlerChrysler AG may yet get involved in talks in the
near future, unless Nissan Diesel resolves to rehabilitate
on its own without depending on the Nissan group or its
main bank. (Nikkei  14-Feb-2000)

NISSAN MOTOR: To sell defense division to IHI
Japan's Nissan Motors said yesterday it had agreed to sell
its defence and aerospace division to defence contractor
Ishikawajima-Harima Heavy Industries (IHI).

The deal is expected to be closed by August after the two
companies signed a memorandum of understanding, following
Nissan's February 3 announcement that it wanted to offload
the division as part of a major restructuring drive.

"As the automotive and aerospace industries require an
increasingly global focus, the deal will allow both
companies to concentrate their technological and
engineering resources on their core businesses," a Nissan
statement said.

The world's fifth largest carmaker is seeking to reverse a
slump in sales and earnings by focussing on its core
operations under a restructure announced last October under
the control of majority shareowner Renault.

"The sale of the aerospace division is one step in Nissan's
restructuring plan that is aimed at achieving growth,
improving profitability and reducing its debt," the
statement said.  Nissan spokeswoman Ritsuko Harimoto
declined to confirm a possible sale price for the division.
"There are still discussions to decide about that," she

A figure touted by the Nihon Keizai Shimbun earlier this
month of 40 billion yen (US$370 million) was "speculation,"
she said. IHI has also rejected the figure.

Nissan, hit by diving vehicle sales in Japan, has warned
its earnings in this fiscal year to March could be even
worse than forecast in November, when it announced a big
interim net loss.  Nissan said its operating profit in the
fiscal year could be lower than the 90 billion yen
previously expected. Nissan predicts a net loss in the year
of 590 billion yen.

Nissan expects to return to profitability in the fiscal
year to March 2001, and is planning to halve its debt by
March 2003. (Business Day  15-Feb-2000)

SHOEI CO.: First-ever Japanese hostile takeover bid fails
A takeover bid by M&A Consulting Inc. (MAC) for Shoei Co.
(3003) fell through Monday as the M&A specialist only
managed to acquire a mere 6.52% of Shoei shares.

Only a few Shoei shareholders took up an MAC offer to buy
Shoei shares at 1,000 yen per share between Jan. 24 and
Feb. 14. The offer failed to attract interest as Shoei's
share price rose above 1,000 yen just after MAC announced
the bid, reaching 1,480 yen at one point.

Shoei, at a meeting of its board of directors, adopted a
resolution to fight the first-ever hostile takeover bid by
a Japanese firm for another Japanese concern. The offer
didn't interest Canon Inc. (7751), Shoei's top shareholder,
Fuji Bank (8317) or other Fuyo group companies which have
major stakes in the firm.

At a press conference on the same day, MAC President
Yoshiaki Murakami, a former Ministry of International Trade
and Industry bureaucrat, said, "Shoei should draw up a
restructuring plan, including numerical targets." He also
said he will seek to make the company account for the
plunge in the number of shareholders to 784 at the end of
last year from 1,330 four years earlier.

At a Shoei shareholders meeting slated for March, Murakami
intends to propose that the company name him as an outside
director and that it change its corporate statute to allow
stock buybacks.

Although the bid ended in failure, it will have reminded
Japanese executives that their firms can be targeted for
takeover at any time if they use assets inefficiently or
are lackadaisical about seeking high profits, analysts
said. (Nikkei  14-Feb-2000)

TOMEN CORP.: Asks banks for debt waiver
Growing pressure to use market-based accounting methods has
forced struggling trading house Tomen Corp. to give up on
efforts to achieve a turnaround on its own.

The Osaka-based company has asked its major banks to
forgive a combined 200 billion yen ($1.83 billion) worth of
loans and plans to take an extraordinary loss totaling
407.4 billion yen in the year ending March.

"I was confident we could turn around if we had four or
five years," said Tomen President Akihiro Tsuji in
announcing the measures.

However, after that news, its stock price fell to a year's
low of 56 yen on Feb. 9 and ended trading last week at 66
yen.  Tsuji, who became president in June 1997, launched a
five-year restructuring plan last April that was supposed
to end in fiscal 2002.

The plan was designed to concentrate management resources
on chemicals and the power businesses in an effort to cut
group interest-bearing liabilities by 520 billion yen to
1.2 trillion yen.

Tomen plans to complete personnel cutbacks and withdraw
from money-losing operations during fiscal 2000. "We
started restructuring earlier than other trading houses,"
Tsuji said. Nevertheless, the company was driven into a
corner with a huge amount of debt.

Japan's accounting reforms have proceeded at a faster pace
than Tomen expected. The Japanese Institute of Certified
Public Accountants on Jan. 19 unveiled draft guidelines
urging companies to assess real-estate holdings for sale at
market value. Companies will be required to record the
properties at a loss if the market value falls by 50% or
more from the book value.

The guidelines will likely be used from fiscal 2000
starting in April, but accounting firms are pushing
companies with property for sale to follow the rules from
this business year.

Tomen faced a drastic change in its restructuring plans
when an accounting firm asked it to take a loss for some
bad properties. Nearly half its extraordinary loss, or some
184 billion yen, arises from real-estate-related

The company has so far said it held 6.1 billion yen worth
of property inventory at the parent alone. For fiscal 1999,
however, the group will see a 45.4 billion yen loss at
Tomen Real Estate Development Co. and a 70 billion yen loss
from development of commercial facilities and the property-
leasing business.

Until about a year ago, the big nine in the industry were
all called "general trading houses." However, the
performance gap has been widening between the top three,
belonging to the Mitsui & Co., Sumitomo Corp. and
Mitsubishi Corp. groups, and the others. Seventh-ranked
Tomen became the second trader to ask for a debt waiver,
following Kanematsu Corp.

Tomen aims to pull out of metal and other unprofitable
operations and downsize its payroll. Its business prospects
are far from rosy, although Tomen officials maintain it has
quality businesses with growth potential, such as wind-
power generation in which it accounts for 10% of the
world's total supply.

"As a major creditor bank, we will do our utmost to help
Tomen rebuild," an official at Tokai Bank said. Tomen has
asked the Nagoya bank, its leading shareholder, to waive
150 billion yen in loans. While the bank says the idea is
still under consideration, observers expect it to agree to
the proposal. (Nikkei  14-Feb-2000)


DAEWOO GROUP: Gov't to inject W5.9Tril. to cover bonds
The government has agreed to inject W5.9 trillion into
Seoul Guarantee Insurance Corp. (SGIC) to help it offset
guarantees made for defaulted Daewoo-issued corporate

According to a high-ranking official at the Financial
Supervisory Commission (FSC) Sunday, the government decided
that the injection of public funds would be necessary in
order to keep workout programs moving forward at Daewoo.
SGIC has had to make huge payments for guarantees due to
the massive restructuring of the financial sector and has
found itself unable to cover guarantees it made on Daewoo

The total amount of payment guarantees on Daewoo bonds
comes to W9 trillion, with SGIC covering 65% and various
investment trust firms taking care of the remaining 35%.
The FSC official added that W3.5 trillion of the W5.9
million will be injected this year, with the remaining W2.4
trillion to be paid out next year. (Digital Chosun  13-Feb-


INTRIA BHD: UEM Is High Bidder for control
Construction giant United Engineers Malaysia Bhd. has
offered to pay 371 million ringgit ($97.6 million) for
control of listed listed Intria Bhd., out-bidding two other
rivals in a takeover battle has pitted some of the
country's most powerful corporations against one another.

According to senior government officials close to the bid,
the national debt-restructuring agency, Pengurusan
Danaharta Nasional, which is selling its 45% interest in
Intria, will announce its decision to accept UEM's bid
as early as today.  But don't expect UEM's expected
dominant position in the debt-laden toll-road operator to
hasten Intria's restructuring.

In fact bankers warn of open hostility between UEM and
Intria's local and foregin creditors, who are owed 650
million ringgit. That's because UEM, the former investment
arm of Malaysia's ruling political party, controlled Intria
before the company was taken over by the national debt-
restructuring agency in mid-1998.

Intria's creditors have long objected to the possibility of
UEM getting a second chance at managing Intria. What's
more, UEM and its associate, conglomerate Renong Bhd.,
already rank as Malaysia's largest debtors and Intria's
creditors fear they will rank way down in the list of
priorities as UEM and Renong struggle to put their
financial house in order.

"This is something we feared right from the start," says a
local banker, who was informed of the outcome of the
bidding exercise late Friday. He added that his bank and
Intria's other creditors are considering several options,
including a demand on UEM to come up with an acceptable
plan to restructure Intria's debts within the next two

"If they don't (come up with a plan) we will consider to
call a default on Intria's loans and wind up the company,"
he said.

The Intria affair is being closely watched because it
exposes some of the more nettlesome issues that plague
Malaysian corporate reform and illustrates just how little
corporate Malaysia has learned from the regional crisis
that struck in mid-1997. While creditors and the country's
restructuring agency struggle to find common ground in
resolving debt problems in corporate Malaysia, debt-laden
corporations are trying to snare control of assets that
they lost during the crisis.

Worse, with the rebound in the Malaysia market, several of
the country's well-connected companies appear to be
returning to their old ways of mounting acquisitions
financed largely by borrowings.  Intria, which owns a 25-
year concession to collect tolls on the bridge linking
northern Penang Island with peninsular Malaysia, landed in
trouble in mid-1998 when its controlling shareholder,
privately held Mekar Idaman Sdn. Bhd., defaulted on 550-
million-ringgit-loan, sending it into receivership. UEM
controlled Intria by virtue of its 45% stake in Mekar

As Danaharta went around scopping up bad debts held by
financial insitutions, it snapped up loans owed by
insolvent Mekar Idaman. Along with those obligations came a
45% equity interest in Intria, which Mekar Idaman had
pledged as collateral.  After several months of
negotiations. Danaharta and Intria's creditors agreed in
early November to invite bids for the 45% Intria stake,
triggering a four-way scramble for the company.

Danaharta called on the bidders to submit plans that would
relieve it of its equity interest in Intria, and offer a
complete restructuring plan for Intria's debt. In late
December, Danaharta was informed by the creditor banks that
an independent valuation on the four bids had picked an
offer by MTD Capital Bhd., another toll-road operator with
close ties to the government, as the most as the most

Then, in late January, Danaharta changed its mind and
decided to reopen bids for its 45% stake, arguing that it
wanted to get the best possible value for its interest in
Intria. When bids closed on Friday, UEM emerged as the
highest bidder with its offer of 371 million ringgit in
cash for Danaharta's stake. Senior government officials and
bankers close to the situation say UEM's bid values each
Intria share at 1.07 ringgit. On Friday, Intria shares rose
13 sen, or 12%, to 1.20 ringgit each.

The two other bidders were MTD Capital and listed property
company Kejora Harta Bhd. Government officials say these
two bids came in at just over 200 million ringgit for
Danaharta's 45% interest. Teratai Sansung Sdn. Bhd., which
had shown interest in Intria previously, didn't make an

UEM officials could't be reached for immediate comment. But
officials close to the bidding exercise say UEM will first
buy a 20% interest in Intria for 166 million ringgit and
acquire the remainder of Danharta's holdings in the company
within the next 12 months for another 205 million ringgit.

Bankers say they are puzzled as to why UEM is prepared to
pay so much for Intria. They note that under the company's
original restructuring proposal to Danaharta in November,
UEM stated that a restructuring of Intria would require a
capital reduction to wipe out the toll-road operator's
accumulated losses, which stood at 590.7 million ringgit at
the end of last June.

"It just doesn't make sense to pay current market value for
shares in a company which will soon see a capital
reduction," says senior banker with one of Intria's
creditor banks. He also wonders how UEM, which is faced
with serious financial difficulties, will raise the 371
million ringgit in cash to acquire Danaharta's stake.

UEM and Renong badly need to restructure their holdings and
cut the group's debt. Renong's debt load currently stands
at 25 billion ringgit, and the company recently completed a
plan to settle about 8.4 billion ringgit of debt through
the issue of seven year bonds. No coupon payment will be
made on those bonds, but Renong and its affiliates will
have to pay out 16 billion ringgit to bondholders when
those issues expire in 2006.

Earlier this month, UEM informed the Kuala Lumpur Stock
Exchange that several units in the group were in default of
local facilities amounting to 940 million ringgit.  UEM's
takeover of Intria could also confront Prime Minister
Mahathir Mohamad's government with a dilemma. That's
because Malaysia's securities laws dictate that large
changes in shareholding of a listed company must be
accompanied by a general offer for shares the new
shareholder doesn't already own.

In the Intria case, UEM must offer to buy the remaining 55%
held by minority shareholders of Intria at 1.07 ringgit a
share. Assuming there is full acceptance for the general
offer, UEM must fork out another 454 million ringgit.
Government officials and bankers close to the Intria affair
say UEM intends to seek a waiver from the Minister of
Finance from having to undertake a general offer. But a
waiver could raise allegations of favoritism by Dr.
Mahathir's administration on this politically powerful

"If Danaharta is being offered close to the market rate,
then minority shareholders can't be discriminated against,"
says a senior chief executive of local commercial bank.
(The Asian Wall Street Journal  14-Feb-2000)


PHILIPPINE AIR LINES: Lease accord with local carrier ok'd
In an effort to boost the financial recovery of Philippine
Airlines, Inc. (PAL), the corporate regulator approved last
week a lease agreement between the flag carrier and local
carrier Air Philippines Corp. (APC).

In an order, the Securities and Exchange Commission (SEC)
said the wet lease agreement will "protect PAL from any
financial risk while, at the same time, provide opportunity
to earn additional revenues."

Under the agreement, APC will lease out to PAL three Boeing
737-200s to service domestic routes.  Details of the
agreement, however, were not disclosed by the commission
and the PAL permanent rehabilitation receiver (PRR).

Meanwhile, PAL earlier expressed plans to pass on the dry
lease of three Boeing aircraft -- to service its Sydney
route -- to APC "considering its tax exemption as an

Businessworld sources earlier claimed newcomer Aero
Pilipinas would provide both the pilots and cabin crew
while PAL takes charge of the marketing and earns most of
its margins from sales commissions.  Sources added that
under the alleged new scheme, PAL would also provide
"certain services" to APC such as catering, ground
handling, light maintenance and personnel in or out of
Manila based on "appropriate service fees."

The "hosting services" arrangement is also intended to
boost PAL's coffers. Plans are afoot to expand this
arrangement to cover other routes such as Vancouver, Canada
and Europe.  Air Philippines is reportedly majority owned
by PAL chairman and chief executive officer Lucio C. Tan,
while Aero Pilipinas is said to be led by Manila
Representative Harry C. Angping.

However, employees have recently raised questions on the
legality of the airline management's actions on the wet
lease deal.  Last Thursday, the Flight Attendants and
Stewards Association of the Philippines (FASAP) filed a
petition with the Civil Aeronautics Board (CAB) seeking to
block PAL wet lease deal with Air Philippines.

According to documents obtained by BusinessWorld, the PAL
management had petitioned the CAB last January 31 asking
for authorization to wet lease the three Boeing planes with
aircraft manufacturer serial numbers 21834, 21516 and 21517
for five months to be used not only for the flag carrier's
Australian route but also for the airline's extra section
flights to Jeddah in time for the ongoing pilgrimage of
Filipino Moslems to Mecca or the Haj.

Moreover, the flag carrier management said the three
aircraft would not only give the airline additional
capacity for its charter operations to Australia and Jeddah
but also provide PAL "with a spare aircraft and maintenance
cover for its existing aircraft fleet."

Documents show CAB executive director Guia C. Martinez
granted PAL's petition the following day allowing the wet
lease arrangement to take effect for one month or until
March 1, 2000.  However, the FASAP is now opposing the wet
lease arrangement because it will result in the
displacement of regularly-employed PAL cabin attendants.

In an earlier interview, PAL president and chief operating
officer Avelino L. Zapanta said the flag carrier would be
entering into a hosting service arrangement for its
Australia re-opening with Air Philippines and Aero
Pilipinas.  Under the scheme, Mr. Zapanta said Air
Philippines would dry lease three Boeing 747-200 planes for
thrice-a-week flights on the Manila-Sydney route which, in
turn, would be manned by cockpit and cabin crew from Aero

However, problems have already begun as early as this month
when the PAL management allowed Aero Pilipinas to take over
some of its Cebu flights in order to gain "initial
operating experience" required for clearance by the Air
Transportation Office.  FASAP noted several PAL cabin
attendants were displaced as a result of the take-over as
their flight assignments were pulled out.

The cabin crew union pointed out the new arrangement also
sows confusion as to who among the carriers involved will
bear the legal responsibilities in the hosting service

"Since these cabin crew would be flying PAL flights, using
PAL uniforms, and PAL identifications, a confusion might
arise between them and the regular employees of PAL
performing the same functions... There is no line that
delineates the liabilities for damages, such as passenger
complaints, passengers being bumped off, or injuries caused
to passengers that may arise. This is in effect a
subterfuge for the purpose of evading legal responsibility
for tortuous acts that might be committed therein," the
union said.

Despite this, PAL management had said in its petition to
the CAB that the wet lease arrangement with Air Philippines
would not violate the flag carrier's Amended and Restated
Rehabilitation Plan which was approved by the SEC because
the scheme "protects PAL from any financial risks in
respect of the operations of the subject aircraft while
providing PAL the opportunity to earn additional

Nonetheless, the FASAP pointed out the CAB's authorization
of the wet-lease arrangement between PAL and Air
Philippines could already be a "circumvention" of the
appropriate SEC proceedings and cause conflict between "co-
equal" government agencies.

PAL officials were not immediately available for comment.
(Business World  14-Feb-2000)

RURAL BANK OF STA.TERESITA: Ex-mayor charged with graft
The former mayor of Sta. Teresita, Batangas is now facing
graft charges at the Sandiganbayan after he allegedly
placed the town's money in a bank he partly owns.

The Office of the Ombudsman has charged former mayor Bayani
H. Andal after he allegedly transfered 8.442 million
Philippine pesos (US$208,795 at PhP40.432=US$1) in town
money from the Land Bank to the Rural Bank of Sta.
Teresita, a bank which he partly owns, and then malversed
PhP3 million ($74,199) of it in 1998.

A two-page charge sheet filed by the Ombudsman said it was
illegal for Mr. Andal to have authorized the transfer of
PhP8.442 million to the rural bank since it did not have
authority to accept local government deposits.

It also said the money was transferred "despite the lack of
authority of said bank from the Monetary Board of the
Bangko Sentral ng Pilipinas (Central Bank of the Phils)."

"Definitely, deposits give financial or pecuniary interests
to the owners of the bank, which include herein respondent
Mayor Andal," the charge sheet added.

Meanwhile, another two-page charge sheet filed by Ombudsman
accused Mr. Andal of malversing PhP3 million of the PhP8
million ($197,863) town fund he placed in his bank. Mr.
Andal, along with former Sta. Teresita municipal treasurer
Corazon Ellao, were accussed of "willfully, unlawfully, and
feloniously" embezzling PhP3 million.

Probers earlier noted that while the PhP3 million was
refunded after the Commission on Audit wrote Ms. Ellao, she
was not able to give credible evidence for the money's

"Her claim that the said amount was supposed to be
transferred from the Rural Bank of Sta. Teresita to J.P.
Laurel Rural Bank to cover certain obligations deserves no
considertation as no document supports it," an Ombudsman
resolution states.

The Ombudsman recommended a bail bond of PhP20,000
($494.66) for the graft charge against Mr. Andal and
PhP200,000 ($4,946.58) for the malversation charge against
him and Ms. Ellao. (Business World  14-Feb-2000)

UNIWIDE GROUP: To present new rehabilitation program
Following the recent entry of French retail firm Casino
Guichard-Perrachon SA (Casino Group), cash-strapped Uniwide
Group of Companies will submit to the corporate regulator
today, a revised proposal for the rehabilitation of its

In a telephone interview, Monico Jacob, chairman of
Uniwide's receivership committee, said the revised
rehabilitation plan will feature a repayment scheme
supported by a combination of the recent capital infusion
and dacion en pago of several Uniwide properties. Mr. Jacob
said the Casino Group's 3.57-billion-peso (US$88.3 million
at PhP40.432:US$1) investment will be used to service the
Gow-owed firm's outstanding obligations.

Meanwhile, Uniwide's debt reprieve was recently extended by
another 60 days or until April 7, giving the firm's
creditors more time to assess the merits of the revised
corporate recovery plan. Earlier, Securities and Exchange
Commission (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.
(Business World  14-Feb-2000)


CLOB INT'L: S'pore, KL parties plan revised solution
It looks like a new proposal to unlock the frozen Clob
shares is emerging from a Malaysian listed company and

Postmicro said in a statement that it is in the process of
finalizing its collaboration with the listed company, whose
identity "shall be disclosed shortly", and will formally
propose the new offer to Clob investors soon.  It added
that the key people behind the scheme are Singaporean
businessman Andrew Chuah, and Hon Hee Lee, a Malaysian
lawyer and Selangor State Assemblyman for Belakong.

Under the new scheme, Postmicro said the listed company
will exchange its own shares for all the Malaysian shares
belonging to Clob investors.  This will be done through a
fresh issue of its shares at a par value price of one
Malaysian ringgit each.

With the exception of the suspended counters, Postmicro
said the price of the Clob shares to be exchanged by the
listed company will be based on the respective prices of
the Clob shares as of December 31 last year.  The listed
company also undertakes not to dispose of the Clob shares
on the open market of the Kuala Lumpur Stock Exchange
(KLSE), Postmicro added.

However, the company can dispose of the shares through
private placements to local or foreign fund managers, and
through any share buy-back scheme approved by the Malaysian
authorities.  The new owners of the shares in the listed
company can dispose of their shares on the KLSE, but major
and substantial shareholders will have to undertake not to
sell their shares on the open market for a period of up to
three years, and only on a regulated basis after that.

It added that it will charge Clob investors who take up the
offer a flat fee of 2 percent of the acquisition price of
the shares. (Business Day  15-Feb-2000)


FAR EAST ADVERTISING: Posts annual loss                    
Far East Advertising posted 1999 losses of 2.6m baht,
compared with profits of 28.3m the year before. Results are
reviewed.  (Bangkok Post  15-Feb-2000)

MDX PLC: Posts first-half losses despite profitable 2Q     
MDX Plc posted H1 losses of 170.56m baht for the period
ending June 30, 1999, compared with losses of 653.87m the
same period the year before. Q2 profits totalled 112.9m
baht, compared with losses of 420.36m baht the year before.
Results are reviewed and consolidated.  (Bangkok Post  15-

SEAMICO SECURITIES: Denies incurring loss                  
Seamico Securities denied reports that it incurred losses
of 10m baht on through a mistake in keying in an order.  
(Bangkok Post  15-Feb-2000)

SIAM CEMENT PLC: To cull warehouses in streamlining drive
Siam Cement Plc (SCC) has decided that it no longer
requires all of the 64 warehouses that have been handling
the distribution of the group's building materials.

In a drastic restructuring measure, Dusit Nontanakorn,
SCC's vice president, said the group was closing down all
existing depots, replacing them with just four larger
warehouses to handle all distribution.  SCC will also
enforce a 25 per cent reduction in the number of its
building material dealers, while moving instead to shore up
its retailing outlet, Cementhai Homemart.

The overhaul reflects SCC's recent move to intensify its
restructuring efforts as the company - Thailand's flagship
industrial conglomerate - aims to tap foreign funding for
recapitalisation.  Last year, the company had to suspend a
share sale plan because of unfavourable market conditions
and a failure to secure the target share sale price.

SCC has pledged to downsize its businesses by at least 20
per cent through divestiture or reducing its holding in
many businesses regarded as its non-core areas.  Dusit said
the four larger warehouses will act as the distribution
centres for channelling goods to markets in each region of
the country. Half of the depots have already ceased
operations, while the remaining ones will be closed down
all by the end of the year.

About 300 to 400 people from a total workforce of 1,700 are
expected to be affected by the distribution revamp.
However, as the company maintains a strict no-layoff
policy, the surplus staff will be re-employed at some of
the group's other units.

Dusit said the financial goal for SCC's distribution unit,
operating under Cementhai Distribution Co, is to lift its
earnings before interest, tax, depreciation and
amortisation (Ebitda) from 15 per cent last year to 20 per
cent by next year.

"The move to replace small depots with several large
distribution hubs would help the company to reduce
operating and inventory costs. Also, it would help the firm
achieve greater efficiency, thus enabling us to offer a
same-day delivery service," said Dusit, who is also the
president of Cementhai Distribution.

The central hub in Rangsit is already up and running and
the northeastern warehouse, in Khon Kaen, is currently
under construction. The two other sites are planned to be
built in Thung Song in Nakhon Si Thammarat and Lampang.
Once the old depots are closed, Dusit said the buildings
and land would be sold. Each depot occupies roughly 10 rai
of land and the total assets of Cementhai Distribution
amount to about Bt7-8 billion, he added.

SCC's measure is similar to one implemented by its main
rival Siam City Cement Plc (SCCC), who replaced more than
100 of its warehouses with just a few larger ones. However,
SCCC was forced to lay off a large number of employees as a
result of the streamlining drive.  The company was also
downsizing its dealer network, Dusit said. Out of almost
700 dealers today, only about 500 would remain by the end
of the year.

Meanwhile, Cementhai Distribution will further expand its
modern retail outlet Cementhai Homemart chain. By the end
of this year, 40 Homemarts will be added, bringing the
total number of locations throughout the country to around
380.  On this year's sales prospects, Dusit said Cementhai
Distribution aimed to boost total revenue to Bt50 billion,
of which 30 per cent would come from exports with the
remainder from domestic sales.

Due to a slowdown in the construction sector during the
economic crisis, the company's sales revenue slumped by
about 40 per cent during 1998-99 to Bt40 billion, he said.
Cementhai Distribution also plans to concentrate on seeking
non-group products to distribute in a bid to increase the
volume it handles. The proportion of revenue contributed
from products outside the SCC group was expected to surge
to 50 per cent within three years, said Dusit.

Dusit added that Cementhai Distribution was also
negotiating with port developers from the US and Singapore
over acquiring stakes in its joint ventures, Thai
Prosperity Co and Rayong Bulk Terminal Co. (The Nation  14-

TANAYONG: Posts 9-month loss                                 
Tanayong posted M9 consolidated losses of 1.69bn baht for
the period ending Dec 31, compared with losses of 429.97m
for the same period the previous year. Q3 profits were
1.05bn baht, compared with profits of 382.76m the year
before. Results are reviewed.  (Bangkok Post  15-Feb-2000)

TELECOM ASIA: Debt restructure to be completed next month
Telecom Asia's debt restructuring process will be completed
by March this year, as Germany's Kreditanstalt fur
Wiederaufbau (KFW) will pay $150 million for 7.02 million
preferred shares, TA Vice President Atuek Assawanand
announced at a press conference yesterday.

Atuek said after the meeting of TA shareholders the entire
amount to be obtained from KFW will be used for payment of
13.3 billion baht outstanding debts to unsecured creditors.
According to the TA executive, the company will also close
the books in March and temporarily halt share transfer, in
order to allow existing shareholders to place orders for
new shares that they are eligible to buy.

Atuek disclosed that TA signed debt restructuring
agreements with their creditors in December last year. The
total debts for restructuring was 61.7 billion baht,
including the total secured debt of 48.5 billion baht.
KFW's holding of 7.02 million preferred shares, accounting
for 24 percent of the total registered capital, has made
the foreign holding of TA equity 73 percent.

TA's operations after the debt restructuring process will
become more stable with an expected increase of cash income
of 2-3 billion baht per year.  However, TA is shouldering
an annual interest of 4.0 billion baht, Atuek added.

Meanwhile, TelecomAsia president Supachai Chevaranont,
speaking after a shareholders' meeting yesterday, said the
company would not make any acquisition before the
completion of its debt restructuring.

There were rumours last week that TelecomAsia was
negotiating with Total Access for the take-over of the
latter's Wireless Communication Service, which operates the
World Phone 1800 mobile phone service.  (Business Day, The
Nation  15-Feb-2000)

THAI PETROCHEMICAL INDUS.: Bitter hearing looms
A showdown over the fate of Thai Petrochemical Industry,
responsible for $3.4bn in unpaid debt, looms on Monday as
Thailand's bankruptcy court considers a debt restructuring
proposal that has been the subject of an array of last-
minute wrangling from both creditors and the company's
leading shareholder.

What was supposed to be a routine hearing after creditors
and TPI management jointly filed a debt restructuring plan
to the court last month after more than two years of
acrimonious negotiations, is now expected to be a bitter
one after TPI objected to the plan - which it had
previously agreed to - on a number of grounds and creditors
counter-attacked by seeking to take over management control
of the company while the debt restructuring plan was
carried out.

The case is crucial for Thailand in a number of areas. As
the country's largest bad debtor, local banks need to
quickly make TPI's debt perform again in order to reduce
pressure to raise new capital.

The hearing is also the biggest test for the country's
bankruptcy court since it was established last year, along
with a revamped bankruptcy law. A decision that overtly
favours TPI is likely to anger foreign creditors, which
include the International Finance Corp, the US Export
Import Bank, Bank of America and Citigroup, and prompt
worries that other Thai companies will seek to manipulate
the legal system rather than agree to debt restructuring

Last month it seemed as though creditors and Prachai
Leophairatana, the main shareholder and chief executive,
had reached a deal whereby TPI's 148 creditors would
receive a 30 per cent stake in exchange for $400m in
accrued interest. Creditors would also receive bonds which
could be converted into an additional 45 per cent stake in
TPI should it default on the restructured loans.

Late last week TPI, apparently frustrated by creditors'
refusal to allow a $1bn capital-raising exercise to become
a centrepiece of the restructuring plan, filed a number of
objections. They included a request that debt repayment be
extended beyond the agreed date of 2003, and questions over
the validity of a court-sanctioned restructuring process.
TPI argued its assets exceed its liabilities and therefore
it should not be considered bankrupt.

Creditors countered by demanding the restructuring plan to
be amended so that an independent administrator would be
put in charge of the company while the plan was being
implemented. (Financial Times  14-Feb-2000)

THAI PETROCHEMICAL INDUS.: Court ruling may be delayed
The Central Bankruptcy Court is supposed to decide today
whether or not to restructure $3.5 billion debts of Thai
Petrochemical Industries (TPI), but the decision may not be
handed down because TPIU and its creditors are engaged in
complex maneuvers in and out of court.

Sources from TPI's creditors told Business Day that the
main arguments to be presented to the court would focus on
whether TPI is overwhelmed with debts that need to be

About one week ago, five major creditors petitioned the
court for permission to have TPI's huge debts restructured
under the plan to be mapped out by TPI Chief Executive
Officer Prachai Leophairatana.  On February 10, Prachai
told the bankruptcy court that TPI vetoed its creditors
debt restructuring plan because the company's debts was
lower than its equity.

However, in the morning of the following day, he told the
court that he would like to go ahead with the debt
restructuring plan.  In the afternoon, the TPI chief went
back to the court and said that he changed his mind again
and withdrew TPI from the debt restructuring scheme
proposed by the creditors.

Meanwhile, on the same afternoon, before the end of the
court office hours, TPI creditors informed the court they
would like to revise the debt restructuring plan by
changing the responsible person from Prachai to Affective
Planner Company.

The sources said in the beginning TPI major creditors did
not want TPI to become bankrupt because they already spent
more than two year ,trying to negotiate with the TPI

"If the way to solve the problem is through bankruptcy, our
efforts during the past two years would be in vain," said
the sources.

If the court accepts Prachai's objection today, it would
meansthat the entire debt restructuring plan would have to
be revised.  "We only hope that the Bankruptcy Court would
not accept Khun Prachai's objection," said the sources.

The sources also indicated that two major foreign debtors,
the World Bank-affiliated International Finance Corporation
(IFC) and the US Exim Bank were reportedly very unhappy
with the way things have been going. (Business Day 14-Feb-

THAI PETROCHEMICAL INDUS.: Creditors seek chief ouster
Creditors of Thailand's most indebted firm, Thai
Petrochemical Industries, said Monday they were taking the
firm to bankruptcy court to try and oust its chief

The foreign and local creditor banks said they were weary
of foot-dragging on restructuring the firm's massive 3.5
billion dollar debt.

"The newly nominated planner, in its capacity as plan
administrator, will impliment the agreed restructuring plan
as sanctioned by the (bankruptcy) court," the creditors
said in a statement.

Shareholders last month approved a restructuring plan for
the firm, while the bankruptcy court appointed existing
chief executive officer Prachai Leophairatana as planner.
But creditors say Prachai has since sought "unacceptable"
changes to the court-approved plan.  If the court's
decision goes in favour of the creditor group, it would
pave the way for a virtual takeover of the firm.

The TPI restructuring process has been closely watched by
foreign investors as it has major implications for efforts
to cut through billions of dollars of debts submerging Thai
banks and the economy since it plunged into crisis in

Bankruptcy court proceedings Monday morning were adjourned
briefly to allow lawyers for the company and creditors to
discuss the rehabilitation plan in detail.  Lawyers for the
creditors told the AFP-affiliated financial news agency
AFX-ASIA that if TPI withdrew its objections to their
proposed debt restructuring programme, the creditors would
reconsider who should be appointed to execute it.

The court's judge Monday acknowleged the petition and gave
both parties until February to file additional petitions
before ending hearings for the day.  TPI filed an objection
with the court last week to the creditors' proposed
debt restructuring.  The creditors then filed a petition
asking TPI founder and chief executive Prachai
Leophairatana be removed and their own choice appointed
instead.  They have yet to announce that choice.

The creditors include Bangkok Bank, Citibank, Bank of
America, the US Ex-Im Bank, International Finance
Corporation, KfW, Krung Thai Bank, Sanawa Bank,
Standard Chartered Bank and Korea Exim Bank. (Agence France
Presse  14-Feb-2000)

THAI WAH PCL LTD.: Reports debt rehab progress to SET
Thai Wah Public Company Limited, through Mrs.Duangkamol
Chaichanakajorn, Assistant Vice President-Accounting,
updates the progress of partial debt restructuring under
debt restructuring process of the Corporate Debt
Restructuring Advisory Committee (CDRAC) to the SET.

The meeting was held on February 10, 2000.  The majority of
creditors of Baht 4,103.3 million which represent 71% of
total loan had voted to approve our debt restructuring
plan. Major contents are all of the restructured loan will
be rescheduled into a six year term loan with a seven
installments remedy period payable and assets should be
mortgaged as security.

Sources of fund will be derived from disposal of non-core
assets, cash flow from main business, tapioca starch, and
dividend received from investment. In addition new
facilities not exceeding Baht 960 million would have to be
sourced as working capital within 90 days of the date of
debt restructuring agreement.  Detailed debt restructuring
plan will be sent to SET later. (Stock Exchange of Thailand  

THAI WAH PLC: Creditors approve debt plan
Creditors of Thai Wah Plc (TWC) holding debts of Bt4.103
billion, or 71 per cent of the property developer's total
debt, have approved a debt-restructuring plan.

The company's debt restructuring will proceed under the
supervision of the Bank of Thailand's Corporate Debt
Restructuring Advisory Committee (CDRAC).  The debt-reform
plan involves rescheduling repayments in seven instalments
over another six years, with assets to be mortgaged as

According to a filing to the Stock Exchange of Thailand,
funds will be derived from disposal of non-core assets such
as tapioca starch, and the dividend received from
investments.  Moreover, a new credit line not exceeding
Bt960 million would have to be sourced for working capital
within 90 days of the agreement on the debt restructuring.

The low-rise residential property developer and hotel
operator is mired in debts of Bt5.779 billion following the
four-year slump in the real estate market. It is a major
shareholder of luxury hotelier Laguna Hotels and Resorts
Plc. (The Nation  15-Feb-2000)

TOTAL ACCESS COMMOS.: Telstra negotiating for 25% stake
Telstra Corp., Australia's biggest phone company, said it's
in discussions to buy a 25 percent stake in Total Access
Communications (TAC), Thailand's No. 2 mobile phone
servicecompany, as it seeks to expand abroad.

Melbourne-based Telstra said it's been offered the stake by
Total Access' two-thirds owner United Communication
Industry Pcl, though no agreement has been completed. The
company declined to comment on the value of the
shareholding or whether it intends to make a offer

"We're taking a look at it, and we have been involved in
discussions," said Telstra spokesman Steve Wright, adding
that Telstra is likely to know "sooner rather than later"
whether it will accept the offer.

Total Access provides mobile phone services throughout
Thailand, and also sells cellular handsets and other
telecommunications equipment through its "WorldMedia"
network of owned and franchised retail stores.

It ranks just behind Shin Corp. Pcl's Advanced Info Service
Pcl in mobile phone subscribers, with a market share of
about 43 percent. Total Access had 1.01 million subscribers
at Sept. 30, 1999.  Bangkok-based Total Access said Jan. 13
it would complete the share-sale agreement within six weeks
that will put 25 percent of the company in the hands of a
foreign telecommunications firm to repay debt and fund
network expansion.

Telstra has been seeking phone and Internet investments in
the Asia Pacific region over the past year. (Business Day  

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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