/raid1/www/Hosts/bankrupt/TCRAP_Public/000221.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                            A S I A   P A C I F I C

           Friday, February 18, 2000, Vol. 3, No. 35

                                     Headlines


* C H I N A  &  H O N G  K O N G *

TRAFFIC STREAM(BVI)Infrastructure: S&P keeps low rating
WAH NAM GROUP: Reports wind-up petition hearing to HKSE


* I N D O N E S I A *

PT ASTRA INT'L: Cycle & Carriage to join in bid
PT BAKRIE FINANCE CORP.: Again sued by foreign creditors


* J A P A N *

NAGASAKIYA CO.: Failure puting retailers under scrutiny
NISSHIN FIRE & MARINE INS.CO.: S&P downgrades rating
TOMEN CORP.: Stock taking a beating


* K O R E A *

DAEWOO GROUP: FSC warns creditors about workout violations
DAEWOO MOTOR: GM offers to take sales, financing sections
KOOKMIN BANK: To issue FRNs worth $200M


* M A L A Y S I A *

TELEKOM MALAYSIA: ACA to investigate kickback claims


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

A BROWN CO.,INC.: Inks debt-for-asset swap with 2 creditors
ALTAMIRA CREDIT CORP.: SEC cracks whip on erring traders
BW RESOURCES CORP.: President files leave of absence
CAPWIRE WIRELESS INC.: Set to sign debt-rehab agreement
FORTUNE TOBACCO CORP.: Gov't to pursue tax evasion case
MONDRAGON INT'L PHILIPPINES: Finalizing Mimosa funding
NATIONAL STEEL CORP.: Asks for debt reprieve extension
NATIONAL STEEL CORP.: Swiss group plans purchase talks
NATIONAL STEEL CORP.: Gov't favors Swiss-firm takeover
RURAL BANK OF SAN MIGUEL: Hurls accusations vs. top bank
TELEBABAD DIRECT SA PILIPINAS: Phone syndicate busted


* T H A I L A N D *

FINANCE ONE PLC: Ex-exec's extradition hearing delay
SIAM SYNTECH CONSTRUCTION: Debt plan rejected
SWEDISH MOTORS PLC: Creditors get first payment
TELECOMASIA CORP.: Heavy selling of TA drags market down
THAI PETROCHEMICAL INDUS.: Crunch time for Bangkok Bank
THAI PETROCHEMICAL INDUS.: Bankruptcy court decision Mar.1
THAI TEL.& TEL.: Creditors expected to approve debt plan


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

TRAFFIC STREAM(BVI)Infrastructure: S&P keeps low rating
-------------------------------------------------------
Standard and Poor's Corp. maintained its single-D rating on
Traffic Stream(BVI) Infrastructure Ltd.'s US$119 million
senior secured notes due 20006.

Traffic Stream, a Hongkong company, is currently engaged in
a lawsuit with noteholders and hasn't made any interest
payment on the notes since November 1998.  Earlier this
month, a U.S. federal judge directed Chase Manhattan Corp.
to foreclose on Traffic Stream's collateral accounts after
the Hong Kong company defaulted on its 14.25% senior
secured notes, which were issued in may 1998 to finance a
business venture involving the construction of toll roads
in China. Merrill Lynch & Co. was the lead manager for the
offering. (The Asian Wall Street Journal  16-Feb-2000)

WAH NAM GROUP: Reports wind-up petition hearing to HKSE
-------------------------------------------------------
Further to the announcement dated 10th February, 2000
issued by Wah Nam Group(incorporated in Hong Kong with
limited liability), in respect of the Petition filed on
10th February, 2000 by Excel Noble Development Limited
("1st Petitioner") and Unbeatable Assets Limited ("2nd
Petitioner") at the High Court against the Company, the
Directors of the Company through Chan Kwok Choi Matthew,
Executive Director, wish to announce that the hearing of
the Petition is scheduled to be heard on Wednesday on 12th
April, 2000 at 9:30 a.m. at the High Court.

The Company has arranged with an independent third party
not connected with any of the directors, chief executive,
substantial shareholders of the Company or its subsidiaries
or any of their respective associates (as defined in the
Listing Rule) to provide unsecured finance for the
settlement anticipated to be during early next week, of the
HK$6 million payment order ("HK$6 Million Order") made
against the Company by the court on 17th December, 1999
plus interest thereon subject to the Petition being
withdrawn. The Company is appealing against the HK$24
million payment order ("HK$24 Million Order") made against
the Company by the court on the same day.

The Company will defend the Petition on the grounds, inter
alia, that the Company has adequate finance to satisfy the
HK$6 Million Order and that the subject matter of the HK$24
Million Order is a claim under serious dispute.  Further
announcement will be made in respect of any material
development of the Petition. (Hong Kong Stock Exchange  17-
Feb-2000)


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

PT ASTRA INT'L: Cycle & Carriage to join in bid
-----------------------------------------------
In its boldest move in recent memory, listed motor group
Cycle & Carriage Ltd (CCL) is bidding for a substantial
stake in Indonesia's troubled automotive giant, Astra
International.

Sources said CCL would be part of a Singapore consortium
that would try to secure a 43 per cent stake in Astra
International, the holding company behind Indonesia's
largest vehicle and components group. The consortium is
said to be putting up a bid of US$500 million (S$850
million).

BT understands that CCL is keen and will be taking up one-
fifth -- or US$100 million -- of the consortium's bid. A
few other co-bidders are said to be taking up smaller
stakes in the attempt, which BT learnt is led by the
Government of Singapore Investment Corp (GIC).

As it is still what sources described as "early days", it
is not known how CCL will finance the venture, although it
has more than enough cash at hand to do it internally.
Astra International's various automotive units assemble
Toyota, Peugeot, BMW, Daihatsu and Isuzu cars and trucks as
well as Honda motorbikes. It has about 55 per cent of the
Indonesian vehicle market and about the same share of the
components segment.

Besides its automotive business, Astra International has
interests ranging from electronics and agriculture to
timber and telecommunications. However, automotive is by
far its biggest business, contributing over 90 per cent of
revenue in pre-crisis days and 70 to 75 per cent currently.

CCL group managing director Philip Eng had previously told
BT that he viewed Indonesia as one of the most promising
car markets in the region. In pre-crisis days, car sales
hovered above 300,000 units a year -- or 10 times the sales
in Singapore.

An informed source said CCL, despite its keen interest, was
"treading with caution" because of two concerns. Firstly,
Jakarta has recently reduced tariffs on imported cars, and
is expected to do so further. This may affect local
assembler Astra's dominance in the field. Secondly, "Astra
is a political entity . . . and nobody really knows what's
inside."

But its concerns may be overshadowed by other events. A
number of other bidders are reportedly eyeing the Astra
stake, currently held by the Indonesian Bank Restructuring
Agency (Ibra). They include Lazard Freres of France, Credit
Lyonnais Securities, Filipino-owned J G Summit Holdings,
and George Soros' Quantum Fund.

The highest offers are said to hover around S$1 billion.
Ibra, which has kept mum on who has been bidding, is
expected to reveal shortlisted names of contenders around
March 23.  But analysts said the highest offer may not
necessarily secure the bid. For one, a "strategic investor"
would be preferred. Others said a government-backed bid --
of which CCL's is the only one so far -- could also carry
more weight.  In that light, the GIC-CCL bid will stand a
reasonable chance.

"All current bidders would want to resell the company at
some stage," a Jakarta-based researcher who covers Astra
said.

She believed the successful bidder would have to be
"approved" by the Japanese automotive partners involved in
Astra companies, notably Toyota. "Any group that is seen to
be undermining the Japanese interest would be opposed," she
said.  Also, the successful bidder's "subsequent actions --
for instance, how many people they will lay off -- would be
under close scrutiny".

BT understands Singapore's bid is being handled through JP
Morgan. When contacted, a JP Morgan senior executive
declined comment. A GIC spokeswoman also declined to
comment.  CCL has been trying to secure new businesses
since DaimlerChrysler said it would be taking back the
wholesale part of the Mercedes-Benz operation from next
year. Analysts said CCL's share price of around $3.80 was
well below its net asset value not just because of the
impact of DaimlerChrysler's move.

"Investors have little clue as to what it will do to shore
up earnings," said one. "Now, at least they know it is
doing something." (Singapore Business Times  17-Feb-2000)

PT BAKRIE FINANCE CORP.: Again sued by foreign creditors
--------------------------------------------------------
Four Hong Kong-based creditors filed a bankruptcy suit
against finance company PT Bakrie Finance Corporation (BFC)
for the second time on Wednesday for the company's failure
to pay US$13.5 million in debt.

The creditors' lawyer William S. Palijama of Hanafiah
Ponggawa Adnan Bangun Kelana law firm said previously the
four foreign creditors plus Hana Bank of Hong Kong filed
the same bankruptcy suit against BFC in August last year,
but was turned down by the court on the technical matter.

"We are filing a bankruptcy suit against BFC for the second
time and again in the effort to recoup the creditors'
money," he said.

The four creditors who are filing suit are AB Capital
Markets Ltd., Cho Hung Leasing & Finance Ltd., Hanmi
Leasing & Finance Ltd. and KEB Leasing and Finance Ltd.,
said William.  The loan, which matured on May 3, 1999, was
part of a $21 million total loan matured under a syndicated
loan agreement involving seven foreign financial
institutions and one local bank, Bank Negara Indonesia,
William said.

However, the four creditors -- in the context of protecting
their own rights -- are acting independently from the other
creditors under the syndicated agreement.

"Each amount outstanding at any time from the borrower to
each lender or the agent shall be a separable and
independent debt and every lender and the agent shall have
the right to protect and enforce its rights arising out of
this agreement," said William quoting the agreement between
the syndication and BFC.  "So we do not have to get
approval from the agent of the syndication or from the
majority creditors under the syndication," he said.

Tae Seon Paik, a representative from one of the above four
creditors (AB Capital Markets Ltd.) said that he was
frustrated with the implementation of the Bankruptcy Law
here that it seemed to be so difficult to bankrupt even an
obviously defaulted company.

"These companies get away without paying their debts and
continue operations, while their creditors are suffering,"
he said.

Sometimes they even sued the creditors who had filed a
bankruptcy suit against them, claiming that the creditors
had caused defamation to them by filing such bankruptcy
suit.  "This kind of attitude is totally unacceptable in
the financial sector," he said. (The Jakarta Post  17-Feb-
2000)


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

NAGASAKIYA CO.: Failure puting retailers under scrutiny
-------------------------------------------------------
The collapse of Nagasakiya Co., with some 380 billion yen
in liabilities, serves as a chilling reminder that the days
when large retailers could count on the unequivocal support
of their main banks are gone.

Some analysts believe the bankruptcy will speed up the
reorganization of Japan's retail sector by putting
retailers under tougher scrutiny by banks, suppliers and
investors.

Kazuo Kosugi, president of Kosugi Sangyo Co. (8146) and
representative of a group of Nagasakiya's suppliers, said
he contacted Tokuichi Kitajima, president of Nagasakiya, on
Feb. 8 after hearing reports that the major retail chain
operator's liabilities were expected to exceed its assets.
Kosugi asked him to get Dai-Ichi Kangyo Bank (8311), the
ailing company's main bank, to calm worried suppliers by
announcing support for the retailer and revealing plans to
rehabilitate the company.

This did not happen, and Nagasakiya filed for protection
from its creditors under the Corporation Rehabilitation Law
five days later. The incident has changed the way Kosugi
sees his customers. A customer can no longer be trusted
just because it is a major retailer, he said.

Rumors that Nagasakiya was in financial trouble had been
circulating for the past several years. But suppliers
continued to do business with the major store operator.
They were following a truism in the retail industry that it
is easy to recover money owed by retailers because they
make money everyday. It was hard to believe a main bank
would abandon a major retailer such as Nagasakiya, an
executive at an apparel maker said.

But circumstances in the financial sector have changed
dramatically since the collapse of the bubble economy.
Banks are reducing their assets and becoming more selective
about who they lend to. Tokai Bank (8321) and many other
banks that had loaned money to Nagasakiya recovered their
lending from the retailer over the last year or so,
increasing its dependence on Dai-Ichi Kangyo.

Unfortunately, the main bank could not continue lending to
a company which did not have a clear strategy to resolve
its troubles, since it is busy trying to ensure its own
survival by merging with Industrial Bank of Japan (8302)
and Fuji Bank (8317).

One of the consequences of the failure is the tougher
examination of retailers by suppliers. Though it is
unlikely to stop doing business with financially shaky
retailers, it does have to act tougher sometimes, said
Koichiro Yoshikoshi, president of Triumph International
Japan Ltd., one of Nagasakiya's suppliers. Yoshikoshi
believes manufacturers will select who they do business
with more carefully as a result of Nagasakiya's collapse.

The bankruptcy has also affected investment in retail
firms. General supermarket stocks have been sinking faster
than the Nikkei Stock Average since the failure was
announced. Investors are being very careful about buying
into the retail sector, and the divide between winners and
losers will become clearer by spring, said Kenji Tsukazawa,
an analyst at Jardine Fleming Securities (Asia) Ltd.
(Nikkei  16-Feb-2000)

NISSHIN FIRE & MARINE INS.CO.: S&P downgrades rating
----------------------------------------------------
Standard & Poor's Corp. lowered its rating based on public
information, or "pi" rating, for Nisshin Fire & Marine
Insurance Co. to triple-B-pi from single-A-pi.

The credit-rating agency cited the company's deteriorating
operatinh performance as a factor for the downgrade.
Nisshin Fire's combined ratio, which reached 99.4%. in
fiscal 1998 ended in March 1999 continues to deteriorate
amid typhoon-related losses,S&P said. The combined ratio
measures the company's costs relative to the insurance
premiums received.

The company's net premiums, or premiums after deducting
commissions, also remain low, falling 5.4% in fiscal 1998,
as recession-hit Japan deregulated its insurance industry
and competition intensified, S&P said. (The Asian Wall
Street Journal  17-Feb-2000)

TOMEN CORP.: Stock taking a beating
-----------------------------------
Tomen Corp. (8003) shares have taken a beating since the
company's Feb. 8 announcement of a 400 billion yen
extraordinary loss that forced it to seek 200 billion yen
in debt relief from Tokai Bank Ltd. and other creditors.

On Feb. 9, Tomen shares dropped 50 yen. Some bargain
hunters have begun to move in, but "the loss was larger
than expected," says Takashi Murakami, an analyst at Daiwa
Institute of Research Ltd.

The stock had been rising at the end of last year, on news
that Tomen was planning a public listing for a cable
television company in which it has a stake. The severity of
the recent drop suggests that individual investors who
bought at that time, unaware of the dire nature of Tomen's
financial straits, have been cutting losses on their
positions.

An official at a domestic investment advisory firm said,
"In its medium-term business plan released last March, the
company explained that its losses would be less than its
shareholder capital," which at that time was about 100
billion yen.

But under the market accounting system, Tomen plans to
fully introduce in March, its balance sheet is 200 billion
yen in the red. Real estate and related assets account for
more than 180 billion yen of this year's extraordinary
loss, while restructuring costs for affiliated companies
comprise nearly 150 billion yen.

According to an analyst at a foreign securities brokerage,
"More people have less faith in the company's balance
sheet."  For the immediate future, the question of debt
relief and next year's planned capital increase are the
main factors determining the direction of the company's
stock. Tomen shares are likely to remain vulnerable to news
reports about financial support. (Nikkei  17-Feb-2000)


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

DAEWOO GROUP: FSC warns creditors about workout violations
----------------------------------------------------------
The government will impose fines on banks and other
financial institutions participating in the debt workout
programs of 12 Daewoo Group units if they fail to turn the
units around, Financial Supervisory Commission (FSC)
Chairman Lee Yong-keun said yesterday.

"The financial institutions will face tough penalties if
they do not extend fresh funds and debt-for-equity swaps to
Daewoo units under the rehabilitation plans," the top
financial regulator said.

In order to spur subsidiaries into early recovery, the
government will conduct thorough checks on the progress of
the rehabilitation programs, he said.  Lee stressed the
government will not hesitate to impose penalties on
financial institutions found to be reneging on workout
promises.

Domestic creditors of the Daewoo units, including the
group's flagship Daewoo Corp., signed the rehabilitation
programs last year in a bid to turn the firms around.
Last month, domestic creditors and the government
tentatively agreed with the group's foreign creditors to
buy their loans to the ailing group at about 40 percent of
face value.

Once the nation's second largest conglomerate, Daewoo
collapsed under the weight of debts hovering above 60
trillion won in late July last year. Its foreign debts are
estimated to reach more than $5 billion.  The commission,
which is in charge of the nation's industrial and financial
restructuring, said financial institutions participating in
the workout programs are actively providing financial
support to the Daewoo units.

They have extended only 10 percent of new loan commitments
to the group's four major subsidiaries - Daewoo Corp,
Daewoo Motor Co., Daewoo Heavy Industries Inc. and Daewoo
Electronics Co. (DEC) - the commission said. In addition,
creditors of Daewoo Corp. and DEC were found to have
delayed the extension of fresh loans, it added. The FSS
emphasized the importance of the financial institutions
adhering to the rules of the workout programs in order to
boost the values of the Daewoo units. (Korea Herald  16-
Feb-2000)

DAEWOO MOTOR: GM offers to take sales, financing sections
---------------------------------------------------------
General Motors (GM) has said it wants to take over the
sales and financing arms of Daewoo Motor as well as the
main body of the company, an official supervising the
auction of the troubled automaker said yesterday.

"GM has told Daewoo creditors that it wants to acquire most
of the Daewoo Group's auto business," Managing Director Han
Young-Chul of the Corporation Restructuring Commitee of the
Daewoo Group said.

This means that GM wants to buy Daewoo Motors and its
overseas operations, its jeep-making Ssangyong Motors,
Daewoo Capital and Daewoo Motor Sales as a package, Han
said.

Yonhap News Agency quoted Daewoo Group creditors as saying
that the US giant automaker had promised to build up Daewoo
Motor into GM's production hub in the region instead of a
mere supplier of auto parts for GM. It also told the
government that it would pour money and resources into
Daewoo Motor for research and development and help Daewoo's
subcontractors. (Business Day  17-Feb-2000)

KOOKMIN BANK: To issue FRNs worth $200M
---------------------------------------
Kookmin Bank will issue floating rate notes (FRNs) worth
$200 million through a public offering in Hong Kong at the
end of this month, a bank official said yesterday.

The notes will mature in two years and carry an interest
rate of 1.43 percent above the six-month LIBOR (London
Inter-Bank Offered Rate), the official said. Kookmin Bank
will sign a contract with 23 overseas financial
institutions Feb. 28 and receive the funds in early March,
which will be used to pay back foreign debts.

Citibank and Standard Chartered Bank will serve as the lead
managers in the projected deal, the official added.
(Korea Herald  17-Feb-2000)


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

TELEKOM MALAYSIA: ACA to investigate kickback claims
----------------------------------------------------
The Anti-Corruption Agency (ACA) is to investigate claims
that a Japanese firm paid Malaysia's telephone company a
$2.8 million kickback in return for a big contract, reports
said yesterday.

ACA officials quoted by several newspapers said the local
agent allegedly involved in the payment to Telekom Malaysia
in 1997 had been identified.  They said a representative of
Japan's Mitsui and was due to visit the anti-graft agency's
headquarters yesterday to assist investigations.

A Japanese newspaper Friday said Mitsui had paid about 300
million yen in kickbacks in return for a big order from
Telekom Malaysia.  It said the sum was paid through a
Malaysian consultants' firm which turned out to be a dummy
company.

Asahi Shimbun, quoting sources at the Tokyo Regional
Taxation Bureau, said Mitsui - in a syndicate with NEC -
landed orders from Telekom Malaysia in late 1996 for
switchboards with a total capacity of about 800,000
circuits.  The Japanese syndicate won the deal, estimated
to be worth more than 10 billion yen, against a number of
European bids. The switchboards were delivered from 1996 to
1998.

Mitsui registered the kickbacks, paid in 1997 to the
Malaysian agent under a consultant contract, as
"commissions" which were reported as losses, Asahi said.
But the tax bureau is believed to have determined the
payments were rewards for the orders and they were
categorised as taxable "entertainment fees," the report
said.

Communications Minister Leo Moggie said Tuesday that
Telekom Malaysia would be asked to report to his ministry
about the matter. The firm says it has no knowledge of any
wrongdoing but has promised to investigate.  Opposition
parties have demanded an independent inquiry into the
affair. (Business Day  17-Feb-2000)


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

A BROWN CO.,INC.: Inks debt-for-asset swap with 2 creditors
-----------------------------------------------------------
Stockholders of listed manufacturing firm A Brown Co., Inc.
(ABC) have approved a debt-for-asset swap deal to pay 600-
million-peso (US$14.8 million at PhP40.459:US$1) worth of
debts with Land Bank of the Philippines and Solid Bank
Corp.

In a disclosure, ABC corporate secretary Oliva Pedere
said the board has been authorized to negotiate for the
payment of its PhP440-million ($10.9 million) loan with
Land Bank. Assets swapped for the loans include parcels of
land located at Upper Balulang, Cagayan De Oro City with a
value of PhP224.9 million ($5.6 million). The board was
also authorized to negotiate with the bank for the
restructuring of the loan's remaining balance.

ABC also said it will restructure an existing loan with
Solidbank through the mortgage of real estate properties
and share of stocks in Xavier Sports and Country Club. ABC
owes PhP169 million ($4.2 million) to Solidbank.
Stockholders also approved the creation of a new
corporation which will be engaged in the business of
manufacturing and trading of goods. All of ABC's trademarks
and assets in its chemical division will then be sold to
the new subsidiary. Speculations are rife the firm's
ongoing restructuring may be a prelude to the entry of a
new investor. (Business World  17-Feb-2000)

ALTAMIRA CREDIT CORP.: SEC cracks whip on erring traders
--------------------------------------------------------
The Securities and Exchange Commission (SEC) has finally
cracked the whip on erring businessmen selling non-existent
shares of stock of some companies to the detriment of
unwary investors.

One such recent case involves some P10 million worth of
preferred shares of Altamira Credit Corp. sold by its
president Ernesto Qua Hiansen to another Makati
businessman.  In its transaction, Qua Hiansen represented
that his company "is capable and had the SEc authority to
sell and deliver the shares" and that it had pending
application with the SEC.

However, the SEC denied that there was such as application.
Reacting to the SEC's action the Department of Justice
Makati prosecution office has filed criminal charges
against Qua Hiansen for "selling non-existent shares" of
his company.  The DOJ charged Qua Hiansen, under case No.
98-J-478651, of estafa uner article 315 of the Revised
Penal Coke for "fraud, deceit and false pretenses." The
case has been filed with the Regional Trial Court in
Makati.

The filing of the charges was recommended by assistant
prosecutor Amado Y. Pineda and review Prosecutor Albert A.
Kalalo and approved by Assistant State Prosecutor Leonardo
Guiab Jr.

The renewed crackdown by the SEC comes on the heels of the
new public interest brought about by the recent investors'
complaitns regarding insider trading which had been
responsible for the decline of the local stock market's
performance.

SEC Chairman Perfect Yasay Jr., who is scheduled to retire
next month, has set the wheels in motion for a crackdown
with renewed vigor to clean up illegal transactions in the
SEC before he bows out of office. (The Philippine Star  17-
Feb-2000)

BW RESOURCES CORP.: President files leave of absence
----------------------------------------------------
One of the top executives being investigated for alleged
insider trading at the stock market went on leave from his
company yesterday to parry the "vicious attacks" in media
that have distracted him from pursuing the firm's goals and
vision.

"To serve the best interests of BWRC (Best World Resources
Corp.) and to concentrate on clearing my name and obtaining
vindication, I request that I be granted a leave from my
position... effective today (Tuesday)," Eduardo "Moonie"
Lim Jr. said in a letter to the BW board.  "These lies must
be answered," he added.

At the Senate, Sen. Raul Roco, chairman of the committee on
banks and financial institutions, released to the media
last night copies of the investigation-report of the
Philippine Stock Exchange (PSE) on the controversial
trading of BWRC.

Roco decided to reveal the report despite an earlier
request by the PSE to keep it confidential because it is
"required in the public interest or for the protection of
investors."

"Public officials or persons with fiduciary obligations to
the public must protect the public welfare. This is
transparency in democratic life," Roco said in a letter to
Trinidad Kalaw and Jose Luis Yulo Jr., PSE chairman and
president, respectively.

Roco described the report as a good one but he could not
say if it is already complete.  Results of the PSE
investigation showed that BW chairman Dante Tan made about
P820 million from January to June when he bought about
414.2 million shares and sold 256.8 million shares.

It said that Tan also committed "manipulative schemes and
devices" in his BW transactions such as private placements
with lock-up, private placements with both lock-up and buy-
back, wash sales, over-the-counter transfers, no
disclosures of ownership beyond 10 percent, and misleading
disclosures.  It said that in preparation for his "scheme,"
Tan opened 21 accounts with 14 brokers using his name and
coded account names.

"Dante Tan created the illusion that there was active
trading in BW shares by wash sales, causing massive
transfer of his shares over the counter to many of his
associates and using private placements to generate funds
for his buying transactions and at the same time squeeze BW
shares out of the market to create an artificial shortage,"
the report said.

It added that these "schemes" artificially pushed the price
of BW upward until the market gained its own momentum and
the investing public was ultimately drawn in.  The report
described as "an illusion" the active trading in BW shares
from January to June 1999 because most of the transactions
were "wash sales."

"During this period, we noted a total of 130 buy and sell
transactions involving 37,902,600 BW shares which, however,
were traced to the accounts of Dante Tan as both the buyer
and seller and, hence, are wash sales," the report said.

Tan had claimed that he lost money in the BW transactions.
The report said this probably took place after the stocks
reached a high of P107 per share.

"Since his brokers had instructions to buy all shares in
the market for Dante Tan to corner the BW shares, they
bought the shares even at P107. Unfortunately, Dante Tan
ran out of resources causing the price of BW to plummet as
he could no longer support its price," it said.

The report cited the following PSE member-brokers liable
for alleged complicity with Tan: PCCI, A. T. de Castro,
Asesec, Securities 2000, Quality, Guild, Armstrong and
Angping.

Meanwhile, business executives said no matter what the
outcome of the investigation, the Estrada administration
should act fast on the results of the probe on BW to rid
itself of charges of cronyism.

Former Finance Secretary Ramon del Rosario Jr., now
chairman of AB Capital and Investment Corp., said the
government "must be able to prove it can handle the
investigations in a straightforward and credible way" if it
wants to restore confidence of the business community.

"We hope it would not be an effort to sweep the issue under
the carpet," he said. "It's either a step forward or a step
backward."

Roman Azanza, former head of the Philippine Capital Markets
Development Council, said regulatory agencies such as the
PSE and the SEC should move immediately to avoid
accusations that the probe is being whitewashed by
influential people.

There were reports that a powerful bloc within the PSE,
called the "old boys club," would pressure probers to
influence results of the investigation.
Copies of the report were sent to the SEC, the Senate and
the PSE's business conduct and ethics committee.

"Until then, speculation is rife and speculation is not
good for the market," said Azanza, who is now vice chairman
of the investments rating agency Thompson Ratings
Philippines.

Ricardo Lorayes, an analyst at the Unicapital Securities
Inc., said keeping the results away from the public will
not be good for the market.

"If investors will perceive that a whitewash has happened,
market sentiment may further weaken," he said.  "But if
investors perceive the report as factual and transparent
and moving toward a thorough housecleaning, the sentiment
may improve over the long term," he added.

While results of the probe remained classified, BW's share
went down by a peso to close at P6.40 per share. It was one
of the top four losers in yesterday's thin trading.  (The
Philippine Star  16-Feb-2000)

CAPWIRE WIRELESS INC.: Set to sign debt-rehab agreement
-------------------------------------------------------
Capitol Wireless Inc. (Capwire) is expected to sign a debt
restructuring agreement with creditor banks this month, a
move seen to pave the way for the beleaguered firm's
financial recovery.

Epitacio Marquez, Capwire president and chief executive
officer, said yesterday that the final terms and conditions
of the scheme are currently making the rounds of creditor
banks.  The banks, he pointed out, are already amenable to
the proposed repayment plan but are only awaiting official
approval of their respective board of directors for closure
of the deal.

Capwire's creditors include the Land Bank of the
Philippines, Philippine National Bank, Urban Bank,
Development Bank of the Philippines, United Overseas Bank
Philippines Inc., Far East Bank and Trust Co., and
Equitable PCI Bank.  The program involves the P908.83-
million loan obligations incurred by Capwire, primarily
caused by the sudden increase in interest rates brought
about by the Asian economic crisis which started in 1997.

Under the arrangement, 75 percent of Capwire's total debt
amounting to P681.62 million will be paid in eight years,
inclusive of a two-year grace period.  The remaining
P227.208 million will be settled in nine years with three
years' grace period.  The interest rate will be based on
the 91-day Treasury bill plus a two-percent spread per
annum subject to quarterly repricing.

At the same time, there will be an interest rate cap of 15
percent per annum subject to quarterly repricing and a
yearly review of the firm's actual earnings before interest
and taxes (EBIT). Once the annual review of Capwire's
performance shows a 20-percent positive variance on the
EBIT of actual versus projected revenue, an interest rate
of 91-day T-bill plus two percent will be charged and the
rate cap lifted.  (The Philippine Star  17-Feb-2000)

FORTUNE TOBACCO CORP.: Gov't to pursue tax evasion case
-------------------------------------------------------
Undaunted by the unceremonious ouster of Serafin R. Cuevas
as Justice secretary, government lawyers are still silently
working to pursue the over seven-year-old 25.27-billion
Philippine peso ($0.625-billion at PhP40.459=$1) tax
evasion case against controversial Chinese-Filipino
business tycoon Lucio C. Tan.

BusinessWorld learned the Office of the Solicitor General
(OSG) continues to press the Court of Appeals to order the
Marikina Regional Trial Court (RTC) to proceed with the
hearing of the nine criminal suits filed against Mr. Tan
and other Fortune Tobacco Corporation officials for
deficiency payment of value-added and ad valorem taxes, as
well as nonpayment of income taxes from 1990 to 1992.

Records showed the Solicitor General asked appellate court
Associate Justice Bennie de la Cruz last month to direct
the resumption of the proceedings at the Marikina court.
By its action, the OSG effectively adopted the position of
the Department of Justice (DoJ) that the beer and tobacco
magnate and Fortune Tobacco should be indicted for tax
fraud and junked the recommendation of the Bureau of
Internal Revenue (BIR) recommendation that the cases be
dropped.

In a telephone interview with BusinessWorld, Assistant
Solicitor General Mariano Martinez said that after careful
study of the case, he filed a position paper with the
appeals court's third division, asking it to direct
Marikina RTC judge Olga Palanca Enriquez to review the
earlier decision of Marikina Metropolitan Trial Court judge
Alex Ruiz, instead of refusing to hear the cases due to
DoJ's late filing of the appeal -- 11 days after the 60-day
deadline from the ruling, as provided by law -- the
technicality that prompted this lower court to junk the
complaint.

In Judge Ruiz's dismissal of the government's attempt to
force Fortune Tobacco officials to face a public trial, he
gave more weight to the BIR's argument that, as
complainant, it has the prerogative to determine whether or
not to pursue the case. The BIR had ruled against the DoJ
that there is no sufficient evidence to pin down Mr. Tan or
anyone of his firm's officials in this case.

"In the OSG's memorandum, we asked the Court of Appeals to
adopt the Republic's position that the petition for
certiorari should be tried on the merits, not just on mere
technicality," Mr. Martinez said.

The government's decision to resort to legal means to
collect the multibillion-peso tax liabilities was reached
after Mr. Tan said he would not enter into any kind of
compromise to settle what he called a "persecution suit."
Unlike former BIR commissioner Liwayway Vinzons Chato, who
first brought the case to the DoJ for investigation,
Beethoven Rualo, who was the BIR chief when the cases were
filed, wanted to exonerate the respondents, saying there
was not enough evidence to convict them for tax evasion.

Newly appointed BIR commissioner Dakila Fonacier was of the
impression the cases have long been dismissed by the
courts.  In his first press conference after his
appointment last month, he successfully evaded questions on
the controversial suits, saying since these have been
junked, "it is better to leave things at that."

Solicitor General Ricardo P. Galvez had assigned the case
to Mr. Martinez, with a specific order to determine the
best way to dispose of the controversy without leaving the
government at a losing end.

Mr. Martinez admitted the OSG was "torn between" the
Justice department's insistence to pursue the cases and the
BIR's demand to drop them.  The Solicitor General serves as
official lawyer of both the DoJ and the BIR.

The persistence of Mr. Cuevas, a former Supreme Court
justice, to pursue the controversial cases against Mr. Tan,
a known supporter of President Estrada, was reportedly
among the reasons that prompted the Chief Executive to
accept the courtesy resignation Mr. Cuevas tendered in
December -- a practice required of all Cabinet members at
the end of each year.

A BusinessWorld source at the DoJ said in light of the
developments at the Court of Appeals, "Malaca¤ang is
mistaken if it thinks the Tan case is now closed with the
ouster of Cuevas."

"With this interesting development, it appears the OSG is
standing pat on Secretary Cuevas's position that the case
is worth pursuing all the way to the Supreme Court," said
the BusinessWorld source.

Should the appellate court grant the government's appeal
and set aside the October 12 ruling of Judge Enriquez, then
the DoJ will resume handling the cases for prosecution at
the trial court.  The suits will likely be assigned anew to
the original five-person prosecution panel headed by Senior
State Prosecutor Paulita A. Villarante.

"Then, that's when we'll know whether newly appointed
Justice Secretary Artemio Tuquero is sincere in his earlier
statement that he will pursue all cases initiated by Mr.
Cuevas," said the DoJ source.

Last year, the OSG ordered the BIR to review the
"truckloads of evidence" the Justice department had against
Mr. Tan and Fortune Tobacco to determine whether or not
there was basis to pursue the tax cases.  OSG said it
wanted to ensure the government has solid evidence against
the accused corporation and officials before it makes its
next move. (Business World  17-Feb-2000)

MONDRAGON INT'L PHILIPPINES: Finalizing Mimosa funding
------------------------------------------------------
Mondragon International Philippines Inc. is gearing up to
regain control of the Mimosa Leisure Estate in Clark by
finalizing a bridge financing facility to cover its
obligations to the government.

This developed as Mondragon told the Philippine Stock
Exchange that the unusual movement in the trading of its
shares on Friday might have been caused by "the strong
interest generated by the statement of Clark Development
Corp. of its willingness to turn over the Mimosa Leisure
Estate back to Mondragon upon payment of its obligations to
the government."

Mondragon shares rose by 50 percent on Friday, making it
the biggest gainer in the PSE that day.

"In the meantime, Mondragon is exerting all efforts to
facilitate the release of the funds from the US Trust in
order to meet its obligations and to pursue interim
measures for bridge financing," Mondragon financial
controller Pierre Paul Buhay disclosed to the PSE.

Mondragon chair and CEO Jose Antonio Gonzalez earlier
tapped Resort Suites International to come up with a
development plan that would persuade a California-based
investment trust to grant the company $200 million to
refinance the local firm's obligations.

The state-run Clark Development Corp. earlier shut down the
Mimosa casino for refusing to pay more than P400 million in
taxes and back rentals.  Several investors have expressed
interest to take over Mimosa since then, including the
group of "Plastics King" and presidential ally William
Gatchalian who has seriously ventured into the hotel
business and the group of Antonio "Tonyboy" Cojuangco.

Mondragon is in need of a new investor to pump fresh
capital into leisure estate.  On top of its obligations to
the government, more than 20 banks are running after
Mondragon for some P5.5 billion worth of principal debts.
The creditor-banks included Asianbank Corp., Far East Bank
and Trust Co. and United Coconut Planters Bank.

The three banks last year elected eight of their officials
to the Mondragon board during a contested annual
stockholders' meeting. The three banks have argued that
under the compromise agreement they signed with Mondragon,
they would be able to exercise their right to vote on the
shares pledged by Mondragon in case the company would
default on its loans.  The banks had claimed that Mondragon
has not paid a single centavo for more than a year.

Macau casino tycoon Stanley Ho and Filipino bingo baron
Dante Tan have also earlier surfaced as among those who had
sent feelers to Gonzalez for a possible buy-in into
Mondragon. (Philippine Daily Inquirer  16-Feb-2000)

NATIONAL STEEL CORP.: Asks for debt reprieve extension
------------------------------------------------------
In an effort to stop foreclosure proceedings on its assets
pending approval of its proposed rehabilitation plan,
beleaguered steel manufacturer, National Steel Corp. (NSC)
sought a 30-day extension of its debt payment reprieve set
to lapse on Thursday.

In a motion filed with the Securities and Exchange
Commission (SEC), NSC said creditors need more time to
comment on the proposed recovery plan which was completed
by NSC only this month.

"(We) immediately served (our) creditors with copies of the
(SEC's January 18 debt suspension order) and the petition.
However, considering the number of its creditors, (NSC) was
able to complete the service of copies of the order and
petition only this week," NSC said.

The cash-strapped steel maker said the debt moratorium
should be extended until March 18, considering that the SEC
has not yet acted on its application for the formation of a
management committee or appointment of a rehabilitation
receiver.

NSC filed its petition to be declared in a state of
suspension of payment and rehabilitation last December 28
after it failed to meet obligation of over 16.18 billion
Philippine pesos (US$400.6 million at PhP40.387:US$1). The
firm's losses allegedly resulted from the government's
accession to the World Trade Organization which led to the
proliferation and dumping of cheap imported steel products
in the local market.

Also, like many other firms hit by the Asian economic
slump, NSC suffered foreign exchange losses when the cost
of imported raw materials became higher than the selling
price of the steel maker's finished products.

The Commission had earlier suspended all actions for claims
against NSC, after it (SEC) found the steel maker's
petition "sufficient in form and substance."  The SEC
hearing panel, led by top corporate overseer Perfecto R.
Yasay, Jr., also prohibited NSC "from disposing its
properties ... and from making any payments outside of the
legitimate expenses of its business," pending resolution of
the firm's petition for rehabilitation.

NSC said even before any action is taken on the firm's
pending petition, NSC's "liabilities will continue to fall
due after the expiration of the 30-day provisional
suspension order."  NSC's lead creditor -- Philippine
National Bank (PNB) -- earlier scheduled an extrajudicial
sale of some assets in Lanao del Norte to cover the steel
maker's debts of over PhP9.87 billion ($244.4 million). The
sale, however, was temporarily deferred by the regional
trial court in the province.

A hearing on the petition to be declared in a state of
suspension of payment (for a period of two years) and the
creation of a management committee has been scheduled on
February 16.

Meanwhile, a solon yesterday revealed that NSC may have
been deliberately put down the drain to give Malaysia
leverage in the Asian steel industry.  During a Senate
hearing, Senator Juan Ponce Enrile questioned the
privatization of Asia's oldest steel company, where the
government allegedly lost PhP1.5 billion ($37 million) in
revenues.

Former National Development Corp. (NDC) general manager
Arthur Aguilar claimed they were not aware Malaysia was
setting up its own steel plant at the time of the NSC
auction.  He admitted, however, that they were in a hurry
to sell off the government stocks. "The magnitude involved
is so huge that we had to assume that they have complied
with the scheduled requirements because we can no longer
double check," he said.

"As the general manager, I had the burden of protecting
taxpayers' money to the tune of PhP22 billion ($544.7
million)," Mr. Aguilar added.

"I do not want to be malicious that's why I asked if they
knew at the time Malaysia was also trying to put up a plant
similar to NSC's capabilities," Mr. Enrile told reporters
after the hearing. "Now NSC is dead as an industry whereas
Malaysia has its own steel industry. We might end up buying
our steel requirements from Malaysia instead of producing
our own," he added.

NDC controlled NSC until 1995 when 82.5% of its shares were
bought by Wing Tiek Holdings Berhad of Malaysia.  Wing
Tiek's control, however, did not result in improved
operations after it failed to deliver its original
commitments.  In 1997, the controlling shares were sold to
another Malaysian firm, Hottick Investments Ltd.

Mr. Enrile, government corporations committee chairman,
said officials may have violated the 1987 Constitution when
it sold 82.5% of government shares in NSC to Wing Tiek in
1995. Even before the privatization, the Malaysian firm
held at least 55% interest, the solon pointed out.

"Apart from that I cannot understand why the government
just wanted to get rid of NSC and that seems to be the
tenor of testimonies of former government people," he
added.

Mr. Enrile also said the government seems to have condoned
Wing Tiek's failure to deliver on its commitments. The
committee has summoned former Cabinet officials, including
former Finance Secreatry Edgardo B. Espiritu, who paved the
way for the NSC auction. (Business World  16-Feb-2000)

NATIONAL STEEL CORP.: Swiss group plans purchase talks
------------------------------------------------------
Swiss-based Duferco Group is set to talk directly to the
Malaysian owners of the National Steel Corp. (NSC) to
explore the possible purchase of a controlling stake in the
debt-saddled steel company.

Duferco "is the best one" among companies interested in
buying the shares from Hottick Investments Ltd. because it
is the only one that can assure NSC with stable supplies of
slabs needed in the plants operations, said a government
official involved in discussions to help make NSC
attractive to prospective buyers.

"The only way to fast-track negotiations for the purchase
of the NSC controlling stake is to negotiate directly with
Hottick" which owns 82.5% of the steel firm, said the
source who requested anonymity.

NSC suspended operations in November last year due to
financial problems highlighted by its failure to repay
reaching about 16 billion Philippine pesos (US$395.5
million at PhP40.459:US$1) with 14 local creditor banks.
It is best for the firm to talk to Hottick rather than just
limit talks with Philippine government representatives
because the Malaysian owners can opt later on to reject any
offer, said the source.

NSC's creditor banks earlier moved for foreclosure
proceedings but Hottick has petitioned the Securities and
Exchange Commission for an extension of the debt suspension
period.  Several other groups have expressed interest in
NSC but government officials who have been facilitating
negotiations for the sale of the said shares to another
private sector group said Duferco has better chances of
bagging the deal because "it is deemed willing to put its
money where its mouth is," the source said.

Among companies reportedly interested in NSC are Dutch firm
Ispat International NV and Paris-based Pentium Group. Some
downstream steel industry players have also reported to
join forces and bid for Hottick's shares in NSC.

Duferco is represented by Credit Agricole in negotiations
to purchase Hottick's shares in NSC. The European firm is
engaged in trading of steel products such as tin plates,
special steels, and raw materials including coal, coke,
scrap, iron ore, and pig iron.

The source said it is best the shares are sold the soonest
because the NSC plant in Iligan City can deteriorate if it
takes much longer to resume operations.  The government
official said it is possible Duferco will just infuse $15
million "and this is only to restart operations."

Earlier, Finance Secretary Jose T. Pardo said the new
private sector owner of NSC needs to put in $130 million to
make the integrated steel firm viable again.
Representatives of Duferco, however, "feel there is no need
for that much money," said the source.

Duferco earlier met with NSC creditor banks and the banks
apparently arranged for the meeting with the Malaysian
owners, the source added.  Among concerns interested
investors wanted the government to clarify was the status
of dumping petitions against Russian goods that compete
with NSC in the Philippine market.

At present, the Philippine government, which formerly
controlled NSC, owns 12.5% of the beleaguered firm. In
1995, the government sold majority shares to Malaysian firm
Wing Tiek Holdings Berhad which later sold the shares to
Hottick.  Some quarters have alleged that these firms
failed to infuse fresh investments to reinvigorate NSC
operations, leading to its current woes.

NSC officials, however, have insisted the deluge of Russian
steel products in the Philippines contributed to the
collapse of the company's operations.  To avoid a repeat of
this situation, government is planning to get the new owner
to register with the Board of Investments which grants
firms fiscal incentives and monitors actual investments of
registered firms. (Business World  17-Feb-2000)

NATIONAL STEEL CORP.: Gov't favors Swiss-firm takeover
------------------------------------------------------
Government is supporting the bid of Swiss firm Duferco Inc.
to acquire controlling interest in debt-saddled National
Steel Corp. (NSC). The Swiss company has already initiated
talks with Malaysian owners Hottick Holdings Inc.

This developed even as two Russian firms expressed interest
in investing in the financially troubled steel firm.  A top
trade official told reporters that Duferco has escalated
its efforts to buy into NSC by initiating talks directly
with Hottick instead of confining negotiations to NSC's
creditor banks.

The official made this disclosure within days of the
announcement by the Paris-based Pentium Group that it has
completed the buyout offer and financing arrangements to
purchase NSC in conjunction with the DLJ Group in New York.
But, Alfredo Lim, NSC's legal counsel said the company is
now talking to the two Russian companies and expects to
close a deal within the next three to four weeks.

Lim made the disclosure in a hearing at the Securities and
Exchange Commission (SEC) where the firm asked to be given
another 30-day extension of its suspension of debt payments
or until March 18.

"There is nothing solid here," the DTI official said.
"Duferco is the most serious group we have met so far and
we think this is the best deal because it has access to
supply that NSC needs to continue operating."

Duferco is known as a steel trading firm, but has also
signed a contract for a joint-venture steel rolling plant
in South Africa which was expected to process 650,000 tons
of steel annually.  Represented in the Philippines by Swiss
banking giant Credit Agricole, the official said Duferco
was scheduled to meet with Hottick officials sometime this
week to discuss the terms of acquisition.

According to the official, Duferco is moving fast for fear
of the continued deterioration of NSC's plant and
facilities since it closed down in November last year.
(The Philippine Star  17-Feb-2000)

RURAL BANK OF SAN MIGUEL: Hurls accusations vs. top bank
--------------------------------------------------------
Putting another spin into its much-publicized problems,
beleaguered Rural Bank of San Miguel (RBSM) yesterday
accused top Bangko Sentral (Central Bank of the Phils.)
officials of "pressuring" its owners and "brokering" to
sell to buyers.

The rural bank issued the statement as the Court of Appeals
(CA) temporarily stopped the Philippine Deposit Insurance
Corp. (PDIC) from taking over its operations.Last February
9, the appellate court issued a 60-day temporary
restraining order (TRO) on a Monetary Board resolution that
placed the troubled bank under receivership of the PDIC.In
a statement issued to the press yesterday, RBSM said it
"attributes its present difficulties to the administrative
case it filed against Deputy Gov. Alberto V. Reyes and
another central bank official last May, 1999 for brokering
and pressuring RBSM owners to sell the bank to his named
buyers, in violation of the Anti-Graft and Corrupt
Practices Act and the Code of Conduct and Ethical
Standards."

The bank did not name the alleged buyers. It alleged Mr.
Reyes and other central bank officials, which it did not
name, "played key roles in causing the bank run and closure
of the rural bank."  It said the case is still pending
resolution with the Monetary Board, the central bank's
policy-making body, which ordered the placement of RBSM
under receivership of the PDIC last Jan. 21.

Mr. Reyes, who is officer-in-charge of the Bangko Sentral
in place of Gov. Rafael Buenaventura who is abroad,
yesterday denied the charges. He also pooh-poohed RBSM's
move to publicize the charges as a "defensive" tack. "We're
coming up with another estafa case against Mr. (Hilario)
Soriano," RBSM's owner and president. (Business World  16-
Feb-2000)

TELEBABAD DIRECT SA PILIPINAS: Phone syndicate busted
-----------------------------------------------------
The Presidential Anti-Organized Crime Task Force (PAOCTF)
busted the operations of a syndicate engaged in illegal
overseas telephone service and arrested two of its members
the other day. PAOCTF said the group offered international
calls from Taiwan to the Philippines through Telebabad
Direct Sa Pilipinas prepaid cards without passing through
telecommunications companies resulting in a PhP3 billion
($74.15 million) loss for the telecommunications industry.
(Business World  17-Feb-2000)


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

FINANCE ONE PLC: Ex-exec's extradition hearing delay
----------------------------------------------------
The Bow Street Magistrates Court yesterday postponed a
hearing by two weeks -- until Feb. 29 -- for the
extradition of financier Pin Chakkaphak, and granted an
extension of bail for Pin, the former president of the now
defunct Finance One Plc.

Pin was arrested by British authorities last December in
connection with a loan scandal in Thailand. He is caught in
a legal battle with the Thai government, which is
requesting his extradition so that he will be tried in the
Thai justice system. The former high-flying financier is
accused by the Bank of Thailand of embezzling some Bt2.1
billion from Finance One Plc in early 1997, a charge Pin
has denied. (The Nation  16-Feb-2000)

SIAM SYNTECH CONSTRUCTION: Debt plan rejected
---------------------------------------------
Thirteen creditors of Siam Syntech Construction Plc
(Syntec), led by the Bank of America, yesterday flatly
rejected the company's proposed debt-restructuring plan
worth an estimated Bt9 billion.

Piya Sosothikul, vice president of Bangkok Bank - one of
the creditors - said that creditors voted against the plan
because a 94 per cent haircut proposal was unacceptable to
them.

"The financial burden is too huge to accept," he said at
the Bank of Thailand yesterday where 23 Syntec creditors
met to vote on the plan.

Syntec's debt restructuring plan, under the supervision of
the Corporate Debt Restructuring Advisory Committee
(CDRAC), involved a new capital injection of Bt400 million
by the Richee Fund, debt-to-equity conversion and debt
forgiveness. (The Nation  16-Feb-2000)

SWEDISH MOTORS PLC: Creditors get first payment
-----------------------------------------------
An impressive cashflow improvement following a business
rehabilitation deal has enabled Swedish Motors Plc to make
the first cash repayment to its creditors this month.

Swedish Motors also said it was forecasting a rise in car
sales this year to more than 1,000 units, from 721 last
year, including an additional 300 used cars, plus 10%
growth in revenue from after-sales service and spare parts.
Managing director Geoffrey Rowe said the company would
earmark 50 million baht this year to improve its sales
network.

Swedish Motors has also appointed a business manager to
develop related businesses, such as insurance and hire-
purchase, to offer a one-stop shop for customers.  The
company recently introduced a tourists' and diplomats'
centre at its Sukhumvit 39 showroom to offer duty-free cars
to potential customers working for embassies and
international organisations.

As well, improved after-sales service will include a 12-
month warranty covering parts, labour and crash repairs.
Short- and long-term Volvo rental programmes are also
planned.  Dudduen Boonsue, finance and accounts manager,
said the company would start repaying its restructured debt
of 129 million baht by the end of this month.

In the first repayment, 29 million baht was raised from the
successful sale of a land plot in Bangkok and another 100
million from improved cashflow.

"The creditors believe the company will be able to complete
debt repayment within the next five years, two years sooner
than that specified in the rehabilitation deal, if there is
no similar crisis," Ms Dudduen said.

Swedish Motors reduced its total debt to 1.1 billion baht,
from 3.5 billion, under a rehabilitation deal signed last
December.  This was largely through new capital increases,
some cash repayments, a debt-to-equity swap by creditors
and sale of non-performing assets.  As a result, the
creditors, mostly foreign banks, have become 73%
shareholders and have injected new capital of 2.3 billion
baht. (Bangkok Post  16-Feb-2000)

TELECOMASIA CORP.: Heavy selling of TA drags market down
--------------------------------------------------------
The heavy selling of TelecomAsia Corp's (TA) shares
continued for a second straight day, leading to a 10.62 per
cent fall in value and dragging the market down nearly two
per cent, or 8.14 points, at the close yesterday.

Investors reacted to the disappointing performance on
Nasdaq by a TA affiliate, FLAG Telecom Holding, with heavy
dumping of TA shares, resulting in a 12.38 per cent fall to
a low of Bt49.50 before recovering slightly to end at
Bt50.50. It was the most active share yesterday with
Bt446.351 million turnover.

On Tuesday, TA shares, which rose strongly last week,
plunged 14.39 per cent from Bt66 to Bt56.50. Sentiment
against TA, which accounts for nearly seven per cent of the
overall capitalisation of the Thai market, also hurt the
stock market and its peers in the sector.  All listed
communications stocks fell, except Advance Info Service.
Shin Corps shares tumbled Bt12 to close at Bt298.

An analyst at a foreign brokerage attributed the continued
fall in the stock market to the decline of communications
stocks, particularly TA.  The main reason for the turn
against TA is the performance of FLAG Telecom Holding which
is trading at about US$35 on Nasdaq - far below the
speculation of about $60 when it started trading last
Friday.  TA indirectly owns about 10 per cent of FLAG.

"TA's share price jumped dramatically last week because
investors bet on its future, but their predictions were too
long-term," he said.

"The share price fell sharply when investors found it to be
higher than the fundamentals could support. Foreign
investors, the major players in the Thai stock market, are
still selling Thai shares, particularly TA shares."

Foreign investors sold off Bt4.846 billion in the past 15
days alone - up significantly from the Bt3 billion net sale
in the entire month of January.  The analyst said that it
was difficult to predict the direction of TA's share price,
because even though there were still sale orders, some
investors had started to buy back the shares in the second
trading session yesterday.  He recommended that investors
wait for the price to stabilise before making any
investment decision. (The Nation  17-Feb-2000)

THAI PETROCHEMICAL INDUS.: Crunch time for Bangkok Bank
-------------------------------------------------------
Bangkok Bank will come under tremendous pressure to
recapitalise soon if it fails to strike a debt-
restructuring deal with Thai Petrochemical Industry Plc, to
which the bank has a huge exposure of US$370 million
(Bt14.6 billion) in direct loans, plus Bt40 billion in off-
balance sheet guarantees.

People familiar with the discussions say relations between
TPI and Bangkok Bank have hit rock bottom following
increasingly acrimonious debt-restructuring negotiations
between the country's largest debtor and its local and
international creditor banks.

One of the lawyers involved said: "If Bangkok Bank cannot
bring this deal to a successful conclusion, it will face
pressure to recapitalise over the next two to three months.
And it looks as if Prachai Leopairattana (the chief
executive of TPI) is going after Bangkok Bank in a rather
vengeful way."

Indeed, the stalemate in the TPI debt-restructuring talks
has eroded investors' confidence in the prospects for
Thailand's economic recovery and has also dampened
sentiment in the Thai stock market. Late last year, most
investors believed a successful TPI deal would bolster
confidence in the Thai legal system and blaze the trail for
other debt-restructuring agreements.

"The TPI case is very sensitive. It affects confidence in
the entire system," said a banking analyst at a local
securities company.

Shares of Bangkok Bank and other bank stocks have been
falling sharply since the beginning of the year as
sentiment soured on the banking sector and the sluggish
progress of corporate-debt restructuring. Bangkok Bank
closed at a high of Bt66 on Jan 20 and has been falling
steadily ever since. Yesterday the bank was trading at
about Bt50 a share.

Apart from the $370 million in direct loans to TPI,
Vachiraphand Phromprasert, a financial adviser to TPI, said
last year that the bank had also agreed to guarantee Bt40-
billion worth of TPI's stand-by letters of credit.

If TPI fails to honour the stand-by LCs, the burden to pay
on them will fall on the shoulders of Bangkok Bank. As of
last December, Bangkok Bank had reserved Bt166.75 billion
in provisions against loan losses, or 83.5 per cent of its
expected total requirement for this year. Similarly, it had
succeeded in restructuring Bt102.51 billion of corporate
debt. Its non-performing loans stood at Bt393 billion, or
30 per cent of total loans.

Over the weekend, it was reported that the lawyers
representing the creditor banks had pressed Prachai into
surrendering his control over TPI, so that the creditor
banks could appoint an independent planner and take over
the company. TPI owes 148 creditors a combined US$3.5
billion.

"It looks as if the clash between the creditor banks and
the company has escalated into a personal war," the lawyer
said.

Both sides are now locked in a bitter court battle over the
control of TPI. The creditor banks are seeking to prove to
the Central Bankruptcy Court that TPI is insolvent so that
they can lead the company into a course of reorganisation
or rehabilitation. Prachai has altered his tactics by now
arguing that TPI is not insolvent and that the creditor
banks should sue him under the civil code - not under
bankruptcy or foreclosure laws - if they want to get their
money back.

So far, the legal fees racked up by both sides are
estimated to have skyrocketed to Bt1 billion, said the
lawyer.  Bank analysts agreed that Bangkok Bank may be
forced to tap the capital markets again if it is not able
to reclassify its TPI assets back to the performing-loan
category. "For the strategy of the bank is to work on debt
restructuring to fulfil this year's provisions for loan
losses without having to resort to a capital increase," one
analyst said.

Adisak Kammaal of Philippe Securities (Thailand) Ltd said
failure to resolve the debt-restructuring case has clouded
the earnings outlook of the banking industry, resulting in
prices falling for bank stocks, including those of Bangkok
Bank.

"The market's expectation that banks will soon be posting
profits has been postponed," he said. (The Nation  16-Feb-
2000)

THAI PETROCHEMICAL INDUS.: Bankruptcy court decision Mar.1
----------------------------------------------------------
The Central Bankruptcy Court will rule on whether Thai
Petrochemical Industry (TPI) is insolvent or not on March
1. The court heard 10 witnesses representing creditors on
Monday and yesterday.

TPI's major shareholder and chief executive Prachai
Leopairatana is arguing that the company is solvent because
its assets exceed its liabilities by Bt28 billion. However,
creditors have argued that the fact that the firm defaulted
on its US$3.5-billion debt in late 1997 means that it is
insolvent.

The court has heard witnesses representing the
International Finance Corp (the investment arm of the World
Bank), German development bank KFW and Price
WaterhouseCooper, among others.

Meanwhile a source said that in a Feb 9 letter TPI had
asked creditors for an additional reduction of $900 million
in principal loans. Creditors had agreed to convert $400
million of unpaid interest into 30 per cent of the
company's equity.

Previously, TPI had sought support from its creditors for a
$1-billion equity-raising plan. After creditors declined to
support the plan, the company filed an objection to the
debt-restructuring plan with the Central Bankruptcy Court.

According to procedure, the court will first have to decide
the solvency issue. If the court rules that TPI is
insolvent, it will proceed to consider whether the firm
should be rehabilitated according to the debt-restructuring
plan of the creditors.

Then it will consider the issue of who should oversee the
rehabilitation. Creditors have asked the court to approve
their plan to replace Prachai with Effective Planner Co, a
unit of the restructuring firm representing the creditors.

TPI, meanwhile, has filed an objection with the Central
Bankruptcy Court to a creditor proposal to appoint
Effective Planner Co as debt restructuring planner.
The creditors want TPI chief executive officer Prachai
Leophairat replaced as the planner, a court official said.

The official said TPI in its objection proposed that TPI
itself should be the debt restructuring planner. TPI said
the company's specialization in the petrochemical industry
qualifies it to serve as planner, the official said.

"The company operates a petrochemical business... (it has)
the expertise required, and has greater ability than
Effective Planner Co," the official said, quoting TPI's
objection.  (The Nation, APX News Limited  16-Feb-2000)

THAI TEL.& TEL.: Creditors expected to approve debt plan
--------------------------------------------------------
Creditors of Thai Telephone & Telecommunication (TT&T) are
expected to endorse the company's no-haircut debt
restructuring plan on February 25, according a source at
TT&T.

The source also said that TT&T's debt plan was considered
"reasonable" by its creditors, adding that TT&T was allowed
to extend payment period by up to 17.5 years. But what
appealed to creditors the most was that TT&T didn't include
"haircut" in the package.

Apart from rescheduling the payment, TT&T was given an
interest rate reduction on 30 percent of the outstanding
debts, while the interest rate on the 70 percent portion
remained as stipulated in the original contract.

TT&T president Tongchat Hongladaromp said the plan, under
the guidance of the Office of Corporate Debt Restructuring
Advisory Committee (CDRAC), was supposed to be voted on
February 18. However, creditors requested for more time to
look at the details. Tongchat denied the news that the
delay was caused by the company's asking for a huge
"haircut."

The debt plan, meanwhile, didn't specify who was going to
be a strategic partner. Tongchat said the company would
immediately conducted a roadshow to find an appropriate
partner after creditors approved the restructuring plan.

Previously, Tongchat said in an interview that TT&T planned
to raise capital 5-6 billion baht by debt for equity swap,
but he didn't not say if it would issue common shares,
convertible debentures or warrants to creditors.  He said
this year TT&T had 1.2 million fixed-line subscribers, or
80 percent of the concession it was granted, adding that
the company expected to completed the project in 3 years.

He also pointed out the difficulty the company was facing
was the low monthly subscriber bills , averaging only 620
baht. (Business Day  16-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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