TCRAP_Public/000329.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, March 29, 2000, Vol. 3, No. 62


* A U S T R A L I A *

BHP: Division shuffle in BHP revamp
FRANKLINS: Grocer tipped for store sell-off
GOLDEN WEST REFINING CORP.: In center of $20M gold heist
HANDY & HARMAN REFINING GROUP: In center of $20M gold heist
PAULINE HANSON: Legal reprieve wipes away Hanson's tears

* C H I N A  &  H O N G  K O N G *

CHINA CONSTRUCTION BANK: CINDA takes over HK$392B in loans
CHINA DEVELOPMENT BANK: CINDA takes over HK$392B in loans
SUNEVISION HOLDINGS: Sued for trademark infringement
SUN TECHNOLOGY SERVICES: Sued for trademark infringement
TIANJIN HUALI MOTOR: Lion Land to sell stake in firm
ULTRA GRACE LTD.: Three executives held for alleged fraud

* I N D O N E S I A *

PT BAKRIE FINANCE CORP.: Creditors appeal case dismissal

* J A P A N *

NIIGATA ENGINEERING: Expects larger after-tax loss
NIIGATA ENGINEERING CO.: Restructures to cut liabilities
NIPPON EXPRESS CO.: To cover retirement gaps in FY2000
NISSAN MOTOR CO.: Cuts debt by Fuji Heavy sale to GM
SANWA SHUTTER CORP.: To post first net loss in its history
SEIYO CORP.: Creditors asked to extend interest cut
SEKISUI HOUSE LTD.: Posts annual loss
SOFTBANK CORP.: New stock issue report hurts stock

* K O R E A *

DAEWOO GROUP: Creditor banks urged to offer new fund
DAEWOO GROUP: KAMCO to buy $1.95B of its foreign loans
HYUNDAI GROUP: Chaos reigns as brother vye for control
MAXON ELECTRONICS: LGIC seen emerging as bid winner
SEOUL BANK: Leaderless, it flounders

* M A L A Y S I A *

RENONG BHD: Expected to be debt-free after restructure

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

NATIONAL POWER CORP.: Incurs P3.8B net loss
NATIONAL STEEL CORP.: Wants debt rehab extension
PILIPINO TELEPHONE CORP.: Debt pact to be finalized
VICTORIAS MILLING CO.: Interest-equity conversion proposed

* S I N G A P O R E *

GWEE GROUP: Ceases operations, in receivership

* T H A I L A N D *

FINANCE ONE: ECID expands scope of fraud probe
iTV: Undecided on Merrill Lynch offer
KIATNAKIN FINANCE: Ready to increase capital
KRUNG THAI BANK: Sets debt restructuring target
POMPUI: To raise capital to cut debt
S-CHEM: Posts quarterly loss
SIAM CEMENT GROUP: Cuts back steel investments
SIAM CEMENT PLC: Bonds boosted to B30bn as demand soars
SUN TECH GROUP: Reports progress of debt rehab plan
THAI TEL.AND TEL.: Alcatel claims offer beneficial to all
TOTAL ACCESS COMMUNICATIONS: Close to foreign partner deal
UNITED COMMUNICATION INDUS.: Close to foreign partner deal


BHP: Division shuffle in BHP revamp
BHP will this week dismantle its multi-billion-dollar
services division as part of chief executive Paul
Anderson's push to streamline management and maximise
returns on capital.

The shake-up, outlined in an internal staff memo, will see
the big transport and logistics business one of the world's
largest integrated transport companies moved into BHP
Steel, and services' remaining functions placed in a
smaller entity labelled Corporate Services.

Consequently, BHP Services, which generates annual revenue
in excess of $2.7 billion, will cease to exist on April 1,
reducing BHP to three main operating divisions: petroleum,
minerals and steel.  The decision, affecting more than 2200
staff, comes a fortnight after the appointment of services
division president Kirby Adams as new head of BHP Steel,
following the departure of Bob Every to lead the steel long
products business to be spun off in December.

It also closely follows a management restructure of the key
BHP Minerals division as the company moves to lift annual
returns to at least 12 per cent.  Under the revised
structure, Corporate Services, under newly appointed vice-
president Fiona Bennett, will be responsible for the
provision of services across BHP.

Ms Bennett, at present vice-president, risk management and
audit, will report directly to Mr Anderson but will not sit
on the group's senior policy committee, as the president of
BHP Services did previously.

"The changes provide continuing focus on the activities
being provided to the three BHP businesses with a clear and
unambiguous emphasis on customer service," Mr Anderson said
in the memo.  "The changes also give further effect to the
portfolio model we're implementing across the company with
transactional services being provided separately from
business operations."

A key driver of the move is to further reduce BHP's
internal cost structure and, consequently, a core function
will be to eradicate unnecessary duplication (like the 30
different ledger and payroll systems used group-wide) and
take full advantage of BHP's bulk purchasing power. Though
BHP has not publicly stated the expected gains, chief
competitor Rio Tinto last month said its own efforts to
maximise bulk purchasing should generate savings of $US80
million a year.

Meanwhile, BHP Transport and Logistics, Australia's biggest
shipping business, will come under Kirby Adams' control at
BHP Steel, its biggest customer. BHP Transport generates
annual revenues in excess of $1.5 billion and is the prime
carrier of BHP exports of coal, iron ore, steel, crude oil,
alumina, LPG, LNG and other bulk cargoes.

Given the value and strategic importance of the business to
BHP, the move should end any speculation it would be sold
off, a company spokeswoman said yesterday. (The Australian

FRANKLINS: Grocer tipped for store sell-off
Struggling supermarket chain Franklins is believed to be
negotiating the sale of around 12 stores in NSW to the
aggressive new entrant in the Australian market, German
supermarket giant Aldi.

The deal is seen as a precursor to a possible outright sale
of the Franklins group by owner Dairy Farm of Hong Kong.
The talks involve existing Franklins supermarkets
predominantly in the Newcastle area but also in parts of
suburban Sydney.

Macquarie Equities said in a recent research note that the
sales provided further evidence Dairy Farm was considering
selling all of Franklins and redirecting the funds to the
higher growth supermarket sector of Asia.  Macquarie said
it was unclear why Franklins would sell its stores on a
piecemeal basis, although other analysts suggested
disposing of the sites would probably make the supermarket
operator more presentable to potential buyers.

"Aldi might be able to make those sites work but no-one who
would want all of Franklins would care about those stores,"
said one analyst, who declined to be named.

The pressure on supermarket operators, in particular third
ranked Franklins, is expected to intensify with the entry
of Aldi into the market this year.  Aldi has secured about
20 supermarket sites throughout greater Sydney and
Wollongong. It is understood the chain has its sights set
on eventually opening about 100 stores, supplied from a $46
million warehouse in the north-west Sydney suburb of

It has recently secured a site at a planned shopping centre
at Villawood and has bought a 10,000sqm store at Fairfield
West from developer Leda.  It is also understood Aldi has
undertaken due diligence on a former Jewel Food Barn outlet
at Queanbeyan, near Canberra, as well as a Franklins store
at Strathfield Mall in Sydney.

Franklins owns about 290 stores and holds around 13 per
cent of the grocery market, compared with industry leader
Woolworths which has 36 per cent.  Franklins has struggled
to produce acceptable financial returns in the past few
years against tough competition and mounting capital
expenditure as it expands and refurbishes stores.

Most work has gone into repositioning Franklins, once a
chain offering a narrow range of mainly dry goods at
cheaper prices, closer to rivals Woolworths and Coles, with
an emphasis on fresh food.  Franklins had previously said
it would not make a positive contribution to parent Dairy
Farm until later this year at the earliest, after only
managing to break even during 1999.

Dairy Farm management has on several occasions stated it
would "provide Franklins [with] all the support it needs to

A spokesman for the chain described speculation of a sale
as "just rumours" and said Dairy Farm had indicated it
would commit substantial funds to turn the company around.
The spokesman wasn't able to rule out the sale of sites to
Aldi, but said "we are on a growth path. We are opening new
supermarkets and plan to open more."

Dairy Farm officials did not respond to inquiries while an
Aldi spokeswoman declined to comment.  Dairy Farm has
pulled out of several underperforming markets in the past
few years, selling major retailing interests in Britain,
Spain and Taiwan.  It is believed the Hong Kong company has
offered Franklins to WalMart of the US, although as one
analyst said: "WalMart would look at anything they are
offered. It doesn't necessarily mean they are interested."
(Sydney Morning Herald  27-March-2000)

GOLDEN WEST REFINING CORP.: In center of $20M gold heist
HANDY & HARMAN REFINING GROUP: In center of $20M gold heist
Australia's biggest gold refiner is embroiled in an
extraordinary scandal, with $20 million worth of gold
missing, a former key executive facing charges over a $210
million fraud, bank accounts frozen and warnings of further

At the centre of the scandal is a US subsidiary of Perth-
based Golden West Refining Corp.  The company warned the
Australian Stock Exchange in February it expected heavy
losses from the subsidiary, Handy & Harman Refining Group,
but gave few details.

Golden West managing director Michael Ryan revealed
yesterday $20 million worth of gold bought by the US
subsidiary in Peru has been missing since some time after
September last year.  The loss will plunge Golden West into
the red this financial year.

Mr Ryan confirmed that most senior staff from HHRG, which
Golden West bought in 1996, have resigned or been sacked.
And the subsidiary's bank accounts in the US have been
frozen.  An investigation by the London office of KPMG has
uncovered other losses within the US operation that will
require further substantial write-downs, he said.

And in a separate development, two former HHRG executives
and a consultant have been indicted by the US Department of
Justice in relation to an alleged $US130 million ($214
million) fraud against the Argentinian government. One of
the men, Barry Wayne who was president and CEO of HHRG was
responsible for buying the Peruvian gold that is missing.

Golden West is Australia's biggest refiner, accounting for
10 per cent of the West's gold and silver refining. Its
Perth refinery is run in partnership with the Western
Australian Mint. It has other refineries in Papua New
Guinea, Canada and the US.

Mr Ryan said his company first became concerned in late
January about transactions involving the US subsidiary. Of
particular concern was $US12.5 million worth of gold that
had been bought by HHRG from a long-standing supplier in
Peru.  The gold which was meant to be in the custody of an
"internationally recognised" secure carrier in Peru had
been confirmed at the time of its purchase.

Its presence in stock was confirmed again by an inspection
agency last September.  Some time after this the gold was
returned to the seller without Golden West's knowledge.
Golden West began an investigation in January. On February
18, Mr Wayne resigned three days before Golden West's
inquiries confirmed the gold was missing.

Since then most of the senior management who served under
Mr Wayne have resigned or been dismissed.  Australian
chartered accountant Tony Pearce has taken over running
HHRG. The London office of KPMG, which investigated all
HHRG operations, has warned of other losses within the
subsidiary, Mr Ryan said. And all of HHRG's bank accounts
have been frozen. Claims have been lodged with insurance
companies to cover the loss of the gold.

On March 7, Mr Wayne and two others former executive
Richard Searle and consultant Michael Verleysen were
indicted in the US in connection with alleged activities
involving US-listed Handy & Harman between 1992 and 1996.
(HHRG was then Handy & Harman's precious metals refining

The indictments relate to an alleged scheme to defraud the
Argentinian government. This allegedly involved a
conspiracy to ship precious and non-precious metals out of
Argentina at inflated prices and then claim export
incentives from the government.  Golden West is 50.1 per
cent-owned by NM Rothschild. Mr Ryan said the Perth
refinery was not affected by the developments at HHRG. (The
Australian  27-March-2000)

PAULINE HANSON: Legal reprieve wipes away Hanson's tears
Former One Nation candidates asked yesterday why millions
of dollars given to the party had apparently disappeared
and could not be used to rescue Pauline Hanson from

Queensland MP Bill Feldman, who defected from One Nation to
lead the City Country Alliance with five other MPs, said he
understood about $6 million had passed through party

"Everybody that was associated with them is still wondering
where the money went," Mr Feldman said.

He rejected a call from Ms Hanson for the MPs to pay back
some of the money the party had spent on their campaigns in
the 1998 state election, saying he had paid for his run
himself with help from his local branch. "Why would you
throw good money after bad?"

Ms Hanson defaulted yesterday on a $502,000 debt to the
Queensland Electoral Commission after raising only $50,000
in a public plea for donations to rescue her from
bankruptcy.  The commission gave Ms Hanson 14 days to
return the electoral funding after the Court of Appeal this
month upheld a decision that One Nation had been registered

Ms Hanson signed a personal guarantee for the money and now
the commission wants it back so it can pay it directly to
the individual candidates.  But after breaking down in
tears on Thursday, Ms Hanson was buoyed yesterday after
learning the commission's lawyers had agreed to meet her on
Monday to hear a proposal that would involve the party
providing proof that most of the money had already been
paid to candidates.

"I am feeling a lot better," Ms Hanson said. She said she
had documents showing about $335,000 of the funding the
party received had been paid out.

Electoral Commissioner Des O'Shea said yesterday that legal
action against Ms Hanson would probably be postponed until
after the meeting.  But even if the commission agrees to
the deal, candidates such as Independent MP Shaun Nelson
have denied they ever received the money One Nation claims
to have paid them. And Ms Hanson is still liable to repay
the remainder of the money and, on her own estimate,
$150,000 in legal costs. (The Australian  25-March-2000)

Reinsurance Australia Corp is believed to be considering
options to sell its remaining assets, including a proposal
for a management buy-out of the embattled group by its
chief executive, Mr Nick Steffey.

Mr Steffey is understood to have approached large US
reinsurance brokers and insurers with proposals to either
sell ReAC's $800 million in loss reserves to another
reinsurer or to stage a management-led buy-out of the

Mr Steffey is believed to have told brokers that ReAC's
liquidation value was about $100 million, well above its
current market capitalisation of $21 million, leaving a
large margin for a buy-out.

According to the brokers, Mr Steffey is willing to commit
$2 million of his own money in a buy-out but wanted the
rest to be funded by private investors.  Neither Mr
Steffey, nor any of ReAC's executive team, could be
contacted last week.

However, Mr Steffey's plans to sell the group could face
opposition, with rumours mounting of a shareholder
challenge to the entire ReAC board, lead by major
shareholders Hunter Hall and Grand Improve Holdings, the
investment fund of Macau property developer Mr Wai Hing

The challenge would probably be made at ReAC's annual
general meeting, which is due to be held in May or June.
Mr Steffey is already facing legal action, brought by
shareholders, relating to his management at GIO, where he
was managing director before AMP's takeover of the group.

Under one of the plans Mr Steffey is understood to have
taken to brokers, ReAC will sell its loss reserves to
another reinsurer to manage and then take out $150 million
to $200 million in adverse development cover to protect the
company against new claims or a deterioration of existing

The alternate position is that Mr Steffey will lead an on-
market buy-out of ReAC's shares.  ReAC directors earlier
this year decided to move their business into "run-off"
when heavy losses saw the reinsurer slip below the minimum
capital requirements set down by the Australian Prudential
Regulation Authority. "Run off" means the company will
cease to write new insurance, cutting off their principal
source of revenue and cancelling existing insurance
contracts where possible.

It has also reduced its staff and undertaken a program to
close its overseas offices.  On Friday ReAC disclosed it
had been asked by APRA to show cause why an inspector
should not be appointed to the company.  ReAC said it would
cooperate with the regulator and had about two weeks to
show cause.

ReAC shares have fallen from $3.60 in late 1998 to a 11c
close on Friday after its exposure to a number of man-made
and natural disasters, including the European storms in
January.  It reported a $467 million loss for the year to
December 31, 1999, and warned it still had "unexpired
exposure to events that may occur in the current year."

However, ReAC still maintains $800 million of loss reserves
which are required to settle claims not to restore capital
levels. (Sydney Morning Herald  27-March-2000)

C H I N A  &  H O N G  K O N G

CHINA CONSTRUCTION BANK: CINDA takes over HK$392B in loans
CHINA DEVELOPMENT BANK: CINDA takes over HK$392B in loans
China Cinda Asset Management has taken over 420 billion
yuan (about HK$392.7 billion) in non-performing loans from
China Construction Bank and China Development Bank,
according to an official.

The figure comprises 250 billion yuan of non-performing
loans plus about 70 billion yuan of investment assets taken
over from branches of China Construction Bank, and another
100 billion yuan in bad debts and non-performing loans from
China Development Bank.

Details were unveiled by Gao Jianmin, managing director at
Silver Grant International Industries, a company which is
42 per cent controlled by China Construction Bank and Cinda
- one of the mainland's four key asset management
companies. Mr Gao said Silver Grant would have priority in
acquiring assets from Cinda's 420 billion yuan portfolio.

"Bad debts are not necessarily bad assets, everything is
about the right pricing," he said. "We will look for good
quality assets from China Construction Bank and Cinda."

Silver Grant is assessing ways to acquire assets from
Cinda. These include infrastructure-related projects, such
as properties and hotels as well as on-line banking and
travel portals.  However, no concrete plans have yet been

Silver Grant could finance future acquisitions from the
estimated $300 million cash on hand it holds, Mr Guo said.
He said Silver Grant would focus more on infrastructure-
related business, while subsidiary Righteous (Holdings)
would concentrate on the Internet and technology. Cinda was
created last April to take over bad debts from the two
banks, serving as part of the mainland government's
ambitious scheme to clear about one trillion yuan of debt
burden for state-owned enterprises. (South China Morning
Post  27-March-2000)

SUNEVISION HOLDINGS: Sued for trademark infringement
SUN TECHNOLOGY SERVICES: Sued for trademark infringement
United States-based Sun Microsystems has begun legal
proceedings against Sunevision Holdings and a subsidiary,
alleging the names and logos of the companies are an
infringement of its trademark.

Sun Microsystems sent a writ to the two companies on
Thursday in a bid to solve the dispute in the High Court,
Sun Hung Kai Properties (SHKP), the parent of Sunevision,
said yesterday.

SHKP said Sunevision and its subsidiary - Sun Technology
Services - would take "whatever steps required to defend
the proceedings and to protect our names and interests."

Sun Microsystems was objecting to the use of the word "sun"
in the names and logos of Sunevision and its subsidiary,
SHKP said.  "We are, however, firmly of the view that these
objections are without merits," SHKP said.

The word sun is common in the English language, and it is
the transliteration of the Chinese character which means
new, the company said.  Further, the word appeared in the
names and logos of many SAR and international businesses,
SHKP said.

"We are also of the opinion that the members of the public
are extremely unlikely to assume any connection between Sun
Microsystems with Sunevision Holdings and Sun Technology
Services," the company said.

SHKP said it would continue to explore the possibility of
resolving the dispute with Sun Microsystems other than
through litigation.  Sun Microsystems was unavailable for
comment last night.  The dispute began ahead of
Sunevision's listing on the Growth Enterprise Market this

Sunevision received a legal letter on March 1 from Sun
Microsystems' solicitor claiming possible trademark
infringement.  Sun Microsystems later said it was working
out a "satisfactory and proper" solution with SHKP.

Analysts said they were surprised by the litigation because
neither party would benefit from a legal battle.
They said the issue should be settled out of court.
Sun Microsystems also this week began legal proceedings
against Lai Sun Hotels International in an attempt to stop
the company from changing its name to Holdings.
(South China Morning Post  25-March-2000)

TIANJIN HUALI MOTOR: Lion Land to sell stake in firm
Lion Land Bhd is proposing to dipose off a 25% equity
interest in Tianjin Huali Motor Co Ltd to Tianjin
Automotive Industry (Group) Co Ltd, for Rmb65mil cash
(RM29.83mil), but will continue to hold a balance 25% stake
in the company after the disposal.

Lion Land said in an announcement to the KLSE that its
wholly-owned subsidiary LLB Suria Sdn Bhd is selling the
stake as Tianjin Huali's performance has deteriorated since
early 1998 due to the change in policy by the Beijing
municipal government which has imposed a ban on the use of
mini-van taxis in Beijing.

This resulted in a huge drop in sales as mini-vans
constituted more than 90% of total sales. The net losses of
Tianjin Huali for the year ended June 30 1999 was about
Rmb100mil and it had continued to make losses since
although it had been profitable in the first three years of

Tianjin Huali was set up in February 1995 as a 50:50 joint
venture between LLB Surian and Tianjin Automotive which is
a state owned enterprise with over 40 years in the
automobile manufacturing industry.  The joint venture
duration is 50 years and LLB Suria invested Rmb250mil in
the company which is principally involved in the assembly
and sale of mini vans and medium size trucks.

At company level, LLB Suria is expected to register a loss
on disposal of RM9.02mil, but at group level, the disposal
will realise a gain of RM14mil.  Lion Land said the sale
consideration was arrived at a willing-buyer willing-seller
basis after taking into account a 25% portion of the NTA of
Tianjin Huali as at Dec 31 last year amounting to about

The sale consideration thus represented a discount of
Rmb19.16mil or 22.7% over Tianjin Huali's NTA. The disposal
which is expected to be completed by end June is
conditional upon the approval of the Chinese authorities.
(The Star  27-March-2000)

ULTRA GRACE LTD.: Three executives held for alleged fraud
Six people, including three officials from a China-owned
company, have been arrested in connection with an alleged
92 million Hong Kong dollar (11.8 million US) fraud, an
anti-graft spokesman said.

The six arrests were made after a complaint that bank
officials may have accepted bribes for granting letter-of-
credit applications to the suspects, who worked for Ultra
Grace Ltd., an investment vehicle in Hong Kong for
neighbouring Guangdong provincial government, the
Independent Commission Against Corruption said.

The ICAC alleged the suspects conspired to use false
documents to apply for 20 letters of credit from three
banks, between 1997-1998.  The bogus documents purportedly
showed business deals involving Ultra Grace for the sale
and purchase of 80,000 metric tons of steel bars for

ICAC said the three banks were deceived into issuing
letters of credit worth 92 million dollars and about half
of the amount had turned into bad debts.  ICAC alleged the
funds were used by the directors of Ultra Grace for
speculation in the property and stock markets. (The Star


PT BAKRIE FINANCE CORP.: Creditors appeal case dismissal
PT Bakrie Finance Corp's creditors have filed an appeal
with the Supreme Court against a decision by the commercial
court to dismiss a bankruptcy suit against the company, a
Bakrie official said.

The official said the appeal was filed on March 22 and must
be heard within 30 days of that date.  A Jakarta Stock
Exchange listing division spokesman said Bakrie Finance
will remain suspended until the result of the appeal.

The plaintiffs in the bankruptcy suit are AB Capital
Markets (Hong Kong) Ltd, Cho Hung Leasing and Finance (Hong
Kong) Ltd, Hanmi Leasing and Finance (Hong Kong) Ltd, and
KEB Leasing and Finance Ltd.  (AFX News Limited  27-March-


NIIGATA ENGINEERING: Expects larger after-tax loss
Niigata Engineering Co. said Friday it expects to suffer an
after-tax loss of 40,444 million yen in the current year to
March 31, far larger than the previously estimated loss of
6,880 million yen.

The machinery maker will log extraordinary losses totaling
38 billion yen, including 18.5 billion yen in securities
appraisal losses, 8.8 billion yen from inventory disposal
and extra loan-loss reserves of 5.1 billion yen. The
company came up with a business restructuring program the
same day envisaging realizing a consolidated recurring
profit of 2.5 billion yen in the year to March 2003.

Niigata Engineering plans to liquidate seven affiliates to
shed unprofitable operations and reduce outstanding
interest-bearing debts by about 19 billion yen from the
current level of some 160 billion yen. The company will add
20 billion yen from land revaluation to capital. (Jiji
Press English News Service   24-March-2000)

NIIGATA ENGINEERING CO.: Restructures to cut liabilities
Niigata Engineering Co. (6011) unveiled Friday a package of
restructuring measures to cope with deteriorating finances
amid a slump in sales.

The midsize machinery producer revised earnings down the
same day and now expects a group net loss of 38.8 billion
yen and net liabilities of 9.7 billion yen for the year
ending March 31. It is the first time the company has
fallen into negative net worth.  The plans include the
merger of a subsidiary with Sanko Engineering Corp. (6379)
and salary cuts of up to 15%.

Subsidiary Niigata Construction Co. will merge with Sanko
Engineering on Oct. 1. Sanko will be the surviving company.
Both of the firms are located in Yokohama.  Niigata
Engineering also plans to sell a group firm and part of its
construction machinery operations.

The company will reduce the number of board directors to
six from the current 15 and adopt an in-house company
system for its five business sectors, including
engineering, motors and machinery in April.

On a parent-only basis, the company will chalk up a net
loss of 40.4 billion yen after scoring an extraordinary
loss of 38 billion yen. The special loss will include 18.5
billion yen in appraisal losses on securities holdings.

"We will clean up our balance sheet of all latent losses
during the current term," President Yoshihiro Muramatsu
said. (Nikkei  24-March-2000)

NIPPON EXPRESS CO.: To cover retirement gaps in FY2000
Major transport company Nippon Express Co. (9062) expects
to mark 65 billion yen in extraordinary loss in the fiscal
year through March 2001 in order to cover reserve shortages
in retirement payouts, company sources said Friday.

Nippon Express, which does not offer a corporate pension
program, has 125 billion yen in reserve shortages in
retirement payouts on a parent-only basis. The company
plans to cover these shortages by transferring about 60
billion yen in stockholdings to trust banks and by marking
65 billion yen as an extraordinary loss.

The shipper expects to post a net loss of 25 billion yen in
fiscal 2000, compared with a profit of 19 billion yen
projected for fiscal 1999.  Pretax profit is expected to
rise 14% to 40 billion yen, on a 3% increase in revenue to
1.3 trillion yen. A cut in personnel costs and an increase
in air cargo to other Asian countries are expected to boost

The company marked 202.2 billion yen in latent profits on
securities holdings and 42.4 billion yen in undivided
profits at midterm. As a result, it expects to secure
profits to keep the dividend unchanged at 8 yen in fiscal

For fiscal 1999, revenue is expected to fall 1.5% to 1.26
trillion yen on sluggish railway cargo and warehousing
operations.  Pretax profit is expected to fall 10% to 35
billion yen. The decline is attributed to rises in carriage
rates by airlines and shipping agents. An increase in fuel
prices was another negative factor. (Nikkei  25-March-2000)

NISSAN MOTOR CO.: Cuts debt by Fuji Heavy sale to GM
Nissan Motor Co. said Friday it would sell its entire stake
in Fuji Heavy Industries to General Motors Corp., part of
GM's previously announced plan to acquire a stake of 20
percent in the maker of Subaru cars.

GM will buy Nissan's 4.1 percent stake in Fuji Heavy for an
undisclosed sum, the companies said. GM also said it would
purchase 112.5 billion yen ($1.05 billion) worth of new
shares to be issued by Fuji Heavy on April 11. Nissan said
the transaction "contributes to achieving the goal of
reducing net automotive debt."

Selling nonessential assets, such as the Fuji Heavy stake,
is a key aspect of Nissan's plan to cut its 1.4 trillion
yen debt by 50 percent in the financial year ending March
2003, said Carlos Ghosn, Nissan's chief operating officer.
The pace of such asset sales will quicken during the rest
of this year, he said.

"It's a very small step, but a very convincing sign Nissan
is serious about implementing the plan it has committed
itself to," said Steve Usher, an analyst at Jardine Fleming
Securities (Japan) Ltd.

GM had said in December it would pay $1.4 billion for the
20 percent stake, becoming Fuji Heavy's biggest
shareholder. But it did not say where the shares would come
from.  GM and Fuji plan to co-design and manufacture small
sport utility vehicles, all-wheel-drive systems and low-
pollution transmissions. (The International Herald Tribune

SANWA SHUTTER CORP.: To post first net loss in its history
Sanwa Shutter Corp. (5929) announced Friday that it will
record a net loss of 7.5 billion yen for the fiscal year
ending March 31, falling into the red for the first time
since its founding in 1956, and dropping sharply from last
year's net profit of 3.2 billion yen.

The net loss is attributed to 18 billion yen in
extraordinary losses, including the write-off of 8 billion
yen in unfunded pension and severance obligations, and 8.5
billion yen in losses incurred from extending financial aid
to ailing affiliates such as Sanwa Exterior Corp. and Meiji
Aluminum Industries Co.

The extraordinary losses also include 1.1 billion yen in
valuation losses from investment trusts, and 350 million
yen from the falling market value of its golf course
memberships.  However, Sanwa Shutter will still pay a 4.5
yen term-end dividend to its investors.

Sales are expected to decline 7% for fiscal 1999 to 140
billion yen. Housing construction materials and repair
services earned a profit, but orders fell for building-use
construction materials such as heavy-duty shutters. Though
Sanwa Shutter tried to cut costs for materials and labor,
its operating profit is expected to shrink 13% to 6 billion

On a consolidated basis, sales are seen declining 8% to
221.7 billion yen, operating profit is expected to shrink
7% to 9 billion yen, and net losses are expected to total
7.6 billion yen. Last fiscal year, the company posted 2.7
billion yen in consolidated net profit. (Nikkei  25-March-

SEIYO CORP.: Creditors asked to extend interest cut
The Saison Group has requested creditor banks of debt-
ridden affiliate Seiyo Corp. to continue their interest
payment reductions for three more months, informed sources
said Friday.

The current agreement expires on March 31. The creditors,
including Dai-Ichi Kangyo Bank, are likely to accept the
request, the sources told Jiji Press.  The extension of the
interest payment cut is an interim measure, as it is
becoming difficult for the two sides to agree on a debt-
reduction plan for the troubled real estate developer by
the deadline.

The Saison Group previously asked the creditors to forgive
a total of 300 billion yen in loans on condition that Seiji
Tsutsumi, the Saison Group founder, puts up his personal
properties and group firms provide additional financial
support for Seiyo.But the two sides remain apart over the
size of the additional support. The creditors have been
calling for 140 billion yen or more, while the group has
offered about 100 billion yen.

In addition, the group firms have been disputing over the
amount to be supplied by each company. Seiyo has been
burdened with bad loans that resulted from its real estate
investments during Japan's booming "bubble" economy period
in the late 1980s.  Group companies including Seibu
Department Store provided about 200 billion yen for the
company in 1995. But as of March 31, 1999,

Seiyo still had interest-bearing debts of about 390 billion
yen, and its debts exceeded assets by about 290 billion
yen. Including affiliates, Seiyo has more than 400 billion
yen in bad loans.  The Saison Group includes Seibu
Department Store Ltd., Seiyu Ltd., Credit Saison Co., Parco
Co. and Seiyo Food Systems Inc. (Jiji Press English News
Service   24-March-2000)

SEKISUI HOUSE LTD.: Posts annual loss
Sekisui House Limited has posted an unconsolidated net loss
of 97.04 billion yen ($906.4 million) for the fiscal year
ended Jan. 31, compared with a profit of 20.57 billion yen
a year earlier.

The company blamed valuation losses from part of its land
holdings.  Sekisui reported parent pretax profit climbed
23% to 63.29 billion yen, while operating profit rose 27%
to 68.77 billion yen. Sales edged up 0.1% to 1.228 trillion

The company said the pace of growth in the nation's housing
starts slowed in the second half, partly because of an
increase in the mortgage loan rates charged by the
government-affiliated the Housing Loan Corp., as well as
fears about the future course of the economy.

Efforts to cut expenses helped boost its profitability, the
company said.  Total orders secured rose 11% to 1.254
trillion yen.  However, the company reported a special loss
of 216.46 billion yen because of valuation losses from
holdings of land it intended to develop and resell.

The collapse in land prices after the burst of the bubble
economy of the late 1980s helped widen the gap between the
assets' prevailing value and the price at which these
assets were originally bought. The company said the move
will help it achieve sound financial standing.

For the year through Jan. 31, 2001, Sekisui House predicted
an unconsolidated pretax profit of 90 billion yen and net
profit of 31.50 billion yen on sales of 1.240 trillion yen.
It will distribute a dividend of 20 yen per share. (The
Asian Wall Street Journal  24-March-2000)

SOFTBANK CORP.: New stock issue report hurts stock
Shares in Softbank Corp. took a beating Friday after a
Japanese financial newspaper reported that the company
would issue new stock at market prices to try to raise some
$3 billion for acquisitions.

The Nihon Keizai Shimbun reported in its evening edition
that the new share issue, which would be one of the largest
ever in Japan, was planned for next month in part to
finance more investments in fast-growing Web-based start-

Softbank shares tumbled 14 percent, to 87,000 yen ($810),
before trading was halted until the Tokyo market closed.
The shares are down 56 percent from their record high of
198,000 in mid-February.  Softbank's shaky share
performance has forced investors to rethink the true worth
of the Internet investing giant.

"It seems that Softbank's shares are caught in a downward
spiral," said Makoto Ueno, an industry analyst at Daiwa
Research Institute.

A Softbank spokesman declined to comment on the newspaper
report, which came two days after Softbank said it had sold
its holdings in the antivirus software maker Trend Micro
Inc. for about 66.9 billion yen, creating the impression
that it had few options for generating cash besides selling
shares in other companies.

"The report comes at a bad time, just when investors are
becoming more selective about high-tech shares as a whole,"
said Kota Nakako, an analyst at Warburg Dillon Read.

Softbank, whose market capitalization of around 9 trillion
yen makes it one of the five biggest companies in Japan,
had chalked up 5 trillion yen in net unrealized gains on
its investments in publicly listed Web-related firms across
the globe, according to calculations at the start of trade
on Friday.

Yasuo Sakuma, a senior fund manager at Dai-Ichi Asset
Management Co., said big Japanese Internet investors such
as Softbank have been using their unrealized stock gains as
leverage in setting up investments. "When market momentum
is upward, nobody cares about the high leverage," he said.
"But when it turns downward, some start worrying about
their financial health."  (The International Herald Tribune


DAEWOO GROUP: Creditor banks urged to offer new fund
The nation's top financial regulator has urged the creditor
banks to supply a new fund to the Daewoo companies under
workout program at the earliest possible date.

Lee Yong-keun, chairman of the Financial Supervisory
Commission (FSC), told the presidents of the seven creditor
banks of the ailing Daewoo firms that the new fund, which
was provided in the memorandum of understanding for the
restructuring program, should be released as soon as

In a breakfast meeting with the bank presidents Saturday,
Lee contended that only 38.8 percent or 2 trillion won of
the new fund agreed between the Daewoo firms and banks was
supplied so far.  The delayed funding has been causing
troubles to the workout program, Lee noted, asking for the
banks' cooperation for a smooth restructuring process of
the troubled Daewoo affiliates.

Lee said that foreign creditors are expected to decide
individually whether to agree with the Daewoo workout
programs in May.  During the meeting with the bank CEOs,
Lee strongly warned against "moral hazards" of bankers in
charge of work programs of their debtors, particularly
Daewoo firms.

"If people supervising workouts spend too much and enjoy
the benefit of comfortable offices and deluxe cars, they
are not helping the company but making things worse," Lee
was quoted as saying.

Bank managers should only supervise financial affairs and
stay out of management, Lee said, according to FSC
spokesman Kim Young-jae.  Banks can retrieve their debts
when workout companies work hard and make profits, and for
this, the banks should not interfere with business affairs,
Lee said. (Korea Times  26-March-2000)

DAEWOO GROUP: KAMCO to buy $1.95B of its foreign loans
The value of Daewoo Group's foreign debt to be purchased by
the government through the Korea Asset Management Corp.
(KAMCO) is estimated at around $2 billion, according to
officials at the Financial Supervisory Commission.

KAMCO is expected to take over Daewoo's foreign debt in
June after individual foreign creditors accept the recovery
ratio offered by domestic creditors.  According to a
commission official, the face value of Daewoo's foreign
debt the government should assume totals $4.9 billion.

Daewoo's total foreign liabilities amount to $7 billion, of
which $2.1 billion is in the form of corporate bonds
possessed by individual or institutional investors. The
remaining $4.9 billion are loans offered by foreign
financial institutions.

Excluding bond obligations, the cost of purchasing loans
from foreign creditors comes to $1.95 billion applying the
39.9 percent recovery ratio proposed by domestic creditors,
the official said.  For Daewoo bonds owned by foreign
investors, the government plans to have the individual
Daewoo firms that had issued them negotiate with the bond
holders for repayment.

Domestic creditors and the Daewoo Group Restructuring
Promotion Committee are expected to offer specific debt
restructuring proposals to foreign financial institutions
in May.  After taking over Daewoo debt from foreign
creditors, KAMCO plans to hand over the assets to the
corporate restructuring vehicles to be set up in the second
half of the year to normalize operations of Daewoo firms.

When this option is not applicable, KAMCO will promote
outright sales of Daewoo units to recoup its investment.
(The Korea Herald  27-March-2000)

HYUNDAI GROUP: Chaos reigns as brother vye for control
The power struggle at Hyundai group met with a number of
twists Sunday, with different sections of the group
contradicting one another regarding which of the two
warring brothers, Chung Mong-koo or Chung Mung-hun, is in

Hyundai Motor planning and coordination office vice
president Chung Soon-won called a press conference to tell
reporters that the older of the two Hyundai scions, Chung
Mong-koo, remains as chair of the Hyundai Group CEO's
Council. He said the Friday announcement made by the
Hyundai restructuring coordination office that Chung Mong-
koo had been divested of his position as the group's co-
chair was a mistake and had thus been cancelled Sunday.

Chung Soon-won claimed Chung Mong-koo had a document signed
by his father, Hyundai founder and honorary chair Chung Ju-
yung, which reinstates him. He added that he was making the
announcement on the orders of Chung Mong-koo.

Late in the afternoon, however, the restructuring and
coordination office and the PR office of Hyundai issued a
statement saying that the Hyundai Motor announcement is
groundless. The Mong-hun camp is saying that the
announcement from the Mong-koo camp is absolutely untrue,
and that the younger brother confirmed this in a meeting
with his father that afternoon.

Chung Soon-won said the group restructuring coordination
office is an ad hoc body which only deals with Hyundai's
restructuring affairs. He went on to say that Friday's
announcement was ill-advised, causing serious chaos at the
group and drawing major concern from Hyundai executives,
employees, shareholders and the general public. Chung Soon-
won added that Chung Mong-koo apologized on behalf of the
Hyundai group for the confusion.

The spokesman said he had no information to give on the
earlier attempt to transfer Hyundai Securities chair Lee
Ik-chee to the position of Korea Industrial Development
chair. The transfer attempt had reportedly been prompted by
Chung Mong-koo, in a power play against his brother,
Hyundai group co-chair Chung Mong-hun.  (Digital Chosun

MAXON ELECTRONICS: LGIC seen emerging as bid winner
LG Information and Communication (LGIC) is likely to claim
victory over the C&I-led consortium in the bid for Maxon
Electronics, an ailing manufacturer of wireless handsets.

Arthur Anderson, the underwriter of the sale, has selected
the final candidate upon review of proposals submitted by
LGIC and the C&I-led consortium, according to industry
sources. The creditor group is due to reach a decision on
Arthur Anderson's choice in a meeting today.

A memorandum of understanding (MOU) on the deal could be
signed as early as April 3. A final deal is expected for
conclusion in the middle of next month if creditors agree
to the terms of sale.

According to industry watchers, LGIC is the stronger
candidate of the two. The company which makes CDMA (code
division multiple access) wireless phones is eager to
takeover Maxon, whose product line features GSM (global
system for mobile communications) handsets, in order to
boost the chances of its wireless operator affiliate of LG
Telecom of being selected as an IMT-2000 business operator.

Maxon Electronics, which was subjected to a corporate
workout program, exports GSM handsets to European companies
including Vodafone-AirTouch. Exports make up for 98 percent
of company sales. Last year the company posted a net loss
of 72 billion won on sales of 326.7 billion won. The
company has about 300 billion won in debts. (The Korea
Herald  27-March-2000)

SEOUL BANK: Leaderless, it flounders
While the appointment of a new CEO for Seoul Bank has
become a major hurdle to be overcome before its second
phase of restructuring can begin, Deutschebank has recently
expressed its interest in providing technical assistance in
managing the bank.

An official at the Financial Supervisory Commission (FSC)
said the government has been trying to determine whether
the German banking giant might be interested in buying a
stake in the bank or wants to limit its involvement in the
bank to taking up commissioned management duties.

The government has been attempting to sell the bank to a
foreign financial institution or commission management out
to overseas professionals for the last two years, but it
has not yet been able to report any concrete progress. The
government had signed an MOU last February to sell off the
firm to British firm HSBC, but negotiations eventually
broke down.

Similarly, government attempts to farm out management to
banking professionals outside of the country have met with
little result. The FSC has also been searching for a
foreign CEO to helm the bank, but has been unable to find a
suitable candidate for several months.

Rudderless, the bank has been racking up losses. Over the
past two years, the government has injected a total of
W6.23 trillion into the bank, but operations have continued
to deteriorate, and some believe that the bank will be in
need of an additional government funds in the near future.
(Digital Chosun  26-March-2000)


RENONG BHD: Expected to be debt-free after restructure
Renong Bhd is expected to be debt-free after the completion
of its debt restructuring plan and degearing exercise which
involves the disposal of assets and flotation of its units,
said its executive chairman Tan Sri Halim Saad.

"After the debt restructuring exercise and the
reorganisation, Renong will be stronger than before.
We will be a more focussed group and will be careful with
the way we invest," Halim said in an interview with Star

K & N Kenanga Bhd head of research Seow Choong Liang said
the group was now moving into the "degearing stage" as they
had restructured their debts.  "We think with the
degearing, Renong will be able to realise the potential of
its assets and move forward," Seow said.

The flotation and disposal of assets are key elements in
the initial debt restructuring programme of Renong and its
associate United Engineers (M) Bhd (UEM) in which RM8.37bil
of Project Lebuhraya Utara-Selatan (PLUS) bonds have been
issued to creditors to settle the debts of both companies.
As at end of last year, UEM had total debts of RM3bil while
Renong's debts stood at RM4.3bil.

On March 13, Renong announced the disposal of its stake in
Commerce Asset-Holdings Bhd (CAHB) and UEM to float PLUS by
year end.  Renong has 143.1 million shares or 12.25% stake
in CAHB (which controls Bumiputra-Commerce Bank Bhd) and
14.9 million CAHB warrants, and has mandated Merrill Lynch
to sell its entire stake in CAHB via a private placement.

The flotation of PLUS is expected to raise RM3.75bil, of
which RM3bil will be used to retire UEM's debts. The asset
disposal is part of the plan whose proceeds will go towards
repaying a large portion of its seven-year zero coupon
RM8.37bil PLUS bonds issued last year.

As for Renong, the sale of CAHB will raise RM1.63bil, of
which Renong's gain is expected to be RM1.1bil. Apart from
the sale of CAHB, Renong is considering the listing of
Prolink Sdn Bhd, which is undertaking a huge development
near the second crossing to Singapore.  Renong will also
dispose more parcels of land in Johor to retire its debts.

The group is expected to raise RM4.1bil, which will retire
most of its debts.  This will be possible if Renong can
raise RM1.63bil from the sale of CAHB, RM1.5bil from the
flotation of Prolink, and RM1bil from the sale of land in
Johore. (The Star  27-March-2000)


NATIONAL POWER CORP.: Incurs P3.8B net loss
The very huge burden of interest rate payments on its local
and foreign loans have caused the ballooning of the
National Power Corporation's (NPC) net loss to over P3.8
billion in 1999.

This was bared by NPC president Federico E. Puno, as he
admitted that 1999 was really a bad year for the power
firm. The NPC has yet to release its official financial
performance last year.  An initial forecast showed that
interest payments for 1999 alone could reach P13.75
billion, which accounts for a sizeable chunk of its
operating expense last year.

NPC has earmarked around P45.2 billion of its total
operating expenses (OPEX) for the payments of its purchased
power, both from its self-operated plants and those owned
by independent power producers.  As a result of its
escalated losses, NPC is also expecting an even lower
return on rate base (RORB) for 1999. RORB is a formula used
to measure the profitability of specialized industries.

In 1998, NPC's RORB was 3.9 percent with P3.1 billion net
loss. The figure is way below the level of profitability
being required by its creditors, which is 8.0 percent in
RORB.  Puno admitted the firm's dwindling profitability
would definitely create problems, especially with the
requirements of its creditors.

Last year, the NPC was banking on the approval of two of
its petition at the Energy Regulatory Board (ERB) to
increase its revenues.  These are petitions for the
recovery of foregone revenues from the 6-month delay in the
implementation of its P0.079 per kilowatt-hour (kwh) rate
increase; and the approval of its six new power purchase
contracts with independent power producers (IPPs).

With these two mechanisms in place, NPC said it might even
achieve a turnaround with at least P1 billion in net
profit.  However, the ERB failed to decide on said
petitions because of the delay in the submission of
documents by NPC that would justify the rate recovery and
the prescribed electricity costs in the contracts.

Last January, ERB approved three of the IPP contracts
between NPC and the Philippine National Oil Co. (PNOC)-
Energy Development Corp. (PNOC-EDC), while deferring
approval on the three others allegedly due to expensive
purchase costs. (Manila Bulletin  27-March-2000)

NATIONAL STEEL CORP.: Wants debt rehab extension
Claiming to have gotten on the good side of its creditor
banks, debt-laden steel maker, National Steel Corp. (NSC),
asked the corporate regulator to extend its debt moratorium
for another 30 days from today.

In his last interview as chairman of the Securities and
Exchange Commission (SEC), Perfecto R. Yasay, Jr. told
reporters that NSC is requesting for additional time to
prepare and submit a rehabilitation.

In the preliminary report submitted to Mr. Yasay, NSC's
interim receivership committee (IRC) said it has gotten the
support of the steering committee of creditor banks --
composed of representatives from the Philippine National
Bank (PNB), Land Bank of the Philippines, Global Bank and
Credit Agricol -- in seeking ways to rehabilitate the firm.

Monico Jacob, IRC chairman and former Petron chairman, and
Antonio Arizabal, member and former NSC chief executive
officer, met with the steering committee on March 21.
During the meeting, "the banks agreed to take measures to
preserve and conserve the assets of the corporation and to
appoint a comptroller." The IRC also said the management of
NSC has guaranteed the preservation and maintenance of the
company's assets.  (Business World  27-March-2000)

PILIPINO TELEPHONE CORP.: Debt pact to be finalized
After almost a year of negotiations, the telecommunications
giant's ailing cellular subsidiary, Pilipino Telephone
Corp. (Piltel), will finally conclude debt talks with
creditor banks within the week.

Such a move will set the tone for negotiations with other
creditors such as bondholders and its Japanese supplier.
Piltel -- whose financial condition was the main concern of
parent firm Philippine Long Distance Telephone Co. (PLDT)
and even strategic partner, NTT Communications Corp. -- has
reportedly agreed with the banks on the restructuring and
repayment of 34.9 billion (US$853.4 million at
PhP40.897:US$1) in obligations. Around one third of
Piltel's PhP34.9-billion debt, or PhP11.6 billion ($283.6
million), is with the banks.

NTT Communications is the fully owned subsidiary of
Japanese telecom giant Nippon Telegraph and Telephone Corp.
(NTT).  In an interview after the closing of the NTT-PLDT
and Smart Communications, Inc. deal at Malaca¤ang last
Friday, Piltel president Napoleon L. Nazareno said the
company is expecting to sign the final restructuring
agreement with the banks within the week.

"We will be signing the final restructuring agreement with
the banks within the week. Actually, it is already
finished. It is just a matter of documentation and it is
currently being arranged by our lawyers," Mr. Nazareno
said. He is also the president and chief executive officer
of Smart and the head of the wireless division of the PLDT

Based on the indicative restructuring terms, in tranche A,
50% of Piltel's debts will be converted into Piltel notes.
The notes can be exchanged for PLDT preferred stock or
convertible note, which is convertible to a PLDT common
stock. The notes will bear a 1% interest, which will be
payable annually.

Tranche B, or 25% of the obligations, will have a 10-year
repayment term, while tranche C -- or the remaining 25% --
will have a 15-year term.

Mr. Nazareno said Piltel has proven the status of its debt
talk with the banks was not a main hurdle on the closing of
PLDT's deal with NTT Communications and Smart acquisition.
To recall, Piltel's debt arrangement with the banks was one
of the conditions set by NTT before the Japanese firm
finalized the strategic partnership with PLDT.

Even without Piltel finalizing debt restructuring talks
with creditors, PLDT and NTT forged an alliance last
Friday. NTT's entry also means fresh capital for PLDT of
PhP14.7 billion ($360 million). The amount will be used by
the company to finance capital expenditures of other
subsidiaries and data-related ventures.

Mr. Nazareno said after debt talks with creditor banks,
Piltel will be discussing similar terms with the
bondholders and Marubeni supplier. He stressed the terms
will be similar with the banks as the remaining creditors
do not want "less superior treatment" from the company.

The Piltel president likewise added the company has not, in
any way, considered tapping the Miyazawa fund to pay for
its Marubeni obligations. The Japanese supplier installed
Piltel's 400,000 landlines in Mindanao.  The Miyazawa fund
is provided by the Japanese government to provide loans to
financially distressed firms at concessional rates.

Moreover, in a separate interview, Piltel chief financial
adviser Michael J. Lonergan said PLDT will be infusing $150
million in the company to assist the company in the
repayment of obligations.

"($150 million) was the cap set by NTT. PLDT's support will
not exceed that amount," Mr. Lonergan said. "But it will
not be $150 million in one infusion. For the first year, I
believe PLDT will infuse around $3 million to $4 million in
Piltel and the rest for the succeeding years."

Mr. Lonergan added the cellular firm will be doing
marketing initiatives in coordination with Smart's
marketing plans for the year. He nonetheless declined to

Piltel started incurring debt in 1996 to 1997 when the
market was soaring and most of the banks were confident
with the company's performance. Largely a result of
aggressive expansion activities, Piltel's debts ballooned
to PhP34.9 billion especially after the July 1997 crisis
hit the country. (Business World  27-March-2000)

VICTORIAS MILLING CO.: Interest-equity conversion proposed
Unsecured creditors of beleaguered Victorias Milling Co.
(VMC) have proposed to convert unpaid interest into direct
equity to trim down the debt level of the sugar miller,
which has gone up to 6.5 billion Philippine pesos (US$160
million at PhP40.897:US$1).

A source from one of the creditor banks said the accrued
interest from March 1997 up to March this year "will not
exceed PhP1 billion ($24.4 million). Clean creditors will
become majority shareholders. Of the 32 creditor banks, 23
are unsecured," the source said.

Unsecured creditors have a combined exposure of PhP4.2
billion ($102.7 million) in the company. Aside from this,
the clean creditors have also proposed to scout for a
joint-venture partner which will be willing to infuse
PhP300 million ($7.3 million) into VMC. The source said of
this amount, PhP150 million ($3.7 million) should be in the
form of direct equity while the other half should be
"advances in the form of liability."

"The advances will be payable in three years," the source
added. (Business World  27-March-2000)


GWEE GROUP: Ceases operations, in receivership
Heavily-debted local telecommunications dealer, the Gwee
Group, has ceased operations and is in receivership. The
15-year-old company runs a chain of about 30 retails shops
here selling mobile phones and pagers.

"Thousands of Gwee customers (mobile phone users) have been
left in the lurch," said a source.

YC Chee, a partner at local accounting firm Chio, Lim &
Associates, has been appointed by Gwee's creditor banks to
look into its financial situation (to dispose of its
assets).  Mobile phone customers are usually required to
pay a S$100 deposit when they purchase a unit. They then
have to "stay" with a specified mobile operator--usually
for six months--before they can claim their deposits. The
deposit is imposed by the dealer and not the mobile phone

Unfortunately, the local regulator, the Info-Communications
Development Authority, cannot ensure that customers are
refunded should dealers close shop.

"IDA has never regulated security deposits," said an IDA
spokesperson. "The security deposit pertains to the
commercial operations of the dealer. It is a form of
safeguard for the dealer should the consumer run away."

She added that with the opening of the telecom industry,
IDA would not want to regulate such a "micro aspect".
In January, IDA lifted restrictions on the tie-in period
for telecommunication service packages from April 1.
Previously, this tie-in period was limited to a maximum of
one year but not extending beyond March 31 for fixed-line
and mobile phone services. The restriction lift means that
service providers and equipment dealers can set the tie-in
duration as they deem fit.

To add salt to the wound, the local mobile operators also
said they were not accountable for customers' loss.

"They (phone dealers) are our agents, We don't have any
control over what they do," said a Singapore Telecoms Ltd.
spokesperson when contacted. "We can't do anything about

SingTel operates Singapore's first mobile network called
SingTel Mobile.  On refunds, the island's second mobile
operator MobileOne (Asia) Pte Ltd (M1) spokesperson Chua
Swee Kiat said: "The deposit collected by Gwee--which it
retains entirely--is strictly its own business practice and
is not a requirement imposed by M1."

Bertrand Bidaud, director of telecommunications and e-
business for Dataquest Asia Pacific, agrees that the mobile
operators should not be accountable for customers' loss.
"The issue is how to regulate (the deposit)," he said.

The government can oblige the dealer to put the deposit
into a separate account that is not part of the company's
liabilities and assets," he added.

He said that the dealers should not use the deposits to
finance their operations anyway. It is probably safest to
buy from the telcos (directly). Then again, some dealers
have really great promotions, Bidaud added.  Last October,
Gwee's chairman Gwee Lin Kar, 42, was fined S$10,000 for
helping the company's assistant manager cheat SingTel over
advertising fees. (CNET Hong Kong  24-March-2000)


FINANCE ONE: ECID expands scope of fraud probe
Economic Crime Investigation Division (ECID) officers
investigating the Finance One fraud case said yesterday
they were expanding the investigation to include more board
members of Fin One's subsidiaries Ekapat and Joint Business

ECID also said latest findings indicated no strong evidence
of direct and active wrongdoing by current central bankers
who formerly worked at companies in the Fin One group.

ECID source told Business Day yesterday that recent reports
by local newspapers quoting police officials as saying that
they were reluctant to prosecute the Finance One fraud case
because of possible implications on certain central bank
officials were not entirely correct.

The police, however, have missed several deadlines given to
the press to announce the official results of its
preliminary investigations and to summon central bankers to
give testimonies.

The ECID source said in fact, the police were widening
investigation to include other directors at Ekapat and
Joint Business Management, subsidiaries of Finance One,
adding that that rxpanding the scope of the investigation
was the cause for the delays.

Originally, the ECID focused its investigation only on top
executives at Ekapat and Joint Business Management. The
source said the investigations will now include other
directors at the firm.

The two subsidiaries of Finance One issued promissory notes
which were picked up by Siam City Bank, Nakornthon Bank and
Credit Agricole Indosuez. The three banks then re-
discounted the notes to Finance One. The move allegedly
circumvented central bank regulations limiting parent firm
supporting its subsidiaries.

Former officers of these defunct firms now work in senior
positions at the central bank. The ECID said investigations
into their activities originally targeted certain current
central bankers as main suspects in an alleged fraud
orchestrated by Pin Chakapak, the former president of
Finance One.

But the latest findings showed the central bankers to be as
"passively active" in their involvement, and thus the
penalty levied on them, if found guilty, would be about
"two thirds" lighter, said the EDID source. Pin is also
charged with embezzling other funds meant for the
subsidiaries. He is fighting extradition to Thailand in a
British court.  (Business Day  27-March-2000)

iTV: Undecided on Merrill Lynch offer
The board of directors of Independent Television (iTV)
yesterday discussed a partnership proposal from US
investment bank Merrill Lynch as part of its restructuring
plan but fell short of making a final decision.

Merrill Lynch's offer is among four known proposals which
are under consideration by Siam Commercial Bank Group, a
major shareholder and creditor of iTV.

Nopporn Pongvej, president and CEO of iTV, said: "We have
not made any finalisation on the debt restructuring plan.
But even if there is going to be any change to the
ownership or management structure, iTV will continue to be
a newsoriented station."

iTV is operating under severe financial constraint with a
Bt4 billion debt owed to the SCB. As of Dec 1999, it had a
negative net worth of Bt130 million or a book value of
minus Bt2 a share. Moreover, iTV will need to set aside
Bt800 million to settle the concession fee to the
government within May this year.

The other three restructuring proposals came from The
Nation Multimedia Group, publisher of The Nation; station
management who are former staff of SCB, and telecom tycoon
Thaksin Shinawatra.  Nopporn quashed recent news reports
that iTV is walking away from its original charter as a
news station. He said the terms of reference requires iTV
to allocate at least 70 per cent of its air time to news
programme and presently, the station's news programme
stands at 77 per cent.

He expected the station's debt restructuring plan to be
completed in April this year.  As for a news report that
Thepchai Yong, its news director, is pondering resignation
in protest against its news programme policy, Nopporn said
there is no resignation yet from Thepchai.

"If he is to resign, we'll sit down and talk. But iTV is a
professional organisation and the resignation of any
individual should not have any impact on its operation," he

According to Merrill Lynch's proposal, the firm would
inject Bt1.3 billion into iTV, making it a 45percent
shareholder, followed by SCB 48 per cent and other
shareholders holding a combined seven per cent. iTV's
equity would also be subject to a write down to Bt250
million, or 25 million shares.

Merrill proposed to buy 65 million new shares at US$20 or
Bt760 each, plus an equivalent 65 million warrants at US$4
(Bt152) each.  But the American firm has covered itself in
the investment by proposing that if iTV is not able to list
shares in the Stock Exchange of Thailand by June 4, 2004,
SCB would have to buy back the shares and warrants. The
deal would also be governed by the State of New York law.
(The Nation  26-March-2000)

KIATNAKIN FINANCE: Ready to increase capital
Kiatnakin Finance said yesterday it would raise registered
capital by 4.59 billion baht to 7.15 billion through a
rights issue to existing shareholders.

The company will issue 56 million shares in a rights issue,
with one new share offered for every five held at a price
of 25 baht each. Subscribers will also receive three
warrants convertible for one common share each.  Warrants
have a maturity of 10 years, with the exercise price set at
par or 100-140% of the weighted average price traded on the
SET, whichever is higher.

Directors also agreed to issue up to 10 billion baht in 10-
year debentures to institutional or public investors.
Another 10 million warrants will be issued to Kiatnakin
directors and staff. Other shares will be reserved for
debenture and warrant holders.

Shareholders will vote on the capital increase on April 27,
with the share register closed on April 7. (Bangkok Post

KRUNG THAI BANK: Sets debt restructuring target
Krung Thai Bank aims to restructure debts totalling 170
billion baht this year, with branches accounting for 36
billion baht and head office the rest.

Speeding up debt restructuring, extending more loans and
generating more fee-based income are expected to result in
the bank earning a profit before provisions, management
told staff at a recent meeting. (Bangkok Post  25-March-

POMPUI: To raise capital to cut debt
Pompui will hold a shareholders' meeting April 25, register
closed April 5. No dividend payment. It will propose to
raise capital by issuing 5.5m shares at 10 bt each as part
of a restructuring to convert debt to equity. It will also
issue 268.1m bt in convertible debentures.  (Bangkok Post

S-CHEM: Posts quarterly loss
S-Chem said its reviewed net loss for the quarter ending
Sept 30 last year was 309.4m bt, compared with a net loss
of 41.1m bt for the same period a year earlier.  (Bangkok
Post  27-March-2000)

SIAM CEMENT GROUP: Cuts back steel investments
The Siam Cement Group is cutting back its interests in
steel production because it sees no turnaround in the
construction industry for five years.

The problem is compounded by difficulties in obtaining raw
materials, many of which have to be imported.  To ease the
burden, the group is consolidating its operations with
those of two major competitors, while selling shares in
several subsidiaries.

Vice-president Wirach Krittaphol said steel was no longer a
core business. The implosion of the property sector during
the regional financial crisis had set back the steel
industry many years and it would take at least five years
to recover.

To resolve its problems, the group established Cementhai
Steel Co as a holding company to oversee interests in steel
subsidiaries ridden with total debt of four billion baht.
Of those subsidiaries, Siam Iron and Steel Co, Siam
Construction Steel Co and Siam Industrial Wire Co are
supervised by the holding firm.

Siam Yamato Steel Co and Siam United Steel (1995) Co, two
other subsidiaries, are independently managed with a view
to finding partners. Although the group has been scaling
down its presence in the industry, steel sales worth 12
billion baht a year account for 7% of its revenue.

Siam Cement has reduced its holding in Siam Yamato, a Thai-
Japanese joint venture which makes beams, to 46% from 51%.
The Japanese partner increased its stake to 39% from 33%
when Siam Yamato increased capital by 800 million baht to
7.8 billion. The stakes of the other shareholders, Mitsui
and Sumitomo, were unchanged.

Siam Yamato Steel's managing director, Damri Tunshevavong,
said Siam Cement's reduced holding had not affected the
subsidiary in terms of policy or management structure.
Siam Iron and Steel, which makes steel bars, is integrating
its operation with other two producers, NTS Steel Co and
Bangkok Steel Industry, both of which are undergoing debt

The steel makers embarked on integration as they believed
they could not survive otherwise in a depressed market in
which competition is increasing. As well, the domestic
steel market must be opened to foreign competition under
trade agreements.  Once integration is completed, the three
companies will account for 40%-about two million tons a
year-of the country's total steel production.

According to the Board of Investment, 16 producers of
construction steel receive promotional incentives. However,
in 1998 their debts totalled 65 billion baht compared with
assets of 59 billion baht. Turnover was 21 billion baht, of
which 37.5% was interest burden.

Mr Wirash said the integration plan was expected to be
completed in a few months after NTS Steel and Bangkok Steel
Industry completed debt restructuring programmes.
Initially, the three companies would form a new company to
oversee management and production. This would allow other
producers to come under the umbrella.

Mr Wirash said he did not expect the Finance Ministry to
tax asset transfers involved in the integration as no
assets were being sold. The value of assets transferred was
on-paper only, in order to establish the new company.

Meanwhile, Siam United Steel, which has a registered
capital of six billion baht, has spent 25 billion baht to
make steel plates for can production and the cold-rolled
steel industry, as well as galvanised steel for
construction industry. Production will eventually total one
million tons a year.

Since production began nine months ago, the company has
made 200,000 tons of steel products. Output is expected to
reach 60-65% of capacity this year, and full capacity in
two years.  As part of its restructuring, Siam Cement
reduced its holding in Siam United Steel to 44% from 60%,
while the foreign partners, Nippon Steel, Kawasaki,
Sumitomo, Kobe Steel and Mitsui, increased their total
stake to 56% from 40%. The partners are expected to help
the company increase exports.

Siam Industrial Wire, which makes wire mesh and concrete
strands for road construction, has a capacity of 150,000
tons a year, of which 30% is earmarked for export.
Negotiations are under way to consolidate the company's
operations with two foreign partners. An agreement was
expected to be reached this year, Mr Wirash said. (Bangkok
Post  27-March-2000)

SIAM CEMENT PLC: Bonds boosted to B30bn as demand soars
Siam Cement Plc has increased the value of its bond issue
to 30 billion baht, the maximum permitted, from 10 billion
because of heavy oversubscription.

Subscriptions, which opened on March 9 and are due to close
this Thursday, had topped 15 billion baht and more
applications were being received, a Siam Cement executive
said. The issue will be listed on the market on Friday.

Compared with bank interest rates of up to 3%, the six-year
bonds offer 7.75% annually for the first four years, and
then a floating rate based on the average 12-month savings
rates paid by the country's four biggest banks, plus two
percentage points.

The source said that all money raised by the issue would be
used to repay foreign debt, of which payments will total 15
billion baht this year.  To spread the repayment burden,
the company will seek longer repayment periods to reduce
short-term debt to 23% of the total.

Last year, Siam Cement issued bonds worth 50 billion baht
to refinance foreign debt in local currency. It plans to
reduce foreign loans to 25% of its total debt. The bond
issue reduced the foreign debt to US$1.8 billion from $4.2
billion in 1998.

On Wednesday, the company will seek shareholders' approval
to issue more bonds, totalling 50 billion baht with 20-year
maturities, over the next few years. (Bangkok Post  27-

SUN TECH GROUP: Reports progress of debt rehab plan
Reference is made to the debt restructuring process of Sun
Tech Group Public Company Limited under the process of
CDRAC. Mr.Ramet Opatumphun, Vice President reports the
progress of the said process to the Stock Exchange of

On 23 March 2000, there was the second vote on the
Company's debt restructuring plan (the Plan) at the Bank of
Thailand. The Company obtained a vote from the CDRAC
creditors financial institutions (the Banks) in the number
of 4 from 7 banks in the amount of 84.09% of the total debt
amount in favor of the Plan, which is deemed that the Plan
was approved by the banks. The Company shall enter into the
restructuring agreement with the creditors within 60 days
from the date that the Plan was approved. (Stock Exchange
of Thailand  27-March-2000)

Syn Mun Kong Insurance said its audited net loss for period
ending Dec 31 was 113.7m bt, compared with a net loss of
71.1m bt for the same period a year earlier.  (Bangkok Post

THAI TEL.AND TEL.: Alcatel claims offer beneficial to all
Alcatel (Thailand) maintains that its proposal for Thai
Telephone and Telecommunication Plc is in the best
interests of both the company and customers.

The telecommunications giant has proposed a $25-million
financing package for TT&T to upgrade its fixed-line
network to provide high-speed data services to customers.

"We believe that TT&T will give consideration of our
proposal," said George Jaffres, managing director of
Alcatel (Thailand).  "We believe it is a viable, balanced
plan.. which will boost efficiency for TT&T and be good for

The financing proposal, if accepted, would have to be
incorporated into TT&T's debt restructuring plan.
Mr Jaffres said the proposal is conditional on a "fair
balance between suppliers and banks" in restructuring.

TT&T currently owes Alcatel about $100 million, which
represents around 10% of the firm's total debt. On March 1,
creditors under the Corporate Debt Restructuring Advisory
Committee voted to accept a plan calling for TT&T to raise
five billion baht in new equity within 30 months.

The plan involves rescheduling 30.8 billion baht in debt
into long-term loans and bonds carrying terms of up to 17.5
years, with other debt swapped for equity or settled for
cash at a discount.  Mr Jaffres said that regardless of
whether the proposal was accepted, Alcatel remained ready
to "work with TT&T" for the future. (Bangkok Post  25-

TOTAL ACCESS COMMUNICATIONS: Close to foreign partner deal
UNITED COMMUNICATION INDUS.: Close to foreign partner deal
United Communication Industry Plc (Ucom) and its mobile
phone arm Total Access Communications Plc (TAC) are close
to clinching deals with the same foreign partner as part of
their debt-restructuring plans.

Vichai Bencharongkul, chief executive of Ucom, declined to
reveal the partner's name but said it would take some time
after the completion of the negotiations for fresh funds to
arrive.  Telstra of Australia confirmed recently that it
was talking with TAC on a possible stake in the Thai
company but did not disclose the offer. It said the
acquisition was part of its strategy of exploring growth

The Australian newspaper said Telstra was offering A$500
million (about 12 billion baht) for a 25% stake in TAC,
which would be Telstra's biggest offshore foray to date.
Mr Vichai said that when Ucom, a major local
telecommunications infrastructure and service provider,
acquired a new partner, it would dilute its 67% holding in
TAC to an undisclosed percentage.

However, Ucom chairman Boonchai Bencharongkul said earlier
that Ucom would sell part of its stake in TAC in the first
quarter of this year, expecting to gain $100 million from
the deal. He did not name the likely partner.  An industry
source said that the most likely candidate was Telstra.
Telenor of Norway was out of the picture as its offer,
including the share price, was deemed unacceptable by Ucom.

Mr Vichai said the search for a partner had been slow
because Ucom and TAC wanted a company that "really
understood" their positions. If there was no prompt
conclusion of a deal, neither Thai company would suffer.
"Right now we can stand by ourselves with enough cashflow
to pay our debts on time," he said.

However, if fresh funds were injected, debt could be repaid
more quickly, easing the interest burden.  Last month, Ucom
and 27 creditors led by UK investment bank Somers signed a
plan to restructure debt of $573 million. A total of $120
million was converted to shares in Ucom. Repayment of the
balance was put back four years to Dec 15, 2003. Ucom will
raise its registered capital to 4.354 billion baht. Somers
will convert 128 million debentures into 128 million
shares, raising its stake to 36% from 7%.

Somers previously bought shares in Ucom from
telecommunications giant Motorola.  The other creditors
will together hold 16.6%. The stake held by the
Bencharongkul family will be diluted to 26% from 51%,
according to Mr Boonchai.

TAC signed a US$537-million debt restructuring plan with
creditors in July 1998 under which it is to raise $150
million in new equity by April 2001.  If it cannot meet the
obligation, the creditors can vote on whether to terminate
the debt terms. (Bangkok Post  25-March-2000)

S U B S C R I P T I O N  I N F O R M A T I O N

Troubled Company Reporter -- Asia Pacific is a daily
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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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