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                           A S I A   P A C I F I C

              Thursday, March 30, 2000, Vol. 3, No. 63


* A U S T R A L I A *

BOND CORP.: Probe into art mystery could reopen
IAMA: Forecasts 6-mo. loss; buys slice of Holidays
TELSTRA: Facing multi-million dollar damages claims

* C H I N A  &  H O N G  K O N G *

FOREVER WELL INT'L LTD: Facing winding up petition
GUANGDONG INT'L TRUST: Officials pushing nonpaying debtors
GUANGDONG TANNERY: Parents' woes push further into red
MING YING HIGH FASHION LTD: Facing winding up petition
S MEGGA INT'L HOLDINGS: Loss-maker buying into Internet
WAH LEE RESOURCES HLDGS: Winding up hearing postponed
ZENIX TECHNOLOGY LTD: Facing winding up petition

* I N D O N E S I A *

BANK CENTRAL ASIA: Assets up for grabs, too
BANK INT'L INDONESIA: Expects to post annual loss
DANAMON: Assets up for grabs, too
GAJAH TUNGGAL: Assets up for grabs, too
KIANI: Assets up for grabs, too
PT ASTRA INT'L: Key Astra stake sold for $828M
PT MAPINDO PARMA: Bob Hasan detained over scandal
SALIM GROUP: Assets up for grabs, too

* J A P A N *

AKAI HOLDINGS: Gets 30 days to block winding up
FIRST CREDIT CORP.: Projects 6.4B Yen net loss
FUJI ELECTRIC CO.: Forecasts 7B Yen FY99 group net loss
KOFUKU BANK: FRC narrows bidders down to two
KOHNAN SHOJI CO.: 11% rise in interest-bearing debt seen
MITSUBISHI MOTORS: DaimlerChrysler takes 34% stake
RYOSEI DENPAN CO.: M'bishi Cable to liquidate it
SHOWA SANGYO CO.: To sell U.S. subsidiary, offset loss
TOKIMEC INC.: To scuritize HQ to repay Gov't
TOKYO DOME CORP.: Shares remain in doldrums
TOMEN CORP.: Toyota Tsusho to take 10-15% stake
YAMAICHI SECURITIES: Former head jailed for money hiding

* K O R E A *

DAEWOO HEAVY INDUSTRIES: Losses widen in a week
DAEWOO MOTORS: Power struggle undermines Hyundai's bid
HYUNDAI GROUP: Founder deems younger son in charge
SAMSUNG GROUP: Renault, Samsung to set up joint firm

* M A L A Y S I A *

TELEKOM MALAYSIA: Kickbacks probe still going on

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

NATIONAL POWER CORP.: JG group joins acquisition race
NATIONAL STEEL CORP.: Seeks new 60-day debt relief
PHILIPPINE NAT.BANK: Gov't may lower floor price for PNB
UNIVERSAL RIGHTFIELD PROPS.: Investors in buy-in talks

* T H A I L A N D *

ORIENTAL LAPIDARY: Losses,rehab failure prompt SET plea
STA GROUP: Breaks deadlock on B30B debt
STA GROUP: Creditors okay rehab plan
THAI AIRWAYS INT'L: To launch IPO,pick partner by year-end
THAI MILITARY BANK: Capital increase plan approved by FRAC
THAI PETROCHEM.INDUS.: Special venture for creditors?


BOND CORP.: Probe into art mystery could reopen
On 23 March 2000, Australian Federal Police confirmed they
are prepared to re-open investigations into Alan Bond's

This will occur if Adelaide-based liquidator, Richard
England, is able to provide fresh information about
allegedly sham transactions involving the overseas sale of
the Bond Corporation's art collection and the resyphoning
of the money back to the Bond family in Australia.

The comments came on the day it was revealed two missing
art works have been held in a security warehouse in London,
since 1996, when England obtained a Supreme Court of South
Australia injunction preventing their sale by Christie's
International. (The Advertiser  24-March-2000)

IAMA: Forecasts 6-mo. loss; buys slice of Holidays
Agribusiness group IAMA warned yesterday it expected to
post an after-tax loss for the six months to March 31 due
to of adverse seasonal conditions.

The profit warning came as no surprise to analysts, who
described the group's recent performance and plummeting
share price as "shocking" and "woeful." IAMA's share price
has halved from a high of $2.55 on November 30 to
yesterday's close of $1.25, an eight-year low. In December,
IAMA announced a disappointing 16 per cent full year profit
plunge to $13.3 million, after warning that up to $3.7
million would be wiped from profit because of discrepancies
in its WA accounts.

IAMA also said it would become the biggest single
shareholder in WA turf, irrigation and gardening group
Hugall & Hoile after selling its irrigation subsidiary to
the WA group. IAMA will gain a 19.9 per cent holding in
Hugall & Hoile for $3.45 million, including shares worth
$2.7 million. (Sydney Morning Herald  28-March-2000)

TELSTRA: Facing multi-million dollar damages claims
Telstra and its Foxtel pay television partners face multi-
million dollar damages claims after the Federal Court
yesterday ruled all pay TV and Internet rivals may use the
Telstra cable running past three out of 10 Australian

In a landmark case Justice Brian Tamberlin ruled Foxtel
could not stop Telstra from granting access to Kerry
Stokes's Seven Network or Mike Boulos's Television and
Radio Broadcasting Services (TARBS).  Foxtel and Telstra
had argued they could deny pay TV rivals access to the $3
billion broadband cable to protect their exclusive

Seven Network launched the action late last year after
Telstra refused to carry its proposed Sydney 2000 Olympics
channel and two sports channels on Foxtel.  The case
focused on whether Telstra and Foxtel had the legal right
to exclude others from the network because their agreement
pre-dated a government ruling that both Telstra's and Cable
& Wireless Optus's cable networks were open to anyone who
wanted access.

Justice Tamberlin found that Foxtel and Telstra failed to
finalise a legally binding agreement until April 14, 1997,
seven months after the September 1996 cut off date
announced by the Federal Government for agreements which
could claim protection from competition on the cable.
Foxtel and Telstra last night were considering an appeal to
the Federal Court's full bench.

They are also waiting on the outcome of a separate Federal
Court action in which they are asking the court to overturn
the Australian Competition and Consumer Commission's
decision to declare the cable open to competition.
The ACCC is expected to eventually declare the cable open
to anyone who wants access for digital pay television
services and high-speed Internet services.

TARBS chairman Mike Boulos said his company was considering
a damages claim for the 18 months Telstra and Foxtel
refused access to TARBS's adult and ethnic channels.

"It will be substantial damages," Mr Boulos told The
Australian. "We'll get them to account for subscriber
numbers on the adult channel and attempt to get them to
account for ethnic subscribers."

Mr Boulos pointed out that since he started to seek access
to Telstra's cable, Foxtel had added several ethnic
channels and an adult channel of a type proposed by TARBS.
He said TARBS also would move quickly to seek access to the
cable for its 39 channels.  Mr Stokes said that Seven
"looked forward to working closely with Telstra in
broadcasting C7's exciting array of sports programs, as
well as other services in the future."

Foxtel 50 per cent owned by Telstra, 25 per cent by Kerry
Packer's PBL and 25 per cent by News Limited (publisher of
The Australian) said yesterday it had "always been willing
to negotiate over the Olympics or other programming on
terms that are commercially sensible and attractive to our
subscribers." (The Australian  28-March-2000)

C H I N A  &  H O N G  K O N G

FOREVER WELL INT'L LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for April 26 on the petition of
Yung Yuk Wa for the winding up of Forever Well
International Limited. A notice of legal apperance must be
filed on or before April 25.

GUANGDONG INT'L TRUST: Officials pushing nonpaying debtors
Officials have urged wayward state firms owing money to the
bankrupt Guangdong International Trust and Investment Corp
(Gitic) to pay debts, the official China Daily reported.

Gitic was the largest non-bank financial institution in
Guangdong province before it collapsed in October 1998
under a mountain of unpaid foreign debts.  Guangdong vice-
governor Wang Qishan urged government departments to do
what they can to get debtors under their control to pay
back several billion dollars of Gitic debts, the paper

"Courts at all levels in Guangdong should try to get back
the debts by freezing, confiscating and auctioning off the
assets of debtors," Mr Wang said.  "Those who refuse to
repay Gitic's debt will be seriously punished according to
the law," Mr Wang was quoted as saying by the English-
language daily.

However, many of Gitic's debtors are ailing state-owned
enterprises that simply do not have the money to repay
debts.  The issue is further complicated by the fact the
people enforcing debt repayment are the authorities that
owe the debts.  Foreign creditors, who expect to collect
less than 16 cents in every dollar, doubt this latest
effort will generate much cash.

"I don't think it will make much difference. It is like
trying to squeeze the last little bit of blood out of the
stone," said a Hong Kong-based lawyer representing Gitic

Creditors are expecting to be repaid by the end of the
year.  Gitic accumulated debts of 36.17 billion yuan (about
HK$33.82 billion) and had assets of only 21.47 billion yuan
when it declared bankruptcy in January last year, the paper
said.  Those figures do not include litigation and
liquidation costs.

Gitic now has 240 domestic and foreign creditors but still
faces an uphill battle to collect the outstanding debts,
the paper noted.  The creditors are from Hong Kong, Macau,
the United States, Japan, Thailand and Australia. (South
China Morning Post  28-March-2000)

GUANGDONG TANNERY: Parents' woes push further into red
Guangdong Tannery, a unit of the debt-laden Guangdong
Investment (GDI) and Guangdong Enterprises (GDE) groups,
suffered increased net losses last year.  They blew out
nearly three-fold to $65.12 million.

"The impact on Guangdong Tannery of the standstill of
payments on outstanding borrowings of the GDE and GDI
groups was felt in various ways," said chairman Yu Fang.

A debt-induced shortage of working capital resulted in a
contraction of the company's operations amid the
deflationary retail market in both Hong Kong and the
mainland last year, and cut turnover by 30 per cent - to
$59.5 million against $845.98 million a year earlier.

The loss per share was 12.42 cents and no dividend was
recommended.  During the year, the company launched
clearance shares to facilitate a faster cash inflow but
they were significantly discounted by a sharp decline in
selling prices.

In March 1999, Guangdong Tannery joined its parent company
in requesting a standstill arrangement with its financial
creditors for a deferral of principal payments, while
interest payments would have to be made upon the completion
of the proposed restructuring.

As at December 31, the company had total borrowings of
$272.61 million, while cash and bank deposits amounted to
$163.32 million. After deduction of cash and bank balances,
its ratio of net bank and other borrowings to shareholders'
equity was 23 per cent.

Mr Yu said the company would continue to adopt contingency
measures on financial and cash management for a higher
level of operational efficiency.  The introduction of cost-
control measures last year included a negotiation of a 5
per cent to 10 per cent reduction in raw material costs,
and a cut in its workforce of almost a third.

The company also planned to close down several inefficient
production lines in the first quarter, aiming for a further
5 per cent reduction in staffing.

"The future development of the Guangdong Tannery mainly
depends on the implementation of the proposed restructuring
of the GDE group and the restoration of the company's
normal operations," said Mr Yu. (Hong Kong Standard  28-

MING YING HIGH FASHION LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 3 on the petition of Wong
Pik Fun for the winding up of Ming Ying High Fashion
Limited.  A notice of legal appearance must be filed on or
before May 2.

S MEGGA INT'L HOLDINGS: Loss-maker buying into Internet
Loss-making S Megga International Holdings yesterday said
it had agreed to buy 40 per cent of Act Power Enterprises
(APE), an Internet content provider (ICP).  The deal is
valued at $50 million.

S Megga, which last week reported its losses had widened,
said in a statement that it would pay for the APE stake
with 125 million S Megga shares at 40 cents each. The
shares represent about 10.7 per cent of S Megga's issued
capital and 9.66 per cent of its enlarged capital.

Currently suspended, S Megga last traded at 12.3 cents a
share.  It said APE started business in late January as an
ICP, offering sports entertainment programs and interactive
services.  It operates a website under the domain name
"" and sells sports-related merchandise.

"As a technology-driven company, we have been watching
closely . . . the development of the Internet market. In
light of the rapid development of online communications and
increasing e-commerce activities, we believe our investment
in, and alliance with, APE will enable the group to
penetrate into the market with strong growth potential,"
said S Megga chairman Paul Leung.

Having realised that demand was rising for wireless
Internet access, the firm said it has started developing
advanced products with Internet access. S Megga makes
telecommunications products, including cordless and feature
telephones and facsimile machines.

On Friday it reported a net loss of $47.6 million for the
six months to December 31, compared with a net loss of
$37.6 million incurred in the equivalent period in 1998.
The losses came despite a rise in turnover to $256.9
million, compared with $196.8 million in the second half of
1998. (Hong Kong Standard  28-March-2000)

WAH LEE RESOURCES HLDGS: Winding up hearing postponed
Wah Lee Resources Holdings Ltd said the hearing in Bermuda
on the winding up petition against the company scheduled
for March 23 has been postponed to April 20.

It said the delay will allow KPMG more time to engage in
discussions with potential new investors in the company.
Wah Lee closed Friday up 0.021 hkd, or 11 pct, at 0.21 on
trade of 142.64 mln shares.  (AFX News Limited  27-March-

ZENIX TECHNOLOGY LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for April 19 on the petition of
Zenix Electronics Limited for the winding up of Zenix
Technology Limited. A notice of legal appearance must be
filed on or before April 18.


BANK CENTRAL ASIA: Assets up for grabs, too
DANAMON: Assets up for grabs, too
GAJAH TUNGGAL: Assets up for grabs, too
KIANI: Assets up for grabs, too
SALIM GROUP: Assets up for grabs, too
Why stop at Astra International? Buy more. On the table are
five holding companies, including assets previously owned
by giants like the Salim Group and the controversial timber
king Bob Hasan.

That was the plain and direct message the Indonesian Bank
Restructuring Agency (Ibra) sent out yesterday to Singapore
investors. Fresh from the sale of the automotive group,
Astra, to a consortium which includes Cycle & Carriage Ltd
(CCL), Ibra chief Cacuk Sudarijanto offered to sell
Singapore investors five holding companies linked to such
major groups as Salim (Liem Sioe Liong), Gajah Tunggal
(Syamsul Nursalim), Kiani (Bob Hasan), and Danamon (Usman

The holdings were set up to manage the assets pledged by
their owners. Also for sale this year is Bank Central Asia,
Indonesia's biggest private bank when Ibra took over
control two years ago amid the financial crisis. The BCA
and Astra are Ibra's two prime assets. Once owned by Liem
Sioe Liong of the Salim Group, the BCA is to be disposed
off through a public offer this year. A roadshow is due in
Singapore next month as part of a series of global
marketing trips.

Mr Cacuk, who pushed for the Astra sell-off as soon as he
took over Ibra four months ago from Glenn Yusuf, had a
simple proposal for Singapore investors: Follow the same
route that CCL took to buy into Astra through a consortium,
backed by the Government of Singapore Investment
Corporation (GIC). Eyeing the remainder of the US$500
million (S$850 million) fund set aside by the Singapore
government to co-invest in Indonesia, Mr Cacuk said:

"If there's a buyer who likes to buy the whole thing rather
than piecemeal, it's better. If they can build up a
consortium, they can buy the whole thing."

Speaking at a press conference here soon after addressing a
forum organised by the Singapore Chinese Chamber of
Commerce & Industry, he gave an insight into what he called
his "spectrum of readiness": "There is some US$400 million
left (from the Singapore fund). If they want to assemble
potential buyers and if these funds are available, I'm
ready to sell the whole lot... I ask you strongly, please
indicate your interest, what kind of company or industry
you have in mind. Tell us how much money you are willing to
put in over the next nine months so that we can speed up
(the process)."

A man in a hurry? The Ibra chief has to raise funds for the
state to revive the battered economy. Ibra does this by
selling off massive assets taken over from several local
business groups laden with huge debts by the economic
crisis. Last week, after some halting starts, Ibra
succeeded in selling Astra, a prized asset formerly owned
by the Suryajaya family, to the Singapore consortium.

The agency managed to raise about US$506 million by selling
nearly 40 per cent of Astra at 3,700 rupiah per share. Mr
Cacuk called it a success. But the sale of Astra has not
gone down too well with others who had expected a better
price.  Economist Sri Mulyani, who is also the secretary-
general of the National Economic Council, for instance,
said the public expectation was for Astra to be sold at
4,000 rupiah per share - the same price that was offered at
the eleventh hour by Malaysia's Kumpulan Guthrie. "The
performance of Ibra is now in question," said the outspoken
Dr Sri Mulyani.

Ibra leaders, however, seemed at odds over how much the
agency has been able to raise through its assets sale. In
Jakarta, the head of its Asset Management Unit, Mahmudin
Yasin, said Ibra could contribute only 15.2 trillion rupiah
in cash to the state Budget. This is short of the 17
trillion Ibra is supposed to inject into the state coffers.

But at the press conference here yesterday, Mr Cacuk, a
Berkeley-trained banker, remained unperturbed. The Astra
sale, he said, has contributed to Ibra's ability to raise
almost 18 trillion rupiah (S$4 billion) -- more than what
was required for the Budget. And he spoke of how this had
been achieved although he had only been two months in his
hot-seat job. The implication was clear: Give him more
time, and the man some called a dynamic go-getter would
have no problems in raising more money for the state by
selling off the assets under his control.

"I cannot accommodate failure," he said, as the finance
ministry in Jakarta announced the sacking of one of his
deputies with whom he had clashed over policy.

Would the sale of Ibra's assets to Singapore parties invite
a political backlash, Mr Cacuk was asked. He did not think
it would be a problem. After some time, Indonesians would
see that the foreigners who buy the assets are creating
jobs for them, he said.

What's important, the Ibra team who was here said, is that
the assets are all sold off in a transparent manner. "The
bottomline is: Don't worry, the government will not
influence or intervene in any way a commercial deal," said
the Ibra chief, confidently.  (Singapore Business Times

BANK INT'L INDONESIA: Expects to post annual loss
Bank International Indonesia (BII), which plunged into
trouble during the recent financial crisis, yesterday
forecast a net loss of around 1.9 trillion rupiah for last
year, but expects to return to profit this year.

BII, one of Indonesia's largest listed banks, also
announced a major revamp of its board of directors,
replacing most of the expatriates with local bankers.
Hiroshi Tadano, a Japanese national, was the only

The meeting also agreed to the bank's private placement
plan which will seek to find investors for a 11 percent
stake in the bank held by IBRA. According to Tadano, BII
needs Rp 8.7 trillion in funds to recapitalize the bank.
(The Jakarta Post  28-March-2000)

PT ASTRA INT'L: Key Astra stake sold for $828M
The sale of a controlling stake in PT Astra International
marks the first major asset divestment by the Indonesian
Government since the country plunged into an economic
crisis more than two years ago.

Over the weekend, the Government announced it had sold its
40 per cent interest in the country's largest car maker to
a Singaporean-led consortium for $US506 million ($828

Jakarta said the transaction sent a strong signal to
foreign investors that President Wahid's five-month-old
Government was committed to swift and transparent asset
sales to fuel Indonesia's financial recovery.

The strategic investment - the largest of its kind in
Indonesia - "is a landmark transaction" for the country,
said Mr Cacuk Sudarijanto, chairman of Indonesian Bank
Restructuring Agency.

A consortium led by Singaporean car distributor Cycle &
Carriage and the investment arm of the Singaporean
Government, the Government of Singapore Investment Corp,
won the tender, outbidding an investor group led by
Newbridge Capital of the US.  Cycle & Carriage managing
director Mr Philip Eng said the best thing Astra's new
ownership could bring to the company was "stability."
(Sydney Morning Herald  28-March-2000)

PT MAPINDO PARMA: Bob Hasan detained over scandal
Timber tycoon Mohamad "Bob" Hasan was detained at the
Attorney General's Office on Tuesday after formally being
named a suspect in a US$87 million corruption scandal.

Chaerul Imam, the director of corruption affairs at the
Attorney General's Office, said a warrant had been
issued to detain Bob Hasan for 20 days for questioning
in connection with a government contract to map out
Indonesia's forestry resources. Bob Hasan is a suspect in
the government's investigation into the alleged
embezzlement of the government's massive reforestation

"We named Bob Hasan a suspect after questioning two
others who revealed his role in the case," Chaerul told
journalists in a hastily called news conference after
questioning the tycoon.

After seven hours of questioning, Bob Hasan did not leave
the Attorney General's Office compound on Jl.
Sisingamangaraja. He was instead sent to a detention
cell in the office complex.  The case relates to a contract
the then forestry ministry awarded to Bob Hasan, who once
chaired the Indonesian Forest Concessionaires Association
(APHI), to perform aerial mapping and airborne radar
imaging of the country's forestry resources in 1997.

The $87 million contract was carried out by PT Mapindo
Parma and the money was paid out of the government's
reforestation fund.  However, the Ministry of Forestry and
Plantation last month reported irregularities in the
mapping results, saying the techniques used were obsolete,
uneconomical and did not live up to value of the contract.

Bob Hasan, who briefly served as minister of industry
and trade in 1998, has been questioned by the Attorney
General's Office since February over the case. Accompanied
by his secretary Andi Darussalam, the golf-buddy of former
president Soeharto said he had no objections to being named
a suspect in the corruption investigation.

"I must comply with the legal procedures," he said after
the questioning. "Besides, this is a state based on law,"
he added.

Bob Hasan has disclosed on other occasions that government
investigators have also questioned him about corruption
cases involving Soeharto.  The Attorney General's Office
has summoned the former president to appear on Thursday and
answer questions regarding the management of billions of
dollars of funds belonging to charitable foundations which
he chaired.

Attorney General's Office spokesman Soehandoyo told The
Jakarta Post that Bob Hasan did not have a lawyer as of
Tuesday night.  "We will ask him about this," he said,
adding that questioning would continue on Wednesday. (The
Jakarta Post  29-March-2000)


AKAI HOLDINGS: Gets 30 days to block winding up
Akai Holdings has been given a month to file evidence to
block a legal bid to have the insolvent Japanese audio-
video maker wound up.

Affidavits are to be filed by the company at the High Court
by April 27, giving further details of a restructuring
proposal. Opposing creditors will also be entitled to file
evidence before the next hearing on May 2.  Bank of
Scotland, Den Danske Bank Aktieselskab and Emirates Bank
International filed winding up petitions against Akai
Holdings - formerly known as Semi-Tech (Global) - in
January. At the time, it owed HK$ 3.54 billion to 10
creditor banks around the world.

The three petitioning banks questioned its plans to use a
HK$ 630 million loan from Toyo Holdings and proceeds from a
HK$ 335 million convertible bond offer for working capital
when the company had outstanding debts to pay. However,
major creditors of Akai Holdings opposed the winding-up
bid. The opposing creditors include insolvent sewing-
machine maker Singer, which used to be an associate
company.  (South China Morning Post  28-March-2000)

FIRST CREDIT CORP.: Projects 6.4B Yen net loss
Mortgage loan specialist First Credit Corp. (8580) is
projecting a net loss of 6.4 billion yen for the fiscal
year ending March 31, a sharp drop from its initial
estimate of 750 million yen in net profit.

The drop is attributed to a 7.2 billion yen extraordinary
loss stemming from the decline in value of its real estate
for sale, which dropped to less than half book value. The
firm will continue to pay no annual dividend to
shareholders, despite its original projected payout of a 3
yen dividend.

A new accounting rule taking effect in fiscal 2000 requires
the valuation of real estate to be calculated in a firm's
books. First Credit has been doing so since last fiscal
year, when it posted an extraordinary loss of 7.5 billion

Successful sales of real estate are expected to boost sales
for fiscal 1999 to 29.1 billion yen, exceeding initial
estimates by 960 million yen, a 34% gain from the previous
year. Pretax profit is projected at 1.09 billion yen,
unchanged from the company's initial estimate. (Nikkei  28-

FUJI ELECTRIC CO.: Forecasts 7B Yen FY99 group net loss
Fuji Electric Co. (6504) expects a group net loss of around
7 billion yen for the business year ending March 31,
significantly larger than the loss forecast earlier of 6
billion yen, company sources said Monday.

Some group firms will apparently fail to meet earnings
targets, they said.  Consolidated sales should total 850
billion yen, or slightly less than the figure for the
previous year.  The Tokyo-based electrical machinery
manufacturer expects a pretax loss of some 2 billion yen,
which would be a major improvement on the 6 billion yen
loss suffered in fiscal 1998.

Sales of microchips for use in cellular phones and personal
computers have been running strong, but those of magnetic
disks, vending machines and measuring instruments will come
in below projected levels, leaving subsidiaries handling
these products to report weaker earnings than expected.

Fuji Electric had earlier planned to book an extraordinary
loss of just over 30 billion yen on retirement allowance
payments, subsidiary liquidations and elimination of an
unfunded pension obligation. But the figure will likely end
even higher since the company is going ahead with
restructuring programs at a faster pace than originally

The extraordinary loss will not have much influence on the
bottom line, however, because securities and land will be
sold to offset the charges.  On a parent-only basis, Fuji
Electric will record pretax profit of 1 billion yen thanks
to a major reduction in fixed costs. (Nikkei  28-March-

KOFUKU BANK: FRC narrows bidders down to two
The Financial Reconstruction Commission and the
administrators of failed Kofuku Bank have narrowed down the
field of candidates to take over healthy assets from the
secondary regional bank to two bidders -- the Daiwa Bank
(8319) group and the Anglo-U.S. financial group Rothschild,
The Nihon Keizai Shimbun has learned.

A final decision by the FRC is expected to be reached as
early as this month, sources close to the negotiations say.
The initial view was that the Daiwa Bank group had the
inside track with its bid, but Rothschild has put itself in
the running by agreeing to rehire Kofuku Bank employees,
the sources said.

Rothschild proposes purchasing the entire portfolio of
healthy Kofuku Bank assets without carving it up by region.
Daiwa Bank, in contrast, only wants to take on healthy
assets centered in the Osaka, Hyogo and Kyoto areas. The
assets would be absorbed by the entity created from the
scheduled April merger of two Daiwa regional bank
affiliates, Bank of Kinki (8523) and Bank of Osaka (8371).
(Nikkei  25-March-2000)

KOHNAN SHOJI CO.: 11% rise in interest-bearing debt seen
Kohnan Shoji Co. (7516), which operates home improvement
retail stores, expects its interest-bearing liabilities to
total 48.4 billion yen for the fiscal year ending Feb. 28,
2001, up 11% from fiscal 1999.

The rise is attributed to 12.5 billion yen in capital
investment, about three times the company's operating cash
flow, which is projected at 4.5 billion yen. Kohnan Shoji
will spend 8 billion yen to launch 15 home improvement
superstores, more than initially planned, because
regulations on launching new stores are expected to be
tightened when a new law takes effect in June.

Next fiscal year, operating cash flow is projected at 5.7
billion yen. Capital investment will be decreased to 3.4
billion yen, to bring free cash flow out of the red.
(Nikkei  27-March-2000)

MITSUBISHI MOTORS: DaimlerChrysler takes 34% stake
DaimlerChrysler, the US-German carmaker, on Monday secured
a strong foothold in Asia, the world's fastest-growing car
market, when it said it would take a 34 per cent stake in
Mitsubishi Motors.

The E2.1bn ($2.04bn) deal will make DaimlerChrysler the
third largest company in the international car industry.
The alliance spanning three continents is the latest
development in the move to create cross-border alliances in
the vehicle industry.

Volkswagen on Monday secured a large block of shares in
Swedish truckmaker Scania after the European Commission had
stopped Volvo from taking over Scania. Last month General
Motors and Fiat swapped shareholdings to expand in Europe
and Latin America.

At a news conference in Frankfurt's old opera house Jrgen
Schrempp, DaimlerChrysler chairman, referred to Giacomo
Puccini's Madam Butterfly, which "merges two worlds to a
musical entity". He called the alliance a "milestone for
DaimlerChrysler's Asian strategy" that would allow his
group to participate in the double-digit growth of Asia's
car market.

For Mitsubishi, Japan's fourth largest carmaker, it comes
at a time of weakness. After sluggish sales and a weak
model line-up, it has Y1,746bn ($16.3bn) of debt.

The planned co-operation through the exchange of
components, research and technology, focuses on passenger
cars and light commercial vehicles. It aims to boost
DaimlerChrysler's presence in the small car segment and
assure Mitsubishi a growing role in Europe.

But the deal, struck ahead of a deadline that allows
Mitsubishi to take full control of a European car plant
joint venture with Ford, fell short of giving
DaimlerChrysler access to Mitsubishi's truck and bus
business, often referred to as the jewel in its crown.

Instead, Mitsubishi confirmed its plan to continue an
alliance on trucks agreed with Volvo in October 1999. To
prevent conflicts of interest between its two foreign
shareholders, Mitsubishi will create a separate truck unit
in 2001.

The deal will give DaimlerChrysler three seats on
Mitsubishi's 10-seat board, with the right to veto
decisions. Katsuhiko Kawasoe, Mitsubishi president, said he
would still control the company's direction.

"While Mitsubishi Motors will essentially remain an
independently managed company, we will be able to combine
our strengths in many areas," he said.

Mr Schrempp will also pay several million euros for Ford's
stake in Mitsubishi's Dutch Nedcar passenger car factory.
Nedcar is held 50-50 by Mitsubishi and Ford. Mitsubishi's
option to buy out Ford expires on March 29.

DaimlerChrysler will pay Mitsubishi E2.1bn for the
controlling minority stake in Mitsubishi. It will buy 500m
shares at Y450 a share from a capital increase this year.
This price values Mitsubishi at about Y639.8bn -
considerably higher than many analysts in Tokyo had
expected. (Financial Times  28-March-2000)

RYOSEI DENPAN CO.: M'bishi Cable to liquidate it
Mitsubishi Cable Industries Ltd. (5804) will liquidate a
loss-laden cable sales subsidiary at the end of March and
transfer its business, marketing network and employees to
two sales companies that Mitsubishi Cable will create on
April 3.

Ryosei Denpan Co. has accumulated losses since the collapse
of the economic bubble early in the 1990s, as earnings
deteriorated due to falling orders. Mitsubishi Cable has
concluded that eliminating the subsidiary's losses, which
stand at 774 million yen, is no longer possible.

Mitsubishi Cable plans to treat Ryosei's accumulated losses
from past unprofitable operations as a loan loss and create
additional reserves against it. The resulting loss will be
offset by capital gains from real estate sales. The company
has left intact its pretax profit forecast of 100 million
yen for fiscal 1999. (Nikkei  27-March-2000)

SHOWA SANGYO CO.: To sell U.S. subsidiary, offset loss
Showa Sangyo Co. (2004) announced Friday its decision to
sell GranPac Foods Inc., a wholly owned subsidiary in the
U.S. that manufactures and sells frozen foods.

Showa Sangyo is negotiating with Japanese food companies
and plans to sell the U.S. unit for slightly less than 1
billion yen.  In the fiscal year ending March 31, Showa
Sangyo will report an extraordinary loss of about 3.3
billion yen, the difference between the money it has
invested in the subsidiary and the market value of the
unit's assets.

GranPac was launched in 1989 to export frozen foods to
Japan, but it shifted its sales focus to the U.S. market
due to the weakness of the yen against the dollar. The
company's net balance has been in the red since its
founding. Sales for the year ended Dec. 31, 1999, totaled
11.79 million dollars, and it posted a net loss of 2.43
million dollars. Showa Sangyo doubts the firm will make a
profit in the future.

Showa Sangyo has lowered its earnings projections for the
term ending March 31. It now estimates net profit at 400
million yen, a drastic drop from initial estimates of 1.5
billion yen. (Nikkei  27-March-2000)

TOKIMEC INC.: To scuritize HQ to repay Gov't
Tokimec Inc. (7721) will securitize its head office
building and pull out of unprofitable businesses to raise
funds to return money which it overcharged the Defense
Agency in equipment sales, company sources said.

As a result, the leading maker of air and marine
instruments, which has been suffering sluggish sales,
expects slightly over 9 billion yen in net loss for the
year through March 31, compared with 3.9 billion yen in
loss a year earlier.

The company will set aside 5 billion yen to repay the
Defense Agency although the exact amount of the refund has
not yet been decided. The firm will book the amount as an
extraordinary loss.  It will also take a charge of 2.5
billion yen to cover special severance pay for some 230
applicants for early retirement.

To cover part of the extraordinary losses, the firm will
place its Tokyo HQ building in trust and sell the
beneficiary rights to the trust for 4.6 billion yen. This
will bring in 1.2 billion yen in profit for the year. It
will also see extraordinary profit of 800 million yen from
the sale of other property.

By concentrating management resources in eight core
operations, the company aims to return to pretax profit in
the year ending March 2002. (Nikkei  27-March-2000)

TOKYO DOME CORP.: Shares remain in doldrums
Tokyo Dome Corp. (9681) shares have fallen since the start
of the year and hit 480 yen on Jan. 7, their lowest level
since the bubble era.

With personal consumption remaining sluggish, investors
have grown worried about the pace in restructuring group
subsidiaries. Tokyo Dome has extensive cross-shareholdings
with financial institutions, and its stock price is
sensitive to declines in bank issues.

Results have been worsening at subsidiaries that operate
hotels and golf courses, which have had to rely on the
parent's support for loan repayments. The firm took
extraordinary losses related to subsidiaries of almost 19
billion yen for the fiscal year that ended in January.

This fiscal year, Tokyo Dome will set up a new company to
operate and consolidate its hotel and golf subsidiaries,
shutting down unprofitable ones. Losses to date have been
dealt with, but the economic recovery is slow in outlying
regions, and it is not yet possible to be optimistic.

Revenue is stable for the Tokyo Dome stadium itself, and
should grow about 1% on the year to 16.5 billion yen. But
pretax profit is likely to fall 32% to 6.5 billion yen as
revenue drops at the amusement park division, which is
developing new facilities, and financial outlays rise due
to higher interest rates and subsidiaries' borrowing.

Tokyo Dome's restructuring "should be appreciated, but it
must be speedy for the market to respond," says Daiwa
Institute of Research analyst Masaaki Kitami.

Many investors say they will be watching occupancy rates at
the Tokyo Dome Hotel, but for now the stock is likely to
just keep pace with the overall market. (Nikkei  28-March-

TOMEN CORP.: Toyota Tsusho to take 10-15% stake
Toyota Tsusho Corp. (8015) is expected to take a 10-15%
stake in Tomen Corp. (8003), becoming the largest
shareholder of the general trading house, industry sources
said. Toyota Tsusho is a trading company affiliated with
Toyota Motor Corp. (7203).

Two other Toyota group firms -- Toyoda Automatic Loom Works
Ltd. (6201) and Toyoda Boshoku Corp. (3116) -- will also
take stakes in Tomen, the sources said. The two companies
have business ties with Tomen.  In a restructuring plan
unveiled in February, financially troubled Tomen said it
would ask its creditor financial institutions and business
partners to purchase 30 billion yen worth of new shares.

The company has also asked Tokai Bank (8321), Sakura Bank
(8314), Bank of Tokyo-Mitsubishi (8315) and Chuo Trust &
Banking Co. (8408) to forgive their loan claims. Its main
bank, Tokai Bank, is expected to agree to forgive loans
worth just over 160 billion yen at a board meeting on
Tuesday. The bank is currently the top Tomen shareholder
with a 5% stake. (Nikkei  25-March-2000)

YAMAICHI SECURITIES: Former head jailed for money hiding
A Japanese court sentenced the former head of Yamaichi
Securities Co. Ltd. Tuesday to a 30-month jail term for
hiding billions of dollars in losses which led to its
spectacular collapse.

The Tokyo District Court sentenced 64-year-old former
president Atsuo Miki for illegal conduct prior to the 100-
year-old institution's demise.  Miki immediately filed an
appeal, according to reports by Kyodo News and Jiji Press
news agencies.
Yamaichi's former chairman, Tsugio Yukihira, also received
a three-year term for the same charges but his sentence was
suspended for five years, meaning he will not be jailed
unless he commits another offence.

Yamaichi Securities, once Japan's fourth largest brokerage,
collapsed in November 1997 under a mountain of bad loans
and was finally declared bankrupt on June 2 last year.  It
was Japan's biggest business failure since World War II.

The two bosses had concealed up to 271.8 billion yen (2.56
billion dollars) in losses over the three financial years
which ended in March 1998. The pair also approved a
dividend payout of six billion yen in the last of those
years, the court said.
In doing so, they flouted securities legislation
prohibiting falsification of financial statements, and
violated Japan's commercial code, the court found.

"Both defendants were found guilty of violating the
commercial code and the securities and exchange law," said
a Tokyo District Court spokesman, who asked not to be
named. "They should be held responsible for putting
concealment of losses before
everything else, delaying business restructuring and
causing the company's collapse," presiding judge Kaoru
Kanayama reportedly said.

"As the top management of the company, they should have
implemented drastic measures for the company's revival
without worrying about past glory," he told the court,
according to Jiji Press news agency.

At the start of the trial, the former Yamaichi president
had pleaded guilty to all charges while the chairman had
insisted that he did not consider the dividend payment to
be illegal.
Miki was also found guilty of illegally paying 107 million
yen in 1994 and 1995 to an infamous "sokaiya" corporate
racketeer, Ryuichi Koike.

Koike, jailed for nine months on April 21 last year, preyed
on companies which had something to hide in their accounts,
demanding payoffs for his silence at shareholders'
During the hearing, the two bosses argued that the Bank of
Japan and Ministry of Finance should take some
responsibility, claiming the authorities had suggested they
carry out stock shuffling.  (Agence France Press  28-March-


DAEWOO HEAVY INDUSTRIES: Losses widen in a week
Daewoo Heavy Industries lost about 1.5 trillion won (HK$
10.52 billion) more than it reported last week, taking into
account additional one-time losses such as its inflated
sales figures over several years. Daewoo Heavy said it lost
3.97 trillion won last year instead of 2.54 trillion won as
reported last week to its creditors and other government
agencies, said officials at Daewoo Heavy's Planning and
Finance Departments. The announcement comes one day before
its shareholders' meeting today. Daewoo Heavy is set to
split into three businesses as part of rescue plans for
near-insolvent Daewoo Group, which has debts of at
least US$ 78 billion.  (South China Morning Post  28-March-

DAEWOO MOTORS: Power struggle undermines Hyundai's bid
The Hyundai Group's recent family dispute is expected to
force the conglomerate out of the race for control of
Daewoo Motor, analysts said yesterday.

The ugly power struggle between group founder Chung Ju-
yung's sons brought the managerial problems of the chaebol
into the public eye, prompting regulators to vow to toughen
corporate restructuring reforms.  Amid the widespread
negative publicity surrounding Hyundai and other family-
controlled chaebol, the government and creditors have more
reason to be reluctant to sell Daewoo Motor to a chaebol
company, like Hyundai Motor, said the analysts.

"Chung Mong-hun, the fifth son of the founder, won the
battle for group chairmanship, defeating Chung Mong-koo,
the eldest son," said an analyst at Daewoo Securities.
"But both could wind up losers in the end. Mong-hun will
face mounting reform pressure from the government and
creditors, while Mong-koo will have to overcome negative
public opinion over Hyundai Motor's bid to acquire the
Daewoo carmaker."

Indeed, signs of negative fallout are already tangible, as
Hyundai Motor's due diligence team was blocked by Daewoo
Motor unionists from entering the company's plant in
Pupyong, west of Seoul.  Inspectors from Hyundai Motor,
one of the five bidders for Daewoo, attempted to conduct
due diligence on the Pupyong plant yesterday morning, but
met with strong resistance from Daewoo's unionists, who
vowed to deter a takeover by a family-controlled chaebol
accused of managerial irregularities.

The analysts also noted that Mong-hun, now in control of
cash-rich electronics and financial units, may not extend
financial support to Hyundai Motor's takeover bid. The
Mong-hun camp has not expressed any formal stance on the
issue, but is internally opposed to the takeover, they

In addition, civic activists are opposed to Hyundai's
purchase of Daewoo, raising fears of adverse monopolistic
effects. The People's Solidarity for Participatory
Democracy also said the Chung family's attempt to inherit
group management rights has cast a dark cloud over the
group's future, not to mention the nation's credit

"This is not the time for Hyundai to fight among itself,"
said a Seoul-based foreign analyst. "In the global car
industry, there are few carmakers that have not jointed
global alliances. Hyundai Motor has not presented any
concrete vision for its global alliance yet," he said,
warning that the internal bickering may be a turn-off
for foreign companies.

Meanwhile, Chung Mong-koo, the chairman of Hyundai Motor-
Kia Motors, may employ desperate measures to win the
Daewoo carmaker takeover in a bid to make up for his loss
of group co-chairmanship to his younger brother, watchers

"Control of Daewoo Motor would turn Hyundai Motor into an
auto giant with an annual capacity of 4 million units and
about 60 trillion won in assets ($54 billion), nearly
matching the size of Mong-hun's Hyundai Group," said an
industry watcher.

Hyundai officials are also confident about the outlook for
the Daewoo bid. Dismissing concerns about Hyundai Motor's
financing capabilities, an executive said the company now
has about 1.3 trillion won in extra cash liquidity, secured
through new rights issues and other means last year, while
the debt-to-equity ratio has fallen to 159 percent. He also
asserted that in this era of market opening, debate over
monopoly is meaningless, adding that the automaker is
vigorously pushing to form an alliance with foreign firms.
(Korea Herald  29-March-2000)

HYUNDAI GROUP: Founder deems younger son in charge
Hyundai Group founder Chung Ju-yung has given control of
the nation's largest industrial group to his younger son,
ending a public spat within one of South Korea's most
prominent and secretive families.

The 72-hour battle saw conflicting press statements issued
on behalf of two of Mr Chung's sons as they vied for
Hyundai Group's chairmanship, which the two brothers had
shared for two years. The 85-year-old Hyundai founder
selected Chung Mong-hun, 51, as his successor to snuff out
a power struggle that had been raging between Mr Chung
Mong-hun, his fifth son, and second son Chung Mong-koo, 62.

"The (Hyundai Group) chairmanship is assumed solely by
Chung Mong-hun," Mr Chung Ju -yung told a meeting of
Hyundai's chief executives. His remarks were recorded and
later broadcast on television reports.  (South China
Morning Post  28-March-2000)

SAMSUNG GROUP: Renault, Samsung to set up joint firm
Renault forwarded a proposal on March 6 to the Samsung
group to set up a joint company owned 70 per cent by
Renault and 30 per cent by Samsung.

Renault would acquire the operating assets of Samsung
Motors Inc. (SMI) for a total of $450 million US. The joint
company would be incorporated with an initial share capital
of $335 million US, 70 per cent of which would be held by
Renault and 30 per cent by the Samsung group. In the longer

Samsung could, if it so wishes, reduce its shares to 20 per
cent. The new company would acquire the operating assets of
Samsung Motors Inc. (Pusan plant, Kiheung R& D centre,
domestic dealer network, use of the Samsung brand name).
The business plan drawn up by Renault and Samsung should in
a few years' time allow full use of the industrial plant's
capacity with annual volumes in the order of 200,000

The new company would keep on Samsung Motors' highly
qualified workforce, some of whom were trained at Nissan in
Japan. The new company, with the technical support of
Renault and Nissan, would seek to develop the supplier base
set up by SMI.  The new company would continue production
of the vehicle currently produced by Samsung and derived
from a Nissan vehicle and would gradually introduce a range
of Renault and Nissan-based vehicles, adapted to the Korean
market by the existing engineering facility.

Renault's objective is to move into the South Korean
market, Asia's second largest, with a partner of
international renown, in order to take a 10 to 15 per cent
market share with the Samsung brand and consequently,
double sales volumes of the Renault-Nissan Alliance in Asia
(outside Japan).

Renault considers that the bid submitted to the Samsung
group and Samsung Motors' creditors represents a
significant growth opportunity in Asia for the Renault-
Nissan Alliance and an opportunity for its Korean partners
to become an effective part of one of the world's leading
automotive groups. (Winnipeg Free Press  24-March-2000)


TELEKOM MALAYSIA: Kickbacks probe still going on
Investigations are continuing on the alleged kickbacks of
RM10.64 million paid by Mitsui & Co of Japan to Telekom
Malaysia for a switchboard supply contract, said Anti-
Corruption Agency (ACA) director general Datuk Ahmad Zaki

The investigations are half-way through, he told reporters
yesterday. Mr Ahmad Zaki said the ACA had recorded
statements from two Mitsui & Co officials who arrived in
Malaysia two weeks ago to assist in the investigations. The
ACA had, before this, questioned Mitsui officials based in

As for investigations concerning Perwaja Steel, he said
they were now in the final stages of completion. He
declined further comment. (Singapore Business Times  29-


NATIONAL POWER CORP.: JG group joins acquisition race
Retail magnate John Gokongwei Jr. has joined the race to
acquire the power plants and other assets of state-run
National Power Corp., according to a person familiar with
the situation.

The source, a ranking Napocor official, said JG Summit
Holdings Corp. executive vice president Lance Gokongwei
asked Napocor's Privatization and Restructuring Office for
a briefing on the sale of the power firm's assets.

If it pushes through with its plan to buy Napocor's assets,
the Gokongweis will compete against the Lopez and Alcantara
groups, two well-diversified business families. The Lopezes
has a controlling stake in Manila Electric Co., the
country's biggest electricity distributor, and First Gas
Corp. while the Alcantaras own Davao Light and Power Co.,
the biggest in Mindanao.

The Napocor official said apart from JG Summit, other firms
that requested for a briefing were Republic Asahi Glass
Corp. of former Energy Minister Geronimo Velasco and Asian
Terminals Corp. of businessman Eusebio Tanco.  Tanco also
owns Power and Renewable Resources Corp., which already has
a stake in the Tiwi-Makban geothermal facility.

"We were asked by these business groups to make a briefing
of the Napocor assets and other power facilities scheduled
to be privatized," the Napocor official, who requested
anonymity, said in an interview.

Napocor earlier announced that 112 foreign investors,
financial intermediaries and consultants inquired about the
planned restructuring and privatization of the government's
largest corporation.  Two big players in this list--British
firms National Power Plc. and Powergen Plc.--had already
lost interest due to delays in the approval of a law that
will lead to Napocor's privatization.

"These firms had already established their offices here two
to three years ago. But this year, they could not wait much
longer and said they still could not see a clear indication
that the privatization would push through," the Napocor
official said.

Lawmakers have promised to approve a bill on the
restructuring of the local energy sector and privatization
of Napocor before they go on recess on April 9 but
observers are doubtful this deadline will be met.
Napocor's privatization is being delayed by several
contentious issues.

Proponents say power rates will go down once the power
sector reform bill, now pending in Congress, is enacted. In
fact, Napocor president Federico Puno has promised a 30-
centavo drop per kilowatt-hour in consumer power bills.
Others, however, are concerned about the reported P300
billion in financial and contractual obligations--dubbed as
stranded costs--that will be left behind after the
privatization of Napocor.

The executive department says the government can absorb up
to P150 billion of this up front but the balance will have
to be paid for by consumers.  Napocor has over P120 billion
worth of debts maturing within the next three years out of
outstanding loans estimated at P285 billion as of December
1998. It also has around $9.8 billion (roughly P390
billion) in long-term power purchase contracts. (Philippine
Daily Inquirer  28-March-2000)

NATIONAL STEEL CORP.: Seeks new 60-day debt relief
The National Steel Corp. (NSC) is seeking another 60-day
extension of its suspension of debt payments to keep its
creditors at bay and prevent them from pursuing claims
against the company's assets.

The debt-laden NSC said that while the first 60-day debt
relief granted to it by the Securities and Exchange
Commission (SEC) lapsed last March 18, it needs another 60
days or until May 18 to firm up talks with a potential
investor and to come up with a viable rehabilitation plan.

NSC said it is currently firming up negotiations with a
European steel firm, Duferco S.A. of Switzerland. The steel
company is said to be the largest independent trading firm
in the world and also the biggest trader of slabs.
Together with its extensive trading operations, Duferco
S.A. is becoming a major producer of steel finished
products in the world, currently producing five million
metric tons.

NSC said that Duferco S.A. has tied up with Novolipetsk
Mettalurgical Kombinat (NLMK), a major slab producer in
Russia, with their plan to rehabilitate the Iligan-based
steel company.  The NSC said Duferco S.A. already made an
ocular inspection of the steel mill and confirmed its
interest by offering to bring into the country its
worldwide, sophisticated trading operation.

The NSC said that while negotiations have reached its final
stage, there are still many details that need to be
threshed out between the two parties.  The final shape of
the agreement will be the basis for the preparation of the
revised or amended rehabilitation plan of NSC.  The NSC
also requested the SEC for another 30-day extension or
until April 27 to come up with a revised rehabilitation

The interim receivers for NSC led by Monico V. Jacob and
Antonio Arizabal said the extension is necessary since the
receivers have just assumed their functions and are
currently talking with creditor banks on how to
rehabilitate the company, the inputs of which will be
incorporated in the amended rehabilitation plan.

The receivers said they met with the steering committee of
creditor banks last week, including representatives of the
Philippine National Bank, Land Bank of the Philippines,
Global Bank and Credit Agricole.  NSC's rehabilitation plan
hinges largely on being able to find investors willing to
pump fresh money into the company to be used immediately to
buy raw materials needed to resume steel production.

Aside from Duferco S.A., another group of investors led by
Grupo F. Jacinto (GFJ) has also expressed interest in
acquiring 51 percent of the company.  NSC, still owned by
Hong Kong-based Hottick Investments Ltd., has said it has
assets worth around P20 billion.

The steel manufacturer was forced to seek debt relief after
suspending operations in November 1999 following a
continued decline in sales due to the influx of cheap
imported steel from Russia and South Korea. (The Philippine
Star  28-March-2000)

PHILIPPINE NAT.BANK: Gov't may lower floor price for PNB
The government may bring down the P160 per share tag price
it earlier set for the combined holdings of the state and
of taipan Lucio Tan in Philippine National Bank, which will
be sold to a strategic investor by June.

Finance Secretary Jose T. Pardo said a draft memorandum of
agreement on the planned sale has been sent to the lawyers
of Tan and to government financial advisors ING and Lehman

Tan had said he would only sell his 46-percent stake in the
bank at no less than P160 per share. This, he claimed, was
the price at which he had acquired the PNB shares. However,
PNB shares are currently trading at slightly more than P80
per share.

"The floor price could not go higher than P160 per share.
Once the agreement with Tan is signed, we could determine
the floor price," said Pardo.

The draft MOA prepared by Finance Undersecretary Cornelio
Gison stipulates that the price of the PNB shares would be
based on the market price or a floor price to be determined
later, whichever is higher.  Gison said the government
would prepare "a more detailed agreement" once Tan signs
the first. "The price is something that has to be
negotiated by both parties," he noted.

"I would push to have the agreement signed within the
week," said Pardo. The MOA would bind the taipan to his
word that he would unload his PNB shares together with the

Pardo said Hong Kong-based fund manager Templeton Asset
Management has also indicated its intent to sell its
shares. "Templeton wants to be a party to this agreement,"
the finance secretary said.

Gison said the draft MOA would require Tan to execute a
special power of attorney with the companies that have
given him proxy rights including the firms that have lent
to the PNB Retirement Fund special purpose vehicles.

The retirement fund has four special purpose vehicles
namely, RF Investments Inc., Witter Webber and Schwab,
Integrion Investments Inc., and Dreyfuss Mutual Investments
Inc.  Of these, the last three obtained loans from Tan-
owned companies Mabuhay Equities Corp., Starline Holdings,
and Grand Monde Holdings Corp. These companies have given
Tan the proxy rights over their shares.

These companies accounted for a 10.59 -percent stake in PNB
under Tan's control. Tan also has the 19.22-percent
combined stake from Mandarin Securities, Wealth Securities,
and Luys Securities.  If Templeton and PNB Retirement Fund
would join the PNB sale, the stake could reach more than 92
percent. With a huge amount involved, Pardo said the bank
could generate interest from foreign groups.

The 30 percent stake of the government in PNB is seen to
fetch at least P6.2 billion for the state coffers.  (The
Philippine Daily Inquirer  28-March-2000)

UNIVERSAL RIGHTFIELD PROPS.: Investors in buy-in talks
Local and foreign investors are keen on cash-strapped
property firm Universal Rightfield Properties and Holdings,
Inc. (URPHI).

Consunji-controlled URPHI needs additional equity to help
finance the company's unfinished property and leisure
projects.  In an interview with reporters during a
recently concluded investors' briefing, URPHI chairman
Isidro A. Consunji said the Metro Pacific Group and a
foreign investment firm have expressed interest to
invest in the company on the condition that URPHI's market
price reaches par value. The Consunji family has also
expressed willingness to infuse additional equity in
the beleaguered property firm.

"There are investors, including us, the Consunjis, who
would want to put new equity into the company to help
finish some of the projects. Others are considering equity
infusion to settle some disputes like the case of Metro
Pacific. There is also an investment banker willing
to enter once the market price of URPHI reaches par value,"
he said.

Mr. Consunji, however, said the parties have yet to reach
an agreement for this purpose. He said the Metro Pacific
Group has reportedly proposed to infuse equity in URPHI to
settle the land acquisition dispute between the company and
Metro Pacific subsidiary, Landco Pacific Corp. involving
87-hectare lot in Batulao, Batangas.

Metro Pacific allegedly failed to deliver the property
which was bought and partially paid for by URPHI parent
firm, DMCI Holdings, Inc.  Metro Pacific officials were not
immediately available comment.  The company official said
the management of URPHI will seek the approval of
stockholders to restructure the company's capitalization to
pave the way for the entry of a new investor or an increase
in the equity of existing shareholders.

URPHI president Alfredo P. Lozano, Jr. said the company
will use a two-pronged strategy in the restructuring
process. First, URPHI will decrease the authorized
capital stock from the current 3 billion Philippine
pesos (PhP) (US$73.27 million at PhP40.943:US$1) to PhP750
million ($18.3 million) at PhP1 par value to eliminate the
accumulated deficit of the company.

Mr.Lozano said the decrease in authorized capital will
increase URPHI's book value from PhP0.50 per share to PhP2
per share. The improvement will likewise make the company a
more viable proposition to prospective investors.  The
property firm will then move to increase its capital stock
from PhP750 million to PhP2.35 billion ($57.4 million).
No fresh capital can be raised and no new projects can be
undertaken unless the company successfully restructures its
capitalization, Mr. Lozano said.

The URPHI official said the company is targetting to finish
construction of Pioneer Highlands and Dansalan Tower, both
located in Mandaluyong. Mr. Lozano reported that the second
phase of Pioneer Highlands is scheduled for launching in
April.  Meanwhile, the company is currently in talks with
developers to purchase golf courses. This will allow club-
members of subsidiary Universal Leisure Club, Inc. to
use existing facilities while six planned golf courses are
still undergoing construction.

"We're exploring various options to keep our business going
and we have offered to acquire various golf courses in
Clark (Field, Pampanga). We're discussing with True North
for us to use other golf courses prior to the completion of
the permanent golf courses of the company. We have also
secured the approval from Universal Leisure Club members to
reclassify A, B & C shares where A holders may use all
facilities while B and C shares will be priced at lower
value," Mr. Lozano said.

Officials of True North -- controlled by PCCI vice-
president Donald Dee - were not immediately available for
comment.  URPHI is among local property firms badly
affected by the regional economic crunch. In 1998, the
company posted a net loss of PhP923 million ($22.54
million) from PhP242 million ($5.9 million) compared
with the previous year.

Following the difficult economic conditions that year, the
firm's contracts receivable, real estate held for sale and
advances to Universal Leisure Club amounted to PhP3.6
billion ($87.9 million). Total sales that time reached only
PhP558 million ($13.6 million). (Business World  29-March-


ORIENTAL LAPIDARY: Losses,rehab failure prompt SET plea
Oriental Lapidary asked for its shares to be delisted on
the Stock Exchange of Thailand (SET) due to significant net
losses and a failure to restructure its debts within the
SET time-frame. In a filing, the firm's board of
directors decided to delist the company's 60 million common
shares, totalling Bt600 million. (The Nation  29-March-

STA GROUP: Breaks deadlock on B30B debt
STA Group (1993), a major furniture and board maker, and
its four subsidiaries, are preparing to restructure 30
billion baht in debt after a stalemate lasting two years.

The companies yesterday filed petitions to the Central
Bankruptcy Court to appoint Deloitte Touche Planner Co as
their common planner to carry out debt restructuring.
STA Group owes 14.2 billion baht, STA Particle 4.6 billion,
STA MDF 5.7 billion, STA Furniture 2.5 billion, and STA
Para-Plywood 2.1 billion baht.

STA Group was delisted from the Stock Exchange of Thailand
in February last year because it had failed to rehabilitate
its business within a two-year period as ordered by the
SET. In addition, it was unable to find any new strategic
partners during the same period.

As of Sept 30, 1998, the company had reported a 6.7 billion
baht loss, raising accumulated losses to 14.8 billion baht.
STA Group was considered an attractive stock until the
economic crisis struck, and the company's high leverage
became a point of concern.

The December 1996 death in a car accident of one of its
major shareholders and key executives, Supotpong Vilaipan,
was a further setback.  The STA case entered the headlines
again last September when opposition politicians disclosed
irregular lending practices at the state-owned Krung Thai
Bank. They linked the non-performing loans owed by STA to
politicians from the governing Democrat Party.

Mr Supotpong reportedly had been close to the Democrats,
especially Transport Minister Suthep Thaugsuban. An STA
executive who declined to be named said the restructuring
petitions had been filed separately because the debt
structure of each company was different. As well,
collateral had been cross-pledged, which was expected to
create confusion.

"Having different creditors does not present a major issue.
However, the cross-pledging of collateral by STA and its
four subsidiaries complicated the matter," he said. "It is
far better for the STA Group and its subsidiaries to file
their respective petitions separately. With this approach,
each creditor will be assured that its interests would be
protected under the bankruptcy law."

The executive said the potential for rehabilitation of the
STA Group was high as the particle- and fibre-board
businesses were doing well. However, certain businesses
that could not generate revenues would have to be sold out,
and the company would also have to negotiate with creditors
for write-downs.

The STA Group's major creditors include Krung Thai Bank,
Thai Farmers Bank, Bangkok Metropolitan Bank, and
Chanthaburi Asset Management Co, set up by TFB to manage
assets transferred from the defunct Phatra Thanakit Plc.
(Bangkok Post  28-March-2000)

STA GROUP: Creditors okay rehab plan
About 90 per cent of creditors have approved a
rehabilitation plan for STA Group, which is made up of five
subsidiaries that are saddled with combined debts of
Bt30.44 billion, a financial source said yesterday.

The Central Bankruptcy Court yesterday agreed to hold a
hearing on the rehabilitation plan. It set April 24 as
the opening day for the hearing into bankruptcy procedures
against the country's major producer and exporter of
parawood furniture.

STA Group's five subsidiaries - STA Group (1993) Plc, STA
Paraplywood Co, STA Furniture Group, STA MDF Co and STA
Particle Products Co - have agreed to undergo a
rehabilitation plan and voluntarily applied for bankruptcy
procedures to go ahead via the court.

Major creditors of STA Group include Krung Thai Bank, Thai
Farmers Bank, Bangkok Metropolitan Bank and Chanthaburi
Asset Management Co. No foreign creditors were involved in
the company's debt.  The source said KTB alone was owed
Bt14 billion by the group.

STA Group (1993) Plc, a distributor and exporter of
processed parawood and particle boards, owed 55 creditors
Bt14.25 billion. STA Paraplywood Co, distributor and
exporter of plywood and vinear boards, has debts worth
Bt2.14 billion owed to 23 creditors. STA Furniture Group,
distributor and exporter of parawood furniture, owed
Bt2.57 billion to 55 creditors. STA MDF Co, distributor and
exporter of "MDF" parawood, owed Bt5.74 billion to 118
creditors, while STA Particle Products Co owed Bt5.74
billion to six.

The STA subsidiaries told the court that due to the
economic crisis, they have excessive debts and that their
liabilities exceeded their assets.  But their business
fundamentals remained sound, so they asked for court
approval of the rehabilitation process.  In September,
1998, the STA subsidiaries' liabilities exceeded their
assets by Bt13.77 billion. They also made a combined loss
of Bt6.7 billion. (The Nation  29-March-2000)

THAI AIRWAYS INT'L: To launch IPO,pick partner by year-end
Thai Airways International (THAI) said yesterday it would
launch an initial public offering of its shares in
September under a long awaited privatisation scheme and
select a partner airline by the end of the year.

Shares will be made available to the public during a
roadshow in the first week of September and the issue will
be concluded before the end of the month, company chairman
Mahidol Chantharangkul said.  The airlline expects to reach
a decision on which strategic partner will be offered
company stock by December, he added.

"At this stage, we don't know yet to whom we would offer
shares. We expect to select a buyer and conclude a deal and
terms of offering in December this year," he said.

The government is selling off a 23 percent stake of the
carrier to a foreign partner and the public.  A partner
will only be allowed to buy up to 10 percent of the
company, with 13 percent reserved for offer to the general
public and THAI staff. The government will retain 70
percent of THAI under the plans.

The sell-off is among Thailand's commitments to the
International Monetary Fund (IMF) under a 17.2 billion
dollar rescue package approved in 1997 at the height of the
regional economic crisis.  The identity of the airline's
future partner has been the subject of frenzied speculation
here, with rumors rife that THAI is preparing to pull out
of the Star Alliance.

The partner is likely to be from the same alliance as THAI
is in at the time of the share sale.  There have been
reports THAI is unhappy about the imminent entry of its
fierce regional competitor Singapore Airlines (SIA) into
the alliance and is mulling a move to the rival One World
group which is dominated by British Airways and American

THAI has denied the reports and claims it has been
negotiating with NorthWest and KLM on a possible move to
their Wings alliance.  The Star Alliance, established in
1997, includes Thai Airways, United Airlines, Lufthansa,
SAS, Air Canada, Varig, Ansett Australia and Air New
Zealand. (Business Day  28-March-2000)

THAI MILITARY BANK: Capital increase plan approved by FRAC
The Finance Restructuring Advisory Committee (FRAC)
yesterday agreed in principle to Thai Military Bank's (TMB)
capital raising plan, under which the bank would inject 20
billion baht in Tier 1 capital, a source at the agency

The source said the plan called for TMB to mobilize capital
of 20 billion baht by selling shares with free warrants
attached. Currently, TMB has paid-up registered capital of
about 10 billion baht in addition to its previously issued
Super CAPS (Capital Augmented Preferred Shares) of 10
billion baht. This means the bank has 20 billion of capital
on hand, and needs only the fund from the August 14 rescue
package to match 10 billion baht of its Super CAPS.

However, the bank didn't disclose its potential share
buyers, saying only that it would draw up a plan and
propose it to the Finance Ministry.  The source said it is
likely that the bank would offer rights issue to existing
shareholders and the remainder to new shareholders by
private placement.

"TMB plans to hold a board of directors meeting this week
to discuss the share sales and subsequently, propose the
plan to shareholders," the source said. "The proposed plan
is seen as the best and most practical solution without
offering shares to public," the source said, "With current
stock market circumstances, the chance to mobilize fund
through the Exchange is almost nil."

The only drawback to the plan, however, is where TMB would
offer shares to existing shareholders. The source, who is
familiar with the bank, said the Thai armed forces control
40 percent of the bank, and it is very doubtful that it can
afford to buy right issue shares even with the free warrant

Last October TMB delayed a 30 billion baht share sale
because of low demand from foreign investors. That plan
earmarked half the shares for the government through its
Finance Ministry rescue package. The bank, like most Thai
lenders, needs more capital to pay for bad loans and fund
new credit.

The news of TMB's capital raising approval was welcomed by
investors as yesterday TMB shares closed at 10.75 baht, a
gain of 0.25 baht or 2.4 percent. Financial Institutions
Supervision and Development Department Assistant Director
Sarinee Wangtan commented that FRAC has yet to finalize the
plan. (Business Day  28-March-2000)

THAI PETROCHEM.INDUS.: Special venture for creditors?
Thailand's biggest corporate defaulter, Thai Petrochemical
Industry PCL, is proposing a new restructuring plan to its
creditors, in a last-ditch effort to keep them from taking
control of the company.

In a letter due to be sent to creditors by today, TPI
founder and Chief Executive Prachai Leophairatana proposes
that the company's creditors set up a special-purpose
company that would be controlled by one of the Big Five
international accounting firms. But unlike an arrangement
proposed by TPI's creditors, this proposal includes
allowing TPI's existing management to run the company while
it undergoes a restructuring.

The offer gives a new twist to a two-year struggle between
Mr. Prachai and financial creditors over how to tackle TPI
debts, which now amount to nearly $3.5 billion. That
struggle ended in mid-March when creditors won a hostile
lawsuit against TPI in Thailand's bankruptcy court. The
court declared TPI insolvent, ordered it to undergo a
financial overhaul, and left it up to creditors to choose
who will prepare a restructuring plan and manage the
company while the plan is implemented.

Thailand's official receiver is to convene a meeting of
creditors to vote on their choice, probably in mid-April.
Under the terms of the court-ordered restructuring, the
plan administrator assumes authority over the operations of
the company for the duration of the plan.  Five major TPI
creditors are proposing that Effective Planner, a unit of
Australian auditors Ferrier Hodgson, prepare the plan and
run the company.

Ferrier Hodgson's Thai subsidiary acted as adviser to
Bangkok Bank, one of the biggest creditors, throughout
negotiations on restructuring TPI. The five creditors
account for a little less than the two-thirds of TPI's
outstanding debts, the amount they need to secure their
choice of planner. They are trying to gather additional
support from other creditors for the April meeting.

In a bid to pre-empt that outcome, Mr. Prachai's offer,
sent to all creditors, not just financial institutions,
proposes that TPI set up a joint-venture, special-purpose
company with a big international accounting firm, which
would appoint a majority of the board members.

The new company would negotiate the terms of the
restructuring and supervise its implementation. "They will
have the power to run the process," said TPI's chief
investment officer, Vivat Vithoontien.

Under Mr. Prachai's proposal, the new entity would
"delegate limited powers" to TPI's existing management so
that they can continue to run operations, but it would hold
joint authority to sign checks and provide independent
monitoring of the company's cash flow, and would make
monthly progress reports to both the court and creditors.

TPI's management acknowledges the company will have to
fight a high level of creditor fatigue to reopen talks on
the terms of the restructuring. Over the past two years,
Mr. Prachai and his creditors have struck accords only to
have them come undone when Mr. Prachai said lenders had
imposed conditions on the company that were too strict.

Mr. Prachai, an autocratic chief executive who has run TPI
since it was founded 22 years ago, also wanted the
creditors to agree to certain terms that would allow him to
raise new equity for TPI before he would sign any
restructuring accord. But they refused. Now, those same
issues would have to be revisited.

"I hope the creditors are taking the view that commercial
and professional common sense must prevail over personal
feelings," Mr. Vivat said.

TPI says that the restructuring plan prepared by the
special-purpose company still would be based largely on the
plan already negotiated with creditors but amended to
incorporate the principles for a future capital raising.

"I'm not asking them to renegotiate the whole package, I'm
asking them to come back and negotiate where we left off,"
Mr. Vivat said.TPI believes the main attraction for
creditors in their new offer will be that it saves them the
responsibility of taking on the complex task of running
Southeast Asia's only fully integrated petrochemical
complex with over 5,000 employees.

It says the plan to keep existing management in place
offers creditors the best opportunity to maximize the
company's operating value and the fastest route to
obtaining repayment of their debts.  Effective Planner's
managing director, Anthony Norman, who leaves on a 10-day
roadshow of major Asian and Western capitals on Wednesday
to present the company's credentials to creditors,
challenges the argument.

TPI's 1999 financial statement submitted to the stock
exchange last week shows revenue rose from 46 billion baht
($1.22 billion) in 1998 to 56 billion baht, but earnings
before interest, tax and depreciation fell to five billion
baht from nine billion baht, he notes.

"The creditors are going to have to choose between one set
of management who haven't delivered value and another set
of management who are untested but are confident they can,"
Mr. Norman said. "We're past the negotiating phase. That
is the position of the creditors and it doesn't seem to be
accepted by the company yet."

Effective Planner has recruited a former managing director
of Caltex Oil, Barry Murphy, to head a team of up to 40
experienced petrochemical industry personel to take over
TPI's operations if it wins creditors' approval. Mr.
Norman said the company will seek the cooperation of Mr.
Prachai and his staff.

"We are prepared for minimum cooperation," he said, adding
that he hopes to get more. "If it comes to a process of
attrition, we can still get there," he said.

TPI's management is highly skeptical of these claims.
"There's a tremendous potential liability in what they are
doing," Mr. Vivat says. "A petrochemical plant can blow up
easily." (The Asian Wall Street Journal   27-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

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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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