TCRAP_Public/000427.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

            Thursday, April 27, 2000, Vol. 3, No. 82


* A U S T R A L I A *

AMP BANK: Palms off mortgage work to joint venture
BHP: HBI Plant to test CEO's resolve

* C H I N A  &  H O N G  K O N G *

CHAI-NA-TA CORP.: Creditors reportedly approve restructure
GUANGDONG DEVEL.FUND: Annual loss widens
KEL HOLDINGS LTD: Court hearing continued to 19 May

* I N D O N E S I A *

A LATIEF CORP.: Settles suit over debt with IBRA
A LATIEF CORP.: IBRA revokes lawsuit after debt repayment
PT BANK BALI: Gov't to recapitalize, avoid liquidation

* J A P A N *

CHUETSU PULP AND PAPER CO.: Speeding up debt reduction
CREDIT LYONNAIS (TOKYO): Japan authorities seek to punish
HIKARI TSUSHIN: Prepares for struggle, as stock slides
HIKARI TSUSHIN: Plans major restructure
HIKARI TSUSHIN: Expects 11.6B Yen operating loss in FY2000
HIKARI TSUSHIN: To shutter over 30% of its shops
KDD CORP.: To post 56B Yen special loss for FY99
MITSUI FUDOSAN CO.: Stock in tailspin again
SHINWA KAIUN KAISHA: To take 2.6B Yen net loss in FY99

* K O R E A *

DAEWOO ELECTRONICS: Prepackaged bankruptcy ahead?
DAEWOO GROUP: Prepackaged bankruptcy ahead?
DAEWOO GROUP: Receivership plan denied
DAEWOO MOTOR: Prepackaged bankruptcy ahead?
DAEWOO MOTOR: GM, Ford to go to Korea next week
HYUNDAI GROUP: In high-powered tax probe
HYUNDAI INVEST.TRUST MGMT.: Silent over trust losses
LG GROUP: In high-powered tax probe
SAMSUNG GROUP: In high-powered tax probe
SAMSUNG MOTORS: Creditors accept Renault's offer
SK GROUP: In high-powered tax probe

* M A L A Y S I A *

TIME ENGINEERING: Sign SingTel deal nearing conclusion

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

PHILIPPINE AIRLINES: Tan offers PAL stake to Lufthansa
PHILIPPINE NAT.BANK: Auction winner to get sweetener
URBAN BANK: Declares bank holiday
WESTMONT INVEST.CORP.: Presents payment scheme

* T H A I L A N D *

AIG FINANCE: Posts Q1 loss
AROMATICS THAILAND: Rehab plan to go before Cabinet
BANGKOK METRO.BANK: Pres. accused of aiding takeover bid
SG ASIA CREDIT: Posts Q1 loss
SIAM STEEL INT'L: Creditors pass rehabilitation plan
THAI OLEFIN: Rehab plan to go before Cabinet


AMP BANK: Palms off mortgage work to joint venture
Financial services giant AMP is close to outsourcing its
mortgage processing operations to a joint venture half-
owned by rival lender Wizard Mortgage.

AMP Bank has been considering the outsourcing for six
months and is believed to favour the Mortgage Asset
Management operation half-owned by Wizard and Dutch banking
giant ABN-Amro.  The move is designed to save costs by
using an established mortgage processing business as AMP
prepares for an international expansion of its fledgling
banking business.

MAM is based in AMP's Circular Quay, Sydney, headquarters
and processes around $280 million in mortgages a month.
This includes $200 million for Wizard and $70 million to
$80 million for 70 mortgage brokers such as accountants and
real estate agents.  Non-bank lenders are estimated to
account for 15 per cent of the $230 billion residential
mortgage market and as much as 40 per cent of new business.

AMP Bank lost $73 million before tax last year, including
$51 million of capital costs, and is estimated to be two
years away from breaking even. It has assets of about $5
billion, including $3.5 billion in residential mortgages
and a customer base of 200,000.

But the bank has set an ambitious target of expanding its
customer base by 650 per cent to 1.5 million customers in
three or four years.  AMP Bank is close to launching in the
UK, where it hopes to tap the 3.2 million customer base of
its insurance arm Pearl by the middle of this year. (The
Australian  25-April-2000)

BHP: HBI Plant to test CEO's resolve
It's crunch time for BHP's troubled hot briquetted iron
(HBI) plant with the company now just months away from
deciding whether the project will be relegated to the

With BHP's other problem projects such as the US Magma
copper mines now either closed or sold, HBI is a lingering
concern for the new management team under chief executive
Mr Paul Anderson.  With the onus now on the HBI project
team to resolve the technology problems which continue to
hamper normal operations at the plant, its future in the
BHP stable is expected to be known before the end of the

If BHP cannot resolve the issues which have prevented the
2.5 million tonne a year plant operating for extended
periods, then the company is expected to close it or look
for a potential buyer.  Mr Anderson has asked the HBI team
to go back to basics after conceding recently that the
process BHP was using to commission the project was not

"We were pushing the ramp-up too quickly and basically not
fixing the problems that we had," Mr Anderson said.

The latest delay for the $2.3 billion project - which is
already more than a year behind schedule - came late in
February when a lightning strike halted power supplies,
resulting in a seven-week shutdown.  The shutdown followed
delays caused by a fire late last year which resulted in
BHP winding back its production forecasts for fiscal 2000.

The plant is now expected to produce only 900,000 tonnes of
iron briquettes for the year, down from earlier forecasts
of 1.5 million tonnes.  But the updated production forecast
is also looking shaky, given the continuing problems with

HBI, which was BHP's first foray into downstream processing
in iron ore, has been a monumental disaster.  Labour
problems during its construction in 1997 resulted in
significant delays and cost blow-outs pushed the project
almost $1 billion over budget.

The problems also cost the jobs of minerals head, Mr Dick
Carter, and iron ore group general manager, Mr Geoff
Wedlock, as well as an estimated $500 million in lost
sales.  Analysts expect BHP to persevere with the project
in the short term, though its likely contribution to future
earnings is looking increasingly gloomy.

Stockbroking firm Warburg Dillon Read has downgraded its
estimates for the HBI plant to a loss of $224 million for
the full year, blowing out from its previous estimate of a
$151 million loss.  Solomon Smith Barney also has
downgraded its valuation of the project, to $900 million
from $1.4 billion.

Analysts expect BHP will unveil further writedowns of HBI
for the full year to June, potentially as high as $500
million.  That would leave the plant valued at just under
$900 million, having already been written down by that much
during the past two financial years.  But a decision on HBI
- like Ok Tedi - is not easy. Analysts and fund managers
believe it will be a test of the calibre of Mr Anderson's
leadership, now that the easier decisions of BHP's recovery
plan are behind him.

"It's make or break of the new management," said Mr Tim
Barker, Rothschild Australia's Asset Management's associate

Salomon Smith Barney resources analyst Mr Ian Maxwell said
BHP had spread its expertise too thinly by going into HBI
but expected the company would stick with the project,
despite never being able to recover its cost of capital.

"The capital costs of the project - they are all sunk," Mr
Maxwell said. "But if this is a plant producing a product
with reasonable cash flow, then that's got to mean

BHP Iron Ore's vice-president of external affairs, Mr
Stedman Ellis, said the initial customer response to the
HBI briquettes, which are used in the steel-making process,
had been promising. Sixteen cargoes of 25,000 tonnes of
briquettes have been shipped to a handful of Asian steel
makers, including Korea's Posco, since the project started
production early last year. (Sydney Morning Herald  25-

C H I N A  &  H O N G  K O N G

CHAI-NA-TA CORP.: Creditors reportedly approve restructure
The Globe and Mail reports in its Friday, April 21, edition
that Chai-Na-Ta's general and secured creditors have
approved its restructuring plan.

The Globe's Business Report column says the ginseng company
filed for Companies' Creditors Arrangement Act protection
in order to restructure its financial affairs. Its
principal lenders include HSBC Bank Canada, John Hancock
Mutual Life Insurance Co, HSBC Private Equity Fund and its
debenture holders.

Chai-Na-Ta says the plan will reduce its debt by about $22-
million and give Hong Kong's Road King Infrastructure Ltd.
a stake in the company of more than 50 per cent on an
undiluted bases. (Canada Stock Watch  24-April-2000)

GUANGDONG DEVEL.FUND: Annual loss widens
Dragged down by provisions for permanent diminutions in
values of long-term investment and provision for a bank
guarantee given to an investee entity, Guangdong
Development Fund reported a US$20.05 million (HK$153.69
million) net loss attributable to shareholder for the year
to December 31, 1999 compared to the previous loss of $9.44

Net return attributable to shareholders before provision
and minority interest fell 50.5 per cent to $2 million.
Loss per share plunged to $0.21 from last year's $0.097.

During the year, the Fund realised $5 million and recorded
a capital gain of $180,000 from the successful disposal of
its equity interest in the Sanjiao section of the Zhongshan
Nansan Highway.  As a result of the continuing deflation on
the mainland which effected the overall performace of the
industrial sector, the company made provisions for a number
of projects.

A provision was also made for the company's investment in
Zhaoqing Micro-Fibre at $1.73 million, despite the progress
made in restructuring the finances of Guangdong
Enterprises. The aggregrate amount of provision made
represents 65 per cent of the Fund's total investment in
the project.

Profits in Guangzhou Malting and Yangcheng Malting Plant
fell as a result of domestic competition, a general decline
of the brewing industry and a reduction in income from tax
rebates.  Chairman of Guangdong Development Fund, Kang
Dian, said China's entry to the World Trade Organisation
will bring and unfavourable earnings prospects in those
industries currently protected by tariff barriers and lack
of international competitiveness. (Hong Kong Standard  25-

KEL HOLDINGS LTD: Court hearing continued to 19 May
Further to the announcement dated 8 April 2000, the board
of directors of KEL Holdings Limited ("KEL"), through Leung
Yat Tung, Chairman, wish to announce that at the court
hearing held on 20 April 2000 in respect of the originating
summons to convene a creditors' meeting regarding a
proposed creditors' scheme of arrangement (the "Scheme") by
UDL Kenworth Engineering Limited ("Kenworth"), a wholly-
owned subsidiary of KEL, the Judge has adjourned the
proceedings to a further hearing to be held on 19 May 2000.

During the 20 April court hearing, it was reported that the
Restructuring Agreement is expected to be executed before
the end of next week. The detailed terms of the
Restructuring Agreement will therefore be announced
afterwards. It should be noted that terms of the Scheme
have not yet been finalized and the Scheme may or may not

Reference is made to the announcement dated 8 April 2000
whereas Wonderland is obliged to make a general offer for
all the shares in KEL in accordance with Rule 26 of the
Hong Kong Code on Takeovers and Mergers. Wonderland and the
Company are preparing a joint announcement on the detail
terms of the offer which will be released as soon as

The Board of KEL further confirm that no material change
have occurred since the last announcement dated 8 April
2000.  Save as disclosed herein, the board of KEL are not
aware of any other matter discloseable under the general
obligation imposed by paragraph 2 of the Listing Agreement,
which is or may be of a price-sensitive nature.

Meanwhile the trading of KEL shares remain suspended
pending announcement in relation to the offer. Further
announcement will be made when there is any material
development regarding the above matter.


A LATIEF CORP.: Settles suit over debt with IBRA
Indonesia's bank rescue agency and A.Latief Corporation, a
company owned by the country's former manpower minister,
reached an out-of-court settlement on US$16.9 million
(S$28.7 million) of debt. The agreement is the Indonesian
Bank Restructuring Agency's first victory in using the
country's bankruptcy court to force recalcitrant debtors to
repay their debts. It earlier sued the company for
repayment. (Bloomberg, The Nation  25-April-2000)

A LATIEF CORP.: IBRA revokes lawsuit after debt repayment
Indonesian Bank Restructuring Agency (IBRA) has revoked its
bankruptcy petition against trading firm PT A Latief
Corporation following the US$15 million debt repayment by
the latter to the agency.

"The debt repayment is proof of PT A Latief's good
intentions all through the process of debt negotiations
over the past months with its creditors," the company said
in a statement on Tuesday.

IBRA took PT A Latief and two other debtors to commercial
court in late March for their alleged failure to repay
debts to the agency.  The other companies taken to court by
the agency were crude palm oil processor PT Sumi Asih,
which owes the agency Rp 73.94 billion and $6.73 million,
and PT Ometraco Corporation, which has $53.18 million in
unpaid debts.

PT A Latief said the delay in the debt repayment to IBRA
was not at all intentional. The company said it initially
owed a total $30 million debt to syndicated banks
consisting of Bank Niaga, Bank Internasional Indonesia
(BII), Bank Danamon and Bank Pelita.

The debts owed to Bank Niaga and BII, amounting to $17.5
million of the total syndicated loan, were repaid earlier,
while the remaining debts to the other two banks were
pending due to the need of further debt negotiations with
IBRA because the two banks -- Bank Pelita and Bank Danamon
-- were respectively closed and taken over by the

IBRA public relations officer Franklin Richard confirmed
IBRA had revoked its bankruptcy suit against PT A Latief on
Tuesday upon receiving $14.75 million in cash as a debt
repayment from the trading firm.

"IBRA has recovered 100 percent of the loan principal
($12.5 million) and over 50 percent of the overdue interest
payments," Franklin said.

IBRA -- pressured to recover trillions of rupiah in
receivables derived from the debtors of the closed, taken
over and problem banks -- has taken legal action against
these debtors through, among others, the commercial court.
(Jakarta Post  26-April-2000)

PT BANK BALI: Gov't to recapitalize, avoid liquidation
The Financial Policy Committee has agreed to recapitalize
Bank Bali saving the scandal hit bank from the threat of

Deputy Governor of Bank Indonesia Subarjo Joyosumarto said
after a committee meeting last weekend the government would
provide 100% of the recapitalization fund.  The decision
was made for the sake of the 6,000 employees of the banks
and to speed up economic recovery, Subarjo said.

"But recapitalization would be made only after all legal
issues surrounding the bank has been sorted out," he said,
adding "we don't want the bank to get mired in litigation
after its recapitalization."

A court has ruled in favor of the old owner Rudy Ramli, who
filed a lawsuit against the central bank for taking over
the bank rocked by a high profile scandal last year.
Rudy, however, backed down and stopped his move to regain
the bank, after the central bank threatened to liquidate it
as he could not meet the requirement for recapitalization.

Subarjo said all banks are required to have a capital
adequacy ratio of at least 4% by June when all plans of
bank recapitalization are to be completed. Recapitalization
cost of the bank is estimated at Rp4.7 trillion (US$ 670
million).  Rudy said he would do anything to save Bank Bali
from being liquidated.  (Asia Pulse  24-April-2000)

PT Humpus Intermoda Transportasi Tbk hereby reports to the
Jakarta Stock Exchange about its signing of a restructuring
agreement with IBRA.

1. There is only one company form eight who affiliated with
PT Humpus Intermoda Tranportasi Tbk it is PT Humpus
Terminal Petikemas. Therefore, the company is only giving
the clarification for PT Humpus Terminal Petikemas.

2. The total of debt which will be restructured is based on
the IBRA calculation per November 1999 is Rp,71 and US$ 95.135.443,83 ( the detail
attached ) which is a total of all Bank debt of PT Humpus
Terminal Petikemas.

3. Especially for PT Humpus terminal Petikemas the
restructuring will be executed at the latest on 4 May 2000,
with restructuring scheme is conducted combine with
rescheduling method and redetermining the outstanding
interest referring to the policy of IBRA interest

4. Until now, the company is still discussing with IBRA to
continuing the restructuring implementation process.
According to the information from IBRA, the decision will
be issued in the near time.  (Jakarta Stock Exchange  24-


CHUETSU PULP AND PAPER CO.: Speeding up debt reduction
Chuetsu Pulp and Paper Co. (3877) is accelerating its
efforts to shrink its interest-bearing liabilities.

Under its current three-year business plan, the firm aims
by March 2002 to cut debt by about 15 billion yen from the
March 1999 level. But it apparently repaid 10 billion yen
of loans in fiscal 1999, the program's first year.
Interest-bearing liabilities totaled about 92.7 billion yen
as of March 1999, an amount roughly equal to annual sales.

Although the paper market is improving for the first time
in three years, Chuetsu Pulp will hold back on capital
spending and focus on debt reduction for now.  Last fiscal
year, the firm shrank inventory by about 3 billion yen and
reduced cash reserves by about 4 billion yen, helping to
cut interest-bearing liabilities to slightly more than 82
billion yen. (Nikkei  25-April-2000)

CREDIT LYONNAIS (TOKYO): Japan authorities seek to punish
Japan's securities watchdog said on Friday it sought to
punish Credit Lyonnais' Tokyo branch for three legal
violations involving several officials.

The Securities and Exchange Surveillance Commission (SESC)
conducted the inspection of Credit Lyonnais Securities
Switzerland's Tokyo branch and "found legal violations,"the
commission said in a statement.

"SESC sent the recommendation to the Financial
Reconstruction Commission and the Commissioner of the
Financial Supervisory Agency to take disciplinary action
against Credit Lyonnais," it said.

Credit Lyonnais said in a statement in Paris that the
irregularites, concerning three transactions since 1998,
involved "limited sums" and were "not premeditated by the
operators but resulted from intra-day execution errors."

But Credit Lyonnais Securities Switzerland (CLSJ)
"understands that its operations must be irreproachable and
wishes to maintain the highest standard of professionalism
and ethics in its fields of activity.

"Therefore CLSJ will take all appropriate internal measures
to make sure that its internal controls prevent in the
future any possible breach of industry regulations," the
statement said.

SESC alleged the firm violated the securities law by
providing a customer with irregular gains on stock trading
on February 1 this year "with the involvement of the senior
manager of the Japanese equities sales division."

"Credit Lyonnais provided approximately 640,000 yen
($6,095) property gains for the purpose of adding to a
customer's profit concerning stock sales, SESC said.

The company bought these out of the ordinary market session
at a price higher than the weighted average sales price, it
said.  SESC also said the second violation occurred on
January 16, 1998, "with the involvement of the executive
senior manager of the Japanese equities sales division."

"Credit Lyonnais solicited a customer for securities index
futures trading, with a promise to the customer that the
company would switch the trading" which would produced
gains from its own account to the customer's account, it

The third legal violation came on September 11, 1998, "with
the involvement of the senior manager of the head of
operations for Japan,"it said.

"Credit Lyonnais deliberately submitted the falsified
reports on stock trading which resulted from execution of
individual securities option trading," it said.

No comment was immediately available from Credit Lyonnais
here. (Business Day  24-April-2000)

HIKARI TSUSHIN: Prepares for struggle, as stock slides
Hikari Tsushin Inc.'s president, chastened by the 91% fall
in his company's stock price since mid-February, said he
will scale back business targets and close unprofitable
mobile-phone stores in a bid to revive investor confidence.
But Hikari's stock finished down by its daily limit for the
17th straight trading day.

Once considered a standard-bearer of Japan's Internet
economy, Hikari has been pummeled by investors since its
surprise announcement of operating losses on March 30. The
company is a leading distributor of mobile phones in Japan
and also invests in Internet companies.

"We misjudged the mobile market," said Hikari's president,
Yasumitsu Shigeta, as he met with the media for the first
time in three weeks. "I am sorry that I have caused trouble
for so many investors," Mr. Shigeta added.

Hikari said it now expects an operating loss of 11.6
billion yen ($109.6 million) in the year ending Aug. 31 --
the first such loss in the company's 12-year history. The
company expects to post a net profit of 13.5 billion yen
thanks to special gains from selling shares in Qualcomm
Inc. and Cisco Systems Inc. of the U.S.

Mr. Shigeta had planned a rush of new store openings to
meet what he saw as a surge in demand for mobile phones.
But he acknowledged that much of the new demand is going to
NTT DoCoMo Inc.'s phones that provide e-mail and Internet
access. Those phones aren't sold at Hikari's franchise-
operated shops. Mr. Shigeta said more than 40% of Hikari's
shops aren't profitable, and he pledged to close all stores
that can't get into the black.

He expects the number of shops to fall to 900 from 1,445 as
of April 3. Previously, Mr. Shigeta had set a target of
3,000 shops. Hikari also slashed projections for sales of
new phones and digital-TV subscriptions.

Mr. Shigeta also acknowledged that Hikari will need to
scale back its ambitious Internet-investment plans, which
had been a major factor behind enthusiasm for Hikari's
stock. He predicted Hikari will make just two billion yen
to three billion yen in investments in the current half-
year ending in August. The company has invested 70 billion
yen so far in other companies, mostly Internet-related.

Investors showed little enthusiasm for the new targets.
Many institutional investors say they no longer trust Mr.
Shigeta, while bargain-hunters are apparently waiting for
the market to settle before jumping into Hikari stock.

Hikari shares fell 9.2%, or 2,000 yen, to 19,800 yen each
on Monday, and the number of sell orders for the stock
again overwhelmed buy orders. The company's shares have
fallen by the daily limit set by the Tokyo Stock Exchange
every day since March 31. The record closing price was
230,000 yen, set on Feb. 15.

Mr. Shigeta said Hikari has "no risk" in its financial
position. The company has 45.7 billion yen in cash on hand
and expects that figure to rise to 75.2 billion yen next
month, while it has 30.5 billion yen in short-term debt, he

In another pullback, Mr. Shigeta said Hikari's Hitmail
service, which offers Internet access and services to
smaller companies, probably will reach a peak after three
years, due in part to competition from newcomers. One of
the competitors is Softbank Corp., a rival Japanese
Internet investor. Mr. Shigeta said he might resign his
position on Softbank's board as demanded by Softbank's
chief financial officer, Yoshitaka Kitao, who has said he
wants to cut ties to Hikari. (Asian Wall Street Journal

HIKARI TSUSHIN: Plans major restructure
Hikari Tsushin, the troubled Japanese mobile phone
distributor and internet investor, on Monday unveiled a
sweeping restructuring which could herald a shakeout among
Japan's fledgling internet companies.

The moves, including sharp reductions in sales targets and
expansion plans, were aimed at rebuilding investor
confidence which has been battered by profits warnings and
market rumours about financial difficulties.

The market remained unconvinced, however. Hikari's shares
tumbled 9.2 per cent to close at a new low of Y19,800. The
stock has plunged 92 per cent over two months from a
February peak of Y241,000.

"Hikari Tsushin's ship has wrecked, and it will bring its
entire fleet of ships down with it," said Toshiaki Iba,
senior analyst at Tokyo Mitsubishi Securities. "If it has
more severe problems, it could hurt the listing of other
internet companies on Nasdaq Japan later this year."

The move came as the company reported operating losses of
Y13bn (ú76m) in the six months ended in February, against
profits of Y162m for the same period last year. Sales
jumped 92 per cent to Y191.3bn.

Hikari reiterated an earlier warning of operating losses
worth Y11.6bn in the year to August, compared with an
earlier forecast of Y8bn in profits. A warning earlier this
month helped trigger the collapse in the group's share
price.  Yasumitsu Shigeta, Hikari president, conceded that
ambitious growth targets had damaged the group's
profitability. "It is true that we have caused some strains
by hasty expansion," he said.

Like Softbank, the other bellwether Japanese internet group
which issued a profits warning recently, Hikari's
investments in other companies have compounded its
problems. It said these investments were valued at Y99.2bn
at the end of February.

Analysts pointed out that concerns about Hikari had pushed
down the share prices of start-up companies it helped fund.
They added that Hikari might not meet its earnings
forecasts for the full year because of investment valuation
losses and deteriorating profitability.

However, analysts also cautioned that Hikari and Softbank
were not representative of Japanese internet companies.
"People should not confuse them with the new economy," said
Ben Wedmore, internet analyst at HSBC Securities. "I hope
these companies will be separated from those whose
credentials and cash flow are tangible, whose management is
real and whose strategy is evident." (Financial Times  24-

HIKARI TSUSHIN: Expects 11.6B Yen operating loss in FY2000
Hikari Tsushin Inc. (9435) posted an operating loss of 13
billion yen for the first half ended February in a sharp
contrast with profit of 160 million yen a year earlier, the
company announced Monday. It was the first operating loss
since the firm went public in 1996.

Despite the discouraging performance on an operating basis,
Hikari Tsushin reported a 34% increase in pretax profit to
7.4 billion yen, as a result of nonoperating profit of
about 24 billion yen on sales of stockholdings.

Revenue for the six-month period surged 92% to 191.3
billion yen. Sales of mobile phones rose 57% to 1.72
million units. But commission revenue came in 17 billion
yen short of initial forecasts because the company had
signed contracts with telecommunications companies based on
higher sales forecasts.

The company posted a total 2.42 billion yen in nonoperating
expenses and extraordinary losses due to the bankruptcy of
one of its major sales agents.  For the 12 months through
August, the company forecasts an operating loss of 11.6
billion yen, down from 5.5 billion yen in profit a year
ago, despite an expectation of a 27% increase in sales to
330 billion yen.

Hikari Tsushin expects pretax profit to rise 35% to 28
billion yen for the full business year thanks mainly to the
23.9 billion yen in gains from its sales of stockholdings.
(Nikkei  24-April-2000)

HIKARI TSUSHIN: To shutter over 30% of its shops
Hikari Tsushin Inc. (9435) will consolidate its mobile
phone shops and strengthen business-to-business e-commerce
and other Internet operations in its restructuring efforts,
the company said Monday.

It will reduce the number of mobile phone shops to 1,540
from the 2,283 in operation as of April 3. The firm had
earlier planned to increase the number of outlets to 3,000
by the end of August.

"We will continue consolidating outlets until all shops
return to the black," said President Yasumitsu Shigeta,
stressing the company will shift its emphasis to
profitability and away from business expansion.

About 40% of outlets operated in the red at the end of
March, partly because they cannot sell handsets for the
popular i-mode Internet access service offered by NTT
DoCoMo Inc. (9437). The company trimmed its sales target
for the year ending August to 2.9 million units from 4

The firm also said it expects 11.6 billion yen in operating
loss, down from an earlier estimate of an 8 billion yen
profit. It will be the company's first operating loss since
it listed in 1996. The firm, however, expects to post a 35%
rise in pretax profit to 23.9 billion yen thanks to some 48
billion yen in capital gains from the sale of

The company said it has paid back all bank borrowings and
has received a 25 billion yen loan from Shigeta's asset
management firm.  The company's formerly high flying stock
price opened Monday at 19,800 yen, down 2,000 yen from the
ask-only price Friday. It was the first time that the stock
was traded during the trading hour since March 30 when the
company announced it would not achieve targeted earnings.
For the rest of the day, however, the stock remained ask-
only.  (Nikkei  24-April-2000)

KDD CORP.: To post 56B Yen special loss for FY99
KDD Corp. (9431) is estimated to have posted an
extraordinary loss of 56 billion yen for the year ended
March 31, as a result of disposing of communications
equipment and covering a shortfall in pension reserves,
company sources said Monday.

The international telecommunications carrier had estimated
such loss at 20 billion yen when it published a report on
earnings for the half-year ended September. The firm posted
the loss to improve its financial standing ahead of its
planned merger in October with DDI Corp. (9433) and IDO

Sales are estimated to have risen 26% to some 395 billion
yen, thanks to revenue recorded by Teleway Japan, with whom
KDD merged in December 1998. However, income from its
mainstay international telecommunications operations was
slightly down due to fierce competition in the business.

KDD is expected to report net profit of some 4 billion yen,
down 45%, after covering the extraordinary loss through the
sale of stockholdings.  Pretax profit is estimated to have
leaped 170% to some 25 billion yen, 14 billion yen more
than earlier forecast, thanks to nonoperating profit of 28
billion yen from the sale of stockholdings.

On a group basis, net profit is estimated to have risen to
some 7 billion yen, an improvement on a loss of 1.9 billion
yen. The figure is 6 billion yen above an earlier forecast.
KDD is estimated to have posted extraordinary profit of
slightly over 4 billion yen, thanks to gains from a third-
party share allocation in March by its wholly owned
submarine cable-laying subsidiary. (Nikkei  24-April-2000)

MITSUI FUDOSAN CO.: Stock in tailspin again
Mitsui Fudosan Co. (8801) hit a year-to-date high of 1,145
yen on April 13 after bottoming out earlier this year, but
it closed Friday down 69 yen at 981 yen.

The issue earlier rode a wave of investor interest in low-
and medium-priced stocks, attracting buying from overseas
investors picking real estate issues on expectations of a
Japanese economic recovery.

The real estate developer suffered a net loss for the
fourth straight year in fiscal 1999 after recording a 142.2
billion yen extraordinary loss on items such as the loss in
value on real estate held for sale. But all the bad news
seems to have come out by the end of last fiscal year, say
analysts, who expect earnings to start recovering this
fiscal year.

Mitsui Fudosan plans to launch a real estate investment
trust (REIT) business as early as fall, elevating it into a
profit center that will drive the expected recovery.

"Mitsui Fudosan is shifting its focus to collecting
commissions" on managing property portfolios and
supervising such holdings, says Keiko Otsuki, an analyst at
Morgan Stanley Dean Witter Japan Ltd. "We need to see how
well it will do" in its new business, she says.

Net assets per share that factor in valuation gains on
asset holdings are estimated at around 1,400 yen. "The
share price could rise from the current level," predicts
Yoshihiro Hashimoto of Merrill Lynch Japan Inc. But other
analysts are less optimistic, saying that the share is
unlikely to rise without further incentives. (Nikkei  24-

SHINWA KAIUN KAISHA: To take 2.6B Yen net loss in FY99
Shinwa Kaiun Kaisha Ltd. (9110) is likely to post a 2.6
billion yen net loss for the fiscal year ended March 31,
due largely to 2.8 billion yen in extraordinary charges for
items like securities valuation losses.

But the shipping company has worked out a three-year plan
to eliminate accumulated losses, which totaled 5.2 billion
yen at the end of last fiscal year.

Fiscal 1999 sales fell 13% on the year to 56 billion yen.
Revenue in foreign currencies remained roughly flat, but
the yen strengthened 12% over the year. Fuel prices also
jumped 44%, reducing earnings by 2.2 billion. Pretax profit
slumped 82% to 200 million yen.

In addition to the securities losses, Shinwa Kaiun also
booked a 900 million yen charge against loan loss reserves
on bad loans to a real estate affiliate.

The company's medium-term business plan aims to restore
profitability by reducing rent payments, revisiting the
terms of ship financing deals, and reducing the number of
personnel. It is hoping for an average annual pretax profit
of 1.5 billion yen during the next three years. (Nikkei


DAEWOO ELECTRONICS: Prepackaged bankruptcy ahead?
DAEWOO GROUP: Prepackaged bankruptcy ahead?
DAEWOO MOTOR: Prepackaged bankruptcy ahead?
The government plans to drastically shorten the workout
period of Daewoo flagship subsidiaries Daewoo Motor and
Daewoo Electronics by putting them through a new
prepackaged bankruptcy process.

According to the Ministry of Finance and Economy (MOFE)
Monday, it has already completed talks with the Ministry of
Justice (MOJ) on the introduction of prepackaged
bankruptcies, which greatly simplify procedures to activate
court control over firms undergoing workouts. Currently, it
can take as long as 18 months before a firm is placed under
court control, but the new prepackaged system can see court
procedures completed in just 2 months.

MOFE said that workout procedures for the two Daewoo
subsidiaries have been delayed either due to disagreements
between creditors or because of the resistance of minor
shareholders to the outcome of the annual general meeting.
(Digital Chosun  24-April-2000)

DAEWOO GROUP: Receivership plan denied
The government has denied a report it plans to put Daewoo
Group units into court receivership to protect them from
individual creditor action seeking to recover their loans.

"The government for now is not considering court
receivership for Daewoo units," said Choi Hoon, an official
at the economic policy co-ordination division at the
Ministry of Finance and Economy.

Still, receivership may be possible should retail investors
block Daewoo debt rescheduling plans already under way, he
said.  The Korea Stock Exchange (KSE) suspended morning
trading of Daewoo Heavy Industries and Daewoo Electronics
because of the report in the Korea Economic Daily.

Trading of Daewoo Electronics resumed in the afternoon,
after Daewoo Electronics told the KSE it has no plan to
file for receivership. Trading of Daewoo Heavy Industries
will resume tomorrow, because it did not issue a denial of
the report till the afternoon, according to the exchange.

Attempts to sell 12 key Daewoo units have stalled over debt
rescheduling negotiations among local and foreign
creditors.  The government had set a deadline of last year
to sell the units, which comprised what was once Korea's
second-largest industrial group that is now in debt with at
least US$80 billion.

Individual creditors have grown impatient with bank-led
debt rescheduling plans for Daewoo, but the government said
giving in to individual creditors is impractical. Daewoo
Group's debt to individual investors totals US$90.2

"Daewoo's debt to individuals is simply too small to re-
draw ongoing debt rescheduling plans for Daewoo," Mr Choi
said. (South China Morning Post  25-April-2000)

DAEWOO MOTOR: GM, Ford to go to Korea next week
General Motors (GM) and Ford Motor will each send high-
level officials to Korea next week as a part of efforts to
buy Daewoo Motor.

GM President Rick Wagoner will also hold a video press
conference May 1 with Korean and foreign reporters to
reiterate his company's strong will to buy Daewoo and
explain its management strategies after acquisition.

"President Rick Wagoner will hold a video news conference
as he is unable to visit Korea due to unavoidable
circumstances," a GM official said, adding Wagoner will
explain why GM should buy Daewoo.

GM's president of Asia-Pacific business Rudy Schlais, who
is directing acquisition of Daewoo Motor, will also visit
Korea at the beginning of next week to examine the progress
in the Daewoo Motor bid.  Competitor Ford will also send
Vice Chairman Wayne Booker for an official news conference
in Korea at the beginning of next week.

Booker, who also handled Ford's takeover bid of Kia Motors
in 1998, will examine the progress in its bid and explain
Ford's plans on the acquisition to the government and
creditors during his visit, Ford said.  Fiat and
DaimlerChrysler will also send directors to the Korea
Import Motor Show May 3 to explain their plans to buy
Daewoo Motor.  (Asia Pulse  25-April-2000)

HYUNDAI GROUP: In high-powered tax probe
LG GROUP: In high-powered tax probe
SAMSUNG GROUP: In high-powered tax probe
SK GROUP: In high-powered tax probe
The government has begun tax inquiries into four big
conglomerates _ Hyundai, Samsung, LG and SK groups_ in the
first step of the vowed second-stage corporate

According to officials at the National Tax Service (NTS),
the probes began yesterday, concentrating on the share
movements of affiliates between owners and their families,
among other things.

The fourth NTS bureau which is the investigative specialist
in stocks is responsible for looking at the share movements
among family members of chaebol owners, while the first and
second bureaus are checking up on corporation taxes for the
purpose of ferreting out irregularities involved with gift,
inheritance and corporation tax payments, the NTS officials

A total of 250 NTS investigators are being mobilized for
the ongoing probes for about a month. The investigators
presently are at the initial stage of collecting tax-
related data.  There are two types of tax probes - routine
planned audits and special investigations which are
arranged when companies are suspected of tax-related

The latest special probe was conducted on Hanjin Group, the
fifth largest chaebol, which found that the owner of
national flag carrier Korean Air had allegedly dodged taxes
amounting to more than 1 trillion won.

An NTS official said, "At present, scheduled for
investigation are about 20 affiliates of the four

As for stock-related investigations, he said a check will
be done on the shifting ownership of stocks among chaebol
companies occurring since March last year.  Receiving the
utmost attention of investigators are the sources of funds
for the children of chaebol owners and other family members
used for their purchase of affiliates' stocks. It will be
determined if the funds were properly taxed or whether
corporate funds were used for the purchases, the NTS
officials said.

The NTS also is planning to see whether chaebol engaged in
insider trading to transfer wealth to certain persons.
The NTS' regular tax probes, which had not been conducted
since 1995, came days after the government said it would
conduct extensive tax-related investigations to correct the
old, unhealthy practices of owners' one-man rule and
interdependence among affiliates last week.

It is strongly speculated that the ongoing tax probes are
part of the government's much anticipated second phase of
corporate restructuring. Prodding the government into
action were several developments that took place in the
lead-up to the April 13 election.

A couple of weeks prior to the election, an "heir war" took
place over the control of Hyundai Group between two of the
owner's sons, in the process revealing that the family
members used power unwarranted by law and replaced the
senior official of an affiliate without going through the
due process of a board meeting or asking for shareholder

There is increasing doubt among the foreign investor
community over Korea's will for reform that has been
tarnished as the result of a faster than expected economic
recovery, according to some experts. (The Korea Times  24-

HYUNDAI INVEST.TRUST MGMT.: Silent over trust losses
Hyundai Investment Trust Management has declined to comment
on allegations it and other units of Korea's biggest
conglomerate were mismanaging money in trust accounts and
transferring losses to investors.

The People's Solidarity for Participatory Democracy, a
civic group which has spearheaded a minority shareholders'
movement, said its review of two out of Hyundai's 425 funds
showed the firms incurred at least 29 billion won (about
HK$203 million) of losses to investors.

Hyundai Investment acknowledged the accusation that it made
losses, but said the company, weakened by the nation's
economic crisis in 1997 and 1998, could no longer afford to
make up the losses in the trust accounts with their own
capital.  Hyundai declined to say whether it violated the
related regulations by transferring losses at other
investment funds to the two - named Napoleon and
Renaissance - from March through October last year.

Until now, Korean trusts assess their holdings of bonds
purchased before last year according to their book value,
rather than their market price used in other advanced
markets. The system gave a leeway for trusts to make their
performance look better by making up any loss in trust
accounts with their own money.

But from June, Korea will mandate the so-called mark to
market system, making the financial system more
transparent. As a result, the weakest trusts will probably
be forced to exit, accelerating the overhaul in the sector.

"These issues will be addressed naturally, should the new
bond evaluation system take in place and the restructuring
in the trust sector be completed," Hyundai said.

The accusation comes five months after Lee Ik-chi, chairman
of Hyundai Securities, the nation's biggest brokerage at
that time, received a suspended jail sentence and the firm
was fined seven billion won for manipulating stock prices.

The state-run Financial Supervisory Commission said it had
already taken appropriate steps against managers at Hyundai
Investment involved, including suspending its president
from any work for three months. (South China Morning Post

SAMSUNG MOTORS: Creditors accept Renault's offer
The creditors of Samsung Motors Inc. accepted on Tuesday an
offer by French auto giant Renault to take over the
bankrupt South Korean car maker, the chief creditor said.

But the sale of the local company to a foreign investor
sparked criticism that it was sold off at absurdly cheap
price and strong protests by auto workers.  Renault offered
$562 million for a 70.1 percent stake in a joint venture
that will buy Samsung Motors. The French auto maker said it
would spread out the payments over the next 14 years.

Samsung Motors' 16 creditor banks voted for the Renault's
purchase of the troubled auto firm. "The creditors have in
principle approved the deal with Renault," Ryu Han-jo, vice
president of Hanvit Bank, Samsung's key creditor.

Samsung Group will hold a 19.9 percent stake and local
creditors the remaining 10 percent. Creditors said that
Renault officials will be in Seoul Wednesday to sign the
deal.  Ryu said creditors wanted further talks with Renault
to iron out differences over payments conditions, including
terms of the creditors' debt-to-equity swap and collateral.
The ratification of the deal came four days after
negotiators from Renault, Hanvit Bank and Samsung Motors
put the deal together in two days of talks in Paris.

The approval has made Renault the first foreign car maker
to break into South Korea, Asia's second largest auto
market. Samsung Motors has an annual capacity of 240,000
vehicles and a technical tie-up with Japan's Nissan Motor
which is controlled by Renault.  Critics raised suspicions
that Samsung Motors was handed over at an absurdly cheap
price. Renault, which had stubbornly stuck to a price of
$540 million, has raised its bid by about $20 million at
the last minute, an economist said.

About 10,000 Daewoo Motor workers, who launched weeks-long
strike to protest the planned sale of the auto firm to a
foreign buyer, threatened to step up protests. Tens of
thousands of workers at Hyundai Motor, the largest auto
maker in South Korea, also staged partial or full-scale

Daewoo workers fear mass layoffs under foreign ownership,
and Hyundai workers insist foreign takeover of Daewoo Motor
would eventually affect their own jobs. They demanded
Daewoo Motor be nationalized, a request already rejected by
the government, which is pushing for drastic economic
reform.  (United Press International  25-April-2000)


TIME ENGINEERING: Sign SingTel deal nearing conclusion
Time Engineering last night proposed to float its
subsidiary Time dotCom at RM3.30 (S$1.48) apiece, a clear
sign that it is close to wrapping up the deal to bring in
Singapore Telecommunications as its strategic partner
despite recent fears that it may fall through.

If the deal is sewn up, SingTel will have to pump in over
RM2.4 billion for a higher-than-expected stake in Time
dotCom, 14.48 per cent in Time Engineering and 20 per cent
in Time Online.

Time Engineering, the parent of Time dotCom and a 47-per-
cent associate of Renong Bhd, said last night: "Time has
entered into Heads of Agreement with Singapore Telecom
International Pte Ltd and expects to sign a definitive
agreement in due course. Completion of the proposed
acquisition by a strategic partner is expected to occur on
listing of the Time dotCom shares."

This is the clearest hint so far that the mega cross-border
deal is intact despite rumblings of pricing differences and
rumours of a fresh bid led by Malaysia's Sapura
Telecommunications and Hongkong's powerful Li family.
Rumours of a competing bid pushed up the share price of
Time Engineering by a hefty 68 sen to RM4.92 yesterday but
it is still below SingTel's tentative purchase price of RM6
for each Time Engineering share.

Despite some uncertainties, analysts reckoned SingTel is
still the front-runner for a stake in the main asset of
Time Engineering -- Time dotCom's fibre-optics network
spanning the peninsula.  First, analysts pointed out that
executive chairman Halim Saad of Renong could only
negotiate with any new party after May 5 as he has signed
an exclusive in-principle pact with SingTel for 30 days.

Second, they said the listing plan and pricing of Time
dotCom is conditional upon the entry of a strategic
partner. Halim had earlier indicated a tentative IPO price
of RM3 and the sale of a substantial stake to a strategic
partner at RM3.50 per share.

But Time Engineering appeared to have finalised terms of
the IPO even though the 30-day courtship with SingTel has
yet to run its full course.  In the statement to the
exchange last night, Time Engineering said its strategic
partner will be allotted 506.16 million shares in the IPO
of Time dotCom.

The number of shares, which translates into 21.4 per cent
of Time dotCom's expected enlarged share capital of RM2.37
billion shares, is a shade higher than Time Engineering's
earlier offer to sell 20 per cent in Time dotCom to
SingTel.  At RM3.30 per share, the stake is worth RM1.67

If SingTel is the chosen one, its total capital outlay will
be RM2.42 billion -- Time Engineering (RM649.3 million),
Time dotCom (RM1.67 billion) and Time Online (about RM100
million).  (Business Times  26-April-2000)


PHILIPPINE AIRLINES: Tan offers PAL stake to Lufthansa
Lucio Tan is in talks to sell his entire holding in flag
carrier Philippine Airlines (PAL) to Lufthansa, Europe's
second-largest airline.

"I will sell all," Mr Tan said yesterday after he signed an
agreement with the Finance Department for the joint sale of
their stake in Philippine National Bank (PNB), the
country's fourth-largest lender by assets.

Mr Tan said he would seek about US$800 million for the
stake of at least 70 per cent of PAL which he bought eight
years ago against the advice of his business associates.
The shares would be sold to other investors should
negotiations with Lufthansa collapse, he said.

Lufthansa Consulting, a unit of the German airline, last
year signed an agreement to manage PAL for two years.
The two airlines, which have explored the possibility of
creating a joint air cargo service company, also recently
agreed to sell each other's air cargo services, according
to local media reports.

Mr Tan's statement confirmed earlier reports by the local
media, citing Finance Secretary Jose Pardo that Mr Tan, a
close associate of Philippine President Joseph Estrada, was
in talks with the German airline.  Mr Pardo said the
tycoon, who also owns Asia Brewery and Fortune Tobacco,
wanted to move out of PAL to dispel charges that the
airline benefited from his friendship with Mr Estrada.

"He wants to put an end to all this talk of corruption,
which is strongly affecting his relationship with the
president," Mr Pardo said.

Selling the airline may be a lot easier to accomplish now
than a couple of years ago when the debt-ridden carrier was
plagued by labour strife, which forced it to suspend
operations for a month.  PAL, which has US$2.2 billion of
debt, is in the second year of a 10-year financial
rehabilitation programme imposed by its creditors after the
Asian economic crisis drove the carrier close to collapse.

The airline last month said it posted a 98.3 million peso
(about HK$18.5 million) net income in January, better than
its target for the month under the rehabilitation
programme.  The German airline's subsidiary, Lufthansa
Technik Philippines, is set to complete the purchase of
PAL's maintenance and engineering unit this month.

Lufthansa Technik is a joint venture with MacroAsia, a
company controlled by Mr Tan.  MacroAsia is also the
caterer of PAL, a business it obtained following Mr Tan's
takeover of the airline.  Before announcing the PAL deal,
the government and Mr Tan signed an agreement that paves
the way for the sale of their combined 76 per cent stake in

"It's a breakthrough . . . in the sense that Lucio Tan was
very reluctant at first" to sell his stake, Mr Pardo said.

The Philippine Government had asked Mr Tan to bundle his
group's 46 per cent PNB stake with the government's
remaining 30 per cent interest to ensure a better price for
the block.  Mr Pardo said that an auction for the combined
stake was scheduled for May 29 and if it failed, the
government and Mr Tan would decide separately what to do
with their respective shareholdings.

He said the government would review its options if the sale
failed, "but we are committed to privatisation." (South
China Morning Post  25-April-2000)

PHILIPPINE NAT.BANK: Auction winner to get sweetener
To attract more bidders for Philippine National Bank (PNB),
the Department of Finance (DoF) will also offer the 12.9%
stake of Hong Kong-based Templeton Asset Management Group.

Finance Secretary Jose T. Pardo yesterday said winning
bidder for the 76% block of PNB shares will have the option
to buy the additional Templeton shares, which will be
offered to the public on May 15.

"Whoever (buys) the 76% (bloc of shares) may have an option
to acquire the 12.9% stake...," he told reporters at the
fringes of 103rd anniversary celebration of the DoF in
Malaca§ang. "Templeton has (a) 12.9% (stake) which (it)
also said can be made available to the public."

The government yesterday signed a joint sale agreement with
Chinese-Filipino businessman Lucio C. Tan for the sale of
their combined 76% stake in PNB.  Under the agreement, Mr.
Tan will dispose of his 46% stake together with the
government's 30.39% by May 15 to attract more investors.

But the awarding of the joint sale has been moved to May
26, instead of the previously announced May 29, to ensure
the transaction's transparency.  Sources privy to the
bank's privatization proceeding said the DoF and the
bidding committee will open the bids and pick the winning
buyer on the same day.

"The government wants to make sure that no one will
misconstrue the two-day 'weekend gap' as a time when the
envelopes can be switched or the bids can be rigged," a
BusinessWorld source said.

Last week, both Mr. Pardo and Bangko Sentral (Central Bank)
Gov. Rafael B. Buenaventura said the bids will be opened on
May 26, a Friday, and the winning bidder will be announced
on May 29, a Monday.  Another government source said the
May 26 announcement will also give the winning bidder time
to assemble a new set of directors in time for PNB's annual
stockholders' meeting on May 30.

For his part, Mr. Buenaventura expressed satisfaction at
the signing of the joint sale agreement with the tobacco
and beer magnate.  "We are all happy to see that the
agreement is finally signed...sealed and delivered," he

The Bangko Sentral chief said the two-inch thick memorandum
of agreement (MoA) outlines "all the necessary details, as
well as the deliverables that all parties will have to put
forward.  It also commits -- formally and on paper -- all
the commitments and it also establishes the accountability
of all parties," he said.

Sources at the DoF say the MoA signing, while a "mere
formality," is actually meant to ensure Mr. Tan's
commitment to the joint sale.  "It was difficult enough to
get him (Mr. Tan) on the negotiating table," the source
said. "We just want to make sure that he stays in the

The source also said that while no escrow agent has yet
been chosen as a depository for the 46% stake of Mr. Tan
and the 30% holding of the government, either of the two
financial advisers are likely to be tapped for the job.
"The government is thinking of using either Lehman Brothers
or ING Barings for the escrow account," he said.

The source said, however, that ING Barings has an advantage
because it has full-service banking facilities in the
country.  Meanwhile, the Templeton group earlier expressed
interest to participate in the block sale. But due to time
constraints, the DoF decided not to include its holdings
when it bids out the PNB shares next month.

Already, the government is planning "other options" in case
the May bidding fails.  Mr. Pardo said the DoF plans to
negotiate with the highest bidder if all bids are below the
set floor price.

"If all bids fall below floor price, we would have to
directly negotiate with the highest bidder if they should
be interested. That is what we are trying...given the
uniqueness of the transaction," he said.

But the DoF and Mr. Tan have yet to agree on the floor
price since both are still waiting for a parallel audit of
the bank being done by SyCip Gorres & Velayo and
Punongbayan, Araullo & Associates.  The bidding guidelines,
meanwhile, are being finalized by the Committee on
Privatization, the government's privatization arm.  The DoF
is under pressure to complete the privatization of PNB to
fulfill commitments with the World Bank and the
International Monetary Fund.  (Business World  25-April-

URBAN BANK: Declares bank holiday
Urban Bank, a publicly listed medium-sized commercial bank,
will declare a bank holiday starting today after
experiencing a month-long rash of deposit withdrawals
triggered reportedly by reports of its failure to meet the
Bangko Sentral's (Central Bank) capital call and a
downgrading of its status to a thrift bank.

The bank's board of directors arrived at the decision to
declare a bank holiday in an emergency meeting late
yesterday afternoon.  In a statement released at 7:30 p.m.,
Urban Bank said its decision "stemmed from the heavy cash
withdrawals suffered by the bank over the past four weeks
due to a jittery market."

"The liquidity problem is also attributed to the negative
reaction of the bank's clientele and depositors on the
reported downgrading of the bank into a thrift bank despite
assurances that the plan was to convert...into a holding
company that will focus on information technology and
mortgage banking."

Bangko Sentral Governor Rafael B. Buenaventura, after an
hour-long meeting with Urban Bank chairman Arsenio M.
Bartolome III and with president and chief executive
Teodoro C. Borlongan early last night, gave his go-ahead on
the bank holiday.  He said Urban Bank will continue to hold
merger talks with Banco de Oro Universal Bank despite the
suspension of its operations.

"We're giving them time to thresh things out (with Banco de
Oro) they can work out details of the merger," he told

Mr. Buenaventura met with Banco de Oro chairperson Teresita
Sy-Coson last night.  Its statement also said it decided
"not to avail of any financial support from the Bangko
Sentral" despite the heavy withdrawals as it is still
"solvent."  Sought for comment last night, Mr. Buenaventura
attributed the bank run to adverse reports about the
application for a license downgrade and "the fallout from
Wincorp (Westmont Investment Corp.)."

Although Urban Bank does not have an exposure to the cash-
strapped investment firm founded by ex-Finance Sec. Edgardo
Espiritu, Mr. Buenaventura said investors started pre-
terminating their investments placed with banks as a result
of the imbroglio, affecting capital-deficient Urban Bank.
In a disclosure to the Philippine Stock Exchange yesterday,
Urban Bank said its board has approved a deal to merge with
Banco de Oro, with the Henry Sy-owned universal bank
emerging as the surviving entity.

Among Urban Bank's biggest shareholders are: state pension
funds Social Security System, and the Government Service
Insurance System, with 15% and two percent stakes,
respectively; Dizon Copper-Silver Mines, Inc., eight
percent; RBL Fishing, eight percent; San Miguel Corp.
Retirement and Death Benefit Plan, seven percent; SMC
Retirement Plan, one percent; The Wellex Group of plastics
king William Gatchalian, three percent; and the Urban Bank
Management Incentive Plan, 10%.

Urban Bank also has a mortgage banking tie-up with state-
owned Home Development Mutual Fund (Pag-IBIG Fund).
Banco de Oro has more than twice Urban Bank's capital of
around two billion Philippine pesos ($0.048 billion at
PhP41.342=$1).  A merger would propel Banco de Oro to the
top 15 biggest banks in the local industry.

A banking source said talks between the two banks started
only during the Holy Week. "They have been meeting for the
last four days," the source said.  The union with Banco De
Oro is Urban Bank's second attempt at a merger. The
beleaguered bank had on-and-off negotiations with the Tan
Yu family's Panasia Banking Corp. (Panbank).

Talks between Panbank and Urban Bank bogged down. The two
were among three banks which recently requested for a
license downgrade to the thrift bank category.  Urban Bank
was the first universal bank to request and get approval
for a license downgrade.  The bank surrendered its
unibanking license after failing to meet the higher capital
requirements the Bangko Sentral enforced after the July
1997 financial crisis.

Unibanks are required to have PhP5.4 billion ($0.131
billion), while commercial banks need to have at least
PhP2.8 billion ($0.068 billion) by end-2000. Urban Bank
said it has PhP2.2 billion ($0.053 billion) in capital.
Apart from Urban Bank, two other commercial banks have
volunteered to downgrade their licenses after failing to
meet the capital build-up program of the Bangko Sentral.
These were Panasia Banking Corp. (Panbank) of tycoon Tan
Yu, and the Philippine Bank of Communications (PBCom) of
the Nubla family. (Business World  26-April-2000)

WESTMONT INVEST.CORP.: Presents payment scheme
Troubled investment firm Westmont Investment Corp.
(Wincorp) presented just before the Holy Week a proposed
payment scheme for Cebu-based Chinese-Filipino investors.
Filomeno Lim said the investors have formed a committee
among themselves to study Wincorp's proposal.

The committee, however, has yet to meet because of the
Lenten holidays last week.  Mr. Lim told BusinessWorld that
Wincorp has given them until April 28 to decide on whether
to accept the proposed payment scheme, which will allow
some of the borrowers to pay interest payments ranging from
8% to 12% monthly.

Payment for the principal will be made either after two
years or as soon as their assets are liquidated.
Mr. Lim said, however, that there was no need for the
deadline because they also "want to resolve this as early
as possible."

Another Chinese-Filipino businessman, who asked not to be
named, said some of the investors were not thrilled with
the proposed payment plan.

"Lubog pa sa tanang nangamatay (It was extremely
uncertain). How can we be sure that the companies
(borrowers) will still be operational after two years?
Why do we have to wait for two years? We don't know what
will happen next," the source said.

The source said the proposal of some borrowers to liquidate
their assets and pay back the investors may not easily be
realized because of a prevailing soft property market.
He said the only proposal that seemed feasible was the
property swap offered by Sta. Lucia Realty and Development
Corp., one of the major borrowers of the funds pooled by
Wincorp.  Sta. Lucia has several middle-income and high-end
residential subdivision projects in Cebu, such as the
Royale Cebu Estates and El Monte Verde in Consolacion town.

The Securities and Exchange Commission (SEC) is getting
ready to pursue its formal investigation against Wincorp
for possible administrative and criminal violations in
response to a case recently filed by a group of investors.
SEC's Prosecution and Enforcement Department (PED) chief
Ruben Ladia said the case -- filed by a group represented
by lawyer Apollo Sangalang -- has already been forwarded
for investigation. He added, however, that the
investigation could take some time, given the pending
investigation on the most controversial stock market
scandal involving BW Resources Corp and the lack of
manpower in the PED.

Earlier, SEC chairman Lilia R. Bautista said the brokers
and exchanges department (BED) -- the group conducting the
audit on the investment firm's books -- recommended the
issuance of a cease-and-desist order (CDO) against Wincorp.
Ms. Bautista, however, said the basis for the CDO is still
very light and asked the BED to firm up its case against
the investment firm.

Meanwhile, Mr. Sangalang, in a letter to the SEC, requested
that Wincorp and Westmont Bank-United Overseas Bank (UOB)
and its officers "be investigated and prosecuted
administratively and criminally for various violations of
the revised securities act (RSA) ... and other existing
laws ... in relation to the revised penal code."

Depositors of Westmont Bank were allegedly induced to
divert funds previously deposited with Westmont Bank-UOB
and instead invest in securities offered by Wincorp in the
form of a "confirmation advice."

In the confirmation advice, Mr. Sangalang said it was made
to appear that his clients invested their money in
undisclosed third party borrowers and that Wincorp merely
brokered the said "no recourse" transactions.

After a background check, however, the representing lawyer
said the alleged "borrowers" turned out to be merely
"fronts of some of the past and present beneficial owners,
stockholders, directors and officers of Westmont Bank-UOB
and Wincorp."

The group of investors also charged that Wincorp "clearly
violated the RSA by offering to the general public
securities which are not exempted from SEC registration, by
way of transaction which is likewise not exempted."

Wincorp is also being investigated for allegedly violating
the "19-lender rule" prescribed under the Investment Houses
Law which limits to 19 the number of investors in an
investment house. At present count, Wincorp is said to have
at least 2,000 investors, the SEC source added.
Local brokerage house Pearlbank Securities earlier filed a
40-million-peso (US$970,000 at PhP41.258:US$1) lawsuit
against Wincorp. Pearlbank said it was made to appear as a
borrower in several debt instruments Wincorp issued to some
of its investors.

The local brokerage said it "owes nothing to Wincorp or its
investors," but was unwittingly named a borrower when
several Wincorp investors demanded payment amounting to
over PhP274 million ($6.6 million), early this year.
Wincorp started facing liquidity problems after its funders
--over 2,000 Binondo- and Cebu-based Chinese-Filipino
businessmen -- preterminated their investments.

At least 20 companies linked with former Finance Secretary
Edgardo Espiritu, one of Wincorp's founders, and his
business associates were identified as the major borrowers
of funds pooled by Wincorp.  Most of the borrowers were
also shareholders of listed firm Unioil Resources and
Holdings Co., Inc. which owns 100% of Wincorp. (Business
World  25-April-2000)


AIG FINANCE: Posts Q1 loss
AIG Finance (Thailand) said its unaudited net loss for Q1
ending March 31 was 35.1m bt, compared with a net loss of
166.1m bt for the same period in the previous year.
(Bangkok Post  25-April-2000)

AROMATICS THAILAND: Rehab plan to go before Cabinet
THAI OLEFIN: Rehab plan to go before Cabinet
The debt restructuring plans of THAI Olefin (TOC) and
Aromatics Thailand (ATC) will be submitted to the cabinet
in today's meeting.

Suwat Liptapanlop, Minister of Industry, said he will
present the two companies' debt plans for a preliminary
review by the cabinet, adding that the government is
expected to give approval next week.

"The speed of debt processing is crucial, given that
conclusion of the plan will make the companies ready to
perform well during the petrochemical bull market, expected
to come in 2002." Suwat told reporters.

TOC's major creditors - Bangkok Bank (BBL), Chase Manhattan
and Industrial Bank of Japan - have endorsed a US$330
million debt restructuring package.  The package, agreed on
March 15, includes extension of payment periods from five
to seven years. The petroleum Authority of Thailand (PTT),
which has a 49 percent stake, will provide $100 million as
a credit guarantee for raw material purchases. The two
parties are expected to finalize the deal on May 8.

ATC, whose delinquent debt is some $400 million, said its
major creditors - Sanwa Bank, Japan Exim Bank and US Exim
Bank - have approved its plan. The plan, ATC said, calls
for rescheduling of debt pay period from 2007 to 2009, and
an additional $200 million new loan with a prime rate or
lower.  The new loan would be used to pay Korea Exim Bank
which earlier rejected ATC's debt restructuring package.
(Business Day  25-April-2000)

Ayudhya Investment and Trust said its consolidated
unaudited net loss for Q1 ending March 31 was 1.3bn bt,
compared with a net loss of 6.2m bt for the same period in
the previous year. However, its unconsolidated unaudited
net loss for Q1 was 1.2bn bt, compared with a net loss of
8.7m bt for the same period a year ago.  (Bangkok Post  25-

BANGKOK METRO.BANK: Pres. accused of aiding takeover bid
The Save the Nation Movement, or Ruamjai Thai Ku Chart,
yesterday asked the National Counter Corruption Commission
to investigate Somchai Sakulsurarat, president of the
Bangkok Metropolitan Bank.

It is alleged that Mr Somchai wrote off bad loans to
benefit a takeover by a foreign bank.Boonthiam Kemapirat, a
former Bangkok MP and president of the movement, charged
that the bank had suspiciously written off more than eight
billion baht worth of bad loans in 1998 and 1999.

This caused the bank's overall assets to plunge in a way
that could pave the way for a foreign takeover of the
ailing bank at a cheap price, he claimed. Mr Boonthiam also
claimed that Mr Somchai had worked for over a decade for a
foreign bank which planned to buy BMB.

"We do not want the Bangkok Metropolitan Bank to be sold to
a foreign party, because that will be a loss for Thai
people. The commission should probe the BMB president's
role because he has acted like a broker to sell the bank to
foreigners," Mr Boonthiam said.

He also criticised the Bank of Thailand, which took over
the BMB and took charge of negotiations for its sale, for
refusing to publicise sale conditions, which the public had
a right to know as the bank was a public company.
Klanarong Chantik, NCCC secretary-general, said the
commission would decide next week whether it had the
jurisdiction to investigate the allegation.

He admitted the issue was important as it had drawn public
attention, and said if BMB was considered to be a state
enterprise the commission would have the authority to
launch a probe. The Save the Nation Movement also urged a
public hearing on the planned sale of the bank and will
petition His Majesty the King to oppose the sale.

Mr Somchai said in a statement yesterday that the loans had
been written off in line with his bank's regulations,
because the debtors were really unable to repay them.
The action also complied with Bank of Thailand regulations
that bad loans could be written off if the bank could raise
100% of the provision.

The provision would also be included in asset evaluations
during the process of selecting a partner to invest in the
bank. Therefore, the debts written off would not favour any
foreign buyer, he said.  Mr Somchai said he worked for Hong
Kong and Shanghai Banking Corp for 15 years and Bank of
Ayudhya for 13 years. He moved to BMB on Dec 31, 1997 at
the central bank's request.  He dismissed the allegation
that he was speeding up the sale process to serve a foreign
bank.  (Bangkok Post  23-April-2000)

Book Club Finance said its unaudited net loss for Q1 ending
March 31 was 37.6m bt, compared with a net loss of 81.4m bt
for the same period a year ago.  (Bangkok Post  25-April-

Standard Chartered Nakornthon Bank reported a net loss of
165.21 million baht during January to March this year, as
compared to a net loss of 410.73 million baht during
the same period a year earlier.

DBS Thai Danu, a unit of Singapore's DBS Group Holdings,
said its first quarter loss halved from the same period
last year because of falling bad loans and operating
expenses. DTDB President Pornsanong Tuchinda said the bank
suffered a net loss  of 174.7 million baht during the first
quarter of 2000.  He disclosed that the bank is expected to
begin registering a profit in the third quarter of this
year.  Net interest and dividend incomes rose 20 percent to
349 million baht; bad loans now account for 45 percent of
total loans, down from 57 percent a year earlier,
Pornsanong added.  (Business Day  21-April-2000)

Ekachart Finance said its unaudited net loss for Q1 ending
March 31 was 148.8m bt, compared with a net loss of 36.4m
bt for the same period a year ago.  (Bangkok Post  25-

SG ASIA CREDIT: Posts Q1 loss
SG Asia Credit said its unaudited net loss for Q1 ending
March 31 was 225.8m bt, compared with a net loss of 1.3bn
bt for the same period a year ago.  (Bangkok Post  25-

SIAM STEEL INT'L: Creditors pass rehabilitation plan
The business rehabilitation plan of Siam Steel
International Plc was approved yesterday by creditors
representing 75.19% of its total debts or 2.14 billion

The creditors and Siam Steel will jointly manage the
rehabilitation. Siam Steel will establish Siam Steel
Planner Co to co-operate with the creditors' planer,
Deloitte Touche Tomatsu Planner Co. The former will oversee
production and marketing and the latter financial
management and accounting.

Under the plan, total debt worth 2.95 billion baht extended
by 27 creditors would be classified into three portions.
The first portion of one billion baht would be divided into
two sub-portions. The repayment period for the first sub-
portion of 750 million baht will be five years at interest
one percentage point above the minimum lending rate. The
second sub-portion of 250 million baht would be repaid
immediately after the company completed its
recapitalisation. The amount of capital to be raised would
be determined later.

The second portion worth 680 million baht would be repaid
within five years with no interest.  The last portion of
1.27 billion baht would be converted to equity. Company
management would have the right to buy back the shares
later.  The rehabilitation plan would help the company to
reduce its debt burden by half while its loan interest
burden would be only one-quarter of what it had been.

The company's major creditors include HSBC, Bank of
America, Sakura Bank, Credit Agricole Indosuez, Arab
Banking Corp and the Industrial Finance Corporation of
Thailand. (Bangkok Post  25-April-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
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, James Philip P.
Jover and Cristina Pernites, Editors.

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

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