/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/000428.MBX T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Friday, April 28, 2000, Vol. 3, No. 83 Headlines * A U S T R A L I A * MITSUBISHI: Warns Adelaide plants to accelerate performance MITSUBISHI MOTORS: Ultimatum delivered to Adelaide PAULINE HANSON: Calls on help from Pro Hart REINSURANCE AUSTRALIA CORP.: Calls in the cavalry * C H I N A & H O N G K O N G * FRANK CHAO SZE-BANG: Facing bankruptcy petition GITIC ENTERPRISES: Tak Wing unit to the rescue WANG MEI PLUMB.AND SAN.FITTINGS: Facing winding up petition * I N D O N E S I A * BARITO PACIFIC TIMBER: Hopes to restructure foreign debt PT BANK BALI: Failure threat unless ex-owner drops lawsuit PT FISKAR AGUNG: Ordered to honor loan agreement PT OMETRACO CORP.: Court rejects IBRA's bankruptcy petition * J A P A N * KOFUKU BANK: FRC to reopen review of bids KUMAGAI GUMI CO.: Showing steady decline MAEDA CORP.: Predicts 6B Yen net loss NICHIBOSHIN LTD.: Applies for court-led rehabilitation NISSAN DIESEL MOTOR CO.: To trim 70B yen in debt YOKOGAWA ELECTRIC CORP.: Treading water in rough seas * K O R E A * CHUNGGU HOUSING: Courts make way for liquidation DAEHAN INVEST.TRUST CO.: Gov't plans cash infusion DAEWOO MOTORS: Creditors seek seizure of property DAEWOO MOTORS: Union leaders arrested for illegal strikes HANKOOK BELT: Courts make way for liquidation JUNGIL E & C: Courts make way for liquidation KIA INTER-TRADE: Courts make way for liquidation KOREA INVEST.TRUST CO.: Gov't plans cash infusion KYOHA INDUSTRIES: Courts make way for liquidation KYUNGDONG INDUSTRIES: Courts make way for liquidation WOOSUNG DISTRIBUTION: Courts make way for liquidation * M A L A Y S I A * TAP RESOURCE BHD.: Subsidiary gets RM36mil for debt stlmt. TIME ENGINEERING: Sapura-Hutchison may submit new bid * P H I L I P P I N E S * FIRST WOMEN CREDIT CORP.: Appeals court denies RJ bid NATIONAL POWER CORP.: ECC sets P250B absorbable debt cap PETRON CORP.: Loses P331 M in Q1 PHILIPPINE NAT.BANK: Gov't, Tan finalize sale intentions PHIL. NATIONAL CONSTR.CO.: Gov't-stake auction in July URBAN BANK: Gov't to take over, as shares fall URBAN BANK: Henry Sy bank eyes acquisition WESTMONT INVEST.CORP.: SEC body recommends CDO * S I N G A P O R E * FHTK HOLDINGS: In restructure talks ITE ELECTRIC CO.: Gives lenders three options * T H A I L A N D * EASTERN WIRE PUBLIC CO.: Reports on subsidiary's rehab SIAM SYNTEC CONSTRUCTION: Submits debt plan SRIVARA REAL ESTATE GROUP: Files for restructuring WONGPAITOON FOOTWEAR GROUP: Submits debt plan ================= A U S T R A L I A ================= MITSUBISHI: Warns Adelaide plants to accelerate performance ----------------------------------------------------------- Mitsubishi has delivered a warning to its two Adelaide car production plants -- unless they start making money by the end of this year, they will be wound back. Unveiling the company's new corporate strategy, its president has told a press conference in Tokyo that the company's two plants based in Adelaide, are not breaking even. Katsuhiko Kawasoe has asked the Adelaide management of the plants to present him with a report on restructuring plans within the next few days. He says unless the Adelaide plants make money by the end of this year, they will be wound back and jobs will be lost. He says he hopes he will not need to close the plants altogether. Mitsubishi has announced plans to build a new car smaller than the Magna and the Colt. The company president says at the moment the Adelaide plants are not ready to build it. (ABC News Online 26-April-2000) MITSUBISHI MOTORS: Ultimatum delivered to Adelaide -------------------------------------------------- Adelaide's two struggling Mitsubishi plants face severe job cuts and a slashing of their production lines as they struggle to comply with a Tokyo edict that the smallest of the Australian car makers break out of the red or close. The president of the Japanese-based Mitsubishi Motors Corporation (MMC), Katsuhiko Kawasoe, said yesterday he would receive a report from Australia within the next few days outlining measures needed to restore the plants to profitability. Mr Kawasoe said retrenchments and a scaled-down operation were likely by the end of the year. He refused to guarantee Adelaide's future, saying the Australian arm could not fit into his firm's "global strategy" until its financial position improved markedly. "Our operation in Australia must reach break-even point in order to continue," he said. Asked if that meant job cuts and reduced production lines, Mr Kawasoe replied: "To tell you the truth, yes, there is that possibility." However, Mr Kawasoe played down the prospect of a full closure, saying reports from Australia so far suggested this was not an option the company needed to pursue. He declined to outline the cuts, which unions fear could be as high as 600 of the 4000 Mitsubishi jobs. Despite falling domestic sales - domestic Magna sales slumped 20 per cent to 28,200 last year - Mitsubishi Australia recently committed $450 million for a new Magna from 2005. There is also an outside chance that Mitsubishi Motors' new partner, DaimlerChrysler, may use some of Adelaide's excess capacity to beef up its own presence in Asia. In a new mid-term management plan unveiled yesterday, MMC declared it would reduce its interest-bearing debt from 1.75 trillion yen ($A29 billion) to under one trillion yen (A$16 billion) by 2003. Adelaide has been overlooked in the revised plan, with MMC signalling it will direct new research and development funds towards its super-efficient and lower-cost Thai, Malaysian and Taiwanese plants. With DaimlerChrysler executives still wary of MMC's huge debt burdens, the Tokyo car maker is determined to cut costs in its passenger car operations. The assistant national secretary of the Australian Manufacturing Workers Union, Dave Oliver, yesterday called for an urgent meeting between Mitsubishi and the South Australian Government to minimise any job losses. Mr Oliver said the decision by MMC in Japan was disastrous for car industry workers and showed how Australia was increasingly losing control of its economy to large overseas companies. "Once again decisions are being made offshore which will impact on jobs and our economy. Once again it's the push for increased profit as opposed to people's lives. This will mean further job losses elsewhere, outsourcing and contracting out and further job insecurity," he said. Mr Oliver called on the Federal Government to ignore any decision by the Productivity Commission to reduce tariffs in the car industry. He said the commission was preparing an industry report that should call for "an increase in tariffs rather. (The Age 27-April-2000) PAULINE HANSON: Calls on help from Pro Hart ------------------------------------------- Pauline Hanson is hoping a gift from artist Pro Hart will be enough to rescue her from bankruptcy, if the One Nation leader wins an extension of today's deadline to repay her $500,000 debts. Supporters have donated about $250,000 to a fighting fund but Ms Hanson said yesterday she needed at least two more weeks to raise the rest of the money. Ms Hanson's scheme is to sell 250 limited-edition prints of Hart's painting of a flower for about $250 each, and raffle another two paintings recently donated by the artist. While the One Nation leader could call on offers of interest-free loans, she wanted time to raise the funds herself. Ms Hanson is being forced to repay the funds after Queensland's highest court upheld a ruling that One Nation had contested the election as a fraudulently registered party. Hart, who is based in the NSW town of Broken Hill, has come to Ms Hanson's aid once before, donating an artwork to help her party raise money. The pair met three years ago when Ms Hanson was in Broken Hill for a One Nation rally. "Pro's been very good to me over the years and the party and I do appreciate it," Ms Hanson said. Queensland Electoral Commissioner Des O'Shea could not be contacted on whether he would consider an extension of the deadline. But Ms Hanson fears her request will be denied and she will have to hand over her public donations on the spot and also take up large interest-free loans offered by her supporters. "Although I appreciate (the offers of loans), the last thing I want is another debt over my head," she said. NSW Electoral Commissioner John Wasson said yesterday he could decide at the end of the week whether the party is validly registered in NSW. One Nation's application for special leave to appeal to the High Court to overturn the decision to deregister the party in Queensland will be heard on May 4. (The Australian 26-April-2000) REINSURANCE AUSTRALIA CORP.: Calls in the cavalry ------------------------------------------------- Reinsurance Australia Corp has drafted a turnaround expert to the to help it recover from its $467 million net loss last year. The besieged insurer has made two fresh board appointments, including career investment banker Mr Richard Hill. It is understood Mr Hill was introduced to the board by 11 per cent shareholder Hunter Hall Investment Management, whose corporate consultant Mr Jack Lowenstein will also join the board. Mr Hill is the founding partner of Hill Young & Associates, who has worked with the HSBC subsidiary Wardley in Hong Kong and New York and is an expert in corporate work-outs. Both Mr Hill and Mr Lowenstein will fill casual positions but their election won't be voted on at the May 15 annual meeting. In a notice of meeting, ReAC said both Mr Nick Steffey, its managing director, and Mr Stephen Matthews, a fresh nominee, come up for election. But the notice warned ReAC could be in breach of its employment contract if Mr Steffey was voted off. He has been with the group for less than one year but has already been paid a total of $1.01 million in salary and other benefits. ReAC is embarking on a self-managed run-off of its reinsurance contracts expected to take three to four years. This involves settling obligations to policyholders, in some cases settling contracts early through a process known as commutation. ReAC also said it had been in close contact with the Australian Prudential Regulation Authority, which has warned it could install an inspector. A string of catastrophes in the past year, including windstorms in Europe, earthquakes in Taiwan and Turkey and the Sydney hailstorm, meant the company suffered a heavy claims burden. (Sydney Morning Herald 26-April-2000) ============================== C H I N A & H O N G K O N G ============================== FRANK CHAO SZE-BANG: Facing bankruptcy petition ----------------------------------------------- Shipping tycoon Frank Chao Sze-bang is facing a bankruptcy petition from a shipping company over an alleged US$ 6 million (HK$ 46.7 million) debt involving the sale of a vessel. Bright Island Corporation yesterday took Mr Chao to the Court of First Instance for the order before Mrs Justice Doreen Le Pichon. Barrister Ambrose Ho, for Mr Chao, who did not appear in court, said one of the arguments was over the value of the vessel, which was allegedly sold at an undervalued price. Mr Ho made an application to call for expert evidence. The judge adjourned the case until June 22 for further directions to the parties. Mr Chao is the third brother in the wealthy family to hit the headlines in the past month. His flamboyant younger sibling, Cecil Chao Sze-tsung, 63, was called to testify during a high-profile lawsuit brought by his former live-in-lover, Terri Holladay. The socialite and model claimed she lost up to $ 300 million after a lawyer failed to draft the couple's agreement properly. The matter was eventually settled out of court last week. A day after the settlement, George Chao Sze-kwong's multimillion-dollar yacht exploded in the Causeway Bay typhoon shelter, killing the coxswain. Police are still investigating the blast. (South China Morning Post 26-April-2000) GITIC ENTERPRISES: Tak Wing unit to the rescue ---------------------------------------------- Property-developer Tak Wing Investment (Holdings) has emerged as a white-knight for Gitic Enterprises, as a wholly owned subsidiary has agreed to buy a 32.09 per cent stake in the debt-troubled company for HK$80.9 million. Sunberry Investments will purchase about 155.55 million shares of Gitic Enterprises from parent Gitic Hong Kong (Holdings), a subsidiary of bankrupt Guangdong Investment & Trust Corp (Gitic). The purchase price per share of about 52 HK cents represents a 22.37 per cent discount to Gitic Enterprises' closing price of 67 cents on April 20, when trading in the counter was suspended. On completion of the transaction, Gitic Hong Kong's shareholding in Gitic Enterprises will be reduced to 26.57 per cent from 58.66 per cent. Gitic Enterprises is the indirect commercial arm of Gitic, which was forced to close in October 1998 and ordered to go into bankruptcy in January last year. The transaction is subject to regulatory approval of an exemption for Sunberry Investments from needing to make a general offer for Gitic Enterprises. Gitic Enterprises had a net asset value of HK$333.23 million on December 31, 1998. The company owns property in Guangzhou and Hong Kong with an aggregate value of about HK$177.8 million. Tak Wing Investment said the transaction would improve its overall property-investment portfolio and liquidity. It said Gitic Enterprises had substantial cash and other tangible assets amounting to HK$45.6 million. Tak Win Investment said it planned to borrow HK$60 million at an interest rate of 18 per cent to finance the transaction. It plans to settle the balance through internal cash resources. (South China Morning Post 26-April-2000) WANG MEI PLUMB.AND SAN.FITTINGS: Facing winding up petition ----------------------------------------------------------- The High Court of Hong Kong SAR, Court of First Instance, has scheduled a hearing for May 24 on the petition of Wong Hing Kuen for the winding up of Wang Mei Plumbing and Sanitary Fittings Co. Limited. A notice of legal appearance must be filed on or before May 23. ================= I N D O N E S I A ================= BARITO PACIFIC TIMBER: Hopes to restructure foreign debt -------------------------------------------------------- Indonesian plywood producer Barito Pacific Timber (JSX:BRPT) said it hoped to secure an agreement from its creditors to restructure foreign debt amounting to US$378 million this year, a company official said. Corporate Secretary Riskintono Rachman said the company management also hopes to restructure debts valued at Rp400 billion (US$571 million) in bonds issued in 1997 due for repayment in 2001.Rachman said the foreign debt included promissory notes to a bank syndicate. One of Indonesia's biggest plywood producers has exported plywood to Japan, South Korea, the United States, Middle East, Taiwan, Hongkong, China and Europa. The company exported 748,730 cu.m. of plywood last year down from 1,002,480 cu.m. in 1998 . The decline was caused by the destruction of a factory in Mangole, Maluku by an earthquake. (Asia Pulse 25-April-2000) PT BANK BALI: Failure threat unless ex-owner drops lawsuit ---------------------------------------------------------- Indonesia's bank rescue agency declared it would let Bank Bali fail unless the bank's former owner drops a suit aimed at declaring the government's nationalisation of the bank last year illegal. At stake are plans for the government to help recapitalise the lender by subscribing to a new rights offer. Like many Indonesian banks, Bank Bali was hard hit by the near collapse of the country's economy in the 1998 recession. But a suit by former owner and president director Rudy Ramli has already derailed plans to sell the government 4.6 trillion rupiah (about HK$4.53 billion) in new shares by the middle of next month to improve the bank's capital base. "If Rudy Ramli wants to drop the suit and promises not to file any legal suit in the coming months, Bank Bali might be recapitalised soon," said Arwin Rasyid, deputy chairman of the agency. "If not, Bank Bali will face bankruptcy." The government is on the defensive after an Indonesian district court last month ruled in Mr Ramli's favour in the case, declaring the government's takeover of the bank unlawful. The government has appealed the ruling. (South China Morning Post 26-April-2000) PT FISKAR AGUNG: Ordered to honor loan agreement ------------------------------------------------ The Jakarta commercial court has ordered PT Fiskar Agung to to honour a loan agreement with Catnera International Ltd (Hong Kong) using physical assets as collateral. The court issued the order after it rejected an application filed by Fiskar Agung's receiver Makarim and Taira to cancel the loan agreement. Presiding judge Samsudin Manan Sinaga said cancellation of a debt deal is not possible legally even though Fiskar Agung had been declared bankrupt. Fiskar Agung pledged assets consisting of land and machinery as collateral for the 3 mln usd loan it received from Catnera in March 1999. It requested the cancellation because the loan agreement violated a previous promissory note agreement between Fiskar Agung and other creditors which stipulated that Fiskar Agung was not allowed to pledge its assets as collateral for debt. Sinaga said the company should have tried to negotiate with other creditors instead of seeking for a court ruling to cancel the loan deal with Catnera. He added that the court also found evidence that Fiskar Agung does not have enough assets to pay other creditors and therefore needed the assets pledged to Catnera. Sinaga said the court ordered that Catnera be treated as a separate creditor which has the rights on the collateralized assets. He said the order will block Fiskar's plan to repay all its creditors using assets being liquidated on a pro-rata basis. (AFX News Limited 26-April-2000) PT OMETRACO CORP.: Court rejects IBRA's bankruptcy petition ----------------------------------------------------------- The Jakarta Commercial Court said it rejected the Indonesian Bank Restructuring Agency's petition for a bankruptcy ruling against PT Ometraco Corporation. Presiding judge Mahdi Soro Inda said the court rejected the IBRA case because Ometraco was legally declared a company under liquidation by South Jakarta Court. "To declare the company bankrupt is not possible anymore due to the liquidation. Moreover, liquidation and bankruptcy are basically the same things," he said. He said IBRA presented insufficient evidence toi warrant canceling the liquidation. Inda said the court agreed with IBRA that Ometraco's outstanding debt of 53.179 mln usd should be paid to IBRA. IBRA lawyer Benny Harman said he will consult with the agency on whether to pursue an appeal with the Supreme Court. (AFX News Limited 26-April-2000) ========= J A P A N ========= KOFUKU BANK: FRC to reopen review of bids ----------------------------------------- The Financial Reconstruction Commission is poised to reopen as early as Wednesday its review of two competing bids to take over the healthy assets of failed Kofuku Bank. The two remaining candidates -- the Daiwa Bank group and the U.S. investment fund WL Ross & Co. -- have each upgraded their bids, compelling the FRC to take a second look at both. At this point, the decision is a toss-up, FRC insiders say. WL Ross would take over all Kofuku Bank branches and employees under a bid that it would lower the public funds required to fund the bailout. But there are concerns about how stable the bank would be after the takeover. WL Ross is attempting to allay those concerns by offering to bring in a former executive from a Japanese city bank to run the lender after the sale. The Daiwa Bank group, meanwhile, brings stability and experience in regional lending to the table. But the joint bid by Daiwa Bank and its affiliate Kinki Osaka Bank (8371) would require a larger injection of public funds. The group has upped its bid, however, offering to take on more employees and a larger pool of loans. (Nikkei 26-April- 2000) KUMAGAI GUMI CO.: Showing steady decline ---------------------------------------- Kumagai Gumi Co. (1861) shares have been on a steady decline since last summer. They fell to an all-time low of 50 yen on Feb. 22 and have been hovering around 60 yen of late. The supply-demand situation for the stock has deteriorated amid selling related to the unwinding of corporate cross- shareholdings. In the fiscal year ended March 31, the general contractor took a 17.5 billion yen charge on property held as inventory that had declined to less than 50% of its book value. The Japanese Institute of Certified Public Accountants had asked construction firms to make an effort to dispose of such unrealized losses last fiscal year. In addition, Kumagai Gumi booked extraordinary losses totaling about 26 billion yen in connection with, among others, severance payments for early retirements. Conversely, the firm posted 7.5 billion yen of special gains from stock and real estate sales. After the positive effect of changes in accounting rules, Kumagai Gumi was able to meet its original net profit target of 2.5 billion yen. Kumagai Gumi finished the term with 6,575 employees, or 12% fewer than a year earlier, but interest- bearing liabilities swelled 8% to 890 billion yen. The parent has been assuming the debt of group companies, so its interest burden is still putting a damper on earnings. Analysts say that with the environment for securing orders deteriorating, this is not the time to aggressively buy Kumagai Gumi's stock. The firm will have to drastically restructure assets for the issue to stage an earnest recovery. (Nikkei 26-April-2000) MAEDA CORP.: Predicts 6B Yen net loss ------------------------------------- Maeda Corp. (1824) expects to post some 6 billion yen in net loss for the year ended March after setting aside funds to cover pension program shortfalls of 14 billion yen and other unrealized losses, it was learned Tuesday. The figure contrasts with an earlier forecast which estimated net profit of 4.4 billion yen. Listed firms will be required to disclose their pension fund liabilities from fiscal 2000, but the medium-size contractor decided to write off liabilities ahead of implementation of the new rule. To strengthen its financial standing, the company will dispose of all unrealized losses from its real estate and golf club membership holdings. Because the company expect 22 billion yen in gains from an adjustment in income tax payments for past years, it will be able to maintain an annual dividend of 9 yen. In addition to the pension fund liability coverage, the estimated 18 billion yen extraordinary loss also includes unrealized loss of 1.5 billion yen on real estate holdings. At the same time, 1 billion yen in latent loss on golf club memberships was added to the extraordinary loss prior to the introduction of mark-to-market evaluation of financial products. Pretax profit is estimated at slightly higher than the earlier projection of 9 billion yen, which is up 42% year on year, thanks to cost-cutting efforts. (Nikkkei 26- April-2000) NICHIBOSHIN LTD.: Applies for court-led rehabilitation ------------------------------------------------------ Nichiboshin Ltd. (8582), a nonbank financial institution, said Tuesday that it has filed with the Tokyo district court for court-led rehabilitation. Liabilities left behind totaled 289.9 billion yen. Nichiboshin said in a statement that it will overhaul its group business activities under the court's guidance and aims to rehabilitate itself with its creditor banks. Nichiboshin said it expanded its financing activities during the so-called bubble economy of the late 1980's. This brought its outstanding extended loans as high as Y1.424 trillion as of March 1990. The asset price collapse forced the company to restructure over the past few years, a scheme which included receiving debt waivers from banks. But some banks refused to waive more debts in the just- ended fiscal year, leading to the company's excess liabilities. As a result, its liabilities exceeded assets by Y232.88 billion as of the March 31 book closing, the third consecutive year in which the company had excess debt. Its poor financial state made it subject to the Tokyo Stock Exchange's numerical criteria for share delisting. The company's shares are listed on the first section of the Tokyo bourse. Private credit research agency Teikoku Databank Ltd. said Nichiboshin is the fourth listed company to fail this year, following supermarket chain operator Nagasakiya Co., developer L Kakuei Corp. and Toyo Steel Corp. Nichiboshin said it now estimates a parent net loss of Y129.28 billion, pretax loss of Y108.68 billion on revenue of Y2.18 billion for the latest fiscal year. (Nikkei 26- April-2000) NISSAN DIESEL MOTOR CO.: To trim 70B yen in debt ------------------------------------------------ Nissan Diesel Motor Co. aims to trim its group interest- bearing debt by 70 billion yen over the next five years to 250 billion yen, a less ambitious target than before, Jiji Press learned Monday. The figures were part of the overview of Nissan Diesel's new five- year business plan to March 2005. The plan is expected to be announced by Nissan Diesel President Hirofumi Nakazawa on Friday after formal approval from board members. The truck maker, whose joint top shareholders are Nissan Motor Co. and Renault SA of France, initially planned to cut 100 billion yen in interest-bearing debt over two years to March 2001. The debt stood at some 320 billion yen at the end of March. But the company decided to adopt a more pragmatic approach to cope with its group's mounting interest-bearing debt as a rapid recovery in its earnings appears unlikely amid sluggish truck demand. According to the plan, Nissan Diesel expects around 40 billion yen in synergy effects through its business cooperation with the Renault group in the five years.(MORE) Nissan Diesel's roughly 160 billion yen in debt at its sales and finance division will not be subject to the debt reduction under the five-year plan as the debt, such as temporary payments made on behalf of its users, is different from a loan in nature. Including the debt at the division, the plan, if implemented, would reduce the company's overall debt of some 480 billion yen at present to around 400 billion yen in five years. Nissan Diesel will not carry out further payroll cuts as it slashed the group's workforce by 3,000, or almost 30 pct, in January ahead of schedule. But the company will not hire graduates for the year starting next April. The company plans to cover shortfalls in group retirement pension reserves, which stand at some 60 billion yen, over 15 years. Nissan Motor and Renault are said to have approved of the business plan on the whole. The Nissan Diesel group managed to avoid falling into excess debt in the year that ended March 31 owing to assistance from its two largest shareholders, Industrial Bank of Japan and three other creditor banks. (Jiji Press English News Service 24-April-2000) YOKOGAWA ELECTRIC CORP.: Treading water in rough seas ----------------------------------------------------- Industrial instruments maker Yokogawa Electric Corp. (6841) saw its share price fall after the April 15 announcement of changes in the makeup of the 225 issues comprising the Nikkei Stock Average, as investors reduced their holdings of Yokogawa Electric and other stocks in the index to add newly included high-priced issues. The issue went as low as 790 yen at one point on Friday, but it bounced back Monday to 910 yen due to "investors responding to Friday's sell-off," said an analyst at Nikko Securities Co. Yokogawa Electric announced Tuesday that it posted a net loss of 1.7 billion yen for the fiscal year ended March 31, a plunge from the 2.7 billion yen in net profit posted the year before. The firm booked 56.1 billion yen in extraordinary losses from writing off unfunded pension and severance liabilities and from liquidating subsidiaries. "We've disposed of all financial burdens," company President Isao Uchida said of the firm's decision to book the total shortfalls and liquidation in fiscal 1999. "By improving the transparency of our divisions' earnings, we will start afresh," he said. Some analysts also approve of the move, including Ryuichi Hayashi, an analyst at Nomura Securities Co., who said it "takes a load off the company's future financial burden, and clarifies the group's business situation." However, the outlook on private-sector capital spending is bleak, and it may take time for the company's earnings to fully recover. Many institutional investors are holding back from adding Yokogawa shares to their portfolios, according to a money manager at a Japanese investment advisory firm, and the share price is not expected to bounce back easily. (Nikkei 26-April-2000) ========= K O R E A ========= CHUNGGU HOUSING: Courts make way for liquidation HANKOOK BELT: Courts make way for liquidation JUNGIL E & C: Courts make way for liquidation KIA INTER-TRADE: Courts make way for liquidation KYOHA INDUSTRIES: Courts make way for liquidation KYUNGDONG INDUSTRIES: Courts make way for liquidation WOOSUNG DISTRIBUTION: Courts make way for liquidation ----------------------------------------------------- The Seoul District Court announced Tuesday that it has decided to remove court control over seven local firms to make way for their liquidation. The firms to be liquidated are: Chunggu Housing, Hankook Belt, Kyungdong Industries, Woosung Distribution, Kyoha Industries, Kia Inter-trade and Jungil E&C. The court said the seven firms are incapable of paying off their debts and continuing management-labor disputes have been dragging down operations, dimming hopes for business normalization. (Digital Chosun 25-April-2000) DAEHAN INVEST.TRUST CO.: Gov't plans cash infusion KOREA INVEST.TRUST CO.: Gov't plans cash infusion -------------------------------------------------- In its latest attempt to prop up the financial system, the government said Tuesday it would inject billions of dollars of public funds into two of South Korea's three biggest trust companies next month. The decision to allocate 5 trillion won ($4.51 billion) in addition to the 3 trillion won it spent last year to keep Korea Investment Trust Co. and Daehan Investment Trust Co. in business reflects the depth of their financial problems, which have been deepened by Daewoo Group's inability to repay $78 billion of debt. "We shared the view that an early revival of ailing trust firms is unavoidable in order to stabilize the financial markets and to restore investors' confidence," Lee Yong Keun, chairman of the Financial Supervisory Commission, said after a meeting with other economy-related ministers and the central bank governor. Mr. Lee said the government move would not necessarily lead to an additional burden on taxpayers, as it could mobilize 7 trillion won of public funds it had already earmarked for restructuring the country's tattered financial sector. South Korea's 24 trust companies are the biggest buyers of corporate and government debt and are major participants in the stock market. A shortage of cash at the trust companies was a factor in a recent sell-off in the South Korean stock market. The companies held about one-third of Daewoo's debt at the end of last year. The stock market reaction to the government's announcement Tuesday was cool, with the benchmark Korea composite stock price index closing down 10.38 points, or 1.39 percent, at 737.20. (The International Herald Tribune 26-April-2000) DAEWOO MOTORS: Creditors seek seizure of property ------------------------------------------------- Individual and corporate creditors of South Korea's troubled Daewoo Motor have sought provisional seizure of the assets of the car maker, threatening to tighten capital and impede the process of debt workout. According to the corporate restructuring coordination committee and creditor financial institutions Monday, the seizure of property sought by individual and corporate creditors covered about 220 billion won (US$198 million), or 68.8 percent of the total overdue principal of 320 billion won. Individual and corporate creditors hold credit of 3.5 trillion won in the Daewoo Group, including 406 billion won in Daewoo Motor. Daewoo Motor and creditor groups last week started negotiations with individual creditors on the matter, but individual creditors stood firm on their demand for full payment. Creditor financial institutions are reacting just as harshly, saying they are burdened with additional funding resulting from debt-for-equity swaps and fresh lending. "The workout plan and auction process can proceed smoothly only when the individual credit issue is settled," a coordination committee source said. "To counter the individual bid for provisional seizure of property, the creditor financial institutions are also weighing a plan to apply for a similar provisional seizure." (Asia Pulse 24- April-2000) DAEWOO MOTORS: Union leaders arrested for illegal strikes --------------------------------------------------------- South Korean police raided the troubled Daewoo Motor yesterday and detained 20 union activists, four of whom were charged with leading illegal strikes, workers said. Workers at the plant in the western town of Bupyong immediately went on strike in protest of the arrests. There was no violence during the pre-dawn raid as the workers, who were all asleep, were outnumbered and had no chance of putting up any resistance. "Four detectives, backed by 50 riot policemen in uniforms, entered the union office before dawn," a union official told AFP. Union head Choo Young-Ho and three others were arrested and placed in custody for indictment and trial on charges of leading numerous illegal strikes from February 15 to April 12, police said. The remaining workers were released. "I was sleeping on the couch in the office when the police stormed it. We did not expect them to raid us," a union official, Yoo Young-Koo, told journalists at the police station. The company says the wave of strikes has cost it some $64 million in lost production. Following the police raid, some 1,000 workers downed tools and rallied on the company compound, bringing passenger-car assembly lines to a halt. Union representatives of Daewoo Motor and three other automakers, including Hyundai, Kia and Samsung, were due to meet later yesterday to decide whether to spread the strike to other automakers and how long the strike should last. Unions had already planned a strike this week in opposition to the planned sale of Daewoo Motor to a foreign company. General Motors is seen as the favorite to acquire the ailing company. (Business Day 26-April-2000) =============== M A L A Y S I A =============== TAP RESOURCE BHD.: Subsidiary gets RM36mil for debt stlmt. ---------------------------------------------------------- The debt settlement of RM36mil agreed by TAP Resources Bhd's wholly-owned subsidiary, TAP Construction Sdn Bhd (TAPCon), with Meda Bina Sdn Bhd (MBSB) and Meda Property Services Sdn Bhd (MPSB), would result in a write-off of RM11.95mil for TAP Resources' financial year ending April 30, 2000. Nonetheless, the RM36mil debt settlement would enable TAPCon to recover a substantial portion of the outstanding amount due from both the companies and to avoid any further legal expenses to recover the debt, TAP Resources said in a circular to its shareholders. In order to settle the amount, MBSB and MPSB would jointly and severally undertake to procure and cause the relevant owners to transfer and deliver the settlement properties-- the Bukit Mertajam and Seri Kembangan projects--to TAPCon. The settlement sum would be set-off against the total amount of RM46.97mil owed by both the companies. ZKP Development Sdn Bhd, a wholly-owned subsidiary of MBSB, is the beneficial owner of the 100% completed Bukit Mertajam Property. Pujian Development Sdn Bhd is the registered owner of the 80% completed Seri Kembangan project. The debt settlement, which is subject to ratification by TAP Resources' shareholders at an EGM, would also result in TAP Resources' shareholders' funds dropping to RM86.3mil from RM92.6mil as at April 30, 1999. MBSB and MPSB, both turnkey contractors, had disputed the RM47.97mil claim filed by TAPCon for construction and piling work done by TAPCon on the Bukit Mertajam and Seri Kembangan projects, on the grounds of late completion and alleged poor workmanship. MBSB and MPSB had counter sued TAPCon for delay of work and other claimable items under the respective contracts. (The Star 26-April-2000) TIME ENGINEERING: Sapura-Hutchison may submit new bid ----------------------------------------------------- There have been some rumblings lately that a spanner may be thrown into Singapore Telecom International Pte Ltd's (STI) deal to acquire stakes in Time Engineering Bhd (Time), Time dotCom Bhd and Time Online. Speculation is rife that another suitor may emerge to bid for the three companies despite STI, Renong Bhd and Time Engineering Bhd having entered into a deal early this month. Sources say there is a possibility that Sapura Holdings Sdn Bhd is teaming up with Hong Kong-based Hutchison Whampoa Ltd which is controlled by billionaire Li Ka-Shing, to bid for stakes in Time and its two subsidiaries. The relevant regulatory bodies whose go-ahead is needed for any definitive agreements involving the acquisition of Time and its two subsidiaries will have to decide on these two proposals. In the STI deal, Renong, Time and the Singapore telecom giant had entered into a non-binding conditional heads of agreement (HOA) on April 5 to proceed with the proposed acquisitions after STI was identified as the sole strategic investor. Under the HOA, the three parties are given 30 days, which expires next week, to come up with a definitive agreement. STI is now conducting a due diligence on the companies it is buying into including the final price it will pay for its stakes. STl is buying a 14.48 per cent stake in Time comprising 108.22 million shares at RM6 each, a 20 per cent stake in Time dotCom for RM1.465 billion and 20 per cent in Internet service provider Time Online, which the price has not been fixed. Talk of Sapura and Hutchison entering the fray as the latest suitor for Time and its two subsidiaries is but the latest in a series of speculations on the corporate moves involving the Time group. Back in January this year, The Edge reported that the Sapura group and Hutchison was bidding for Time dotCom. This latest development will get even "hotter" especially with Time's restraining order under section 176 (10) of the Companies Act expiring this Friday (April 28). The Sun newspaper reported Monday that Time is applying to extend the restraining order by another three months. Sources said high-level meetings have been held between senior executives of the Renong, Time and Sapura groups recently. Renong's executive chairman Tan Sri Halim Saad and Sapura's Datuk Shahril Shamsuddin were believed to be present at the meetings. A revised or new proposal is likely to be put forward by the Sapura-Hutchison group to Time and its two subsidiaries soon. Meanwhile, some observers said the proposed STI-Time deal may be in for a rough ride. It was reported in a Malay daily that a senator had urged the Government to review plans to sell the Time stake to STI for national security reasons during a Dewan Negara seating last week. Though Halim, in an interview with a local daily early this month, had said that STI as a important strategic partner would have substantial management participation, in the next breath, he also said that decisions on key positions in management would be left to the shareholders. Time shares rose 22 sen to RM4.46 after touching a low of RM3.98 in active trading with 3.93 million shares transacted in the morning session while Renong remained unchanged at RM2.47 with 1.65 million shares changed hands. Sapura's two listed units Uniphone Telecommunications Bhd and Sapura Telecommunications Bhd have mixed fortunes. Uniphone gained four sen to RM4.58 with a volume of 526,000 shares done while Sapura lost 20 sen to RM870 with 579,000 shares transacted. (The Edge 25-April-2000) ===================== P H I L I P P I N E S ===================== FIRST WOMEN CREDIT CORP.: Appeals court denies RJ bid ----------------------------------------------------- The Court of Appeals (CA) yesterday denied with finality the petition of musician-businessman Ramon "RJ" R. Jacinto to regain control and management of a lending firm that forms part of the Jacinto Group of Companies. In a resolution, the appellate court's fifth division said it cannot overturn an earlier ruling as Mr. Jacinto and partner, Jaime J. Colayco, failed to strictly adhere to legal rules in seeking redress before the tribunal. All three justices of the division also said Messrs. Jacinto and Colayco failed to convince them on the urgency of their plea. "The petitioners failed to show that there is no appeal, or any plain, speedy and adequate remedy in the ordinary course of law since other remedies are evidently still available to them," said the Court, through Associate Justice Remedios Salazar-Fernando. Among the alternative reliefs are: first, to convince the Securities and Exchange Commission (SEC) to reconsider its earlier decision to place the First Women's Credit Corp. (FWCC) under its appointed management committee; and second, to ask the watchdog agency to expedite the resolution of their request for a restraining order to bar the interim committee from overseeing FWCC's affairs. "Mere inaction of delay on the part of (SEC) in the determination of the petitioners' prayer for preliminary injunction does not constitute ... grave abuse of discretion," said the court. Associate justices Angelina Sandoval Gutierrez and Salvador J. Valdez, Jr. concurred in the ruling. (Business World 27-April-2000) NATIONAL POWER CORP.: ECC sets P250B absorbable debt cap -------------------------------------------------------- The Economic Coordinating Council (ECC) has put a P250 billion cap as the amount of liabilities the national government will absorb with the privatization of dole- dependent National Power Corporation (Napocor). In a press conference, Socio-economic Planning Secretary Felipe Medalla said the ECC, in its recent meeting attended by the lawmakers, have agreed to the P250 billion limit instead of the earlier P150 billion being considered. But, informed sources said the P250 billion cap represents only the liabilities of Napocor guaranteed by the government and excludes the stranded cost, which is the guarantee issued by the government to independent power producers for their unsold output. "I don't know exactly how much is the stranded cost," Medalla admitted. The cap is deemed important as Napocor appears to be in a borrowing spree with another $350 million debt instruments to be issued by the fourth quarter of this year with Asian Development Bank and Japan Bank for International Cooperation as lead creditors. All Napocor external borrowings are guaranteed by the national government. The absorption of the Napocor obligations, which is expected to bring down the cost of generating power, is an essential provision in the Omnibus Electricity Reform Bill. The proposed bill, if enacted into law, will pave the way for the privatization of Napocor and eventually will lead to increase competition in the generation and supply of power while, at the sametime, strengthening the regulations in the transmission and distribution of power. It was envisioned that the national government's absorption would result to lower power rates and will not result to higher taxes. This will, hopefully, relieve the government of its annual subsidy to the cash-strapped state utility firm as well as its perennial task of bailing-it-out of financial quagmire. Medalla said the lower power cost will be advantageous both to the consumer and the economy as it is expected to encourage increase business activities. (Manila Bulletin 26-April-2000) PETRON CORP.: Loses P331 M in Q1 -------------------------------- Petron Corp. reported a loss of P331 million for the first three months of the year as against a net gain of P893- million for the same period last year. In a report sent directly from Cebu, the country's leading oil company said that it remains optimistic that recoveries will be experienced in the second quarter of the year as prices of imported crude oil have stabilized. Petron officials are in Cebu reportedly holding a multi-level management conference. In the first two months of the year, the petroleum firm reported a P500-million loss or roughly P403-million net of tax benefits. However, Petron recovered in March with a net income of P48 million as well as income from subsidiaries. In terms of volume, Petron registered total sales of close to 13 million barrels from January to March higher by 11.6 percent compared to last year buoyed by increased aviation and industrial fuel oil sales. Majority of the company's industrial fuel oil were purchased by the National Power Corp. (Napocor). Revenues from the sale resulted in earnings of P19.2 billion or 54 percent higher than last year's P6.7 billion the previous year. Earlier, Petron was forced to rationalize its P1.7-billion capital expenditures for the year 2000. "In the short term, we will continue rationalizing our capital expenditures The capital program already underway will continue. In fact, the board already approved our miscellaneous projects, which are small projects such as replacing small assets," Petron chief executive officer Jose Syjuco Jr. said. The net income of the leading oil refiner dropped to P2.4 billion in 1999 while revenues were recorded at P61.8 billion. Consolidated asset base rose by 23.5 percent to P52.9 billion in 1999 compared to the P42.8 billion in 1998. Sales volume dropped by nine percent due to the reduced volume of Napocor, which has been shifting its power sources from non-fossil based sources. (Philippine Star 27-April-2000) PHILIPPINE NAT.BANK: Gov't, Tan finalize sale intentions -------------------------------------------------------- The government and businessman Lucio Tan formalized Monday their intention to jointly sell their shares in the Philippine National Bank (PNB). President Joseph "Erap" Ejercito Estrada witnessed the signing of an agreement between Tan and Secretary Jose Pardo of the Department of Finance (DOF), as part of the DOF,s 103rd anniversary rites. "It's a breakthrough. The important thing is, Lucio Tan signed and committed his bloc, 46 percent, in this document which spells out how the privatization will be done and ensuring transparency, as we committed to all parties that the sale will be very transparent," Pardo told reporters after the signing. He added this should douse cold water on continued criticisms accusing the administration of cronyism. Monday,s event, Pardo pointed out, was the first transaction this year with respect to government's efforts to dispose its stocks in the PNB. Tan also said he plans to sell his stake in Philippine Airlines (PAL) after the sale of the PNB shares. The joint exposure of the government and Tan in PNB is about 76.4 percent, with government holding 30 percent and Tan with 46 percent. Pardo added that the buyer of the shares would have the option to buy the 12.9 percent stake of Hong Kong-based Templeton Inc. in PNB. He also disclosed details of the procedures for the sale of the PNB shares, which, he said, will be transparent throughout the process. Pardo said the process would begin on May 15, when bidders will file their interest to participate by paying a small filing fee. He said the final opening of bids may be held on May 28 or 29, "with the understanding that the floor price will be set, known only to Mr. Tan and myself." To witness the procedure, he added, would be the governor of the Bangko Sentral ng Pilipinas BSP). The bids would be held in escrow to ensure the whole transparency in the process. "There is an indicative price that will be set. So both a floor price and an indicative price. The indicative price to be known I think by May 15 thereabouts. And the floor price unknown but to be opened simultaneously when the bids are opened," he said. In the meantime, he said, the government is happy with the breakthrough, especially because of Tan's earlier reluctance to sell his PNB shares. "The President imposed on Lucio Tan and reluctantly he agreed to put on the bloc his 46 percent, which was virtual control of PNB. So I think we are at least very happy that he had now formally in a binding contract agreed to be part of the sale," he said. (RP-Business Digest 24-April- 2000) PHIL. NATIONAL CONSTR.CO.: Gov't-stake auction in July ------------------------------------------------------ Continuing its selling spree on state-owned corporations, the Department of Finance (DoF) will put the government's 89% stake in Philippine National Construction Corp (PNCC) on the auction block this July. Finance Undersecretary Joel A. Ba�ares said the public bidding of PNCC shares will start in July as scheduled by financial advisor Development Bank of the Philippines (DBP). "It (PNCC) will be offered in July. We expect the audit to be submitted next month," he said in an interview. DBP is completing a due diligence on PNCC to be submitted to DoF in May. The Finance department will base its valuation of PNCC shares from the audit, Mr. Ba�ares said. To be sold are the combined shares of four government agencies in PNCC totaling 89.1%. Of this, 52% is owned by the Asset Privatization Trust. The Government Service Insurance System owns 23% stake; Land Bank of the Philippines has 0.3%; while the Presidential Commission on Good Government holds 13.8% PNCC has exclusive franchise to build toll roads in the country. This franchise will expire in 2008. The Economic Coordinating Council endorsed the firm's privatization in one of its meetings last January. (Business World 27- April-2000) URBAN BANK: Gov't to take over, as shares fall ---------------------------------------------- Urban Bank Inc. shares fell by a quarter after the Philippine central bank, Bangko Sentral ng Pilipinas, said it will take over the small commercial lender, which temporarily closed to halt a run on deposits. Urban Bank, a medium-sized lender with about 8 billion pesos ($193 million) in deposits, said last night it would shut its doors temporarily to stop a four-week decline in deposits. The closure came after Urban's board approved a merger with Banco De Oro, a bigger commercial lender owned by tycoon Henry Sy. "It's a case of liquidity problems more than anything else," central bank Governor Rafael Buenaventura said in a report broadcast by ABS-CBN Broadcasting Corp. "There has not been any wrong doing." It is the biggest government takeover of a bank since the Asian currency crisis in 1997 weakened many Philippine lenders. Urban Bank's stock dropped 25 percent to 90 pesos, its lowest level since March 16. Sixty shares changed hands, compared to 1100 shares on Monday when the stock surged 26 percent on its plans to merge with a larger bank. The stock didn't trade yesterday. The central bank chief said the temporary closure was the best option for Urban Bank since an emergency loan was deemed insufficient to stop the heavy withdrawals. The government will seize the bank no later than tomorrow and allow owners of deposits of less than 100,000 pesos to withdraw their money, Buenaventura said. Deposits above 100,000 pesos will be returned after a new owner is found for Urban Bank, which the central bank will seize along with the Philippine Deposit Insurance Corp., he said. Two investment banks were hired to advise on selling the bank. "Banco De Oro is still interested in buying Urban Bank but we want to maximize the price that the bank can get," Buenaventura said. Urban Bank said the closure will give it time to find a new owner and management if it can't push through with the merger with Banco De Oro. The bank has been experiencing heavy withdrawals of deposits in the last four weeks due to depositors' concern over reports the bank will downgrade its commercial lender license to that of a thrift bank, it said. (Bloomberg 25-April-2000) URBAN BANK: Henry Sy bank eyes acquisition ------------------------------------------ Despite the closure of Urban Bank, merger talks with mall tycoon Henry Sy's Banco de Oro Universal Bank (BDO) will continue, Urban Bank president and chief executive officer Teodoro C. Borlongan said. "As of this morning, (BDO president) Nestor Tan has stated that Banco de Oro is (still) interested in pursuing an acquisition-merger with Urban Bank," Mr. Borlongan told a news conference yesterday. This was confirmed by a statement from Mr. Tan, who said: "We are still interested in Urban and the bank holiday declared by Urban will give us more time to undertake additional due diligence for proper valuation." On the other hand, to speed up deposit releases, the Bangko Sentral's policy-making Monetary Board designated the Philippine Deposit Insurance Corporation (PDIC) as the receiver of Urban Bank during an emergency meeting yesterday. At the same time, Malaca�ang assured that the temporary stoppage of Urban Bank's operations is an "isolated case." A Palace official stressed the government is closely monitoring the situation. Press Secretary Ricardo V. Puno, Jr. also said President Estrada was briefed by Bangko Sentral (Central Bank) Gov. Rafael B. Buenaventura yesterday afternoon. "In fact, this matter has been under advisement for a number of years. There have been reports that there might be a situation so the central bank had been working on this matter," Mr. Puno added. Urban Bank declared a bank holiday effective yesterday after experiencing heavy withdrawals in the past month. Bank officials claim this was due to adverse publicity brought about by the downgrade of its banking license. The bank downgraded its banking license for two successive years, from being an expanded commercial bank, or a so- called "universal bank," to becoming a thrift bank and eventually converting into holding company. But Mr. Buenaventura said Urban Bank continues to be solvent, although it "appears to be unable to service maturing obligations." The Bangko Sentral chief said PDIC will move in aggressively to service clients with deposits of 100,000 Philippine pesos ($2,417 at PhP41.378=$1) and below. "We're in constant contact with (PDIC president Norberto C.) Nazareno," he said. "We will give PDIC access to the deposit records to facilitate the servicing." PDIC was also named receiver for Urban Bank's thrift bank subsidiary Urban Development Bank. Following the Monetary Board's decision, PDIC started receivership activities in the branches of troubled Urban Bank yesterday. In a telephone interview with BusinessWorld, PDIC president Norberto C. Nazareno said starting next Tuesday, the PDIC will pay off insured deposits up to a maximum of PhP25,000 ($604) per depositor. "It usually takes two to three weeks for PDIC to consolidate depositors' records...but we are paying off insured deposits next week to assure the public and retain its confidence in the banking industry," he said. In a statement, PDIC also said deposits of PhP5,000 ($121) and below will be paid in full while those above PhP5,000 will be paid the equivalent of 25% of the deposit liability but not exceeding PhP25,000. Full payment will be made as soon as PDIC completes the examination of Urban Bank's records. The PDIC chief said this will be the fastest turnaround period for PDIC since payoffs are usually done after the deposit insurer finishes examining all bank records -- the shortest time being two weeks. "I think examination of the (Urban Bank's) records will not take too long since (bank chairman Arsenio M.) Bartolome said their records are highly computerized," he added. The PDIC chief said Urban Bank has 15,000 deposits accounts worth PhP9.1 billion ($0.22 billion) while insured deposits are worth only PhP560 million ($13.53 million). He said this is a relatively low amount since Urban Bank caters to "high net worth" clients. The Bangko Sentral said other subsidiaries which fall outside its supervision and oversight powers will request for suspension of payments and the appointment of a rehabilitation receiver from the Securities and Exchange Commission (SEC). "The Bangko Sentral will be coordinating with the SEC regarding this matter," Mr. Buenaventura said. Urban Bank's investment house subsidiary, Urbancorp Investment, Inc., has also declared a suspension of payments and has asked the SEC to appoint a rehabilitation receiver. The Bangko Sentral and the SEC are evaluating the request and will make a joint announcement on this matter, a statement said. Mr. Puno said the President has left it up to the central bank and the SEC handle the problem. He said, though, that Urban Bank's financial woes were not taken up during the regular meeting of the Economic Coordinating Council yesterday afternoon, indicating the bank's problem is not a major concern. "It's pretty clear that this is an isolated matter. I think it should be made clear that this is not indicative of any kind of trend...This was a situation affecting only a bank and there is a structure and a process in place where the matter would be handled by the PDIC through receivership proceedings through the SEC," Mr. Puno added. Be that as it may, BDO remains interested in Urban Bank. "BDO was, and continues to be, interested in the commercial bank operations of Urban Bank," Mr. Buenaventura said. "The bank holiday will help because it will give (the buyer) more time to perform the due diligence." Mr. Borlongan said Urban Bank and BDO will have 90 days to make a decision. He said Yuchengco-owned Rizal Commercial Banking Corp. (RCBC) also has expressed interest in Urban Bank. "Only this morning, they called indicating interest and wanted us to give them some documents...This morning I got a call from (RCBC executive vice-president) Cesar Rubio and he said RCBC would also be interested in looking at the bank," he said. But this was denied by RCBC. Virgilio Pantaleon, official spokesman for the RCBC group, said late yesterday afternoon: "On behalf of RCBC, I would like to say it's not true." In a disclosure, Urban Bank said it decided to go an voluntary bank holiday to preserve its remaining assets. Bank chairman and founder Arsenio M. Bartolome III said the bank is planning to hire Salomon Brothers and Standard Chartered Bank as financial advisors. For the last four weeks, the bank serviced PhP4.1 billion ($0.099 billion) worth of deposit withdrawals and pre- termination of placements with the bank. The figure excludes another PhP1 billion ($0.024 billion) worth of withdrawals last Tuesday, the disclosure stated. "(Last) Monday, we had about PhP800 million ($0.019 million) worth of withdrawals which we were still able to make good. Yesterday, we had about PhP1 billion ($0.024 billion) in withdrawals. We said: I guess it's time to declare a bank holiday," Mr. Borlongan said. Urban Bank has a deposit base of PhP9.5 billion ($0.23 billion), while investment house Urbancorp Securities Inc. has a fund base of about PhP5 billion ($0.121 billion), he said. "For the past four weeks, almost five weeks beginning in the week of March 13, Urban Bank has serviced and made good withdrawals totalling PhP4 billion ($0.97 billion)," he added. "We should also consider that no medium-sized commercial bank can withstand a withdrawal of PhP4 billion ($0.97 billion) in a period of four weeks. In our case, we are even net lender to the international market. We never availed of the emergency loan and the rediscounting window," Mr. Bartolome said, stressing, however, the bank is "very solvent." He said the bank's board decided against availing of the emergency loan and rediscounting "strongly offered" by Bangko Sentral since a bank holiday would be "in the best interest for everyone, given the trend" of heavy withdrawals. Mr. Borlongan said the bank was able to service part of the withdrawals by calling in the PhP2.4-billion ($0.058- billion) loan to the National Food Authority, which had government guarantee. "By declaring a bank holiday, we are able to preserve the quality of assets as compared to a situation where we availed of emergency loans...we would have mortgaged our prime assets," Mr. Bartolome added. He said Urban Bank will "most likely" call in an existing PhP1.3-billion ($0.031-billion) loan to Metro Pacific Corp. collateralized by Fort Bonifacio shares. Another asset is the Urban Bank Plaza, which has a book value of more than PhP30,000 ($725) per square meter, Mr. Borlongan said. The building is 45%-owned by the bank, the remaining of which is owned by Urbancorp Realty, Inc. "If we are to take an independent appraisal of this building, it has an appraisal surplus of almost PhP1 billion ($0.024 billion)...We were looking at acquiring other banks, precisely to take advantage of the incentives that would allow us to revalue the capital," he said. "We are almost 70% occupied. We have James Martin who occupies two floors, General Milling one and a half floors; Total Petroleum, two floors, Insurance of North America, our latest tenant is one floor, DHL, one floor," he added. Meanwhile, state pension fund Social Security System (SSS), which has a 15% stake in Urban Bank, said it is confident the present management can weather the bank's present problems. "We have confidence in the people running it...people who have invested in the bank are conservative investors," SSS executive vice-president Horacio T. Templo said. Mr. Templo also ruled out the bank having problems with loans extended to its directors, officers, stockholders and related interests (DOSRI). "The bank does not have problems with DOSRI...we conducted a due diligence on the bank last year and we found none," he recalled. (Business World 27-April-2000) WESTMONT INVEST.CORP.: SEC body recommends CDO ---------------------------------------------- The brokers and exchanges department (BED) of the Securities and Exchange Commission (SEC) is recommending a cease and desist order (CDO) against bankrupt investment house Westmont Investment Corp. (Wincorp). SEC sources said the BED recommendation will be taken up today at the regular meeting of the commission en banc. The sources said Wincorp, whose debts piled up to P7 billion, violated several rules governing the issuance of long-term commercial papers (LTCPs), among them, the investment house's failure to register such LTCPs. "Contrary to Wincorp's claims, we don't believe their assertions that they did not borrow funds for their own accounts but merely brokered and re-lent it to other borrowers. There is evidence showing that the proceeds from the loans were deposited in the accounts of several of Wincorp's shareholders," the sources added. The BED had earlier recommended a CDO for Wincorp, but the commission en banc directed it to strengthen further the legal basis for issuing such an order. A number of Wincorp investors earlier asked the SEC to conduct an investigation of stockholders and owners of the firm, including United Overseas Bank (UOB), formerly Westmont Bank. Apollo X.C.S. Sangalang, legal counsel for the unnamed investors who are both depositors of UOB and holders of securities issued by Wincorp., urged the SEC to expand the scope of the probe and to look into the past and present stockholders and beneficial owners, directors, officers and employees of the investment house and the bank. Sangalang said there is legal basis for recommending that Wincorp and Westmonk Bank-UOB be prosecuted administratively and criminally for various violations of the Revised Securities Act. The investors claimed that through branch offices and personnel of UOB, they were lured into diverting funds previously deposited with the bank, and transferring their investments in securities offered by Wincorp in the form of a "confirmation advice." Sangalang said the confirmation advice was made to appear that the investors invested their "hard-earned money" in previously undisclosed third party "borrowers," and that Wincorp merely brokered the transactions. "Our clients were conditioned to believe that they were investing in securities guaranteed and/or underwritten by Westmont Bank-UOB and/or Wincorp as they were never shown any prospectus, financial statement or debt instrument issued by these alleged "borrowers." Sangalang said that a check showed the alleged borrowers eventually turned out to be merely fronts of some of the past and present beneficial owners, stockholders directors and officers of Westmont-UOB and Wincorp. "Based on these, Westmont Bank-UOB and/or Wincorp clearly violated the RSA by offering to the general public securities which are not exempted from SEC registration, by way of a transaction which is likewise not exempted. (Philippine Star 27-April-2000) ================= S I N G A P O R E ================= FHTK HOLDINGS: In restructure talks ----------------------------------- FHTK Holdings Ltd said it is in advanced discussions with major creditors on its debt restructuring plan. The company and its independent financial advisor, Arthur Andersen are "in advanced discussions and negotiations" with the company's major creditors, especially its bank creditors on the terms of its restructuring plan. FHTK said its major bank creditors have continued to support the company pending the finalisation and implementation of the restructuring proposal. (AFX News Limited 26-April-2000) ITE ELECTRIC CO.: Gives lenders three options --------------------------------------------- ITE Electric Co Ltd said it has given three options to lenders of its 10 mln sgd transferable revolving credit facility connected with its property at Harrison Road. In a statement to the stock exchange, ITE Electric said it is offering to sell and then lease back the property, mortgage the property or use the funds from the warrants conversion as part repayment of the credit facility. ITE Electric had breached certain financial covenants pertaining to the credit facility. It said the first option will enable the company to repay the credit facility in full, while the second option will involve further negotiations with the lenders. If the third option is adopted, ITE will only be able to repay part of the credit facility and would have to negotiate the rescheduling of the repayment of the remaining amount for another three years. ITE said it has sufficient working capital to continue as a going concern, pending the outcome of its negotiations with its lenders. Except for some loss-making companies within the group, and the breaches of certain financial covenants, ITE is operating normally in all its businesses, it added. (AFX News Limited 26-April-2000) =============== T H A I L A N D =============== EASTERN WIRE PUBLIC CO.: Reports on subsidiary's rehab ------------------------------------------------------ The Eastern Wire Public Co.,Ltd (EWC), through Miss Chomphunut Kromkroam, Senior Vice President, hereby reports on the progress of the Rehabilitation plan and Debt Restructuring of its subsidiary, Rayong Wire Industries Co. Ltd., that most of creditors signed in the contract of Debt Restructuring on March 27, 2000 and only 2 creditors are under the process of signing. All creditors of the company's subsidiary have completed singing the contract of Debt Restructuring on April 3, 2000 and the company is now under negotiation to accomplish its Debt Restructuring plan, which is expected to be competed within the time as set by the SET. (Stock Exchange of Thailand 26-April-2000) SIAM SYNTEC CONSTRUCTION: Submits debt plan WONGPAITOON FOOTWEAR GROUP: Submits debt plan --------------------------------------------- The Central Bankruptcy Court has received rehabilitation plans from Siam Syntec Construction Plc (Syntec) and Wongpaitoon Footwear Group Plc, which owe creditors about Bt8.34 billion and Bt3.63 billion respectively. The Court has set a hearing date for May 22. Syntec had 1,482 creditors that it owed Bt 8.34 billion as of December last year, secretary to the Central Bankruptcy Court Pornchai Asawawttanaporn said. Syntec said its hefty debt burden was a result of the country's devaluation of the baht, which led to a high foreign-debt burden as well as the company's illiquidity. Syntec Planning Co Ltd has applied to be planning consultant for the rehabilitation. In the Wongpaitoon rehabilitation plan, Wongpaitoon and the Siam Commercial Bank have applied to be planning consultants. The company owes 329 creditors Bt3.63 billion. Wongpaitoon, a leading subcontractor for Reebok sports shoes, had expanded its production capacity, but the company has struggled amid the country's economic difficulties. The Stock Exchange of Thailand had suspended both companies' trading. The Syntec share price closed at Bt0.50 on November 27, 1998 while Wongpaitoon's share price closed at Bt3.10 on March 7 this year. (The Nation 26-April-2000) SRIVARA REAL ESTATE GROUP: Files for restructuring -------------------------------------------------- The Daily Manager Newspaper dated April 12, 2000 had reported that Thai Strategic Asset Fund by One Assets Management Limited had filed a Restructuring Request of Srivara Real Estate Group PCL. at the Bankrupt Court on April 11, 2000. After confirmation with the Bankrupt Court, Thai Strategic Asset Fund by One Assets Management has assigned Asset Recovery Co. Ltd., who reassigned to Far East Law (Thailand) Co. Ltd to file the request. The court accepted the Restructuring request and will testify the menit of request on May 8, 2000. (Stock Exchange of Thailand 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $575 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***