/raid1/www/Hosts/bankrupt/TCRAP_Public/000501.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

             Monday, May 1, 2000, Vol. 3, No. 84

                                     Headlines


* A U S T R A L I A *

BONLAC: To close 4 dairy plants, shed 300 workers
MITSUBISHI AUSTRALIA: Loses $130m, cuts jobs
MITSUBISHI AUSTRALIA: Japan orders it to cut losses
SPORTSCRAFT-SPORTSGIRL: Debt deed backed by Truworths
SPORTSGIRL-SPORTSCRAFT:Creditors to gain beyond liquidation
TELSTRA CORP.: Stock drops, debt rating may too


* C H I N A  &  H O N G  K O N G *

GITIC ENTERPRISES: Tak Wing adds Gitic unit to revamp
LAI SUN GROUP: Red ink keeps on flowing


* I N D O N E S I A *

PT BANK BAPINDO: Sued for not completing loan
PT BANK BUKOPIN: Sued for not completing loan
PT BANK BUMI DAYA: Sued for not completing loan
PT BANK DANAMON: Sued for not completing loan
PT BANK INT'L INDONESIA: Sued for not completing loan
PT BANK NIAGA: Sued for not completing loan
PT BANK PELITA: Sued for not completing loan
PT BANK RAMA: Sued for not completing loan
PT BANK TIARA: Sued for not completing loan
PT BANK UNIVERSAL: Sued for not completing loan
PT FISHAR AGUNG: Ordered by court to honor loan agreement
PT PANIN BANK: Sued for not completing loan
PT SUMI ASIH: Court rules against IBRA


* J A P A N *

YAKULT HONSHA CO.: Groupe Danone to take over?
NISSAN DIESEL MOTOR CO.: Omitted from Renault-Volvo deal
SOGO CO.: Posts five-fold increase in net loss
SOGO CO.: Future hanging as banks consider debt waivers


* K O R E A *

DAEWOO MOTORS: Renault's inroad supports Hyundai's bid
HYUNDAI GROUP: Stock plunges on liquidity shortage rumors
HYUNDAI GROUP: To let go of several affiliates
HYUNDAI INVESTMENT TRUST: Dragging down parent, stock
HYUNDAI INVEST.TRUST: Gov't may extend low-interest loans
KOOKMIN LEASING: Falters, wants to reschedule debts
SAMSUNG MOTORS: Remains auto biz player despite takeover


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

OCE PLANS: SEC to sell condo units, stocks
PHILIPPINE NAT.BANK: Pre-qualification bidding to start
URBAN BANK: BSP orders closure
URBAN BANK: Stock market loss leader
URBAN BANK: To reopen in a month


* T H A I L A N D *

BANGKOK METRO.BANK: HSBC still most likely buyer
SANSIRI PLC: Expects to finish debt restructure this year
SIAM CITY BANK: Likely to take KTB-road on debt
THAI TEL.& TEL.: Expects new partner by August
WONGPAITOON GROUP PLC: Reports on debt restructuring plan


=================
A U S T R A L I A
=================

BONLAC: To close 4 dairy plants, shed 300 workers
-------------------------------------------------
Australia's second largest dairy company, Bonlac, is to
close four plants in Victoria and Tasmania, resulting in
the loss of 300 regional jobs.

Over the next five months, the company will close the four
manufacturing plants - at Drouin and Toora in Gippsland in
Victoria's south-east, at Camperdown in western Victoria,
and at Legerwood in Tasmania.  Production will be
transferred to other operations within Bonlac to ensure
continuity of supply to customers in Australia and
overseas, Bonlac said in a statement.

Bonlac chief executive office Alex Sloan said the company
would concentrate production at its most efficient plants
in Victoria and Tasmania as it pursued greater efficiencies
and improved returns for farmers.

A total of about 300 jobs would be shed across the company,
Bonlac said, with a small number of new positions being
created by the transfer of some production activities.

"The changes are necessary to ensure an improved return to
our supplier shareholders and to enhance the future
prospects and financial strength of the company," Mr Sloan
said.  "Naturally we understand the impact this will have
on many people within and outside the company, and we will
be working hard to assist those who will be affected. We
also know that our decisions will impact on some
communities and we will consult local authorities to find
ways of minimising the impact."

Mr Sloan said inefficiencies had been built into Bonlac's
infrastructure through mergers and acquisitions over 15
years.

"The reality is that today we have 13 production sites
compared with only five operated by a similar sized
cooperative," he said. "This legacy had an inevitable
effect on our recent performance and the board has decided
to address the issue by focusing on key sites that will be
developed as centres for excellence."  (Sydney Morning
Herald  28-April-2000)

MITSUBISHI AUSTRALIA: Loses $130m, cuts jobs
--------------------------------------------
Mitsubishi Motors Australia plans to slash about 600 jobs
after posting a $130 million loss for calendar 1999.

The job cuts are part of a restructure announced today by
the company. It said this was aimed at restoring the
viability of its operations.

Chairman and managing director Norio Takehara said the loss
for the year ending December 31, 1999, was a result of
lower margins because of adverse currency exchange
movements, global over production and a softening of
domestic demand in the latter half of the year.

"Our parent company, Mitsubishi Motors Corp, has made it
clear that we have to address costs to become profitable
therefore we must undertake strategic restructuring to
guarantee Mitsubishi Motors' strong future in Australia,"
Mr Takehara said.

He said the necessary restructuring would involve a
reduction in the company's workforce.

"We simply have to become more efficient and flexible as a
low volume producer in a global market," he said.  "This
difficult decision will help us to achieve a leaner and
more robust management structure that will guarantee the
future of MMAL's (Mitsubishi Motors Aust) core operations
for Adelaide ...."

About 600 positions, most of them at the white collar and
managerial levels, would be removed in the restructure.
The restructure would not affect employees directly
involved in vehicle production.

"We have done all that we can to minimise the number of
lost positions and will continue working tirelessly to
achieve this restructuring through voluntary redundancies,"
Mr Takehara said.

He said the company was optimistic about the second half of
2000, with the introduction of the new Pajero and a major
upgrade to the Magna later this year.  Federal Industry,
Science and Resources minister Nick Minchin said the loss
of 600 jobs was regrettable but noted that the "global
reality is that the automotive industry is undergoing great
change".

Senator Minchin said that if Mitsubishi was to remain
viable in Adelaide long term, it had to be competitive
internationally. (Australian It  27-April-2000)

MITSUBISHI AUSTRALIA: Japan orders it to cut losses
---------------------------------------------------
Mitsubishi's Adelaide operations have been told to return
to profitability by the end of the year to ensure their
future.

Mitsubishi Motors Corporation president Katsuhiko Kawasoe
said yesterday Mitsubishi Adelaide would present a
restructuring proposal to head office within days outlining
how it would achieve its target.  He presented Mitsubishi's
plans to cut costs worldwide just hours after the State
Government announced former Mitsubishi chief Graham
Spurling would head a new taskforce to boost South
Australia's motor industry.

"The Australian operations don't even touch the break-even
point and in order to continue the businesses we have to
see them even or plus," Mr Kawasoe told a press conference
in Tokyo.

But Mr Kawasoe made it clear he did not expect to have to
shut down the Adelaide plants at Lonsdale and Tonsley Park
the clearest indication yet they have a future in
Mitsubishi's global alliance with DaimlerChrysler,
announced in March.

"I hope there would be no need to do that if the plants
restructure properly," he said.

Mitsubishi Adelaide executives could not be contacted for
comment last night. However, The Advertiser understands
cuts to the engineering, design and information technology
departments which employ hundreds of Mitsubishi's 4000
workers are central to its restructure.

Australian sales of Mitsubishi cars fell 17 per cent last
year, to 69,923 vehicles.  Mr Kawasoe said yesterday
Mitsubishi aimed to save $800 million around the world by
cutting costs in passenger car operations over the next
four years.  Part of this would be achieved by Heartbeat
21, a program of joint buying of materials and parts with
DaimlerChrysler.

Graham Spurling, who was managing director of Mitsubishi
from 1981 to 1987, will work with a panel of experts from
the public sector to lobby new and existing vehicle and car
component manufacturers.

"There are some critical times ahead and we want to lay the
foundations for a long-term future of manufacturing
industry in this state," Mr Spurling said yesterday.
"That's really what I am here to try like hell to do."

The taskforce has been asked to report within three months.
Its main aims are to ensure Mitsubishi maintains its
manufacturing operations in SA and to try to get Holden to
build a new engine plant in Adelaide.

Premier John Olsen said yesterday the automotive industry
was undergoing rapid change at an international level and
it was important SA was positioned to take full advantage
of the opportunities that arose.  Others on the taskforce
are Bob Manning of the Centre for Manufacturing, and Nigel
Trewartha and Lorenzo Pizza of the Industry and Trade
Department.

The taskforce's key terms of reference are to:  EXAMINE all
possibilities for securing the long-term manufacturing
future of Mitsubishi in Adelaide to preserve existing jobs
and investment; PRESENT a business case to Mitsubishi's
parent companies to retain manufacturing in Adelaide and to
examine options for future manufacturing in SA; INVESTIGATE
the level of government assistance required to secure
Mitsubishi's long-term manufacturing in Adelaide; ASSIST
the Premier in making direct representations to key
Mitsubishi decision-makers.

Mitsubishi announced early this year it had secured a $500
million investment program to develop and build a new Magna
from 2005 until 2012 but up to 800 jobs would be lost.
Mr Spurling appointed on a consultancy basis said it was a
very important task which he undertook very willingly.

He said the car industry was in "various stages of
tightness" with markets going up and down. "We have just
got to help stabilise all that." (The Advertiser  27-April-
2000)

SPORTSCRAFT-SPORTSGIRL: Debt deed backed by Truworths
-----------------------------------------------------
Truworths, the South African-based former owner of the
troubled Sportscraft-Sportsgirl retailer, used its voting
power as a major creditor to push through a debt compromise
at a lengthy meeting of angry creditors yesterday.

Despite opposition from several major creditors, the
meeting passed a resolution supporting the proposal, under
which Truworths - which is owed about $77 million - will
forgo half the money owed to it.

In return for the resulting increased payout to others, the
deed of arrangement provides that unsecured creditors will
take no further action against Truworths or its directors,
or the directors and former directors of Sportsgirl in
relation to the fashion chain's operations or affairs.

A number of creditors believe the administrators, John
Spark and James Stewart of Ferrier Hodgson, did not
sufficiently pursue the management of Sportsgirl and its
related parties for possible insolvent trading. They argue
that Truworths should not have been permitted to vote, and
that the result constituted an oppression of minority
shareholders.

Melbourne insolvency practitioner Paul Pattison,
representing several creditors who opposed the Truworths
plan, said immediately after the hostile four-hour meeting
that aggrieved creditors were considering legal action.

"The creditors (I represent) are outraged by it," he said.
"We want a liquidator to go in there and investigate the
conduct of the officers (in relation to) the losses of the
company and the insolvency of the company."

He said that if insolvent trading had occurred, and the
related parties were excluded from the payout, the dividend
to creditors could potentially rise to 100 cents in the
dollar. Mr Pattison said he expected to institute
proceedings in the Supreme Court of Victoria within seven
days, asking the court to set aside yesterday's resolution
and appoint a liquidator.

Sportsgirl - which changed its name to Redfern Road Pty Ltd
when the Sportsgirl arm was sold to Marc Besen's Sussan
Corporation in December - went into voluntary
administration on November 25, 1999. Truworths had been
seeking a buyer and further funding for the retailer since
October.

Ferrier Hodgson has overseen sales of the Sportsgirl, David
Lawrence and Aywon businesses, and some Sportscraft stock
and plant. About $50 million has been realised from trading
and business sales. After payment to priority creditors and
other sums, about $10million will be left for the remaining
creditors, who are owed about $100 million. The deed of
arrangement will significantly increase the available
funds.

Mr Spark said that investigations by the administrators
indicated that Sportsgirl might have traded while it was
insolvent. But they concluded there was only a low prospect
of creditors achieving a commercial benefit through
litigation, which was likely to be costly and time
consuming, as well as difficult to prove. Instead, they
recommended adoption of the deed of company arrangement
proposed by Truworths.

The proposal, which required approval from a majority of
creditors by value and a majority of creditors by number,
was passed by 91.4 per cent in value (Truworths and related
parties represent about 77 per cent of that) and by 80 per
cent in number. (The Age  27-April-2000)

SPORTSGIRL-SPORTSCRAFT:Creditors to gain beyond liquidation
-----------------------------------------------------------
Unsecured creditors to the failed Sportsgirl Sportscraft
fashion chain could receive up to 39 cents in the dollar,
after the group's financial affairs are finalised.

A meeting in Melbourne has approved a plan to give about
800 creditors more than twice what they would have received
under liquidation.  In exchange, the directors would be
protected from further claims.

Several creditors wanted to push ahead with liquidation
then sue the directors for breaches of duty, and trading
while insolvent. But administrator, John Spark, says the
outcome is fair.

"This form of administration which Australia brought in
some years ago, basically sets a commercial settlement at
an earlier time, to deal with a wide range of company
issues," he said.  "And really, this is a normal situation,
if someone has to give up something, they want to get
something in return."  (ABC News Online  27-April-2000)

TELSTRA CORP.: Stock drops, debt rating may too
-----------------------------------------------
Australia's ASX200 Index fell 24.40 to 3092.90, with
Telstra Corp. falling 0.8 percent to A$7.58.

The Australian Financial Review reported that the
connection fees that Telstra will have to cut its charges
to competitors wishing to use its network to about 1.7
Australian cents a minute.

Telstra's debt rating may be cut by Moody's Investors
Service and Standard & Poor's Corp. after they said the
majority government-owned phone company's financial profile
will probably weaken because of a 100 percent debt-funded
US$3 billion investment in Hong Kong's Pacific Century
CyberWorks Ltd.  (Bloomberg  27-April-2000)


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

GITIC ENTERPRISES: Tak Wing adds Gitic unit to revamp
-----------------------------------------------------
Tak Wing Investment (Holdings) aims to transform Gitic
Enterprises so that the newly acquired unit fits into the
property developer's diversification plans.

Tak Wing aims to trim its property-investment portfolio and
diversify into information technology.  Tak Wing has agreed
to buy 32.09 per cent of Gitic Enterprises from liquidated
parent Gitic Hong Kong (Holdings) for 80 million yuan
(about HK$74.84 million).

Gitic Hong Kong (Holdings) parent, Guangdong International
Trust & Investment Corp, went bankrupt in January last
year.  After an extraordinary general meeting of
shareholders, Tak Wing managing director Tony Tong Nai-kan
said plans for the acquired company would be revealed after
the deal was completed.  Shareholders voted to give Tak
Wing a general mandate to issue up to 20 per cent of its
ordinary share capital as well as to allow it to increase
its share capital from HK$400 million to HK$1 billion.

Mr Tong said the proceeds from the fund-raising would be
used to finance Tak Wing's move into information
technology.  He said Tak Wing was considering investing
about HK$1 billion in projects related to computer software
development, satellite broadband access to the Internet and
electronic commerce.

Mr Tong said Tak Wing might sign an agreement to invest in
a high technology project next month and he might inject
business-to-business Web sites in which he has personally
invested, into Tak Wing when they mature.  The sites serve
mainland companies and one of them is expected to list in
Singapore, Mr Tong said.

Tak Wing would borrow HK$60 million from investors at an
annual interest rate of 18 per cent to partly finance the
acquisition of Gitic Enterprises and settle the balance
with internal cash resources. (South China Morning Post
28-April-2000)

LAI SUN GROUP: Red ink keeps on flowing
---------------------------------------
Lai Sun Group is still bleeding red ink, with most group
companies led by Lai Sun Development, reporting substantial
losses yesterday.

Beleaguered Lai Sun Development trimmed its interim losses
marginally, reporting a $1.34 billion loss in the six
months ended January 31, down from $1.37 billion in the
previous corresponding period.  Lai Sun Development told
the Stock Exchange that turnover rose to $983.1 million
from $911.3 million.

Its share of losses from associated companies fell to $45.7
million from $196.5 million previously, Lai Sun Development
said. The result reflected exceptional losses of $559.7
million in write-downs for a property being developed, and
$649.3 million in write-downs in the value of hotel
properties.

Lai Sun Garment (LSG) said net losses in the six months
ended January 31 fell to $515.8 million from $616.8
million.  LSG's loss included an exceptional loss of $559.7
million in write-downs for the value of a property being
developed.  LSG also reported an exceptional loss of $649.3
million in provisions for falls in the values of hotel
properties.

Lai Sun Hotels International (LSH) reported a spike in net
losses in the year ended December 31 posting net losses of
$884.8 million, compared with a loss of just $49.8 million
in calendar 1998.   Crocodile Garments trimmed its net loss
attributable to shareholders for the six months to 31
January 2000 to $13.81 million, a significant improvement
of 75 per cent from the previous loss of $55.76 million.

During the period under review the company recorded a $4.62
million exceptional profit mainly from forfeiture of
deposits paid by a buyer for a property owned by Crocodile,
compared with an exceptional loss of $6.96 million from
severance payments for streamlining the Hong Kong
operations registered a year ago.

Chairman Lim Por-yen said the improved result for Crocodile
reflected its emphasis on marketing and sales strategy.
The group also saw a significant growth from its mainland
operation which recorded a 28 per cent growth in turnover
and 92 per cent rise in profit before tax.  Mr Lim said the
group will take advantage of the improving economic
environment and plans to establish new retail shops in
prime districts in Hong Kong and close under-performing
shops in fringe locations.

Bucking the trend, Lai Fung Holdings posted a profit of
$4.12 million for the six months ended 31 January 2000,
although it was down almost 30 per cent on the previous
period.  Chairman Lam Kin-ngok blamed the decline in net
profit to the rental guarantee granted to purchasers of
Hong Kong Plaza, which is continuously pressuring company
results.

During the period under review, the real estate market on
the mainland showed supply outstripping demand, he said.
The significant growth in turnover was attributed by sales
at the second phase of the Eastern Place project in
Guangzhou, which was completed in January.

Looking ahead, Mr Lam said Lai Fung will explore IT and
high-tech investment opportunitites with Bank of China and
other mainland entities.  He sees the group's operating
income to continue improving, helped by the increase in
equity holding of Hong Kong Plaza and the opening of Tianhe
Entertainment Plaza in Guangzhou. Tianhe, in which the
group has a 25 per cent interest, was completed in late
1999.  Construction of the third phase of Eastern Place is
to start in the second half of this year, Mr Lam said.
(Hong Kong Standard  28-April-2000)


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

PT BANK BAPINDO: Sued for not completing loan
PT BANK BUKOPIN: Sued for not completing loan
PT BANK BUMI DAYA: Sued for not completing loan
PT BANK DANAMON: Sued for not completing loan
PT BANK INT'L INDONESIA: Sued for not completing loan
PT BANK NIAGA: Sued for not completing loan
PT BANK PELITA: Sued for not completing loan
PT BANK RAMA: Sued for not completing loan
PT BANK TIARA: Sued for not completing loan
PT BANK UNIVERSAL: Sued for not completing loan
PT PANIN BANK: Sued for not completing loan
------------------------------------------------------
A syndicate of 11 banks led by PT Bank Internasional
Indonesia and PT Bank Niaga have been sued by PT Citra
Samudera Petikemas for failing to provide a 75.5 mln usd
loan.

Based on a credit agreement signed on June 30, 1997, the
creditor banks agreed to lend 75.5 mln usd to Citra
Samudera to finance the construction and operation of a
cargo terminal in Surabaya, Citra Samudera's lawyer Wahyu
Iman Sidarta said.  The terminal was a joint project
between Citra Samudera and state-run PT Pelindo III.  PT
Citra Samudera Terminal Petikemas is controlled by former
president Suharto's eldest daughter Siti Hardiyanti
Rukmana.

Sidarta said Bank Niaga and BII have only lent 1.1 mln usd
out of their original commitment of 9.25 mln usd each. The
other banks in the syndication are state-run PT Bank Bumi
Daya (merged with PT Bank Mandiri), PT Bank Pelita
(closed), PT Bank Danamon, PT Bank Bukopin, PT Panin Bank,
state-run PT Bank Bapindo, PT Bank Universal, PT Bank Rama
and PT Bank Tiara (closed).

Wahyu said under the agreement the banks agreed the cargo
terminal project was feasible to be used as collateral for
the loans.  "But since then the banks did not extend the
loans that they have agreed. And as a result, Citra
Samudera's contract with PT Pelindo was cancelled," he
said.

Their commitments are below the agreed 9 mln usd each.
"The banks did not pay the loans although Citra requested
several times," he added.

However, one of the bank's lawyers, Benny Harman, said his
clients failed to fulfill the agreement purely because of
the economic crisis. Moreover, he said the agreement also
stipulated the participating banks retained the right to
not disburse the loans.

Wahyu said his client has spent around 1.4 mln usd for
paying fees as well as the interests on the 1.1 mln usd
loan it received.  "Bank Niaga also requested our client to
pay a success fee for the release of 1.1 mln usd loan," he
said.

Wahyu said his client had lost contracts due to the
creditors' failure to supply the loans and therefore sought
a court ruling to require the creditors to pay for the
debts resulting from the loss of the contracts.  The
payments include 6 mln dm, for the cancellation of a
contract with Nohl Stahl); 2.5 mln usd for a lost contract
with Kone Crances Corp; and 2 bln rupiah for a lost
contract with Highpoint Bendel Indonesia.

Wahyu said Citra Samudera also requested the court to
cancel the loan syndication agreement and to seize Bank
Niaga's building and BII's building.  The case will be
heard at South Jakarta lower court.  (AFX News; World
Reporter  25-April-2000)

PT FISHAR AGUNG: Ordered by court to honor loan agreement
---------------------------------------------------------
The Jakarta commercial court has ordered PT Fiskar Agung to
to honor 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; World Reporter
26-April-2000)

PT SUMI ASIH: Court rules against IBRA
--------------------------------------
The Jakarta commercial court said it rejected the
Indonesian Bank Restructuring Agency's bankruptcy petition
against PT Sumi Asih, citing lack of evidence relating to
the size of the debt and to IBRA's status as creditor.

Judge I Gusti Nyoman Putra said IBRA and Sumi Asiah gave
different versions of the, while IBRA could no show
evidence regarding details of the debt terms.

"The amount of debt must be verified first by the court,"
he said.

Putera said according a financial report audited by
Prasetyo Utomo, Sumi Asih owes 1.4 mln usd to PT Bank
Pelita and 2.5 mln usd to PT Bank Umum Nasional. IBRA put
Sumi Asih's outstanding debt at 73.937 bln rupiah and 6.728
mln usd as of January.

"The litigation is rejected because it does not meet the
requirements for a bankruptcy petition," he said.  (AFX
News Limited  27-April-2000)


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

YAKULT HONSHA CO.: Groupe Danone to take over?
----------------------------------------------
Shares in Japanese dairy beverages firm Yakult Honsha Co.
Ltd. soared Thursday on market rumours of a takeover bid by
its minority stakeholder Groupe Danone of France.

Yakult Honsha gained 100 yen or 10.31 percent to close at
1,070 yen on the Tokyo Stock Exchange on the rumours, which
the company downplayed.

"I understand that such a rumour is circulating in the
market, but I can assure you that the rumour is (just)
rumour," a Yakult spokesman said. "We have not received any
request from Danone about a possible increase in
equity interest in our company."

Danone currently holds directly and indirectly almost five
percent of Yakult Honsha capital.  The Japanese firm was
vulnerable to a takeover after its involvement in the
"Princeton" bond fiasco, dealers said.  Yakult and its
former vice president are being prosecuted for allegedly
buying the shady bonds from Cresvale International Ltd. to
hide losses on securities.  Cresvale, an offshoot of US
parent firm Princeton Economics International Ltd., filed
for bankruptcy with the Tokyo District Court in December.

"Yakult suffered huge losses linked to Princeton bonds, and
this has led to rumours that it is a target of an M and A
(merger and acquisition)" by Danone, said Tsuyoshi Segawa,
Sakura Securities' equity department head.  "Yakult is a
very familiar brand name in the food sector among Japanese
consumers, and its income is stable.  But it is
questionable whether we can expect future growth."

On April 13 Danone said it was holding talks with Yakult
Honsha aimed at securing an alliance in the probiotics
market which may lead to an exchange of capital.
Probiotics are a healthy product made from fermented milk
sold by both companies.  (Agence France Presse  27-April-
2000)

NISSAN DIESEL MOTOR CO.: Omitted from Renault-Volvo deal
--------------------------------------------------------
Truck maker Nissan Diesel Motor Co has been left out of a
truck production deal announced yesterday by French car
maker Renault SA and Sweden-based Volvo AB. Volvo will take
over truck operations from Renault and Renault will acquire
15 per cent in Volvo.

Although Renault owns 22.5 per cent in Nissan Diesel,
making it the largest shareholder along with Nissan Motor
Co, Nissan Diesel has been sidelined from the deal. The
acquisition by Volvo of the struggling Nissan Diesel would
have hurt Volvo's balance sheet, and Nissan Diesel's
exclusion could touch off a realignment among Japanese
truck makers, industry analysts say. (Asia Pulse  26-April-
2000)

SOGO CO.: Posts five-fold increase in net loss
----------------------------------------------
Sogo, a leading Japanese department store operator,
yesterday announced a five-fold increase in its group net
losses for 1999.

The results underline the troubles facing the country's
retail sector and raise concerns for its fragile banking
sector, as loans to troubled retailers sour. Consolidated
net losses reached Y137.6bn (Dollars 1.29bn), while pre-tax
profits excluding exceptionals plunged 23 per cent to
Y518m. Sales were also down, falling 6.6 per cent to
Y155bn. The retailer forecast a pre-tax loss of Y7m this
year.

The results came as government statistics revealed retail
sales had declined for the 36th consecutive month. The
trend has dealt a painful blow to debt-ridden companies
such as Sogo, which is struggling under Y1,700bn of group
liabilities - the result of overexpansion during the
"bubble" era. The retailer also revealed a capital
deficit of Y580bn.

This month it appealed to 73 creditor banks to forgive
Y639bn of debt, the largest request Japan has seen. This
comes as traditional retailers struggle to compete with
discount stores and follows this year's collapse of
Nagasakiya, a supermarket operator, in the sector's biggest
post-war bankruptcy.

It is unclear whether the banks will grant the request.
Sogo's biggest creditor, the Industrial Bank of Japan, has
indicated that it will forgive its debt, but other banks
are non-committal.  Nippon Credit Bank, another big lender,
is under state control after collapsing in 1998, making it
difficult for it to forgive Sogo's debt.

Sogo could find it even harder to win debt forgiveness if
the economy shows signs of recovery. Some bankers believe
this could lead some banks to pull the trigger on companies
such as Sogo, especially if they have adequate reserves
against these loans defaulting.  In a sign that banks are
stepping up their efforts to clean up their balance
sheets, two leading banks yesterday said they would double
the amount of loan loss charges for 1999.

Asahi Bank said it would write off Y202bn of loans instead
of the Y100bn it had previously forecast, while Daiwa Bank
will write-off Y135bn, compared with its earlier estimate
of Y75bn.  (Financial Times {London}  27-April-2000)

SOGO CO.: Future hanging as banks consider debt waivers
-------------------------------------------------------
Sogo Co. (8243) Wednesday announced that group liabilities
outweighed assets by 580 billion yen when the company's
fiscal year ended Feb. 29, a figure worse than the 530
billion yen previously estimated.

The firm also revealed a consolidated net loss of 137.6
billion yen for the year.  Fiscal 2000 operating revenue
will increase more than sixfold to over 1 trillion yen
because Sogo will include 127 firms on its consolidated
financial statements, compared with just one in fiscal
1999. But the group anticipates a pretax loss of 7 billion
yen, and that will likely interfere with restructuring
plans.

The Sogo group is asking 73 banks for debt waivers totaling
639 billion yen -- among the largest such requests in
Japan's history -- by the end of fiscal 2001. It is far
from clear, however, whether all the banks will be willing
to forgive the claims.

A major source of strife in the negotiations is the lack of
confidence banks have that Sogo management will be able to
successfully restructure the company if the waivers are
granted. Three Sogo representative directors are trying to
persuade the banks that earnings will surge if unprofitable
stores are closed. But bank officials have responded by
saying the projections are overly optimistic.

"For an agreement to be reached, we need a restructuring
plan that will satisfy shareholders," noted a regional bank
official. If the banks forgive debt based on what they see
as optimistic restructuring plans, they could be saddled
with secondary losses, the official said.

Some regional banks are concerned about how Sogo will
compute the amount of debt to be forgiven and how the
burden will be shared with the group's main lenders. As a
result, it appears that Sogo will have a difficult time in
reaching an agreement with the 73 banks by the end of May.

To ensure the company can actually resurrect its financial
position, the banks are also asking for additional
information that takes into account interest rates and
economic forecasts.

Sogo's 88-year-old chairman, Hiroo Mizushima, who
effectively controls the group, stepped down from his
position Wednesday. Analysts say the present management
team should follow his lead.  But President Kyoichi Yamada
is staying on temporarily.

"Only he can deal with creditors while listening to
internal opinion," an Industrial Bank of Japan official
said. (Nikkei  27-April-2000)


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

DAEWOO MOTORS: Renault's inroad supports Hyundai's bid
------------------------------------------------------
Contrary to widespread perception, Renault's acquisition of
Samsung Motors may have beneficial effects on Hyundai
Motor's bid for Daewoo Motor, industry analysts said
yesterday.

Shortly after Tuesday's announcement of the Renault-Samsung
deal, many commentators forecast a dismal fate for Hyundai
Motor-Kia Motors, saying that Renault's inroad, combined
with the possible foreign takeover of Daewoo Motor, will
seriously ruin Hyundai's domestic share, now estimated at
74.4 percent. Some even suggested that Hyundai would
eventually become a target for hostile M&A by foreigners.

But Hyundai officials unexpectedly appear to be optimistic,
convinced that Renault's purchase of Samsung will
strengthen Hyundai's effort to fight back monopoly concerns
in its bidding for Daewoo Motor.

"Recently, the Fair Trade Commission threatened to launch a
monopoly probe into a possible marriage between Hyundai
Motor and Daewoo Motor, hinting at its intent to veto
Hyundai in the sale of Daewoo," said an industry analyst.

Indeed, a possible takeover of Daewoo Motor with a local
market share of 23.6 percent will increase Hyundai-Kia's
domestic market share to 98 percent, stripping Hyundai
executives of any logic to counter the monopoly-related
fears.

"However, Renault's entry into Korea offered a much-needed
weapon for Hyundai, as the French giant vowed to grab 15
percent of the local car market," said the analyst.

In addition, he said, Japanese automakers are projected to
increase their share of Korea's mid-sized and compact car
markets to 7 to 8 percent by 2008, helping to further boost
Hyundai's stance.  A Hyundai Motor executive insisted that
continued market encroachment by Renault and Japanese
automakers will greatly limit Hyundai's exercise of
monopolistic powers.

"In this era of rampant mega-mergers in the global auto
industry, the definition of a monopoly should be changed,"
he said.

In the meantime, a growing number of economists at home are
raising questions over the long-term economic benefits from
the foreign takeover of Daewoo Motor.

"Daewoo Motor should not necessarily be sold off to a
foreign company, particularly in consideration of Hyundai
Motor's weight in the global auto industry," said Prof. Euh
Yoon-dae of Korea University. "Hyundai Motor is surely a
giant in Korea. On the international scale, however, the
No. 1 Korean car maker is dwarfed by General Motors, Toyota
and other majors. Thus, Hyundai should be allowed to
further grow its corporate size, rather than being forced
to downsize," Euh insisted.

Despite such support from the local academics, many
watchers still remain skeptical of Hyundai's bid for Daewoo
Motor, pointing to the widespread anti-Hyundai mood in the
government circles. (The Korea Herald  27-April-2000)

HYUNDAI GROUP: Stock plunges on liquidity shortage rumors
---------------------------------------------------------
Stocks of the Hyundai Group took a thrashing yesterday as
the nation's largest family-controlled conglomerate was
rumored to be suffering from liquidity shortage following a
recent scandal at its investment trust management unit.

Rumors of liquidity crises at Hyundai's major affiliates
began to spread shortly after the opening of the domestic
bourse, prompting foreign and institutional investors to
dump Hyundai shares, traders said.

Two large shareholders of the scandal-ridden Hyundai
Investment Trust Management Co. faced the brunt of panic
selling. Hyundai Electronics Industries Inc. (HEI) tumbled
14.8 percent, or 3,100 won, to close at 17,850 won, while
Hyundai Securities Co. also nose-dived 14.95 percent, or
1,360 won to close at 7,740 won. In particular, foreign
investors sold off as many as 1.3 million HEI shares in a
sharp turnaround from their recent intensive buying.

HEI holds a 35.56 percent stake in Hyundai Investment Trust
Management, while Hyundai Securities has a 24.2 percent
interest.  Traders said that other Hyundai stocks -
including Hyundai Motor, Hyundai Heavy Industries and
Hyundai Construction - were also hit hard by the rumors of
liquidity crises.

Rumors of liquidity crises at Hyundai units surfaced as the
government yesterday excluded Hyundai Investment Trust
Management from a financial aid package for local
investment trusts in the wake of the scandal. Hyundai
investment trust unit was found to have illegally
transferred bad securities to customer trust funds to cover
losses and raise fund yields.

In the wake of the scandal, investors become concerned over
the morality of Hyundai Investment Trust Management, while
the company's exclusion from the aid package made investors
jittery, analysts said.  Also behind the tumble in Hyundai
stocks is on-going tax audits into the nation's four
leading conglomerates and anti-trust regulators'
investigation into their unfair in-house transactions, they
said.

At the moment, the most urgent thing is to get the lowdown
on Hyundai's liquidity crises, which would deal a crushing
blow to the domestic stock market as well as the Korea
economy as a whole, they added.

Meanwhile, the Seoul branch office of Credit Lyonnais
Securities predicted that the risk of a price fall in HEI
shares due to the scandal at Hyundai Investment Trust and
Management is limited.

Despite its strong fundamentals, HEI shares have been
undervalued mainly due to poor performance of Hyundai
Investment Trust Management, the securities brokerage said,
advising investors to maintain their current exposure to
the electronics maker. (The Korea Herald  27-April-2000)

HYUNDAI GROUP: To let go of several affiliates
----------------------------------------------
The Hyundai Group will let go of several affiliates through
spin-offs, liquidation and mergers mostly during the first
half.

According to the consolidation schedule released by Hyundai
Thursday, auto-related units Hyundai Motor (KSE: 05380),
Kia Motors (00270), Hyundai Precision and Industry (12330)
and Hyundai Capital will be spun off during the first half.
Hyundai Pipe (10520), Aluminum of Korea (09050) and Hyundai
Energy will secede from the group after attracting foreign
capital and Inchon Steel (04020) will also be spun off
through its merger with Kangwon Industry (00900). Hyundai
Aerospace will be liquidated. Hyundai Petrochemical, which
seeks foreign capital, will be spun off during September.

The consolidation will reduce the number of affiliates to
24 from 31 at the end of last year. Consequently, total
debts will fall to 31.39 trillion won from 52.59 trillion
won at the end of last year, with debt ratio shrinking to
174 percent from 181 percent.  Hyundai earlier said the
consolidation will be completed by the end of this year,
but advanced the schedule apparently due to the rumor of
its liquidity problem that led to the stock price rout
Wednesday.

"After September, Hyundai's debts will be less than
Samsung's 38 trillion won at the end of last year, and
assets will also drop to 51 trillion won, compared with
Samsung's 64 trillion won," a Hyundai official said.
(Asia Pulse  27-April-2000)

HYUNDAI INVESTMENT TRUST: Dragging down parent, stock
-----------------------------------------------------
Heavy selling of Hyundai's listed subsidiaries, including
Hyundai Electronics, were at the forefront of a plunge on
the Korea Stock Exchange (KSE) Wednesday, with the KOSPI
dropping 23.97 points to 713.23 at the close of trading.

Foreign investors net sold W44.2 billion in Hyundai
Electronics share, and institutional investors net sold
W183.8 billion in shares of the key Hyundai unit. Market
observers say that Hyundai's setback is largely
attributable to problems at Hyundai Investment Trust, whose
debt exceeds its capital by W1 trillion.

Although the government announced yesterday that it would
inject W5 trillion into two investment trust companies,
they have not yet offered up any rescue plan for Hyundai­_s
investment trust arm, which is in as dire straits as the
other two firms that will be receiving government support.

One fund manager who requested anonymity said that the
Hyundai group had used Hyundai Investment Trust to raise
several trillion won from the stock market last year and
currently, no one is sure how to save it. Market observers
believe that about W2 trillion will be necessary to revive
the troubled firm.

Four different ideas have surfaces as possible ways to
extract Hyundai Investment Trust from its difficulties.
Some have suggested that Hyundai's Chung clan could issue
new stocks to raise funds, while others have said that the
firm should try to attract foreign capital. Another
suggestion has been for the company to make a capital
reduction or to seek additional funds from the government.
(Digital Chosun  26-April-2000)

HYUNDAI INVEST.TRUST: Gov't may extend low-interest loans
---------------------------------------------------------
The Korean government said it may extend low-interest loans
to Hyundai Investment Trust & Securities Co., one of the
nation's top three trust companies plagued by their
exposure to bad corporate debt.

The Financial Supervisory Commission didn't specify an
amount or timeframe for the loans. The Seoul Broadcasting
System, citing an unidentified FSC official, said the
government will give 1 trillion won ($902 million) of low-
interest loans using proceeds raised through bond sales.

Hyundai Investment Trust's 816 billion won in capital has
been sapped by surging losses. In the fiscal year ended in
March 2000, the company expects about 400 billion won of
losses. Its borrowing from financial institutions stands at
3.5 trillion won.

While Korea's other two top trust companies, Daehan
Investment Trust Co. and Korea Investment Trust Co., will
receive another government bailout soon, Hyundai has been
silent until now about its debt problems.

"We need some government policy help, such as long-term
loans," Hyundai Investment Trust & Securities said in a
statement.

The company said its debt problems stem from its
acquisition of Hannam Investment Trust Co. in August 1998
and the government requirement that investment trust
companies buy stocks to boost the market in 1989. A Hyundai
Investment Trust & Securities official who declined to be
identified said yesterday the company was hoping to receive
low-interest loans of about 2 trillion won. The company
said it has raised 826.6 billion won in rights offers early
this year and plans to raise 200 billion won worth of
overseas funds.

"We expect our operation to turn normal even without the
government's injection of public funds because our net
income is expected to reach more than 400 billion won this
year," it said.  (Bloomberg  27-April-2000)

KOOKMIN LEASING: Falters, wants to reschedule debts
---------------------------------------------------
Kookmin Leasing, a unit of Kookmin Bank, has said it wants
to reschedule its debts to avert bankruptcy, in a sign that
the nation's financial sector remains wobbly despite two
years of reform after the 1997 economic crisis.

The leasing company, 90 per cent owned by Kookmin, one of
Korea's two biggest commercial lenders, missed a payment
this month on some of the US$2 million it owes to ABN Amro
Bank, said an official at the bank who declined to be
named.

General manager of Kookmin Leasing, Yang Jong-dae said the
arm was now in the process of rescheduling debt repayments
with both its foreign and domestic creditors.

"There were cases of deferred payments of principal, but
we're still paying interest," he said.

Kookmin Leasing's collapse would be a blow to Kookmin Bank.
It is trying to recover from the nation's economic meltdown
in 1998, which forced a record 22,000 companies into
bankruptcy, leaving lenders with large losses.

The leasing company's capital has been eroded by losses
during the past two years. The company saw its debt rise to
1.6 trillion won (about HK$11.2 billion) at the end of last
year.  To keep Kookmin Leasing from insolvency, Kookmin
Bank, one of the nation's most profitable banks, may inject
capital analysts said.

"Kookmin Bank can't let it go under because it also has an
exposure and more importantly Kookmin Leasing's bankruptcy
will tarnish its image," said H. Jin Lee, a banking analyst
at Samsung Securities.

But the revival would be costly and may anger Kookmin Bank
shareholders, including Goldman Sachs which owns 11 per
cent.  Kookmin Leasing booked a loss of 25 billion won in
the year to March last year, leading Kookmin Bank to report
a consolidated loss of 27.8 billion won in the last
calendar year compared with an unconsolidated profit of
107.9 billion won.

The company expects losses to multiply in the year which
ended in March. Final figures could be disclosed next week.
Kookmin Bank is willing to swap as much as 150 billion won
of debt to equity for the leasing unit, if other lenders
agree on debt restructuring, said bank official Chun Hyung-
wook.  The bank estimates that Kookmin Leasing unit's debt
exceeds asset by more than 160 billion won.

"We're now hoping for the best before we think about the
next steps," Mr Chun said.  "We plan a meeting with Kookmin
Leasing's creditors next month to explain our
rehabilitation plans and to persuade them to co-operate on
debt rearrangements."

Kookmin Leasing may face difficulties in getting help from
creditors, the majority of whom are ailing investment trust
companies, at the centre of government-led financial
reforms.  Leasing companies were one of the hardest-hits by
the nation's financial crisis in late 1997, which
necessitated a US$60 billion International Monetary Fund-
led bailout.

Kookmin Leasing's foreign creditors include The Bank of
Tokyo-Mitsubishi, Sumitomo Bank, HSBC and Development Bank
of Singapore.  In January, Korea Development Leasing Corp
(KDLC), one of South Korea's big three leasing companies,
avoided insolvency after its foreign shareholders Orix and
International Finance Corp agreed to buy a combined 100
billion won bonds.

Separately, Korean financial institutions converted 128.7
billion won worth of KDLC debt to equities, and purchased
convertible bonds worth 112.2 billion won from KDLC.
(South China Morning Post  27-April-2000)

SAMSUNG MOTORS: Remains auto biz player despite takeover
--------------------------------------------------------
Attention has turned to the Korean automobile industry,
with speculation mounting over the extent to which Samsung
will be involved in the automotive business, as it will
retain a 19.9% share of Samsung Motor after the Renault
takeover.

Samsung has been adamant about limiting its involvement in
the automobile business and has explained that its
retention of nearly a fifth of its car unit was necessary
to close the deal with Renault. Samsung had flatly rejected
an earlier proposal made by the French carmaker that it
keep a 30% stake in Samsung Motor.

Local automotive industry observers say, however, that
Samsung could expand its involvement in the car business
depending on future market developments.

One official at Hyundai Motor said Wednesday that Renault
is likely to be tied up with operating Japanese automotive
giant Nissan, which has an annual production of 2.3 million
units. He added that a sudden turn in global auto markets
could move Renault to sell off its majority stake at
Samsung Motor.

Market analysts have also pointed out that the possibility
of the Samsung group buying out Renault­_s stake in Samsung
Motor down the line cannot be ruled out.

One local industry expert said the Samsung group has
effectively continued its involvement in the automobile
business, as group subsidiaries Samsung Capital and Samsung
Card still hold a large chunk of the car firm and will
continue to offer financial products for the purchase of
Samsung vehicles. (Digital Chosun  26-April-2000)


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

OCE PLANS: SEC to sell condo units, stocks
------------------------------------------
The Securities and Exchange Commission said yesterday it
was planning to sell the condominium units and P1.64
million worth of stocks of OCE Plans Inc. to refund the
defunct pre-need company's clients.

The SEC recently approved the publication of a final notice
apprising all OCE planholders nationwide of the pre-need
firm's ongoing liquidation and advising them to file claims
against the company if they have not done so yet.

Under the liquidation plan approved by the commission, the
OCE liquidator represented by lawyer Manuel Yngson would
sell OCE's units in Cityland 10 and Alpha Salcedo in Makati
to finance the second 10-percent partial refund of premium
payments of its planholders.

A cease-and-desist order was issued against OCE over two
years ago due to violation of pre-need rules. The company
was later placed under receivership and was eventually
liquidated. With the approval of the SEC, Yngson started
the initial distribution or refund of 10 percent of the
premium paid by planholders to OCE, which was taken from
the available cash of the trust fund.

From October last year to end-January this year, some P1.88
billion had already been paid to OCE planholders. Around
P1.62 billion were claimed by 747 educational planholders
while the rest of the money went to pension planholders.
In a memo to the commission, Madona Borlaza of the SEC's
pre-need ad hoc group said that collection of around P175
million from Eduardo Diaz representing partial payment of
stockholders' advances was expected before the end of this
month.

Borlaza said Yngson was planning to file a case against
Concepcion Celi, president and chair of OCE, for the sum of
money advanced to her.  The SEC official said the OCE
liquidator was continuing the sale of OCE office furniture
and, so far, P36.2 million had been raised, with the
proceeds used for payment of the outstanding association
dues of OCE for its condominium units.  The SEC recently
agreed with a confidential draft study on the pre-need
industry that expressed grave concern over the solvency of
pre-need firms.

"We agree generally on the issue of solvency. This is
becoming a grave concern since several companies like OCE,
Family Plans, Success, have succumbed to solvency problems
which were not readily spotted by the regulator because of
faulty financial statement presentation," the SEC's
investment and research department said in its comments on
the draft study prepared by SEC consultant Agile.

Since 1977, 29 of the 83 pre-need plan companies that once
registered with the SEC have curtailed operations or have
closed down, including OCE. (Philippine Daily Inquirer  29-
April-2000)

PHILIPPINE NAT.BANK: Pre-qualification bidding to start
-------------------------------------------------------
The Department of Finance (DoF) will accept bids for 80% of
Philippine National Bank (PNB) starting today, Friday.

Finance Secretary Jose T. Pardo yesterday said the PNB
Retirement Fund, Inc.'s 3.5% stake in the bank will be
offered along with the combined 75% stake of the government
and tycoon Lucio C. Tan. The Finance department said it
will start accepting "expressions of interest" from
potential buyers starting today until May 15.

Mr. Pardo said interested buyers are required to deposit an
amount "not more than" $50,000 to pre-qualify for the
bidding.  Pre-qualified bidders will be allowed to conduct
a due diligence of PNB from May 5 to 25. The sale is
scheduled for May 26.

The DoF is under pressure to complete the privatization of
PNB by June 10 to fulfil commitments with the World Bank
and the International Monetary Fund.  It wants to attract
several investors to bid for PNB as it is only allowed to
offer the 80% block once under its agreement with Mr. Tan.
If the sale fails, the two parties are not bound to do
another round of joint sale through a public bidding.

Under the agreement, Mr. Tan will dispose of his 46% shares
in the bank together with the government's 30.39% stake by
May 15. The DoF expects the bigger block to lure more
investors into the sale.  Already, the government is
mulling "other options" in case the bidding fails. Mr.
Pardo said the DoF plans to negotiate with the highest
bidder if bids will fall below the 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 to put together
given the uniqueness of the transaction," he said.

But the DoF and Mr. Tan have yet to agree on the floor
price of PNB shares since the two parties are still waiting
for a parallel audit of the bank being done by SGV & Co.
and Punongbayan and Araullo. (Business World  28-April-
2000)

URBAN BANK: BSP orders closure
------------------------------
The Bangko Sentral ng Pilipinas (BSP) ordered yesterday
financially troubled Urban Bank placed under the
receivership of the state-run Philippine Deposit Insurance
Corp. (PDIC).

BSP Gov. Rafael B. Buenaventura said PDIC's takeover of
Urban Bank will allow it to go through the bank's books to
enable the institution to reimburse its small depositors.
The PDIC implemented a swift closure and takeover of the
bank yesterday after the Monetary Board, the policy-making
body of the BSP, approved its placement under receivership.
Buenaventura said the bank was forced to service about P2.5
billion in withdrawals over two weeks -- an amount
equivalent to 25 percent of its assets, after it was forced
to downgrade itself into a thrift bank.

The downgrade stemmed from its failure to meet increased
capitalization requirements.  In a notice to the Philippine
Stock Exchange, the bank said that withdrawals over four
weeks reached P4.5 billion, excluding another P1 billion on
Tuesday, which prompted it to close indefinitely.
Buenaventura said the BSP offered an emergency loan to help
Urban Bank meet the bank run, but its management instead
elected to declare a bank holiday on Tuesday.

"They elected to preserve their assets so as to be able to
pay the bank's liabilities," he added.

Also placed under receivership is the Urban Development
Bank, a thrift bank subsidiary of Urban Bank. Another
subsidiary, Urbancorp Investment Corp., an investment house
without quasi-banking functions, has declared a suspension
of payments and has requested the BSP and the Securities
and Exchange Commission (SEC) to appoint a rehabilitation
receiver for the company.

However, the other subsidiaries of Urban Bank continue to
operate independently and are not covered by the
receivership. These include Urbancorp Insurance Brokers
Inc., Urbancorp Realty Development Inc. and Urbancorp
Travel Services Inc.

The PDIC, in a statement, said that it will start paying
off insured deposits on May 2, 2000. Deposits P5,000 and
below will be paid in full while deposits P5,000 and above
will be paid equivalent to 25 percent of the deposit
liabilities or P5,000 whichever is higher but not to exceed
P25,000.

Full payment of maximum insurance of P100,000 will be made
as soon as the examination of records is completed.
The PDIC advised clients of Urban Bank that payments of
loans and other obligations to the bank should be made only
to the PDIC deputy receiver.  It also cautioned all
depositors and borrowers of Urban Bank that its former
officers and employees are no longer authorized to transact
business with them.

Monetary authorities are shopping around for new investors
to take over Urban Bank, which was forced to shut down
after suffering heavy withdrawals, Buenaventura said

"We are going to hire an investment banker to try and sell
the bank," he said in a radio interview.

Financial advisers which were tapped to consider Urban Bank
for possible repackaging and sale to other foreign
interested parties include Solomon Brothers and Chartered
Bank.  The BSP governor said that "from all indications,
the bank's assets are in order" and that the government
hopes to be able to convince investors to acquire Urban
Bank.

He cited a recently passed banking law which opened the
industry to foreign players, including 100 percent
takeovers of existing domestic lenders.  Urban Bank said it
is still pursuing merger talks with a medium-sized Banco de
Oro. Buenaventura said Banco de Oro will be a good fit as
it is three times bigger than Urban Bank in terms of
capital.

"Discussions on the details of the proposed merger with
Banco de Oro and Urban Bank are ongoing," Urban Bank said
in its notice to the stock exchange.

Nestor V. Tan, Banco de Oro president, reacting to
questions on their plans on Urban Bank, said that "we are
still interested in Urban Bank and the holiday declared by
Urban will give us more time to undertake additional due
diligence for proper valuation."

Urban Bank suffered liquidity problems four weeks ago when
the impact of Westmont Investment Corp.'s (Wincorp)
inability to pay its maturing borrowings was fully felt.
This was compounded by the ASB Realty debacle plus
Citibank's refusal to pay maturing C&P Commercial papers
which caused jitters among the Chinese community.

The bank said the jitters were heaviest at Binondo's
Chinatown and other areas, which are Chinese dominated.
In the first two weeks alone, Urban experienced total pull-
outs of P800 million from Binondo branches. In the next two
weeks, total pull-outs amounted to P4.5 billion.

In a statement, the bank said: "No medium sized commercial
bank can withstand such total pull-outs/withdrawals without
collapsing or folding up. And yet, Urban closed the day
prior to the bank holiday declaration with a positive
balance on its current account with BSP." (Philippine Star
28-April-2000)

URBAN BANK: Stock market loss leader
------------------------------------
The stock market managed yesterday to shrug off Urban
Bank's debacle even as the local financial market was
mildly shaken by the unexpected announcement late on
Tuesday of the bank's temporary suspension of operations.

At the Philippine Stock Exchange, the 30-company composite
index ended 7.73 points, or 0.5 percent, lower at 1,639.83,
adding to Tuesday's 16.90-point fall. In the broader
market, the All Shares index gained 7.52 points at 639.60
points.  Traders said the continued weakening of the peso
and the deteriorating peace and order situation in Mindanao
further fueled negative sentiment.

The Urban Bank group was the day's heaviest losers, reeling
from continuous cash withdrawals and pre-termination of
placements with the bank for the last four weeks. This
prompted the company's board to voluntary declare a bank
holiday effective yesterday "for the best interests of the
clients and depositors and for the preservation of its
assets."

Urban Bank stocks lost 40 percent of its value to P72 while
its subsidiary Urbancorp Realty Developers Inc., which will
soon transform into an IT company and change its name to
Urcom.com. shed off 39 percent to 44 centavos.

"The Urban Bank problem made a dent in investor confidence
and made investors more cautious in dealing with other
banks, especially the small ones," said A&A Securities
research head Astro del Castillo.

The spate of withdrawals was triggered by the bank's
decision to further downgrade from a commercial bank to a
thrift bank, Urban Bank used to be an expanded commercial
bank or a universal bank but changed its status to a
commercial bank in line with the shift in its focus toward
technology and wholesale banking.

The bank said despite the fund run, the buy-out talks with
Banco de Oro are still ongoing. The bank chain of retail
king Henry Sy's SM Group will be the surviving entity in
the merger. (Philippine Star  28-April-2000)

URBAN BANK: To reopen in a month
--------------------------------
The Bangko Sentral and the Philippine Deposit Insurance
Corporation (PDIC) plan to have Urban Bank serve the
withdrawals of its depositors in a "record time" of one
month.

"We hope to open Urban Bank, or the new institution, in 30
days," Bangko Sentral (Central Bank) Gov. Rafael B.
Buenaventura yesterday told reporters.

He said Urban Bank kept a good set of computerized
transaction records that will help Bangko Sentral and PDIC
examiners process depositors' accounts with more speed.

"(Its) records are good, so we can move in quickly," he
said. "In addition, (it has) 28 branches, most of which are
in Metro Manila, except for four outlets in the provinces."

The Bangko Sentral chief said that as an opening move, the
PDIC will begin servicing the withdrawals insured deposits
of up to 25,000 Philippine pesos ($606 at PhP41.278=$1) by
Tuesday.

"By Friday, PDIC will be able to service the entire
PhP100,000 ($2,423) maximum insured amount -- that is also
a record of sorts," he said.

In a statement, PDIC chief Norberto C. Nazareno said all
Urban Bank depositors should proceed to their respective
branches on Tuesday, May 2, and bring two valid
identification cards.  He said all those with deposits of
PhP1,000 ($24) and below will be paid in cash while those
with more than PhP1,000 will be paid in check by PDIC.
The deposit insurer earlier said deposits worth PhP5,000
($121) and below will be paid in full, while insured
deposits above PhP5,000 will be paid an equivalent of 25%
of the deposit liability but not exceeding PhP25,000
($606).

Full payment of the deposit liabilities will be completed
as soon as PDIC finishes the examination of bank's records
in about two weeks. PDIC insures individual deposits up to
PhP100,000 ($2,423) only.  PDIC said it has already
arranged with Bangko Sentral and the Philippine Clearing
House Corp. (PCHC) for the payoff scheme, thus, depositors
who are paid in check can deposit the check for collection
in other PCHC-member banks.

The deposit insurer said Urban Bank's provincial and Metro
Manila branches, except the head office and the Navotas
branch, will serve on a first-come-first-served basis.
The head office in Makati and the Navotas branch will serve
deposits based on the following schedules: May 2,
depositors whose surnames start with the letters A to F;
May 3, those whose surnames start with G to L; May 4, those
whose surnames start with M to R, and on May 5, those whose
surnames start with S to V.  PDIC said that after these
dates, depositors will be served on a first-come-first-
served basis.

In a related development, the camp of former President
Ramos categorically denied speculations circulating in the
banking industry linking him to the temporary closure of
Urban Bank.  Jesus C. Dureza, Mr. Ramos's spokesman, said
the former President who was chairman emeritus of the bank
before it was placed under receivership, is in fact among
those "adversely" affected by the bank holiday.

Reacting to a BusinessWorld query, Mr. Dureza said in a
statement that "former President Ramos categorically denies
rumors and speculations that RPDEV or he personally
withdrew large amounts of money just before the Holy Week
or just after and condemns the rumor mongers who are
spreading such news."

RPDEV stands for Ramos Peace and Development Foundation
which the former President chairs.  "RPDEV is one of the
adversely affected clients of Urban Bank," Mr. Dureza
stressed. The RPDEV is one of the tenants of Urban Bank
Plaza holding office on the building's 26th floor.
It is a foundation cum think tank founded after Mr. Ramos
stepped down from office on June 30, 1998.

The foundation is manned mostly by former Ramos Cabinet
officials and other personalities linked to the previous
administration.  "On the other hand, Mr. Ramos commends
governor Buenaventura, the PDIC and the Urban Bank itself
for working together in a responsive manner to calm the
jitters of the bank's clientele and to quickly act to
provide ample relief for them, especially the small
depositors and protect public confidence in the banking
system as a whole," Mr. Dureza added.

According to Mr. Buenaventura, when prospective investors
buy into Urban Bank, the cash infusion will be used to
service the bank's liabilities to its depositors first.
"The shareholders will be last in line, if there's anything
left after that," he said.

US-based investment banking firm Salomon Smith Barney will
likely be the financial adviser for the bank's sale.

"Already, we have identified several parties interested in
Urban Bank," Mr. Buenaventura said, naming Banco de Oro
Universal Bank (BDO), the International Exchange Bank
(iBank) and an Asia-based foreign bank.  "We are hoping to
sell Urban Bank to the interested investor with some
incentives from the Bangko Sentral," he added. "After all,
(Urban Bank's) non-performing loans (NPLs) are low, and we
have been assured that there are no problems on (its)
books."

For its part, BDO has decided to wait and see while iBank
has indicated "interest" in the beleaguered bank.

"BDO is still interested in pursuing merger discussions
with Urban Bank. The bank holiday will likely give us more
time to conduct due diligence and get better valuation.
However, given the situation, we will wait for further
developments before proceeding with discussions and due
diligence," BDO said.

"Serious merger discussions have just started and the
technical terms of the agreement have yet to be defined,"
it added.

Nilo Pacheco, iBank executive vice-president, confirmed
iBank is "interested in Urban Bank...But we have not
approached anybody from the bank. We are, in fact,
interested in some of the banks for sale."

Both BDO and iBank said Urban Bank's "primary" attraction
is its branch network.  Mr. Pacheco said acquisition is an
alternative to expanding a bank's network after the Bangko
Sentral declared a moratorium on branch licenses. iBank
currently has 59 branches, 48 of which are within Metro
Manila, he said. The 11 provincial branches are divided
into six in the Visayas and Mindanao regions and five in
Luzon -- Calamba, Laguna; Lipa, Batangas; Imus, Cavite;
Tarlac, Tarlac; and Dagupan, Pangasinan.

"Before the moratorium, we got approval for the opening of
eight branches," Mr. Pacheco said, adding that a "good
part" of iBank's PhP84-million ($2.03 million) first-
quarter net income was used for opening additional
branches.  It is targeting PhP300 million ($7.27 million)
in net earnings this year, up from PhP260 million ($6.3
million) last year, he added.

Meanwhile, BDO said it will still proceed with its initial
public offering (IPO) even if it succeeded in acquiring
listed Urban Bank.

"We will pursue the IPO at the appropriate time," the bank
said. "Urban Bank has been in business for a long time, is
managed by professionals and has strengths in key areas of
banking. Certain aspects of their business complement BDO,"
it added.

The Bangko Sentral requires universal banks to offer to the
public at least 10% of their shares within three years
after receiving a universal banking license.  BDO got its
license in September 1996, and was supposed to go public
last September, but was hampered by poor market conditions.

At a press conference the other day, Urban Bank chairman
and founder Arsenio M. Bartolome III said it is up to the
interested party if it wants to purchase Urban Bank lock,
stock and barrel. "It's up to them. We have identified the
operating companies that can stand alone," he said.

These are Urbancorp Securities, Inc.; Urbancorp Life
Insurance; Urbancorp Development Bank, which is 100%-owned;
Urbancorp Realty Developers, Inc.; Urbancorp Travel
Services, Inc.; and the newly-formed information technology
company, URCOM.COM.

Urban Bank president and chief executive officer Teodoro C.
Borlongan earlier said the bank will be converted into a
holding company and will raise its investment in Cebu-based
Urbancorp Development Bank to a capital of PhP2 billion
($0.048 billion), he said.

"The holding company will transfer all assets and
liabilities, including the franchises except for the
commercial bank franchise...to the development bank except
NPLs (non-performing loans) and excess fixed assets. In the
process, we created a very strong bank that had PhP2
billion ($0.048 billion) capital, zero NPL," he said.

Mr. Borlongan said the holding company will have an
investment in Urbancorp Realty Development, Inc. (URDI),
which will be converted into an information technology
company. "Since URDI is already publicly listed, it was
programmed that it would go into further capital raising in
the capital market," he said.

The holding company will also retain its investment in
Urbancorp Investments, so it could be an investment vehicle
for the bank for all other subsidiaries and affiliates.

"Given this broad scheme, what it meant was you created an
organization that was no longer focused on banking, unlike
our present setup, where the bank holds everything down.
Here the bank becomes only one of three major activities,"
he added. Urban Bank was placed under PDIC receivership
last Wednesday.

"We can face our clients and our friends (and look)
straight to their eyes. This bank is a strong bank, a clean
bank. Our balance sheet balances. Mr. Borlongan and myself
are not involved in any DOSRI loans. We can probably say
that. I'd like to believe it's a well-managed bank," Mr.
Bartolome said.

Meanwhile, Mr. Buenaventura denied the Bangko Sentral's
aggressive push to promote consolidation in the banking
system caused Urban Bank's collapse. "Urban Bank became a
universal bank, fully knowing the capital build-up
schedule," he said.

The Bangko Sentral chief said what happened to Urban Bank
is a natural consequence of its shareholders' failure to
infuse fresh capital.

"Many of (the depositors) are high net worth clients, and
when they saw that shareholders were not willing to ante
up, they took their money out," he said. "Now they are
trying to blame the medicine for the ailment."

Mr. Buenaventura said liquidity problems with Urbancorp
Investments might have precipitated the bank's collapse.
"Liquidity problems may have started at the investment
house," he said.

While he declined to speculate, he warned the Bangko
Sentral is ready to prosecute any wrongdoing. "We have been
assured that everything is okay," he said. "But if we find
any anomalies, we are ready to file the appropriate charges
against the responsible parties. Hopefully, their financial
accounts and transactions are not co-mingled," he added.

Urbancorp has a license from the central bank to undertake
trust operations and used this to put up an investment fund
for the secondary loan and real estate market. Once the
Bangko Sentral and the Securities and Exchange Commission
jointly appoint a receiver for Urbancorp, its assets will
be liquidated and distributed pro rata among its investors.
(Business World  28-April-2000)


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

BANGKOK METRO.BANK: HSBC still most likely buyer
------------------------------------------------
Hongkong and Shanghai Banking Corp. (HSBC) is tipped as the
most likely candidate to purchase the debt-ailing Bangkok
Metropolitan Bank (BMB), as the two-day final consideration
concludes today, according to sources of the Financial
Institutions Development Fund (FIDF).

The sources said FIDF, the debt bailout unit set up by the
Bank of Thailand (BOT), has fixed the final sale price for
BMB at 3.5 billion baht. This price will be accepted by
HSBC, with the condition that it will be compensated in
part by Thai authorities, provided that HSBC can prove
BMB's non-performing loans of 160 billion baht cannot be
recovered or restructured within 5 years.

Previous negotiations failed, and the purchase had been
delayed for almost two years, because the exact total
amount of NPLs was quoted differently by FIDF and HSBC.
FIDF calculated that BMB's NPLs are standing at 70 percent,
while HSBC claimed the NPL amount could be as high as 95
percent.

The different estimates of BMB's bad debts, and the low
purchase price offered by HSBC, have divided BMB
shareholders into opposing groups; one in favour of the
quick sale of BMB to foreign financial institutions, the
other preferring to sell the bank to Thai-owned
institutions.

The meeting of BMB's shareholders yesterday saw the two
sides wrangling against each other.  Suchart
Thadathamrongvej, a member of the BMB Board, commented that
the sale of BMB to foreign investors was like giving the
bank to them free of charge, because the Thai authorities
are obliged to pay 8.0 billion baht a year in compensation
for five years.

He said with such generous compensation for NPLs, FIDF
should consider selling BMB to Thai investors instead.
One month ago, Suchart, together with a number of
academics, business people and politicians, approached Bank
of Thailand Governor Chatumongkol Sonakul in the hope of
persuading him to sell the bank to the Thai people.

Meanwhile, BMB President Somchai Sakulsurarat said he
understood the feeling of those who favour retaining BMB in
the hands of the Thai investors. However, he said this
matter has to be decided by FIDF today. (Business Day  27-
April-2000)

SANSIRI PLC: Expects to finish debt restructure this year
---------------------------------------------------------
Sansiri PCL said it expects to complete debt restructuring
by the end of this year.

The Thai property company said it recently has restructured
166.7 million baht ($4.4 million) in debt that it owed to
Thailand's state-owned Asset Management Corp.  Sansiri said
its total debt now stands at 603 million baht.

"Throughout the entire debt-restructuring process that we
began in late 1997, we have consistently had good
cooperation from all our creditors," said Srettha Thavisin,
Sansiri's president.

At the end of 1998, the company's debt stood at 3.62
billion baht, which came down to 770 million baht by the
end of last year. The reductions have come from debt-for-
equity swaps, asset transfers and cash.

Sansiri was burned by overbuilding in Thailand's property
bubble of the mid- 1990s, but refocused last year on
property management. The company sold many of its property
assets, and invited U.S.-based Starwood Hotels & Resorts
Worldwide to become a partner. (The Asian Wall Street
Journal  26-April-2000)

SIAM CITY BANK: Likely to take KTB-road on debt
----------------------------------------------
Siam City Bank is concocting a debt-restructuring backup
plan similar to that of Krung Thai Bank, with funding from
the Financial Institutions Development Fund.

SCIB chairman Angkhani Vorasaph told a shareholders'
meeting yesterday that unlike Bangkok Metropolitan Bank
(BMB), whose privatisation plan will soon be complete, Siam
was progressing at a much slower rate as a potential
investor had not yet been found.

"If there's no buyer at all, SCIB will possibly separate
assets, spin off bad assets and list the good [free of bad
debts] bank on the exchange," said the chairman.

SCIB was delisted after its par value was cut a few years
ago to only Bt0.01 to write off financial damages. At
present the Financial Institutions Development Fund (FIDF)
holds a 99.99 per cent stake in the bank. Siam president
and chief executive Phaithoon Kijsamrej said the bank was
in the first stages of classifying good and bad assets.
While bad assets would be transferred to an Asset
Management Company (AMC) with help from the fund, good
assets would be moved to a new institution.

This plan virtually mirrors that of Krung Thai Bank,
approved by the Cabinet two weeks ago. Under the plan, KTB
has to set aside full reserves against its own loans, which
will either be transferred to its AMC or remain at the
bank. The bank will then take away certain reserves, to be
transferred to the AMC, and convert the amount to equity.
These asset transfers will be financed by the fund, which
holds more than a 90 per cent stake in the bank, after
which KTB will become a good bank.

"The asset separation plan is in case privatisation
completely fails," Phaitoon said.

Finance Permanent Secretary and FIDF director Supachai
Pisitvanich said on Wednesday the fund was still trying to
attract a buyer for Siam. Earlier it was reported the New
Bridge Fund had showed interest in the bank but the
proposed price was considered too low.

Supachai also hinted that the state might not sell Siam at
all if there were no good proposals. Phaithoon said that
once Siam became viable, it could easily resume listing on
the stock exchange. The government could then sell its
stake at a later date. He added that the bank's AMC was
expected to be 100 per centowned by the fund. As in the
case of KTB, Siam would convert certain reserves into
equity to meet the minimum capital adequacy ratio of 8.5
per cent while the remainder went to its AMC.

At present Siam's nonperforming loans constitute 61 to 62
per cent of its total loans, down from its peak last year
of 70 per cent. The bank's present reserves are Bt46
billion about 60 per cent of the minimum amount required to
operate.

Last year, the bank restructured Bt50 billion of its debts.
It expects to reduce its nonperforming loans by the same
amount this year. It also aims to extend new credit by 4
per cent from the outstanding level for last year, while it
hopes to increase deposits by 8 per cent. (The Nation  28-
April-2000)

THAI TEL.& TEL.: Expects new partner by August
----------------------------------------------
Provincial fixed-line operator Thai Telephone &
Telecommunications said yesterday it expected to conclude a
deal with a new strategic partner by August.

Managing director Thongchat Hongladarom said the company
would examine proposals from foreign and local investors
over the next two weeks.  Crucial to any deal will be a
sign of government willingness to change the company's
contract with the Telephone Organisation of Thailand. TT&T
says it is crippled by a requirement to pay 43% of its
revenue to the TOT.

The company is in the process of restructuring 44.36
billion baht in debt with its creditors. (Bangkok Post  28-
April-2000)

WONGPAITOON GROUP PLC: Reports on debt restructuring plan
---------------------------------------------------------
Wongpaitoon Group Public Company Limited (WFC), through
Vijak Sirising, Managing Director informs the Stock
Exchange of Thailand that on our last report we have
highlighted all main points regarding our debt
restructuring plan and implementation time-frame needed for
our plan. The Company also will report on the progression
of our plan.

24 April --Filed the reorganization petition with the
Bankruptcy Court and request for appointment of planner
22 May -- (1) Court proceeds with the inquiry and publishes
the order accepting the petition in daily newspaper.
Automatic stay operates. (2) Submit the copy of petition to
all creditors and Company's registrar - Advertise in daily
newspaper twice. - Company or creditors may object the
petition not less than 3 days before the first hearing -
Hearing on proof of not less than Baht 10 million
indebtedness, justification of reorganization and proof of
good faith. - Order for reorganization and appointment of
planner

At present, plan schedule after April 24, 2000 cannot be
definitely stated since we have to wait for legal procedure
that shall be appointed by the Court. Date of filing to
Bankruptcy Court will be postponed. This due to the fact
that our legal consultant advised that about 3-4 weeks
after filing, the Court will make appointment to conduct
inquiry for the request that the company submitted on April
17, 2000. We believe the Court appointment shall not be
postponed and we also anticipate that Company's Managing
Director will not be available for the inquiry for the
request due to business commitment overseas. As a result,
we would like to postpone filing date on April 24, 2000.
(Stock Exchange of Thailand  27-April-2000)


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