TCRAP_Public/000502.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

         Tuesday, May 2, 2000, Vol. 3, No. 85


* A U S T R A L I A *

BONLAC FOODS: Dairy Farmers drop merger talks
PAULINE HANSON: Wins reprieve
SPORTSGIRL: Directors off hook
TELSTRA: To close three call centres

* C H I N A  &  H O N G  K O N G *

NEWAY CENTURY LTD: Facing winding up petition
NEW SCIENTIFIC TRADING CO.: Facing winding up petition
SANSALE LTD: Facing winding up petition
SINOTON FAR EAST LTD: Facing winding up petition
SUPERSTATE INVESTMENT LTD: Facing winding up petition
SUPERUNIT LTD: Facing winding up petition
THOUSAND FIT GARMENT MFG LTD: Facing winding up petition
TWO LUCK ENGINEERING(HK)CO.LTD.: Facing winding up petition
WINWELL INDUSTRIES LTD: Facing winding up petition

* I N D O N E S I A *

PT BANK BALI: Truce eases funds bid
PT INTI INDORAYAN: Warns govt to let it reopen or face suit
PT PLN GROUP : Books Rp 11.3T net loss this year

* J A P A N *

AIWA CO.: Posts record 11.5B Yen group net loss
HIKARI TSUSHIN: President planning to seek outside help
KANKAKU SECURITIES CO.: Posts 64.3B Yen group net loss
NICHIMEN CORP.: To post 50B Yen, 2-year restructuring loss
SOGO CO. LTD.: Exec kills himself
UEX LTD.: Sees second straight year of net loss

* K O R E A *

DAEWOO CORP.: FSS tabs for bank oversight
DAEWOO ELECTRONIC: FSS tabs for bank oversight
DONG-AH LIFE INSUR.: Acquisition by Kumho Life okayed
HYUNDAI GROUP: FSS tabs for bank oversight
HYUNDAI GROUP: Struggling to regain investor confidence
HYUNDAI GROUP: Creditor bank denies liquidity problems
HYUNDAI GROUP: Founder, family pressure to use wealth
HYUNDAI OIL REFINERY CO.: FSS tabs for bank oversight

LG GROUP: FSS tabs for bank oversight
NONG SHIM CO.: FSS tabs for bank oversight
SAMSUNG GROUP: FSS tabs for bank oversight
SAMSUNG MOTORS: Creditors, Renault sign letter of intent
S OIL CO.: FSS tabs for bank oversight
SK GROUP: FSS tabs for bank oversight

* M A L A Y S I A *

TIME ENGINEERING: Sapura moves on last-minute bid

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

ASIAN BANK: Also hit by heavy withdrawals
BAYAN TELECOMM.INC.: Moody's downgrades senior notes
EXPORT INDUSTRY BANK: Also hit by heavy withdrawals
INT'L EXCHANGE BANK: Also hit by heavy withdrawals
PHILIPPINE COMMMO.BANK: Also hit by heavy withdrawals
SOLID BANKING CORP.: Also hit by heavy withdrawals
URBAN BANK: Now in receivership
URBAN BANK : SMC files suit against it

* S I N G A P O R E *

TONG TIEN SEE CONSTRUCTION: Court rejects liquidator

* T H A I L A N D *

BANGKOK METRO.BANK: HSBC to buy 75% stake
BANK OF AYUDHAH: Recapitalization plan hinges on TPI
ONE HOLDING PCL: SET to delist it
SIAM SYNTEC CONSTRUCTION: Rehab filed for in court
SRITHAI SUPERWARE PCL: Reports on issuance of notes


BONLAC FOODS: Dairy Farmers drop merger talks
Dairy Farmers has halted merger talks with Bonlac Foods,
Victoria's largest dairying group, with Bonlac deciding on
a drastic restructuring which will see it tie up with the
New Zealand Dairy Board.

The New Zealand group is to take a 25 per cent stake in
Bonlac, in exchange for cash.  Dairy Farmers said a merger
with Bonlac would have resulted in short-term cash flow
problems, along with a number of structural issues, which
would have been difficult to resolve.

"With the industry in a state of flux as a result of
deregulation, this may have given our competitors an edge,
which we prefer to keep for our own dairy farmers," Dairy
Farmers chairman Mr Ian Langdon said in a statement.

The two companies continue to pursue talks over operational
areas of co-operation.  Bonlac is to shut four plants and
axe at least 300 jobs in the first steps of a cost-cutting
campaign to get the company's financial house in order.
The closures, which will cost $36 million in write-offs and
redundancies, are only the beginning of a drive to slash
Bonlac's overheads by 30 per cent so it can pay better
returns to its dairy farmer shareholders.

Bonlac chairman Mr Bill Hill estimated yesterday that the
group would pay between $50 million and $60 million less
than its chief competitor in the State, Murray-Goulburn Co-
operative, which translates to around $20,000 less for
every farmer.

As part of its restructuring, the NZDB and Bonlac are also
creating a joint venture company to market their dairy
brands. Bonlac's chief executive, Mr Alex Sloan, said
yesterday milk processing plant closures in Drouin,
Camperdown and Toora in Victoria, and at Legerwood in
Tasmania, were needed to cut costs so the company's dairy
farmer shareholders would receive higher payments.

The restructuring at Bonlac comes after a management shake-
up begun in mid-January with the exit of former chief
executive Mr Phil Scanlan.  Bonlac's dairy farmer
shareholders, furious at their lower milk returns and Mr
Scanlan's $760,000 pay packet for the preceding year, last
November dumped the chairman and deputy chairman at the
annual meeting.

At the time Mr Scanlan said his departure 18 months before
his contract ran out meant that he had finished early the
job he had been hired to do - transform and modernise
Bonlac.  Both Mr Scanlan's replacement, Mr Sloan, and
Bonlac's new chairman, Mr Bill Hill, maintained yesterday
that the rationalisation of the company was overdue.

"I think that we could certainly say to you that decision
to rationalise ... this company probably should have been
taken at an earlier stage," Mr Sloan said. (Sydney Morning
Herald  29-April-2000)

The coachline company Greyhound Pioneer is struggling. In
April, 2000 the Australian company confronted three
takeover offers, and has noted that there is a July 2000
deadline for a potential $A3.2 million debt, which could
bring the company to insolvency.

One of those in the queue is the rival coach company
McCafferty's. Stephen Jones from Greyhound Pioneer noted
that he is evaluating the offers. Jones admitted that if
the debts are called in the company may not be able to go
on trading. (World Reporter  27-April-2000)

PAULINE HANSON: Wins reprieve
The Electoral Commission of Queensland has granted Pauline
Hanson a delay from possible bankruptcy.

On 26 April 2000, the commission gave Hanson an extension
on paying back $A502,000 in election funding granted to One
Nation Party candidates before the 1998 Queensland
elections.  Hanson personally guaranteed the funds.

Hanson says she is fairly confident she can avoid
bankruptcy, with a special aid fund standing at $A270,000.
However, she is still $A390,000 short, including legal
costs, and now plans to raffle 250 prints of a work by
artist Pro Hart to help gain lost ground. (World Reporter

SPORTSGIRL: Directors off hook
Samantha Magnusson the directors of the failed Sportsgirl
Sportcraft Group are to be freed from further legal action
against them. At a meeting on 26 April 2000, the majority
of Sportgirl's creditors accepted an offer from
Truworths International, Sportsgirl's largest creditor, to
give up $A4.5m.

Truworths is owed about $A75m by Sportsgirl. Sportgirl's
voluntary administrators said that whilst the majority of
Sportgirl's creditors accepted the arrangement, it remained
opened to be challenged in the courts.  A small group of
Sportgirl's creditors wish to see the company placed into
liquidation and its affairs further investigated.
(Australasian Business Intelligence: The Australian   28-

TELSTRA: To close three call centres
Telstra planned to close three call centres, axing 300
jobs, a union claimed today.

The Community and Public Sector Union(CPSU) said the
telecommunications giant would begin slashing the jobs in
the billing and new connections call centres as part of its
drive to cut 10,000 jobs this year. The call centres would
close in Sydney, Melbourne and Adelaide, CPSU National
Secretary Wendy Caird said.

"We believe it is imminent," Ms Caird said. "Telstra has
not made any announcement. We are operating with
information which has been leaked to us," she said.
"These cuts will make a bad service worse." (The Age  29-

C H I N A  &  H O N G  K O N G

NEWAY CENTURY LTD: 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 Super
Mate Limited for the winding up of Neway Century Limited. A
notice of legal appearance must be filed on or before May

NEW SCIENTIFIC TRADING CO.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 7 on the petition of Lee
Lai Fung Limited for the winding up of New Scientific
Trading Company Limited. A notice of legal appearance must
be filed on or before June 6.

SANSALE LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 31 on the petition of Li
Sang for the winding up of Sansale Limited. A notice of
legal appearance must be filed on or before May 30.

SINOTON FAR EAST LTD: 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 Super
Mate Limited for the winding up of Sinoton Far East
Limited. A notice of legal appearance must be filed on or
before May 23.

SUPERSTATE INVESTMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 7 on the petition of Wong
Pui Shan for the winding up of Superstate Investment
Limited. A notice of legal appearance must be filed on or
before June 6.

SUPERUNIT LTD: 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 Super
Mate Limited for the winding up of Superunit Limited. A
notice of legal appearance must be filed on or before May

THOUSAND FIT GARMENT MFG LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 31 on the petition of Woo
Ming Tak for the winding up of Thousand Fit Garment
Manufacturing Limited. A notice of legal appearance must be
filed on or before May 30.

TWO LUCK ENGINEERING(HK)CO.LTD.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for May 31 on the petition of Wong
Ming Yiu for the winding up of Two Luck Engineering (Hong
Kong) Co. Limited. A notice of legal appearance must be
filed on or before May 30.

WINWELL INDUSTRIES LTD: 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 Sin
Hua Bank Limited for the winding up of Winwell Industries
Limited. A notice of legal appearance must be filed on or
before May 23.


PT BANK BALI: Truce eases funds bid
Former Bank Bali chief Rudy Ramli has called a truce in his
battle with the central bank and Indonesian Bank
Restructuring Agency (Ibra) so the bank founded by his
family can be saved.

Asked whether he was dropping a legal challenge against
Ibra's takeover of Bank Bali last year, Mr Ramli yesterday
said: "What I will do is make sure that all the legal
barriers for the bank to be recapitalised will be taken

A Jakarta court last month ruled Ibra's takeover of Bank
Bali illegal, throwing its planned recapitalisation into
confusion and dealing a fresh blow to Indonesia's efforts
to patch up its ailing banking sector.  Ibra and Bank
Indonesia appealed and said the bank would be liquidated if
it was not recapitalised. But Mr Ramli said that after a
series of meetings, the two sides had agreed to work
together to save the scandal-hit bank from collapse.

"What is important is that the bank is recapitalised and
then foreign investors come in," Mr Ramli said.  "If there
are legal barriers, then the foreign investors will not
come in."

Yesterday morning, Bank Bali shares jumped on optimism it
would be spared the axe. The stock rose 15 per cent to 375
rupiah (about 30 HK cents).  Mr Ramli declined to comment
when asked whether he had lined up any foreign investors to
help salvage the bank. But he said it would be pointless
for Ibra to try to recapitalise Bank Bali without his co-

"If anybody tries to come in without me, it's no use. If
the government thinks it does not need me to recapitalise
the bank, go ahead, let them try," he said.

Bank Bali was one of the Indonesian banks which qualified
last year for the government's recapitalisation scheme,
with Standard Chartered agreeing to help pay its
recapitalisation costs in return for a stake.  But the deal
went sour amid revelations that Bank Bali was at the centre
of a politically charged scandal involving a hefty payment
to a firm run by officials linked to the powerful Golkar
party in return for helping recover loans from Ibra.

The scandal helped scupper former president B.J. Habibie's
hopes of re-election and prompted the International
Monetary Fund to suspend desperately needed loans. Mr Ramli
was charged with violating banking laws and imprisoned, but
charges were dropped and he was released.

Ibra took over the bank and ousted Mr Ramli and handed
management control to Chartered. But this deal also went
awry, amid protests by Bank Bali employees loyal to Mr
Ramli. He has denied allegations he orchestrated the
protests to frustrate Chartered's planned takeover.
Mr Ramli's dropping of his legal action would allow Bank
Bali to go ahead with a recapitalisation rights issue.

The amount needed was last estimated at 4.6 trillion rupiah
(about HK$4.52 billion), but analysts say the months of
uncertainty surrounding the bank have further damaged it
and the cost of recapitalisation will now be even higher.
Mr Ramli's family originally held a controlling stake in
Bank Bali but sold most of its shareholding during the past

Meanwhile, a mystery buyer, acting through German clearing
house Deutsche Boerse has bought up more than 50 per cent
of the bank's shares.  The stake was built up over several
months at a time when the controversy surrounding the bank
was at its height and when most analysts regarded buying
its shares as madness.

Because Bank Bali's planned 99-for-1 rights issue will
massively dilute existing shareholdings, building up the
stake only makes sense if the mystery buyer intends to
subscribe to the rights issue.  If it does, and pays its
share of the recapitalisation cost, it will have control.

Mr Ramli has denied that he is linked to the mystery buyer,
saying if he had the money to build up such a stake he
would not have needed help to recapitalise Bank Bali in the
first place.  Ibra has also said it did not know who was
behind the buying.  But analysts say that if the buyer does
subscribe to the rights issue it will eventually have to
show its hand, and the controversy surrounding the bank may
well be far from over. (South China Morning Post  28-April-

PT INTI INDORAYAN: Warns govt to let it reopen or face suit
Publicly listed pulp and fiber rayon firm PT Inti Indorayon
has given the Indonesian government one week to allow the
company to resume operations or face international

"If the government closed Indorayon without a due process
of law, I would see that as the government's choice.
However, in that situation, there is no choice left for us,
but to seek international arbitration," finance director
David Pile told a news conference on Friday.

Indorayon factory's operations in Porsea, North Sumatra,
were suspended by the government in mid-1998 due to claims
of the factory causing environmental and social problems.

"We are talking about a 'straight damage claim' arbitration
suit," he said.

He declined to specify the amount of settlement the company
would request, saying Indorayon would not want to get into
the details of the arbitration as yet because the
discussion with the government was not final.

Pile urged the government to provide proof that Indorayon
had breached the country's laws or the company's operating
permit.  The only way to establish such proof is to reopen
the mill and find an independent auditor to work on the
environmental auditing, according to Pile.

"But if the government decided to arbitrarily close down
the mill, what you are saying is that every single company
(in Indonesia) is subject to that," he said.

New Minister of Industry and Trade Luhut Pandjaitan, who
replaced Yusuf Kalla on Wednesday, said shortly after his
installment that he supported the closure of the Indorayon
mill as he said the mill had 3created environmental
problems in the surrounding area.

"(It's) not exactly certain what the new minister of
industry and trade has said, though it is free to say that
(former minister of investment and state enterprises
development) Laksamana Sukardi and Yusuf Kalla were very
supportive of a process of due process of law and order
implementation," he said.

Earlier this month the trustee of Indorayon foreign
shareholders, lawyer Todung Mulya Lubis, said his clients
planned to register its case against the Indonesian
government with the International Center for Settlement of
Foreign Investment Dispute in Washington DC.

"They will charge the Indonesian government with unlawful
closure," Todung said.

The foreign shareholders, together, own 86 percent of
Indorayon.  The two-decade presence of Indorayon's pulp and
fiber factory in North Sumatra, which has a capacity to
produce 240,000 metric tons of pulp in addition to 60,000
tons of rayon fiber a year, has led to mounting criticism
and pressure from local people and many non-governmental

Indorayon's inability to operate during the last 20 months
has resulted in a sharp drop in its market capitalization
value from about $1.4 billion in 1996 to only around $40
million at present.  Inti Indorayon is listed on the
Jakarta Stock Exchange and is also traded in the United
States through American depository receipts.

Both exchanges have threatened to delist Indorayon from
their trading board if the company fails to resume its
factory operations by next week. (Jakarta Post  29-April-

PT PLN GROUP : Books Rp 11.3T net loss this year
Cash-strapped state-owned electricity company PT PLN booked
a net loss of Rp 11.3 trillion (US$1.4 billion) this year,
up from Rp 9.5 trillion in 1998, PLN said on Friday.

PLN's revenue, however, rose to Rp 15.6 trillion from Rp
13.7 trillion last year, the company said.  PLN said
soaring operation costs contributed to an increase in its
operating losses this year, which stood at Rp 5.5 trillion
compared to Rp 2.7 trillion last year. Its operating costs
jumped to Rp 21.5 trillion from Rp 16.8 trillion last year.

The company said fuel expenses reached Rp 9.69 trillion
last year, slightly higher than Rp 9.4 trillion in the
previous year. However, expenditures for the purchase of
power supplies jumped to Rp 5.08 trillion last year, from
Rp 1.01 trillion in the previous year.

The economic crisis that hit Indonesia in mid-1997
following the sharp depreciation of the rupiah to the
dollar, pushed PLN into severe financial difficulties.
The company sells power in rupiah, but pays most of its
costs, including for the purchase of fuel and power
supplies from independent power producers (IPPs), in

The state-owned company had signed power purchase
agreements with 27 IPPs, some of which have started
operation. It is currently negotiating with the IPPs to
reduce their power prices.  The government has allowed PLN
to raise its selling price by an average of 29 percent in
April this year. Still, the company is expected to book a
net loss of Rp 3 trillion this year. (Jakarta Post  29-


AIWA CO.: Posts record 11.5B Yen group net loss
Aiwa Co. (6761) reported Thursday a record group net loss
of 11.5 billion yen for the year ended March 31, compared
with profit of 3.5 billion yen a year earlier.

The loss is attributed to the company's slow response to
the yen's appreciation as well as production delays caused
by the difficulty in procuring electronic parts.  The
company will reduce the second half dividend by 5 yen to 6
yen, cutting the annual dividend to 14 yen -- the first
fall since the year ended November 1986 when the company
canceled the payout.

Sales dipped 6% for the second consecutive fall. The higher
yen depressed sales by 41.8 billion yen, causing pretax
income to shrink by 4.2 billion yen.  Inventories of semi-
finished products built up 27% to 16.5 billion yen.

According to the consolidated cash flow statement, capital
investment reduced cash flow by 17.1 billion yen, but
collection of accounts receivable remained at 4.8 billion
yen. Most of the cash shortfall was covered by bank
borrowing. The cash balance for financial activities
resulted in a 12.1 billion yen inflow.

For the year through March 2001, the company assumes
further appreciation of the yen, to 98 yen against the
dollar and 101 yen to the euro. It will also review its
parts procurement system. Group operating profit is
estimated at 7.3 billion yen with net profit projected at
1.8 billion yen. (Nikkei  28-April-2000)

HIKARI TSUSHIN: President planning to seek outside help
The embattled president of former Internet highflier Hikari
Tsushin Inc. said he planned to hire consultants and might
bring in top executives from outside the company as a way
of restoring confidence.

In an interview, Yasumitsu Shigeta insisted his company
still has high growth prospects, saying it is sharpening
its focus on business-to-business electronic commerce and
Internet applications on mobile phones. Mr. Shigeta said he
hopes to bring back Hikari's stock price to its former peak
"as quickly as possible."

Hikari's shares closed down by their daily limit for the
19th straight trading day on Wednesday, finishing at 15,800
yen ($149.04) each. That's 93% down from the intraday high
of 241,000 yen that Hikari reached in February.

Many institutional investors have been lined up since the
end of March trying to sell Hikari shares, after it
announced it would suffer its first operating loss. Those
investors believe Hikari is stuck in a rapidly maturing
mobile-phone market and doesn't have the expertise to
compete with more experienced Internet investors. Mr.
Shigeta said Hikari plans to call on outside help as it
studies adopting a holding-company structure to make its
operations more transparent.

"We will bring in various consultants," he said. Asked
whether Hikari would follow the model of U.S. Internet
ventures such as Inc. that have brought in top
executives from established companies, Mr. Shigeta said:
"That's one of the things we're studying."

He declined to elaborate.  Mr. Shigeta said Hikari plans to
continue investing in Internet companies, using cash on
hand. He said the company doesn't plan to raise money with
a bond or stock issue.

"We're in a good position - we're in he areas that are
going to grow the fastest in the 21st century," Mr. Shigeta

He added that Hikari can make its mobile-phone business
more profitable by offering services on Internet-enabled
mobile phones such as stock-price data and programs that
pinpoint users' location via satellite and guide them to
their destination.

Meanwhile, Hikari announced that, as expected, Mr. Shigeta
resigned as an outside director at Softbank Corp., a rival
Japanese Internet investor. Softbank's chief financial
officer, Yoshitaka Kitao, had demanded the resignation.
(The Asian Wall Street Journal  27-April-2000)

KANKAKU SECURITIES CO.: Posts 64.3B Yen group net loss
Kankaku Securities Co. (8607) said Friday that it enjoyed
strong growth in revenue and a swing into the black for the
fiscal year ended March 31, citing the robust stock market
and the resultant gains in revenue from stock brokerage

The medium-sized brokerage house said its consolidated
revenue surged 31% to 58.81 billion yen, while it turned
around a loss of 7.92 billion yen a year earlier into an
operating profit of 18.85 billion yen. It posted a group
pretax profit of 17.85 billion yen, a swing from a loss of
8.82 billion yen.

But it suffered an even deeper group net loss of 64.39
billion yen from a loss of 19.40 billion yen a year ago.
Kankaku's net results were battered by a massive 83.26
billion-yen special loss related to steps to strengthen its
financial standing on a group-wide basis. Among the total
losses, the company reported a special loss of 61.70
billion yen as it extended aid to Kankaku Finance and other
ailing affiliates. It also booked a 7.94 billion-yen loss
from sales of investment securities holdings.

On a parent basis, Kankaku said it had a net loss of 64.37
billion yen, greater than the year-earlier loss of 20.17
billion yen. The parent company's revenue surged 33% to
58.77 billion yen.  Its revenue from stock broking
commissions soared 141% to 28.92 billion yen, while stock
underwriting commissions fell 16% to 1.76 billion yen.

Kankaku's stock trading market share on the Tokyo Stock
Exchange fell to 1.05% from 1.34% a year ago in terms of
turnover in value. But its stock brokerage commission per
share transaction grew to 5.91 yen from 3.48 yen a year
ago. The brokerage's capital-to-risk ratio stood at 402.9%
as of the March 31 book closing compared with 305.2% a year
ago. (Nikkei  28-April-2000)

NICHIMEN CORP.: To post 50B Yen, 2-year restructuring loss
Nichimen Corp. (8004) is likely to record a total of about
50 billion yen in consolidated extraordinary losses over
two years through March 2001 to cover restructuring of the
group's unprofitable operations, company sources said

About 20 billion yen of the loss has been posted in fiscal
1999, including some 10 billion yen from covering
investment losses on its group firms and increasing its
loan-loss provisions. The figure also includes 5 billion
yen from devaluation of its property holdings and about 3
billion yen to cover risky debts to Russia and other

The 20 billion yen loss will be absorbed by pretax profit
and extraordinary profit. As a result, Nichimen expects
consolidated net profit of close to 4 billion yen in fiscal
1999, compared with a 21.7 billion yen net loss a year
earlier.  Nichimen plans to post the remaining 30 billion
yen of restructuring-related losses in the fiscal 2000
first half ending September. Sales of fixed assets should
ensure the company remains in the black for the full year
through March 2001.

In fiscal 1999, the parent company will also book an
extraordinary loss of around 20 billion yen. Accordingly,
the company will likely halve the annual dividend payment
to 2.5 yen from the year before. (Nikkei  28-April-2000)

SOGO CO. LTD.: Exec kills himself
A top executive handling Japanese department store Sogo Co
Ltd's efforts to crawl out from under a mountain of debt
has hanged himself -- a high-profile sign of the human toll
of the nation's economic woes.  A police spokesman said on
Friday that Yasuharu Abe, 63, had been found dead on
Thursday after hanging himself at his home in Kamakura,
west of Tokyo, apparently because he could no longer cope
with his company's financial troubles.

"I'm sorry, please forgive me," Abe wrote in a suicide note
to his wife, the police spokesman said.

Domestic media said Abe's wife found the pajama-clad
executive hanged with a necktie which had been tied to a
pillar in the living room of the couple's home.  Earlier
this month, Sogo announced a major restructuring and asked
creditors to forgive 639 billion yen ($6 billion) in debt,
the largest such request ever made to banks.

But analysts said Sogo's creditor banks were reluctant to
forgive the entire amount and were unlikely to alter that
tough stance because of the suicide.  Sogo's share price
plunged 24 percent on Friday morning in Tokyo to its face
value of 50 yen. In early afternoon it was at 51 yen.

Abe's suicide came one day after the ailing department
store reported a group net loss of 137.6 billion yen for
the business year that ended on February 29, up from a 25.6
billion yen loss the previous year.  Sogo's group debt --
accumulated when it expanded aggressively during Japan's
late 1980s asset bubble era -- stands at a massive 1.70
trillion yen. It said on Wednesday that the group's
liabilities exceeded its assets by 580 billion yen.

Japanese department stores in general are struggling to
survive as competition from smaller and more innovative
stores piles on the pressure to take draconian steps to cut
costs and find ways to attract shoppers.

Abe, who joined Sogo in 1994 from one of its chief lenders,
the Long-Term Credit Bank of Japan, had played a key role
in the company's efforts to get 73 banks to forgive 639
billion yen in debt, the largest such request ever made to
creditor banks. Sogo said in a statement that it was
shocked by Abe's death and expressed the firm's deep
condolences, while also pledging to make every effort to
carry out its restructuring plan.

Analysts said his suicide might make it tougher for
creditor banks to refuse the request publicly but that in
the end, the financial institutions would likely stick to
their line of refusing to forgive the entire amount.

"From the banks' perspective, they simply can't swallow the
entire amount and there will be no change in that stance,"
said Takakazu Nakamori, a senior researcher at Teikoku
Databank. "Probably they will try to get (Sogo's biggest
creditor) bank) Industrial Bank of Japan Ltd (IBJ) to
increase its share of the debt forgiveness while reducing
the total amount."

Suicides by Japanese business executives and employees
under stress from corporate efforts to pry profits out of a
stagnant economy have been on the rise and could well have
come close to another record number last year.  The total
number of suicides looks likely to have topped 30,000 again
in 1999, after jumping 35 percent to a record 31,734 in
1998, financial daily Nihon Keizai Shimbun said last week.

Men in their fifties, typically targeted for layoffs when
companies downsize, have especially high suicide rates, the
newspaper noted.  The government said on Friday that the
jobless rate stayed at a record high 4.9 percent in March
for a second straight month.

Japan at present appears on track for a fragile economic
recovery after dipping back into a technical recession late
last year, but companies are increasingly being sorted out
into winners and losers in the face of growing global and
domestic competition. (Reuters  28-April-2000)

UEX LTD.: Sees second straight year of net loss
UEX Ltd. (9888) is expected to report a net loss of 680
million yen for the fiscal year ended March 31, less than
the net loss of 2.88 billion yen it posted in fiscal 1998.

The specialist wholesaler of stainless steel products had
been projecting a net profit of 20 million yen, but it has
booked a string of one-time charges, including a 187
million yen charge to write down the value of its share
portfolio and a 336 million yen charge to cover unfunded
retirement liabilities.

Fiscal 1999 sales are projected to have risen 1% to 32.1
billion yen, helped by rising sales of stainless steel
sheet.  The company swung to profitability on a pretax
basis due to cost savings generated by an early retirement
program and other moves. It is expected to report a pretax
profit of 310 million yen, up from a loss of 352 million
yen in fiscal 1998. (Nikkei  28-April-2000)


DAEWOO CORP.: FSS tabs for bank oversight
DAEWOO ELECTRONIC: FSS tabs for bank oversight
HYUNDAI GROUP: FSS tabs for bank oversight
HYUNDAI OIL REFINERY CO.: FSS tabs for bank oversight
LG GROUP: FSS tabs for bank oversight
NONG SHIM CO.: FSS tabs for bank oversight
SAMSUNG GROUP: FSS tabs for bank oversight
S OIL CO.: FSS tabs for bank oversight
SK GROUP: FSS tabs for bank oversight
The Financial Supervisory Service (FSS) yesterday unveiled
a list of 60 highly-indebted conglomerates, whose financial
conditions and business activities will be subject to
strict oversight of their main creditor banks.

A total of nine conglomerates, including the dismantled
Daewoo Group, were excluded from the watch list, which is
based on the outstanding amount of borrowing from banks,
insurance companies and merchant banks as of the end of
1999. Twelve companies, such as Daewoo Corp. separated from
the Daewoo Group, and Hyundai Oil Refinery Co. were newly
added to the list. Other new entrants included Daewoo
Electronic Co., S Oil and Nong Shim Co., a noodle and snack

The 12 companies will be required to sign agreements on the
improvement of their financial positions with main creditor
banks, which will include debt-reduction plans,
restructuring programs and plans to better their corporate
governance structures.

The financial watchdog said that the combined debts of the
60 conglomerates amounted to 124.09 trillion won as of the
end of last year. Their debts include loans, loan
guarantees, debentures, commercial paper and purchased
export bills.

The Hyundai Group had the largest outstanding debt of 21.74
trillion won, followed by the Samsung Group with 12.74
trillion won, Daewoo Corp. with 10.98 trillion won, the LG
Group with 9.17 trillion won and the SK Group with 7.44
trillion won.

Main creditor banks will closely monitor the financial
positions of the 60 conglomerates and their affiliates,
while the banks will be in charge of handling financially
weak companies.  (The Korea Herald  28-April-2000)

HYUNDAI GROUP: Struggling to regain investor confidence
Investors at home and abroad are rapidly losing confidence
in the Hyundai Group companies, casting fresh clouds over
the group's restructuring efforts, analysts say.

Key Hyundai companies suffered steep falls in their share
prices for the second consecutive day yesterday, as
investor jitters over the group's ailing investment-trust
unit took their toll on other group affiliates. Authorities
hurriedly announced plans to extend public funds to avert
bankruptcy of Hyundai Investment Trust & Securities Co.,
but failed to stabilize the market.

Investors said that the Financial Supervisory Commission's
(FSC) commitment to the Hyundai financial unit was
ambiguous and may face taxpayers' resistance, due to the
group's financial and managerial scandals. Escalating
rumors of a renewed liquidity crisis at the Hyundai Group
also prompted group officials to issue a series of press
releases asserting that the group holds enough liquidity to
finance its operations and will spin off 10 more
subsidiaries by June 30 as planned.

But the desperate pleas from both Hyundai and the watchdog
FSC appeared to fall on the deaf ears of the investors,
particularly foreigners. The "Sell Hyundai" mood was
touched off by a report of Credit Lyonnais Securities
Asia's Seoul branch which was distributed by Tong Yang
Securities. The report suggested Hyundai Investment Trust's
exclusion from the government's public fund injection plans
would force other Hyundai Group firms to extend funds to
the troubled financial unit, resulting in a group-wide
liquidity crisis.

The Credit Lyonnais report immediately shook up investors
who were already wary of suspect fund diversions by Hyundai
Investment Trust Management Co. and unsavory managerial
disputes among Hyundai founder Chung Ju-yung's sons. On top
of that, the authorities' toughening probes into Hyundai
companies' illegal inter-unit deals and tax evasions, and
Renault's expected encroachment into Hyundai Motor's
domestic market share heightened the sense of a crisis.

Just a year ago, an outbreak of "Sell Daewoo" tips from
foreigners drove the financially shaky Daewoo Group to go
bust. "Market jitters over the Hyundai crisis may not be
dissipated easily, as the exact amount of losses at Hyundai
Investment Trust & Securities are not known clearly," said
a Seoul-based foreign analyst, adding that at least 2
trillion won ($1.8 billion) will be needed to normalize the
investment trust unit.

In the meantime, a growing number of economists and civic
activists are demanding that the Chung family shoulder
responsibility for the losses at Hyundai's financial units.

"Troubles at Hyundai Investment Trust have long circulated
in the market. Nevertheless, the more fundamental reason
for the latest shocks is the growing uncertainties over the
exact amount of losses and the immorality of the top
Hyundai managers," said Woo Young-ho, a researcher at the
Securities Research Institute.

Government officials said that it is also important for the
Chung family to strive to dispel the investor distrust over
the group's corporate governance structures and upgrade
managerial transparency. (The Korea Herald  28-April-2000)

DONG-AH LIFE INSUR.: Acquisition by Kumho Life okayed
The Financial Supervisory Commission said it has approved
the acquisition of Dong-Ah Life Insurance Co Ltd by Kumho
Life Insurance Co Ltd on a 1-for-1 share ratio.

It also approved a decrease in Dong-A Life Insurance's
capital to 55.5 bln won from 1,147 trln, after Korea
Deposit Insurance Corp injected 1.092 trln won in public
funds to offset the company's losses, it said.

The Kumho group will hold a 90.3 pct stake in the merged
company, with Kwangju Bank holding 6.5 pct and other minor
shareholders 3.2 pct, it said.  The merged entity will have
a negative net worth, or assets minus liabilities, of 108.0
bln won, it said.  (AFX News Limited  28-April-2000)

HYUNDAI GROUP: Creditor bank denies liquidity problems
Concern over Hyundai Group's liquidity crisis is totally
groundless in light of its small short-term borrowing and
foreign debts, a senior official of Korea Exchange Bank
(KEB), Hyundai's main creditor bank, said yesterday.

"There are no liquidity problems at Hyundai's units since
their structures of domestic and foreign currency borrowing
are stable over the long term," KEB Vice President Manfred
Drost said in a hurriedly called news conference. "In
addition, Hyundai's debts are on a downward trend."

Drost said that Hyundai's short-term debts amount to only
5.2 trillion won or, 15.7 percent of its total borrowing of
37.5 trillion won at the end of last year, which also
declined 11.3 trillion won from a year earlier.  The
group's foreign currency borrowing stood at $12.4 billion
as of the end of 1999, down $1.3 billion from the previous
year, while its short-term foreign debts amounted to a mere
$1.28 billion.

Even if foreign lenders demand immediate repayment, Hyundai
will be able to meet its foreign debt obligations, the KEB
vice president said.  Drost said that it is absurd to
compare Hyundai with the failed Daewoo Group because
Hyundai's debts amount to only 42.5 percent of the now-
defunct conglomerate and Hyundai's units are leading
players in their respective sectors.

KEB's denial comes amid concerns that Hyundai units are
suffering from financial problems because of huge losses in
its investment trust unit, Hyundai Investment Trust &
Securities Co. Meanwhile, Minister of Finance and Economy
Lee Hun-jai also said that there are no liquidity problems
at the Hyundai Group.

"Unlike the Daewoo Group whose subsidiaries were unable to
make money, Hyundai is not suffering from any liquidity
problems from the viewpoint of its ability to pay interest
on debts," the top economic policymaker said in a news

Hyundai is totally different form Daewoo since Hyundai's
subsidiaries are earning profits and have the ability to
solve cash-flow problems on their own, Minister Lee
stressed.  Hyundai Electronics Industries and Hyundai Heavy
Industries are earning a considerable amount of money,
while the profitability of Hyundai Engineering &
Construction is expected to improve this year, he said.

It is true market confidence in Hyundai Securities is
problematic because of its stock price manipulation last
year, but all corrective measures against the violation
have been already taken, Minister Lee said, adding that
much progress has made in its management.

The finance minister also said that there is no need to
worry about the financial soundness of Hyundai Investment
Trust & Securities unlike other two troubled investment
trusts - Korean Investment Trust and Daehan Investment

In a related move, Financial Supervisory Commission (FSC)
Chairman Lee Yong-keun met Hyundai Securities Chairman Lee
Ik-chi and promised financial support to Hyundai Investment
Trust & Securities if the Hyundai Group expedites reform in
governance and ownership structuring.  FSC Chairman Lee
expressed confidence in Hyundai's liquidity condition,
saying the stock market was overreacting.

Hyundai Chairman Lee asked for government assistance to
clean up debts of Hyundai Investment Trust.  The FSC chief
said the government will help but called for transparency
in ownership structuring, reminding the plunge in the
market was spurred by the public spat between the sons of
Hyundai founder Chung Ju-yung over the leadership.

The FSC sees no liquidity problems in Hyundai companies and
explained this to the group's main creditor Korea Exchange
Bank, its chief said. It is mainly up to Hyundai to work
towards restructuring Hyundai Investment Trust and recover
market confidence.

Hyundai's stock crash will be resolved in time after the
group recovers market confidence through its restructuring
efforts, he said, adding Hyundai's situation was clearly
different from that of the Daewoo Group. But he maintained
that the government cannot inject public funds or other
direct financing into Hyundai Investment Trust & Securities
as it did with Korea Investment Trust and Daehan Investment
Trust because the company has a sure owner. (The Korea
Herald  28-April-2000)

HYUNDAI GROUP: Founder, family pressure to use wealth
Hyundai Group founder Chung Ju-Yung and his family appeared
to come under pressure on Friday from the government to use
their massive private wealth to help rescue the group's
ailing financial unit.

An unnamed senior official of the Financial Supervisory
Service was quoted by news reports as saying that the
Chungs should use their private assets to recapitalize
Hyundai Investment Trust Co.  This move would be necessary
to ease public criticism of any government injection of
public funds into the troubled investment trust, he said.

The official reportedly accused Hyundai of failing to live
up to its numerous pledges concerning the protection of
individual shareholders, improvement of its corporate
governance and restructuring of its sprawling empire.
He warned that Hyundai must remember that loss of market
confidence contributed to the collapse last year of giant
conglomerate Daewoo Group, according to Daewoo founder, Kim

Any move to inject private assest would not be unique.
Samsung Group Chairman Lee Kun-Hee handed over his multi-
million-dollar holdings in Samsung Life Insurance Co. to
creditor banks of Samsung Motors Inc. after the automaker
became insolvent.  But the Hyundai Group said the two cases
cannot be compared.

It noted Samsung's Lee was taking reponsibility for his bad
decision to belatedly jump into automaking business. On the
other hand, Hyundai Investment Trust incurred heavy debts
after it took over the bankrupt Hannam Investment Trust at
the government's behest. A spokesman of the Hyundai Group
said: "The group has not received any request from the
government concerning the investment of the Chungs' private

Hyundai Investment Trust on Friday hurriedly released a
plan to raise 2.7 trillion won (2.45 billion dollars) over
the next three years to turn its net liabilities of 1.2
trillion won to assets of 1.5 trillion won. But analysts
said the plan lacked details and appeared too ambitious in
light of the country's battered stock market.

Hyundai Investment Trust's plight has led to shares of
Hyundai units falling drastically, dragging down the
already-weak bourse with them.  (Agence France Presse  28-

SAMSUNG MOTORS: Creditors, Renault sign letter of intent
Creditors of Samsung Motors and France's Renault yesterday
signed a letter of intent (LOI) on the ailing automaker's
sale after agreeing on outstanding details on rescheduling
and mortgage terms Wednesday night.

The signing ceremony, held at Samsung Motors' sole
passenger-car plant in Pusan, was attended by Renault's
vice presidents G. Douin, J.M. Lepeu and A. Dasas, Hanvit
Bank president Kim Jin-man, Pusan Mayor An Sang-yong and
the French ambassador to Korea.

Renault, which agreed to buy 70 percent of Samsung Motors
for 620 billion won (about $562 million), plans to re-
launch the automaker as a joint-venture company which is 20
percent owned by the Samsung Group and 10 percent by
creditors July 1.

Lee Ki-ho, senior presidential secretary for economic
affairs, and celebrities in Pusan held a welcoming
reception at the Lotte Hotel in Pusan later in the day.
At Wednesday's talks, creditors and Renault reached an
agreement on three outstanding issues, including the one
over how much payment should be placed in escrow.

Earlier on Tuesday, creditors agreed to accept Renault's
final offer to buy Samsung Motors for 620 billion won while
requesting for further negotiations on rescheduling,
mortgage and escrow terms. (The Korea Herald  28-April-


TIME ENGINEERING: Sapura moves on last-minute bid
Malaysian telecoms equipment-maker Sapura Holdings has
emerged to make a rival 11th-hour bid for Time Engineering
and its telecommunications businesses, hoping to steal it
from under Singapore Telecommunications' (SingTel) nose.

Sapura was rumoured to be working with Li Ka-shing's
Hutchison Whampoa, but a short statement made to the
Malaysian stock exchange yesterday made no mention of the
Hong Kong player.  Sapura is apparently prepared to offer
M$1 billion (about HK$2.04 billion) more than SingTel. If
its bid succeeds, it will prevent a large chunk of debt-
laden Time falling into Singapore hands.

"It is a sensitive issue," said a Malaysian broker. "If the
Malaysian government doesn't want to give it to Singapore,
then this is the perfect excuse."

Time, which controls a 3,600 kilometre fibre-optic network,
is 47 per cent owned by conglomerate Renong, which in turn
is associated with Malaysia's leadership.  There had been
speculation SingTel's proposed merger with C&W HKT failed
because Beijing was reluctant to see a key Hong Kong
utility in foreign hands.

SAR Internet start-up Pacific Century CyberWorks, run by Li
Ka-shing's son Richard Li Tzar-kai, emerged at the last
minute as a preferred bidder.  Beijing was not thought to
have any qualms with Singapore in particular, but foreign
ownership in general.

Singapore Prime Minister Goh Chok Tong was advised during
his mainland trip this month the HKT deal had been "purely

But many have expressed doubts.  With Time, the fact
SingTel is Singapore-owned could prove influential behind
the scenes. Relations between Malaysia and its neighbour
often blow hot and cold.

"There are certain things they don't want Singapore to
own," said a broker.  "But they are close neighbours as
well and there are times the Malaysian leadership does not
seem to mind."

SingTel has already signed a non-binding provisional
memorandum of understanding with Time about acquiring a
14.5 per cent stake in Time in exchange for assuming M$2.9
billion of debt. (The Star  29-April-2000)


ASIAN BANK: Also hit by heavy withdrawals
EXPORT INDUSTRY BANK: Also hit by heavy withdrawals
INT'L EXCHANGE BANK: Also hit by heavy withdrawals
PHILIPPINE COMMMO.BANK: Also hit by heavy withdrawals
SOLID BANKING CORP.: Also hit by heavy withdrawals
Text messages about bank runs yesterday triggered the heavy
withdrawals that hit International Exchange Bank (iBank),
Philippine Communication Bank (PBCom) and other banks,
officials yesterday said.

Sources said Asian Bank, Solid Banking Corp., and Export
Industry Bank were also hit by heavy withdrawals by jittery
The heavy withdrawals prompted the Bangko Sentral ng
Pilipinas (BSP) to extend financial assistance to the five
banks, according to sources.

"We would like the public to remain calm amid rumors that
there are other banks experiencing problems similar to
those that led to Urban Bank's downfall. The financial
system is very stable and some banks are being hit by
rumors," Finance Secretary Jose T. Pardo said.

Malaca¤ang also assured the public that the local banking
system was "sound and stable."  As late as 6 p.m., the BSP
had to extend P2 billion in loans to iBank. To finance the
withdrawals, stockholders of PBCom had put up P1 billion in

The BSP said it had asked the National Bureau of
Investigation to help it crack down on the rumor-mongers.
But BSP Deputy Governor Alberto Reyes said the BSP had
identified the same group of Filipino-Chinese businessmen
involved in Westmont Investment Corp. and ASB Realty as the
one which started the rash of withdrawals in Davao City and
Binondo, Manila.

"These are the same groups that are spreading the rumors,"
said Reyes, in charge of BSP's supervision.

The BSP cautioned the public against lumping all banks into
the category of Urban Bank, which was ordered closed April
27 because of the panic withdrawals of P4 billion of its
P9.1 billion in deposits in the last five weeks, following
its downgrade from a commercial bank to a thrift bank.
Urban, which has over 14,000 depositors, was the largest
bank to fall after Orient Bank closed shop in 1998.

The queue of depositors even lengthened yesterday at the
branches of iBank and PBCom as panic withdrawals spread
from the provinces to Metro Manila. As late as 7 last
night, some 100 depositors formed a line at the iBank
branch on De la Costa Street in Makati City. Money was made
available to depositors of the bank only starting 7 p.m.

At the iBank Textite branch in Pasig City as of 9 last
night, a long queue of depositors was still waiting to
withdraw their money. The bank manager said they had to
wait until the armored vehicle carrying the money arrived.

The management of iBank said the bank would be open until
12 midnight and would also open today, a Saturday. In Davao
City, depositors lined up at the local branches of PBCom
and iBank as heavy withdrawals continued. Some depositors
had to wait for two hours before they were served by bank
tellers. Others had waited since noon.

At the PBCom Monteverde branch, the priority numbers issued
to clients had already reached 200 at around 10 a.m.  But
more people kept coming, prompting bank staff to distribute
candies instead of numbers.  A depositor at the PBCom
Monteverde branch said he rushed to the bank after
receiving a "text message" that the bank was closing down.
He decided to withdraw all his money.

PBCom officials barred reporters from talking to its
managers. At the only iBank branch in Davao City, depositors
continued to stay inside the bank until around 6 p.m.
Thursday.  A source from the banking industry here said
iBank submitted to the BSP regional office in the city
check withdrawals worth P91 million.
On normal days, the bank submits only P10 million to P15
million worth of check withdrawals, according to the

Jason Ang, iBank-Davao branch manager, declined to comment
on the report, saying the company had designated a
spokesperson in its head office in Manila. A few depositors
of iBank and PBCom still made check deposits expressing
confidence that both banks were stable enough. The majority
of the depositors of both iBank and PBCom in Davao City are
Filipino-Chinese traders.

Ramon Sy, president of iBank admitted the withdrawals have
spread down to Metro Manila. He said he heard of the rumors
that iBank would declare a bank holiday as early as last
Monday, even before Urban Bank had announced a bank
holiday. He said 50 of iBank's 59 branches were affected.
Sy said iBank had a deposit base of P20 billion but he
refused to say how much the withdrawals had amounted to.

"We would like to assure the general public especially our
valued clients, that there is no truth to the rumor being
circulated through text messaging and by some quarters that
the International Exchange Bank (iBank) is going to be
downgraded from a commercial bank to a thrift bank," he
said in a statement.
"The truth is our equity is P3.5 billion way above the
required P2.8 billion for commercial banks. As of today,
iBank has total assets of P34 billion and is considered
among the biggest medium-sized commercial banks in the
country with 59 branches nationwide.

"The bank continues to grow, and in fact is looking at the
possibility of acquiring other banks. We are a commercial
bank and will continue to be so," he said.

Isidro Alcantara Jr., president of PBCom, admitted that
there was a slight increase in withdrawals yesterday and
that even Metro Manila branches were affected. PBCom has 45
branches. Alcantara said PBCom's problem should be over by
Tuesday. "In a situation like this, there's nothing you can
do but to prove that you are able to meet your
obligations," Alcantara said.

He said PBCom should be the least affected by the difficult
environment because it had no exposure in high-risk sectors
like real estate. In a separate statement to the Philippine
Stock Exchange, PBCom said: "The owners of PBCom composed
of the families Luy of International Copra Export Corp.,
Nubla and Chung of La Suerte cigar and cigarette factory
and its officers led by president and chief executive
officer Isidro Alcantara assured the public that the
reported withdrawals are isolated and in no way affect the
bank's continued stability."

"The recently approved amendment to revert its status is
consistent with the operation of PBCom as a pure commercial
bank. It has never used its universal banking license and
has no subsidiaries engaged in real estate and investment
PBCom remains financially healthy and will meet all its
obligations as it has done for the past 60 years being the
fourth oldest bank in the country," PBCom said.

PBCom ended 1999 with P40 billion in total resources with a
capital of P4.7 billion, which makes it the highest
capitalized regular commercial bank.  For his part, Placido
Mapa, chair of the Metrobank Group, now the majority owner
of Solid Bank, denied that the bank was hit by panic
withdrawals.  Asian Bank has been acquired as well by
Metrobank's Global Business Bank. The Export Bank is
controlled by the Philippine group of exporters.

The Monetary Board, the policy-making body of the BSP, led
an emergency meeting yesterday afternoon. It denied that
the problem was systemic.  Executive Secretary Ronaldo
Zamora said the BSP and the Department of Finance were
ready to help banks in trouble.  "They are ready to infuse
the funds needed to keep them running," he said.

Aside from the BSP's lending facility, the Bankers'
Association of the Philippines is providing additional
liquidity pool to assist other banks that are encountering
problems.  In Hong Kong, BSP Governor Rafael Buenaventura
yesterday warned that bank closures were inevitable as the
industry consolidates.

"Unfortunately, as the bigger banks consolidate, from time
to time you will see some of the banks that have their own
peculiar problems," Buenaventura told Dow Jones Newswires
following a speech.

The market will determine which banks survive, he said.
Wise Securities research head Jose Vistan said the looming
jitters in the banking system was the result of the
continuing weakness of the sector.

"This gives the banks more reason to merge. There is big
room for more mergers," Vistan said.

PCCI Securities Brokers Corp. research head Gonzalo
Bongolan said this development showed all the more how
investors would have to be more careful in evaluating

The Philippine Deposit Insurance Corp. (PDIC) will start
servicing claim of depositors with current and savings
accounts in Urban Bank on May 2, PDIC President Norberto C.
Nazareno announced yesterday.  Due to the longer nature of
time deposits and foreign currency deposit accounts, claims
settlement of these accounts will be scheduled and
announced later, according to Nazareno.  Only current and
savings accounts in Metro Manila and the provincial
branches will be serviced initially.

"Accounts amounting to P5,000 and below will be paid in
full while accounts amounting to P5,000 and above will be
paid the equivalent of 25 percent of the deposit account
but not to exceed P25,000. The retaining amount of the
insured deposit will be paid as soon as the consolidation
and examination of deposits are completed by the PDIC. We
estimate the examination to take another week or two from
the initial payoff," Nazareno said.

He announced that depositors need to proceed to their
respective branches and submit evidence of deposits and two
valid identification cards. Cash payments shall be made to
those with balances of P1,000 and below. Accounts amounting
to P1,000 and above shall be paid in check drawn by PDIC as

All provincial and Metro Manila branches except the head
office and head branch will be served on a "first come,
first served" basis. To provide more efficient service, the
head office (in Urban Plaza on Buendia corner Pasong Tamo
in Makati) and Head will serve depositors on the following
schedule: May 2--those with surnames starting, with A-E;
May 3, G-I; May 4, M-R; and May 5, S-7. After May 5,
depositors will be served on a "first come, first served"
basis.  (Philippine Daily Inquirer  29-April-2000)

BAYAN TELECOMM.INC.: Moody's downgrades senior notes
Moody's Investors Service today downgraded Bayan
Telecommunications, Inc.'s (BayanTel) US$200 million senior
notes rating to Caa2 from B3 and its senior implied rating
to B3 from B2, and left the ratings under review for
possible further downgrade.

The rating action reflects the disappointing operating
performance of BayanTel and concern that the company's
near-term growth prospects are insufficient to allow any
meaningful reduction in its debt load. The company is
currently in breach of key financial covenants in its bank
loans, which have the potential to cross-default to the
senior notes if not waived by the banks. The review will
consider the outcome of negotiations with banks to waiver
covenant breaches, BayanTel's ability to source incremental
equity capital, and the likelihood that financial support
from stockholders will be available if required.

The ratings recognise the risks associated with high
leverage, operating in a competitive environment with the
prospect of little subscriber growth, and the challenges of
servicing significant foreign currency debt obligations
against a backdrop of reducing international call
settlement rates.

The ratings consider the importance of Benpres Holdings
Corporation's (Benpres) 67% interest in BayanTel, and its
continued close involvement in the operations of that
company. BayanTel may be reliant on parental support to
meet interest payments in the short term given that bank
lines are fully drawn. Benpres has indicated that it is
willing to support BayanTel, if required, with the interest
and principal on any advances being subordinated to the
claims of other creditors.

BayanTel's growth has been disappointing, being
significantly below management forecasts. The ability of
the company to support its current balance sheet, without
additional equity, is questionable. For the 12 months ended
12/31/99, BayanTel had roughly $125 million in net revenue,
and EBITDA of $45 million, while debt was approximately
$490 million.

Moody's considers that BayanTel is unlikely to achieve a
debt-to-EBITDA ratio of below 5 times in the next five
years without a significant capital injection.
Structurally, the $200 million senior notes are junior to
approximately $225 million in secured credit facilities and
Moody's ratings reflect this effective subordination. The
initial rating allowed for only a one notch differential
between the senior implied rating and the notes rating
based on the perceived worth of BayanTel's assets and the
coverage of debt.

This has been increased to two notches as Moody's has
become more concerned about diminishing asset value in
light of the poor performance and the recovery prospects
for the notes given the large secured position ranking
ahead of the notes, which could come into play if a balance
sheet restructuring is not achieved.

Benpres recently announced that it intends to functionally
align the operations of BayanTel and its Sky Cable
subsidiary, to form an integrated broadband services
platform. These companies will, however, maintain separate
legal and accounting identities. Moody's notes that this
restructure has the potential to reduce costs, capex, and
to leverage sales. Gabie Lopez, a senior member of the
Benpres group, will supervise the day-to-day operations of
the combined group.

BayanTel's service area covers more than 35% of the
Filipino population of 75 million, with installed lines of
over 450,000. Growth in connected lines continues to be
low, with 248,000 as at 2/28/00, up from 236,000 as at
12/31/98. The growth has been retarded by strict
disconnection policies on non-payment of bills and a trend
by marginal subscribers towards prepaid cellular products.

The company has experienced moderate success with growing
its business data revenue, although this could come under
attack from a revitalised PLDT. Bayan Telecommunications,
Inc., based in Metro Manila, the Philippines, is a
facilities based telecommunications service provider
offering a full range of switched and dedicated services.
(Moody's  29-April-2000)

URBAN BANK: Now in receivership
Urban Bank, the Philippine commercial bank, has been placed
under central bank receivership after heavy withdrawals by
depositors, raising concerns over the local banking system.

Trading in the bank's shares was suspended yesterday after
they fell 40 per cent on Wednesday. Analysts believe the
bank's collapse was partly triggered by the over-exposure
of Urbancorp Investments, its investment house subsidiary,
when investors pre-terminated on high-interest brokered
securities deals. Urban Bank was unavailable for comment.
Other investment houses have had difficulties for the same
reason, according to an analyst at a foreign bank.

"That this could happen several times exposes a major
weakness in banking regulations," he said.

However, government officials said Urban Bank was an
isolated case.  Edgar Bancod of Paribas Asia said the run
was caused by concerns that Urban Bank would downgrade from
a commercial to a thrift, or savings, bank.  (Financial
Times {London}  28-April-2000)

URBAN BANK : SMC files suit against it
San Miguel Corp. (SMC) filed yesterday a formal complaint
with the Bangko Sentral ng Pilipinas (BSP) against Urban
Bank in protest of the bank holiday declared by Urban Bank
starting April 25.

The bank holiday resulted in the bouncing of nine Urban
Bank manager's checks issued to various SMC subsidiaries
amounting to P176.9 million.  In the complaint letter, SMC
urged the BSP to take immediate steps to secure the records
of the bank and, importantly, to form a committee which
will include representation from SMC to investigate the

"Notwithstanding the fact that the SMC Retirement and Death
Benefit Plan is a substantial stockholder and has two
representatives in the bank's board, Urban Bank,
particularly the officers, did not seasonably and fully
disclose to us the facts which led to the declaration of
the bank holiday," said Francisco C. Eizmendi Jr., SMC
president and chief operating officer and also a director
of Urban Bank in the letter.

SMC senior vice president and general counsel Francis H.
Jardeleza, meanwhile, issued a demand letter to Urban Bank
for the bank to make good the checks it issued to the
various SMC subsidiaries within five days from receipt of
the letter of face litigation.

Eizmendi and SMC chief finance officer Albert M. de
Larrazabal, also a director of the bank, likewise demanded
to inspect bank records of all business transactions and
minutes of meetings of the bank's board and its committees
with regard to fact sand events which led to the
declaration of the bank holiday.

"We are thoroughly examining this entire issue. We will of
course do all that is necessary to protect our company's
interests," Eizmendi said. San Miguel's exposure in Urban
Bank amounts to approximately P1.3 billion.

"While this amount is obviously huge, we categorically
assure our employees, business partners and stockholders
that SMC's financial strength is not affected in any way
whatsoever," said Eduardo Cojuangco Jr., SMC chairman and
chief executive officer. (Philippine Star  29-April-2000)


TONG TIEN SEE CONSTRUCTION: Court rejects liquidator
Adding yet another turn to the Tong Tien See Construction
saga, the High Court yesterday threw out the firm's
application to remove its provisional liquidator.

The judge dismissed the application with costs, sources
said yesterday.  Yin Kum Choy was appointed the provisional
liquidator earlier this week. He replaced interim judicial
managers Gautam Banerjee and Chan Ket Teck from
Pricewaterhouse Coopers.

It is understood that Tong Tien See requested to re-admit
Pricewaterhouse Coopers but this was rejected by the High
Court.  Steps are being taken by 33 of Tong Tien See's
creditors to wind up the contractor. The hearing will be on
May 26.  Foo Maw Shen of Ang & Partners represents the 33
creditors who are owed a total of $32.3 million.

Tong Tien See was represented by B. Mohan Singh from Ramdas
&Wong.  The firm last month filed to be placed under
judicial management, saying it was "a more advantageous
realisation of the company's assets than would be affected
on a winding up". The court granted interim judicial
management but this has since been struck out by the High

Tong Tien See is a Grade 8 contractor, which means it can
tender for government projects worth $50 million and above.
It owes about $56 million to 34 trade creditors and the
banks. Of the trade creditors, five are listed companies.
The creditors have all done sub-contract works and/or
supplied materials to the company. (Business Times  29-


BANGKOK METRO.BANK: HSBC to buy 75% stake
SBC Holdings Plc agreed to buy control of Bangkok
Metropolitan Bank Pcl, giving Europe's largest bank a
chance to expand in Thailand and a boost to the
government's reform of the country's shattered bank sector.

Both sides settled on terms, after over a year of talks
between the London-based bank and regulators, who seized
Thailand's largest bank in January 1998 to stem a deposit
run, said Sivaporn Dardarananda, head of the central bank's
debt restructuring committee.

Mr Sivaporn didn't immediately give terms, though another
central banker, earlier yesterday said HSBC would pay 15
billion baht (S$671 million) for 75 per cent of Bangkok
Metro.  Officials at the UK-based bank declined to comment.
HSBC chairman David Eldon said last month the asking price
kept rising "with us saying we are on the acquisition

For HSBC, which has had an office in Thailand since 1888,
the purchase will allow it to extend its presence in a
market where curbs on foreign banks capped it to three
offices for its Hongkong and Shanghai Banking Corp unit. It
also has securities and investment banking units in

The sale of the nationalised lender will fulfill a promise
from Thailand made to the International Monetary Fund when
it received an international bailout in 1997 after the baht
collapsed. It will also go some way to paying for the
government's US$80 billion (S$136 billion) effort to
rebuild the country's banking system after it was forced to
take over many lenders.

After a year of negotiations, HSBC will buy the bank for 35
billion baht, then sell a chunk of overdue loans back to
the central bank's Financial Institutions Development Fund
for 20 billion baht, the regulator said. HSBC will then
manage the loans for a fee.

HSBC has long mulled expansion in Thailand. It already has
links to Bangkok Metro. Its customers are able to use the
Thai bank's branches to make payments on HSBC home loans,
credit cards to transfer money between accounts.  The move
also forms part of a global expansion that has seen two
major purchases in the last six months: it bought Republic
New York Corp last year and recently agreed to buy Credit
Commercial de France SA, France's sixth-largest bank.

For Bangkok Metro, the 15 billion baht price is 11 per cent
more than Krungthep Thurakit newspaper reported in November
that HSBC would pay.  Still, about 80 per cent of Bangkok
Metro's 160 billion baht of assets have little or no value,
said Kasem Prunratanamala, head of research at BNP Prime
Peregrine (Thailand). "The reported price seems relatively
cheap, since the FIDF will take away the non-performing
loans," he said.

The loan transfer, essentially a subsidy to the buyer, is
similar to the arrangement made by Thailand in its sale of
insolvent Radanasin Bank Pcl in November to United Overseas
Bank (UOB) of Singapore, he said. And, the price is similar
in at least one manner.  In the HSBC transaction, the net
price after the transfer of bad loans would be 57 per cent
less than the gross price. UOB initially paid 15.1 billion
baht for 75 per cent of Radanasin, then reduced that to 6.5
billion baht with the loan shift.

Thailand shuttered or seized more than three-quarters of
its lenders after a currency devaluation in mid 1997
triggered a two-year recession and surge in defaults. Even
today, two in five loans nationwide are at least three
months delinquent.

Though the majority of smaller finance companies were
closed, regulators have given special treatment to salvage
commercial banks through injections of new capital. Of what
had been 15 full-service banks, two were closed and five
others nationalised. Two of the latter -- Radanasin and
Nakornthon Bank Pcl -- were sold to foreign firms.

Standard Chartered Plc paid 12.4 billion baht for 75 per
cent of Nakornthon in September. In that deal, bad loans
were not hived off to the central bank. Instead, the
government agreed to bear 85 per cent of future losses on
loans identified as non-performing at the time of purchase.
Bangkok Metro, with assets of 160 billion baht at March 31,
is about the combined size of UOB and Standard Chartered's
Thai units.  (Bloomberg; Business Times  28-April-2000)

BANK OF AYUDHAH: Recapitalization plan hinges on TPI
Bank of Ayudhya (BAY) is trying hard to push through Thai
Petrochemical Industries Plc (TPI)'s debt restructuring
deal since its failure will force the bank to complete its
Bt37 billion recapitalisation plan within the next eight

BAY chairman Krit Rattanarak said at a press conference
that the move was necessary because the bank had lent a
total of Bt7.5 billion to the petrochemicals company, but
so far it has set aside only 20 per cent or Bt1.4 billion
against these bad loans.

However, bank executives are confident that BAY will have
no need to raise new capital this year and that it can put
off its recapitalisation plan until next year if the market
conditions remain unfavourable.  BAY has been struggling to
seek new funds since late last year as market sentiment in
the international markets has been poor.

Nevertheless, the bank will be able to recapitalise
immediately if need be as its shareholders have already
given the goahead for such a plan.  Krit insisted that BAY
was in no rush to do so, given that its capital adequacy
ratio, as per Bank for International Settlements (BIS)
standard, was currently as high as 14.84 per cent of total
riskweighted assets. This was still adequate for the full
provisioning requirement.

So far, the bank has set aside around Bt31 billion or 83.78
per cent against bad loans. If it had to meet the full
provisioning requirement, BAY still had a BIS ratio of 12
per cent, which, Krit said, was more than adequate for the
bank's business expansion for the entire year.

"We may have no need to recapitalise this year if market
sentiment remains bearish. I want a high pricing if we
really have to raise new capital," he added.

Aside from the TPI's debtrestructuring case, which is seen
as a major factor in seeking fresh capital, Krit said that
BAY still risked facing a sooner than expected
recapitalisation if a large number of restructured loans
turned nonperforming again and the country's economy
recovery slowed once more.

However, Krit noted that the overall economy was showing
signs of a gradual recovery, raising a high possibility
that Moody's Investors Service, the USbased rating agency,
would soon upgrade Thailand's sovereign rating to
investment grade as well as those of the financial
institutions.  The expected upgrade was likely to have a
tremendously positive impact for the whole country as such
a move would encourage offshore investors to shift their
investments back to the country, said Krit.  This would
help boost the share pricing if the bank decided to move
ahead with its recapitalisation plan.

"I want to recapitalise once and for all. This should be
the last time for a capital hike to protect the interests
of the shareholders. We need to get a good pricing to make
sure that the bank has an adequate capital base to expand
its businesses," Krit said.

Regarding TPI's debts, BAY's president Praphaisith
Tankeyura said that these debts were still booked as normal
debts, given that the company had repaid debts from time to
time.  He also tried to explain why the bank had not
reserved provisions for these loans.

However, Chumlong Atikul, senior executive vicepresident of
BAY, said that he was confident TPI's debt restructuring
plan would finally yield a successful result.  Along with
the TPI case, the bank is also aiming to restructure a
total of Bt40 billion this year. In the first quarter of
the year alone, Bt9 billion in debts have already been
restructured, resulting in a fall in nonperforming loans to
3132 per cent of total loans.

Chumlong noted that BAY would relentlessly pursue the
restructure of the remaining debts, because failure to do
so would force the bank to raise new funds earlier than
planned. (The Nation  28-April-2000)

ONE HOLDING PCL: SET to delist it

The SET Board of Governors previously passed the resolution
to delist the securities of 6 companies in the REHABCO
sector and also provided an opportunity for investors and
shareholders to trade on the securities about 30 days
before such delisting. The companies are:

1. One Holding Public Company Limited (ONE)
2. Thai Melon Polyester Public Company Limited (TMP)
3. Chaophya Marble-Granite Public Company Limited (CMG)
4. Oriental Lapidary Public Company Limited (O-LAP)
5. Thai Fisheries Public Company Limited (T-FISH)
6. Bijoux Holdings Public Company Limited (BIJOUX)

In order to allow shareholders to have the continuous
information before their securities have been delisted from
the Exchange, the SET will allow trading May 3 - June 1,
2000, then delist them from the Exchange June 2, 2000.

In addition, the SET has expanded the ceiling and floor
limits for the common stock of 6 securities because they
have been suspended for more than 15 consecutive days. By
virtue of Clause 24(3) and (6) of the regulation on
trading, clearing and settlement for listed securities
1999,the ceiling and floor limits of 6 securities on the
main board will be expanded from the regular 30% to 100% of
their last trading close. The new limits will be effective
from May 3, 2000.  The SET advises shareholders and
investor to exercise caution with regard to the investment
in such securities.  (Stock Exchange of Thailand  28-April-

The company, through Mr. Vitavas Vibhagool, Managing
Director, wishes to explain that the loss increase of about
20% in the 3rd quarter financial statements ending 30
September 1999 compared with the 3rd quarter financial
statements ending 30 September 1998, as certified by the
auditor to The Stock Exchange of Thailand.

The loss was caused by a number of factors, including the
rate of interest expenses incurred in the 3rd quarter,
1999, which were higher than for the 3rd quarter, 1998.
The company also suffered a decrease in revenues from
sales, as well as dealing with a financial liquidity
problem. The company has temporarily suspended a
construction project. And customers have stopped repaying
in instalments. (Stock Exchange of Thailand  27-April-2000)

SIAM SYNTEC CONSTRUCTION: Rehab filed for in court
Siam Syntec Construction has filed for business
rehabilitation with the Central Bankruptcy Court. The
company appointed Siam Syntec Planner to prepare the
restructuring plan. It owes 8.3 billion baht to 1,482

As well, Siam Commercial Bank and the Wongpaitoon Group
filed a petition for debt restructuring. Wongpaitoon, the
local maker of Reebok sports shoes, owes 3.6 billion baht
to 329 creditors.  Hearings are set for May 22. (Bangkok
Post  28-April-2000)

SRITHAI SUPERWARE PCL: Reports on issuance of notes
The company, through Andrew Donald Robert Gordon, on behalf
of its Plan Administrator, hereby reports to the Stock
Exchange of Thailand on the progress of its planned
issuance of floating rate notes.

As one material aspect of the Approved Plan, parts of
affected debts shall be exchanged for USD 84,200,000
Secured Floating Rate Notes due in 2005, which will be
issued to affected creditors, being considered as foreign
investors on April 28, 2000 by Srithai. Pursuant to Kor Lor
Tor Jor 677/2543, the issuance of Floating Rate Notes and
the appointment of the Chase Manhattan Bank, London to act
as Trustee have been approved by the Office of Securities
and Exchange Commission on March 30, 2000.

Setout below is the summary of significant terms and
conditions of the Floating Rate Notes. Specified Name: USD
84,200,000 Secured Floating Rate Notes Due 2005 of Srithai
Superware Public Company Limited; Face Value: USD 1,000;
Interest Rate: The notes will bear interest quarterly at a
rate equal to 3 month LIBOR plus the relevant margin as

Period Margin Rate
Year 1 1.00%
Year 2 1.25%
Year 3 1.50%
Year 4 1.75%
Year 5 2.25%
Year 6(1) 2.50%

This margin will only apply in circumstances where the
Final Maturity of the notes is extended by 1 year, provided
that, upon a request from Srithai and subject to the
approval of noteholders pursuant to an Extraordinary
Resolution passed at a meeting
of noteholders.
Amortization: Payment of principal will be made upon an
interest payment date falling in the months below.
Repayment Date Repayment at each date USD mn October 2000
1.250, April 2001 1.250, October 2001 1.500, April 2002
1.500, October 2002 2.00,
April 2003 2.000, October 2003 2.500, April 2004 2.500,
July 2004 2.875, January 2005 2.875, April 2005 (Final
Maturity) 63.950.
Total Repayment 84.200. Where the maturity date of the
notes is extended, the following additional amounts of each
USD 2.875 mn will be made in July 2005 and January 2006.
Consequently, the payment on the final maturity, April
2006, will be USD 58.200 mn.

Redemption: The notes will be redeemed in full at Final
Maturity. The Final Maturity for the notes will be the
date, which falls 5 years after the issuance date or 6
years after the issuance date in case of 1-year extension
approved.  (Stock Exchange of Thailand  28-April-2000)

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

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, James Philip P.
Jover and Cristina Pernites, Editors.

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

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