TCRAP_Public/000516.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 16, 2000, Vol. 3, No. 95


* A U S T R A L I A *

AVONWOOD: Rescue package rejected
BHP: Plant closures could cost it $1.50 a share
EASTER PARK DEVELOP.:GST blamed as second builder hits wall
NEWS CORP.: Slides as doubts on spin-off surface
PERRY ENGINEERING: In receivership, jobs on line
SPORTSGIRL-SPORTSCRAFT GROUP: Truworths offers more cash
STUDIO CITY: Set to be liquidated
WATER WHEEL HOLDINGS: Facing frying pan or fire
WATTLE GROUP: Investors sue company, advisors

* C H I N A  &  H O N G  K O N G *

BANK OF CHINA: Restructuring running late
CHI CHEUNG: Secures rescue plan
COFCO FU LAI HONG LTD: Facing winding up petition
DATACOM CABLE SYSTEM CO.LTD: Facing winding up petition
FIVE STAR INVESTMENTS LTD: Facing winding up petition
HONWELL HOLDINGS LTD: Facing winding up petition
INFINITI (ASIA)CO.LTD: Facing winding up petition
KAN MAN COMPANY LTD: Facing winding up petition
MAINLEY HOLDINGS LTD: Facing winding up petition
PAM & FRANK INT'L: Slipping away fast
PAM & FRANK INT'L HOLDING LTD: Facing winding up petition
PROFIT HERO INVESTMENT LTD: Facing winding up petition
RICHMOND GROUP LTD: Facing winding up petition
SHING LUNG HOLDINGS LTD: Facing winding up petition
WILFRED MARBLE ENGINEERING LTD: Facing winding up petition

* J A P A N *

AUM SHINRIKYO: Aleph to take over 4B Yen debt
FUJI ELECTRIC CO.: Reduces group net loss to 7.4B Yen
KAGOME CO.: Plans extraordinary charge to fund pensions
MARUBENI CORP.: Takes aim at source of woes
NISSAN MOTORS: Expects loss for 1999;make-or-break year
TORAY INDUSTRIES INC: Sinks into red on pension scheme gaps

* K O R E A *

CHO HUNG BANK: Cerberus Partners to invest $500M
DAEHAN INVESTMENT TRUST: To undergo major restructuring
DAEWOO SECURITIES CO.: KDB to take over at W500Bil
KOREA INVESTMENT TRUST: To undergo major restructuring
SAEHAN INDUSTRIES: Major rehab to include new chairman

* M A L A Y S I A *

HWA TAI INDUSTRIES: Clarifies RM24M exceptional loss
ISUTA HOLDINGS: To acquire oil palm estates, or rehab
NALURI BERHAD: Concludes plans to reorganize debt
PROTON HOLDINGS: Hicom negotiations on EON sale still on
TIME dotCOM: Japan's NTT may be eyed as partner
TIME ENGINEERING: Revamp set to go on, say analysts

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

ASB GROUP: Begins paying debts
NATIONAL STEEL CORP.: Dutch firm outlines sale conditions
PHILIPPINE NAT.BANK: Gov't,Tan fail to agree on sale date
PHILIPPINE NAT.BANK: RCBC pursues bid to acquire 80% stake
UNIWIDE HOLDINGS INC.: PNB criticizes rehab plan
URBAN BANK: Deposits increase raises doubts on 'bank run'
WESTMONT INVESTMENT CORP.: Given cease-and-desist order

* T H A I L A N D *

PADAENG INDUSTRY: Belgians pay Bt1.1B, take 33% stake  


AVONWOOD: Rescue package rejected
The liquidator for Victorian home builder, Avonwood, has
rejected an industry rescue package.

Clarendon Homes, which earlier decided against a takeover
of Avonwood, had proposed finishing 400 of the 560 Avonwood
houses, left in limbo when Avonwood collapsed under $A13
million of debt.  It would have done the work for no
profit. Had there been some profit, Clarendon would have
given it to the liquidator, Paul Pattison of Pattisons.
However, the liquidator on 11 May 2000 rejected the offer,
sparking an angry reaction from Clarendon.

It is believed Pattison will seek expressions of interest
from several builders to complete the houses. Clarendon
accuses Pattison of protecting Avonwood's creditors at the
expense of the home owners.  (ABIX - The Australian
Financial Review  12-May-2000)

BHP: Plant closures could cost it $1.50 a share
The worst-case scenarios for BHP's troubled Port Hedland
hot briquetted iron operation and its sister plant in
Venezuela - closures - could cost the company as much as
$1.50 a share.

Analysts said investors had formed the view the Port
Hedland facility was unworkable and would close, but were
waiting for a verdict on the Orinoco plant in Venezuela,
which uses the same process.

BHP shares lost 66c the day it announced its shock decision
to write off the remaining value of the $2.6 billion Port
Hedland plant and order a $46 million review of the
troubled process.  The stock has dropped a further $1.03,
including a 3 per cent fall yesterday to $16.60 in line
with an overall market fall, since the announcement.

Analysts believe any positive news on the HBI front would
send investors scrambling to restore value.  The worst-case
scenario was valued as high as $1.50 a share by a Sydney-
based analyst, but JB Were & Son put the cost as closer to

"If we do take the worst case of $1.1 billion closure costs
at the Pilbara plant and the Venezuelan plant not working
and closing with $US350 million [$606 million] debt
becoming recourse, then the net after tax impact to BHP
would be around $1,300 million," said JB Were analyst Mr
Neil Goodwill.  "Assume a further $100 million of closure
costs in Venezuela, then the total cost from here would be
$1,400 million, or 80c a share.  

"For our valuation model we have assumed BHP would be able
to negotiate 50 per cent reduction in the closure costs in
the Pilbara and that it closes, and that the Venezuelan
plant works. We have not assigned any value to the
Venezuelan plant as the debt of $US350 million would need
to be paid before any cash flows are returned to BHP."

Analysts said the worst case had been factored in because
investors viewed problems at the Port Hedland site as worse
than expected.

"The market in general for a long time has thought that the
BHP HBI plant has been 60 to 70 per cent working and they
just needed to give it that final push," said one. "What we
found out at the results presentation last week was that it
is much more an issue associated with the process and
either it is going to work or it is not."

Analysts agreed the possibility BHP's 50 per cent-owned
Venezuelan plant would not work either had yet to be
factored in.  What has become clear is that BHP failed to
convince the market the process in Venezuela would not
succumb to similar problems. Orinoco, due to produce its
first briquette (an intermediate iron product used in
steelmaking) in June, uses the same process as the Port
Hedland facility.

While Mr Bob Kirkby, chief operating officer of BHP's
minerals division, acknowledged that Orinoco faced the same
uncertainties that had dogged the Port Hedland plant, the
key being the behaviour of iron ore in the process, his
presentation focused on lower input costs.

"We do understand, however, that the Venezuelan ore does
not show the same adverse characteristics as the Pilbara
ore in lab tests, and further, that the economics of the
Venezuelan plant are very robust and could economically
stand a major modification rather than closure," said
Were's Mr Goodwill. (Sydney Morning Herald  12-May-2000)

EASTER PARK DEVELOP.:GST blamed as second builder hits wall
Another Victorian residential property building company
closed down over alleged financial difficulties.

A spokeswoman for Easter Park Developments of Berwick said
on 9 May 2000 that the rush to beat the Goods and Services
Tax by building before 1 July has led to delays in getting
approvals and workmen. It has also pushed up the cost of
labour and materials, leading to a blow out in budgets
which are based on fixed-priced contracts.

She said the company has been promised funds from Home
Owners Warranty. This closure came close in the heels of
Avonwood Homes, which has been put under liquidation on 5
May. (Australasian Business Intelligence  10-May-2000)

NEWS CORP.: Slides as doubts on spin-off surface
News Corporation's shares plunged more than 5 per cent
yesterday as uncertainty crept into the market about the
planned $60 billion spin-off of its satellite assets,
despite assurances the listing was on track.

News president and co-chief operating officer, Peter
Chernin, told reporters an announcement on the business
known as PlatformCo would be made in 60 to 90 days.
And he denied the recent market volatility was affecting
News plans.

"I don't think any marketplace issues are having any impact
on our plans right now," he said.

Mr Chernin said News was working through internal
structural issues on how to form the business to best
maximise value.  But significant falls overnight on the
Nasdaq technology market and in satellite-based stocks
(BSkyB's share price fell 10per cent) created doubt in the
market about the listing's future.

"This afternoon a couple of bearish brokers were pushing
the story that they might not do it at all," one media
analyst said.

This sent the company's ordinary shares falling $1.19 to
$19.70, while the preferreds fell $1.12 to $16.60. And that
was despite News reporting a solid 14per cent increase in
third-quarter net profit to $300 million, which was in line
with market expectations. Total revenue grew 4.5per cent on
the same time last year to $5.1billion.

Mr Chernin would not comment on rumors that News was
discussing a new bid for Hong Kong Telecom with Singapore
Telecommunications. But he did say News wanted to expand
its broadband offering throughout Asia. And it was looking
at "various alternatives" for the rollout of broadband
services in Australia as Telstra was blocking access to its
broadband cable for News' 25 per cent-owned pay TV group

As for the health of News chairman Rupert Murdoch, Mr
Chernin said the prognosis for his recovery was "more than
excellent". "Mr Murdoch is right down the hall from me and
somehow manages to get here earlier in the morning than I
do and stay later than I do and be awfully energetic about
things," he said.

Most of the profit improvement was due to stronger results
at News' filmed entertainment business, which was boosted
by higher sales from its film and TV libraries, and the
moderate success of The Beach, which has taken $US135
million ($A232.2 million) in box office receipts. This
division's contribution to operating income grew 166 per
cent on the same time last year to $149 million.

Mr Chernin said each of the content businesses had
performed well, with strong results at the cable, newspaper
and book publishing companies. The newspaper division grew
operating income 16per cent, while its Australian
newspapers, which include the Herald Sun, lifted
advertising revenue 8per cent. Local operating profit was
15per cent higher.

"And we look forward to strong ongoing operations in
Australia as the country, and the city of Sydney, move
towards the Olympics in September," Mr Chernin said.

The result's weak points were lower profits from TV
business and expanded losses at its associates due to the
continued cost of subsidising digital set-top boxes in the
UK. The TV business reported a 26 percent fall in operating
income to $152 million, reflecting poor ratings, marketing
costs to improve these figures and the year-ago period's
inclusion of the Super Bowl, which affected this quarter's
result by $US20 million.  Losses from associates grew from
$22 million last year to $39 million. (The Age  12-May-

PERRY ENGINEERING: In receivership, jobs on line
About 130 jobs are in jeopardy after one of SA's oldest
companies, Perry Engineering, was placed in receivership.

The receiver, Ernst and Young partner Tony Smith, said
yesterday the company was in "very severe financial
difficulty" and its future was uncertain.  Mr Smith could
not guarantee the future of the company's blue collar and
white collar staff some of whom had been with Perry for a
"very long time".

"We will spend the next week or two going over detailed
assessments as to where the company is . . . and what the
prospects are that the business can be preserved," Mr Smith

Perry will keep operating under the control of the
receivers, who will decide whether it can be sold as a
going concern.  Mr Smith said it would be up to the new
owner, if one was found, whether the entire workforce would
be retained.  

"There's no such thing as a certainty," he said.  "If the
business can't be preserved then the only alternative is
for it to close and the people who are currently employed
here become unemployed as unpalatable as that sounds."

Perry Engineering's major creditor, ANZ, appointed the
receivers on Monday and staff were told yesterday morning.
There was a general feeling of "apprehension" among staff
at the meeting, Mr Smith said.  A major reason the company
had fallen into difficulty was it had been exploring some
aggressive and unique opportunities in overseas markets and
had "probably just ran out of time and money", he said.

Mr Smith was "quietly hopeful" the business could be
preserved and was expecting interest from potential buyers.
Australian Manufacturing Workers Union state president Ian
Curry said blue-collar manufacturing in SA was in crisis.

"Our engineering industry has over the long-term been the
backbone of employment in South Australia and it is a
tragedy to see it in its current state," he said. "Sadly,
the experience at Perry is yet another example of Rome
burning while John Olsen fiddles."

Mr Curry said the union would meet the receivers to ensure
workers received all entitlements if made redundant.  For
more than a century, Perry Engineering has been
manufacturing complex electro-mechanical machinery and
hydraulically driven equipment. It is a large supplier of
equipment for the Collins class submarines.  Managing
director Ron Griffiths could not be contacted yesterday.  
(The Advertiser  12-May-2000)

SPORTSGIRL-SPORTSCRAFT GROUP: Truworths offers more cash
Truworths International has agreed to release 50% of the
cash dividends it received from the sale of the Sportsgirl
Sportscraft Group.

Truworths has made the offer in return for all company
directors and related parties to be released from further
claims related to the Sportsgirl Sportscraft Group entering
voluntary liquidation. Under the Deed of Company
Arrangement unsecured creditors would receive around
$A0.30 in the dollar, while Truworths would receive $A0.06
in the dollar.

Joint voluntary administrators John Spark and James Stewart
have recommended that creditors accept the offer. Spark
says creditors would receive between $A0.10 and $A0.14 in
the dollar if the company was liquidated. Sportsgirl
Sportscraft's manufacturing division Aywon International
has been sold to Supreme Three for an undisclosed amount.
(ABIX - Rag Trader  05-May-2000)

STUDIO CITY: Set to be liquidated
The Studio City proposal for a theme park and film studios
at Docklands is finally dead, with the Studio City
consortium set to be liquidated.

But despite lack of investor interest and widespread
criticism of the Viacom-backed dockside theme park plan,
the Docklands Authority will attempt to resuscitate the
scheme with new developers.  Yesterday the Authority
confirmed that the Studio City consortium had formally
scuttled its plan for a theme park and film studios after
failing to secure sufficient financial backing for the
$485million project.

The Authority also confirmed that Studio City would be
liquidated. Consortium chief Paul Hameister yesterday
declined to comment.  In February, Studio City abandoned a
public float after institutional investors failed to bid
for stock. The Docklands Authority extended Studio City's
deadline to financially commit to the project from March 31
to June 30, and since March the consortium had been seeking
private investor project for a more modest version of the
fun park.

Its efforts to keep the project alive were supported by the
Victorian Government, which reportedly offered a $40million
financial support package - and Docklands Authority board
member Graeme Samuel is also believed to have been involved
in the search for private investors.

Docklands Authority spokeswoman Bronwen Colman said the
authority had not given up on the theme-park idea and would
pursue it with new developers.  A second tendering process
would probably be required. "It's early days but we'd like
to leave the door open for another theme-park proposal."

Ms Colman said residential development by the MAB
Corporation and Mirvac was proceeding at Docklands but that
the authority wanted a broader mix of uses. "We don't want
Docklands to be just a residential area. We want it to be a
place for everyone."

However, Ms Colman said the Docklands development was
market driven, and to some extent the authority was at the
mercy of what developers and investors believed was
possible. "There will always be other fantastic
opportunities. This (Docklands) is a long-term project and
there could be something even better," said Ms Colman.

The Authority and the Victorian Government were hopeful of
saving the project to help rejuvenate the ailing Victorian
film industry, which is losing film production to other
states, especially Sydney.  Some industry sources said the
Studio City float was a victim of bad timing, coinciding
with the boom in technology and Internet stocks and
industrial strife in the construction industry.

Others said the float had not been priced attractively
enough for institutions and claimed that a theme park at
Docklands would struggle because of Melbourne's inclement
weather.  The Studio City consortium included the US film
group Viacom (Paramount), Macquarie Bank, Visy Industries
and the Win Corporation. The theme-park project was to be a
centrepiece for the $6 billion Docklands development and
was to include a film-based theme park, film and TV
studios, a hotel, restaurants and cinema complex.
(The Age  13-May-2000)

WATER WHEEL HOLDINGS: Facing frying pan or fire
While creditors of John Elliott's collapsed Water Wheel
Holdings are about to vote for its winding-up, another
proposal has surfaced. This could result in the rice
milling assets of Water Wheel being returned to Elliott's

Details of this proposal are contained in the deed of
arrangement sent to the administrator, Christopher Daly,
less than 24 hours before the creditors' meeting on 11 May
2000.  The proposal calls for Water Wheel's flour and stock
feed milling operations to be sold by the Administrator,
while the rice milling business be returned to the control
of the company's management.

If the creditors approve the directors' proposal, the
directors will arrange for the creditors to get $A1,250,000
or $A0.15 to the dollar over a period of three years. (ABIX
- The Age  12-May-2000)

WATTLE GROUP: Investors sue company, advisors
Documents lodged with the Australian Capital Territory
Supreme Court on 10 May 2000 reveal that 181 investors are
suing the failed Wattle Group.

The litigants are drawn from professional and public
servants in Canberra, and include military personnel,
teachers, academics, scientists, engineers and a lawyer.
The plaintiffs' claim is based on the fact that their
financial advisers failed to check the viability of
Wattle Group and its investments, or its owner, Robert
Dexter, who was declared bankrupt in 1998 with liabilities
worth $A119 million.

The preliminary hearing on 10 May involved setting a
timetable for a more detailed claim. (ABIX - The Canberra
Times  11-May-2000)

C H I N A  &  H O N G  K O N G

BANK OF CHINA: Restructuring running late
Bank of China's restructuring may not be completed by the
end of the year, contrary to its management's earlier
expectations, Ming Pao Daily reported.

The report quoted an unnamed source as saying the
restructuring has proven to be more complicated than
expected and the process may not be completed until early
next year. It said the People's Bank of China also has
doubts about the BoC's plan to list on the stock market
after restructuring.  (AFX News Limited  15-May-2000)

CHI CHEUNG: Secures rescue plan
Shares of property developer Chi Cheung resumed trading
yesterday as the blueprint of a restructuring plan was laid
down by investor Chinese Estate, according to a statement
issued by both companies.

Through its fully owned subsidiary Billion Up, Chinese
Estate will inject $213 million worth of development and
investment properties as well as $60 million in cash into
Chi Cheung for 66.9 per cent of the company.  In return,
Billion Up will receive two billion new shares for $265
million as well as $8 million as an interest-free
shareholder's loan from Chi Cheung.

Chinese Estate and Billion Up will apply for a whitewash
waiver to the Securities and Future Commission, releasing
them from making an unconditional cash offer to buy all new
shares of Chi Cheung at about $0.15. If such a waiver is
not granted, the agreement will be terminated.  Billion Up
will subscribe for a further 600 million new shares in Chi
Cheung in cash at $0.1 per share at the completion of the
deal, the statement said.

Meanwhile, Chi Cheung's partial secured indebtedness of
$277.8 million will be settled by the transfer or sale of
collateral properties.  Upon settlement of the agreement,
creditors will receive a cash payment of $70 million, of
which $60 million will be paid by Chinese Estate and $10
million will be from Chi Cheung's internal resources. They
also will receive 662.5 million new shares, or 22.3 per
cent of Chi Cheung's total shares, and 594.3 million
warrants carrying rights to subscribe for up to about 20
per cent of the issued share capital of Chi Cheung.

After the restructuring, Chi Cheung is expected to have a
positive net asset value of $210 million compared to a net
asset deficit of $733 million at December 31, 1999. Its
total debt stood at $943.4 at October 31, 1999.  Chi Cheung
needs to secure the support of 75 per cent of creditors by
May 22 to confirm the agreement. (Hong Kong Standard  13-

COFCO FU LAI HONG LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Cofco Fu Lai Hong Limited for its winding up. A notice of
legal appearance must be filed on or before June 13.

DATACOM CABLE SYSTEM CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of Chi
Man Li Mary for the winding up of Datacom Cable System
Company Limited. A notice of legal appearance must be filed
on or before June 13.

FIVE STAR INVESTMENTS 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
Worldsec International Limited for the winding up of Five
Star Investments Limited. A notice of legal appearance must
be filed on or before May 30.

HONWELL HOLDINGS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of Tai
Hing (Engineers & Builders)Limited (in liquidation) for the
winding up of Honwell Holdings Limited. A notice of legal
appearance must be filed on or before June 13.

INFINITI (ASIA)CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 21 on the petition of Ng
Chun Hung for the winding up of Infiniti (Asia) Company
Limited. A notice of legal appearance must be filed on or
before June 20.

KAN MAN COMPANY 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 Chui
Wai Pun for the winding up of Kan Man Company Limited. A
notice of legal appearance must be filed on or before May

MAINLEY HOLDINGS 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 Kone
Elevator (H.K.) Limited for the winding up of Mainley
Holdings Limited. A notice of legal appearance must be
filed on or before June 6.

PAM & FRANK INT'L: Slipping away fast
Amid a wave of company restructurings or outright failures,
cut-and-sew products manufacturer Pam & Frank International
looks set to become another belated victim of the Asian

The group's main subsidiary, Pam & Frank Industrial, faces
a winding-up petition on May 22, from trading firm Great
Sir International, claiming HK$1.5 million for supply of
fabrics to Pam & Frank Industrial.  The possible winding up
of Pam & Frank Industrial could seriously affect the
group's normal operations, while Pam & Frank International
itself faces a winding up hearing on May 31 from Li Mei, a
Beijing trading firm claiming US$1.3 million (HK$10.14

Pam & Frank International is still negotiating with Li Mei
representatives but no progress has yet been made, Pam &
Frank said in a statement to the Stock Exchange of Hong
Kong.  Since 1996, Pam & Frank have encountered severe
liquidity problems due to a change in the procurement
policy of a major US customer, and have been undergoing
financial restructuring.

Despite efforts to restructure, its core business felt the
impact of Asian turmoil, with neighbouring currency
devaluations making them more competitive compared to Pam &
Frank, whose products are largely sourced from China, which
did not devalue.

In its most recent result, the company reported a net $27.9
million loss in the six months ended December 31 last year,
compared with a $875,000 loss in the second half of 1998.
Its turnover dived to just $27.1 million from $91.5 million
in the second half of 1998.  As of June 30 last year, the
group's liabilities totalled $309 million.

The group separately has been facing an increasing number
of writs in recent years. As of late 1999, it faced claims
totalling $19.5 million from suppliers to a Pam & Frank
company. (Hong Kong Standard  13-May-2000)

PAM & FRANK INT'L HOLDING 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
Mei Trading Company for the winding up of Pam & Frank
International Holdings Limited. A notice of legal
appearance must be filed on or before May 30.

PROFIT HERO INVESTMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of The
Bank of East Asia, Limited for the winding up of Profit
Hero Investment Limited. A notice of legal appearance must
be filed on or before June 13.

RICHMOND GROUP LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 21 on the petition of
Paradyne Corporation for the winding up of Richmond Group
Limited. A notice of legal appearance must be filed on or
before June 20.

SHING LUNG HOLDINGS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing for June 14 on the petition of
Barclays Capital Asia Limited for the winding up of Shing
Lung Holdings Limited. A notice of legal appearance must be
filed on or before June 13.

WILFRED MARBLE ENGINEERING 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
Guangdong International Trust and Investment Corporation
Hong Kong (Holdings) Limited (in creditors' voluntary
liquidation) for the winding up of Wilfred Marble
Engineering Limited. A notice of legal appearance must be
filed on or before May 23.


AUM SHINRIKYO: Aleph to take over 4B Yen debt
Aleph, the former Aum Shinrikyo doomsday cult, told Aum's
bankruptcy administrator on Thursday that it will take over
Aum's debt of about 4 billion yen and begin by repaying 960
million yen over the next five years.

The cult is accused of a series of indiscriminate crimes
including the 1995 deadly sarin gas attack on the Tokyo
subway system. The debt includes payments to victims of
those crimes.  In talks with Saburo Abe, the administrator,
in Yokohama, Aleph leader Tatsuko Muraoka and Fumihiro
Joyu, a key member, also said the religious group will
completely give up "dangerous" doctrines.

At present, Aleph is handing 10 million yen a month to the
administrator as voluntary compensation. But following the
debt transfer, Aleph will have legal responsibility to
repay Aum's debt.  On Aum-owned computer shops, which could
help the group repay its debt, Aleph said it would most
likely resume their operations, after making management
more transparent. But it declined to comment on when to do

In March, the Tokyo Regional Taxation Bureau ordered two
computer-related companies belonging to Aum to pay about
900 million yen for their failure to declare corporate
income. (Jiji Press English News Service  11-May-2000)

FUJI ELECTRIC CO.: Reduces group net loss to 7.4B Yen
Fuji Electric Co. (6504) reported Thursday a consolidated
net loss of 7.4 billion yen in the year ended March,
compared with a net loss of 17.4 billion yen a year before.
It is the second straight year of group net loss.

The smaller loss was attributed to lower sales and
administration costs.  Operating profit totaled 4.1 billion
yen, up from a loss of 4.1 billion yen the previous year,
even though sales remained flat. The electric machinery
systems business turned into the black and the equipment
and control equipment division posted reduced losses.

Special retirement payments and appraisal losses on
securities holdings contributed to an extraordinary loss of
54 billion yen. This was largely covered by 50.8 billion
yen in proceeds from sales of stockholdings and properties.

Fuji Electric forecasts group net profit of 6 billion yen
in the year through March 2001, on projected sales
increases of semiconductors and industrial equipment. Group
operating profit is expected to rise 380% to 20 billion
yen.  The company plans to resume dividend payments for the
first time in three years. (Nikkei  11-May-2000)

KAGOME CO.: Plans extraordinary charge to fund pensions
Kagome Co. (2811) plans to take an extraordinary loss of
about 3.5 billion yen this fiscal year to fund its pension

The company's consolidated unfunded obligations total 4.97
billion yen. About 1.5 billion yen will be met with a
deposit of in shareholdings to a special trust account, and
the remainder will be taken as a loss as reserves are
topped off.  The company held about 13.74 billion yen in
pension assets and 2.33 billion yen in pension reserves as
of March 31, 2000. Its total obligation, however, was
estimated at 21.5 billion yen.

Consolidated net profit for fiscal 2000 is expected to be
800 million yen, down 56%, as a result of the extraordinary
charge. (Nikkei  12-May-2000)

MARUBENI CORP.: Takes aim at source of woes
Struggling Marubeni Corp. has decided to aggressively
restructure its biggest loss-making venture so as to
strategically position itself ahead of an anticipated
shakeout among Japan's giant trading houses.

The Tokyo-based company will take an additional stake worth
$100 million in Indonesia's PT Chandra Asri, a loss-laden
ethylene producer widely deemed to be the leading drag on
the consolidated earnings and stock price of the trader.
The acquisition will take the form of a debt-for-equity

Recent analysts' reports on Marubeni have invariably made
reference to the murky prospects for its Indonesian venture
as a major unresolved issue weighing down the stock. The
acuteness of the problem becomes clear when comparison is
made with speedier reform efforts at Itochu Corp.,
Marubeni's archrival. Marubeni stock finished trading last
week at 317 yen ($2.90), against Itochu's 512 yen.

Marubeni currently holds 21.2% of Chandra Asri stock, with
the bulk of the remainder owned by the Indonesian
government. The joint venture, with an annual production
capacity of 500,000 metric tons of ethylene, is burdened by
$700 million in cumulative loss.  The venture reduced
Marubeni's group earnings for the year through March by 4.6
billion yen.

Marubeni has agreed with Jakarta on a reconstruction
package that centers on debt-for-equity swaps worth $100
million for the Japanese shareholder and $400-500 million
for the government. Thus recapitalized at $1.05 billion,
Chandra Asri will use the fresh capital to write off a
corresponding amount of existing capital, costing Marubeni
about 11 billion yen in lost equity interest.

Although covered by loss reserves already in place, this
will still be a formidable burden on a company that
forecasts group net profit of only 2 billion yen for the
fiscal year ended March.  Marubeni's involvement with
Chandra Asri dates back to the early 1990s, when the
trading company joined an ethylene project championed by
then-President Suharto.

It looked forward to lucrative contracts for plant
construction, the handling of related procurement and the
like. There was also the hope that the investment would
help Marubeni cement its overall relationships in the
Southeast Asian country.  These ambitions began to unravel
when the Indonesian government reneged on its promise to
apply a 25% protective duty on ethylene imports, setting a
new rate of 5%.

The reversal completely destroyed the profit outlook for
the business, Marubeni officials grumble. Exposed to
competition from low-cost ethylene made elsewhere in Asia,
Chandra Asri has piled up losses.  Rival trading companies
have moved faster than Marubeni to put their financial
house in order ahead of a widely expected consolidation of
the sector.

Charges taken for the year ended March include over 400
billion yen each at Itochu and Tomen Corp. and 140 billion
yen at Mitsubishi Corp. Mitsui & Co., meanwhile, intends to
erase its unfunded retirement benefit obligations, valued
at 95 billion yen, by September, well ahead of schedule.

As traditional trading practices based on face-to-face
dealing and human relationships crumble under challenges
from Internet-based trading and other models of commerce,
the big trading companies see their raison d'etre
increasingly questioned by both producers and consumers.
Analysts predict a shakeout that will leave only three or
four big players in the field.

Tooru Tsuji, president of Marubeni, has made it plain his
company will consider alliances with any of its competitors
if the deal is right. Reconstruction of Chandra Asri should
put Marubeni in a stronger position at the negotiating
table for any such deal, analysts said. (Nikkei  15-May-

NISSAN MOTORS: Expects loss for 1999;make-or-break year
It's make-or-break year for Carlos Ghosn. The Nissan
chief's job is on the line as he waits to see whether his
drive to get Japan's second biggest carmaker back on track
will pay off.

After spending most of the 1990s in the red, Nissan Motors
expects to have posted a steep net loss in the year to
March 31 of 590 billion yen (US$5.4 billion).  But Friday's
results announcement is not the most pressing concern for
Ghosn, "le cost killer" imported from Nissan's French
controlling shareholder Renault last year to turn the
company round, analysts say.

The chief operating officer, who is set to be elevated to
president next month and who says he will quit if Nissan is
not back in the black next year, is looking ahead to the
fruits of his far-reaching "Nissan Revival Plan."

"Following the NRP last October, we have been making
developments on several fronts," says Nissan spokesman
Tomoyuki Shioya.  "Fiscal year 1999 was a year of
development. This year will be a year of results."  

The official line strikes a chord with analysts, who
predict Nissan's financial results will be even worse than
the company has forecast.  Ghosn's decision to bring up
front massive hidden liabilities such as the costs of
factory closures and shortfalls for employee pensions will
have skewed the results, they say.

"Nissan's results are very much in the stock price, and for
the purposes of analysis we have to look at what's going to
happen in this fiscal year," said ING Barings auto analyst
Howard Smith.  "I applaud them for having brought those
charges up front. It completely clears the decks of any
nasty bogeys lurking on the balance sheet and lets them get
on with essential restructuring. We'll see the first
evidence of the purchasing cost reductions coming through
in the year ahead, in the interim results in October."

That belief will gratify Ghosn, who said in March that "the
stopwatch starts on April 1" with the revival plan's
launch. "The plan is sufficient," he argued.

It envisages closing five Japanese plants, shedding 21,000
jobs worldwide and halving the firm's interest-bearing debt
to 700 billion yen by March 2003.  Another key plank is the
goal of cutting supplier costs by 20 percent over three
years, which Ghosn says has been met with understanding by
the suppliers.

"I believe that Mr Ghosn is very confident of generating
profits, so the possibility of him quitting is pretty
limited," Goldman Sachs auto analyst Kunihiko Shiohara
said.  "Nissan Motor has already announced its revival
plan, so this fiscal year is the beginning, and we have to
focus on that."

Ghosn is also investing his hopes in the launch of four new
models in Japan this year, coupled with strong US sales and
the Almeira hatchback's arrival to plug a key gap in the
European market, analysts said.

"None of the four will be large-volume models, but we'll
see the reconstruction of the Nissan brand in the way
they're launched and marketed," said Smith, who predicts
Nissan to have posted a net loss of 633.6 billion yen.
"That Nissan will revive is increasingly without doubt,
it's just a matter of time. I'd be extremely surprised if
he [Ghosn] walks away from it now."

There may still be balance-sheet problems lurking for
Nissan such as unprofitable land holdings, said Merrill
Lynch analyst Takaki Nakanishi, who expects a net loss for
Nissan in the past year of 620 billion yen.  However,
currency rates could yet prove a headache for Nissan
exports if the yen strengthens to 100 against the dollar
from around 108 now, the analysts said. (Nikkei  15-May-

TORAY INDUSTRIES INC: Sinks into red on pension scheme gaps
Japan's Toray Industries Inc has plunged into the red after
accounting for pension scheme shortfalls.

Hit also by the depressed Japanese economy, the country's
top synthetic fibre maker said it posted a group net loss
of 65.7 billion yen (US$608mil) in the past year, against a
net profit of 8.1 billion yen in the previous 12 months.
Pre-tax profit was down 39.9% at 24.9 billion yen and sales
fell 1.1% to 990.5 billion yen.

The big net loss reflected the early application of
accounting changes required by next year, which would force
Japanese companies to make good their losses on employee
retirement benefit schemes, Toray said in a statement.
Toray also wrote off loss-making property held by units.

The Japanese economy was finally picking up, the company
said, but "prolonged slumps in consumer spending have
stymied a self-sustaining economic recovery, severely
affecting Toray's business results."

Weak demand for polyester film used in home videotape and
carbon fibre, coupled with "a slow recovery in fibre and
textile prices" had also hurt, it said.

In this light, "Toray tried to enhance its profitability in
all businesses, and to reinforce its cost competitiveness
by modernising and streamlining production processes as
well as slashing expenses."  (The Star  13-May-2000)


CHO HUNG BANK: Cerberus Partners to invest $500M
Cerberus Partners LP, a specializing in buying
distressed assets, will invest $500 million in Cho Hung
Bank and set up a distressed asset management company with
the Korean commercial bank.

The two companies agreed to an equal ownership in the
proposed joint venture company, which will purchase and
manage 1.5 trillion won ($1.4 billion) of distressed assets
from Cho Hung, the Korean bank said in a statement.

The U.S. fund also will buy $500 million worth of shares in
the Korean bank pending approval from the Korean
government, Cho Hung's biggest shareholder. Foreign
investments are providing support to Korean banks after the
financial crisis forced them to book large loan losses.

"We are so excited about the equity investment in Korea at
this stage," Steven Trawick, managing director of Cerberus,
said at a signing ceremony in Seoul for the agreement.

Cho Hung lost 698 billion won last year when the government
imposed new rules requiring banks to adopt forward-looking
criteria on their provisioning to reflect companies' future
repayment capabilities. (Bloomberg  14-May-2000)

DAEHAN INVESTMENT TRUST: To undergo major restructuring
KOREA INVESTMENT TRUST: To undergo major restructuring
Shareholders of the two troubled investment trust companies
- Korea Investment Trust and Daehan Investment Trust - will
hold general meetings May 25 to implement major

The investment trusts will transform into securities houses
within June and change their company name, Nahm Sang-deok,
a director of the Financial Supervisory Commission said
yesterday.  The securities companies will then be sold to a
third party based on the normalization process, and the
investment management businesses will proceed to form
strategic alliances with foreign funds as they come out of
debt to retrieve the public fund loaned to the investment

All employees will be paid an annual salary and many
management level employees will work on a contracted basis.
Also at the meeting, participants will agree on selling
real estate including office buildings and streamline
underperforming branches to acquire funds for
normalization.  (The Korea Herald  13-May-2000)

DAEWOO SECURITIES CO.: KDB to take over at W500Bil
The Korea Development Bank (KDB) is expected to take over
Daewoo Securities Co., a brokerage arm of Daewoo Group, by
injecting up to 500 billion won by May 15, a senior
government official said yesterday.

The management of the brokerage firm will also be handed
over to the state-run bank, making it the largest
shareholder with a controlling stake of 20.67 percent in
the company.

The total amount of 500 billion won is expected to break
down to about 155 billion won to purchase all the company's
forfeited stocks, 320 billion won to make up for loan
losses in Daewoo affiliates, which were supplied via Daewoo
Capital Corp. and Diners Club Korea. The remaining amount
will be raised by increasing capital.

According to the official, KDB is also poised to reshuffle
the management team of the brokerage firm at its
shareholders' meeting set for May 27.  Considering Daewoo
Securities is market-valued at 700 billion won to one
trillion won, the takeover will be good for KDB, he noted.
(Korea Times  12-May-2000)

SAEHAN INDUSTRIES: Major rehab to include new chairman
Saehan, which is Korea's 27th-largest business group, has
decided to restructure it management, with measures to
include the large-scale sell-off of assets.

Flagship unit Saehan Industries convened a board of
directors meeting Friday where it was decided to invite a
professional manager to head the group. The firm said it
would announce the new chairman next Tuesday. The group
also plans to sell off more than W700 billion in assets and
liquidate some if its 12 subsidiaries.

Sources also say that neither current group chair Lee
Young-ja nor vice chair Lee Jae-kwan will be a part of
frontline decision-making during the restructuring process.
Saehan has been suffering from major setbacks due to
sagging activity in the textiles and synthetic fibers
industries, which are key areas of business for the group.
(Digital Chosun  12-May-2000)


HWA TAI INDUSTRIES: Clarifies RM24M exceptional loss
Hwa Tai Industries Bhd said its acquisitions in 1997 of
Magnum, Renong and Genting shares, which were later
exchanged for Mancon and Anson shares, recorded an
exceptional loss of RM24.03mil on the diminution in value
of the shares for its financial year ended Dec 31, 1998, as
a result of the downturn in the Malaysian economy.

The company, in reply to a query by the KLSE, said it had
acquired 3.4 million shares in Magnum from the open market
on Jan 28, for RM15.62mil, acquired 1.4 million Renong
shares from the open market on Aug 1, for RM4.79mil, and
1.2 million Genting shares on Aug 1, for RM14.02mil.

The acquisitions were financed by internally generated
funds and had no effect on the earnings per share, net
tangible asset per share, share capital and substantial
shareholding of the company.  Hwa Tai then disposed of 3.4
million Magnum shares in exchange for 2 million Mancon
shares valued at RM13.8mil and 795,000 Anson shares valued
at RM5.57mil on March 14.

It also disposed of 1.4 million Renong shares in exchange
for 1 million Mancon shares valued at RM4.18mil and 1
million Anson shares valued at RM4.27mil on Sept 15. On
Sept 8, it disposed of 1.2 million Genting shares in
exchange for 3.21 million Mancon shares valued at RM13.4mil
and 3 million Anson shares valued at RM12.6mil.

Subsequently, Hwa Tai disposed of 6.74 million Mancon
shares in the open market for a total RM4.94mil between Jan
15 and Feb 12, 1999, recording a loss of RM0.16mil in the
financial year ended Dec 31, 1999.

Hwa Tai added that the exchange of Anson shares were
reversed for RM5.61mil cash (equivalent to net book value),
and the reversal had no effect on earnings per share, net
tangible asset per share, share capital and substantial
shareholding of the company.  The proceeds of the disposals
of Mancon shares and reversal of Anson shares were used for
working capital purposes.

According to Hwa Tai, the subsequent downturn in the
economy led to the general diminution in the value of its
investments in Mancon and Anson shares and an exceptional
loss of RM24.03mil.

None of the directors, substantial shareholders and persons
connected with them have any interest, direct or indirect,
in the transactions, except that Hwai Tai, Mancon and Anson
have some common directors and substantial shareholders.

Hwa Tai said a misinterpretation of the provisions of some
of the second board listing requirements had resulted in
the compliance with such provisions being "inadvertently
ommitted."   (The Star  15-May-2000)

ISUTA HOLDINGS: To acquire oil palm estates, or rehab
Isuta Holdings Bhd has proposed to acquire oil palm estates
in Sabah measuring a total of 1,514ha for RM18.8mil, or it
will restructure the debts owing by the group to certain
financial institutions and creditors of RM36.7mil by
converting into RM40.9mil nominal amount of five year 2%
irredeemable convertible unsecured loan stocks (Iculs) on
the basis of approximately RM1.1132 Iculs for every RM1
debt owing.

It has also proposed a special issue of 30,059,137 new
ordinary shares in Isuta at RM1 per share to bumiputra
investors approved by the Ministry of International Trade
and Industry. (The Star  15-May-2000)

NALURI BERHAD: Concludes plans to reorganize debt
Naluri Bhd and Celcom Sdn, parts of Malaysian tycoon
Tajudin Ramli's telecommunications and airline empire,
yesterday have concluded plans to reorganise RM2.5 billion
(S$1.1 billion) worth of debt.

The plan will determine the fate of Malaysian Airline
System (MAS), the nation's flag carrier, and of Technology
Resources Industries (TRI), one of Malaysia's largest
industrial groups. Naluri, the parent of MAS, pledged its
investments including its stake in the airline, as
collateral for its borrowings. Celcom, Malaysia's biggest
cellular phone company, is owned by TRI.

The two have "finalised their respective financial
restructuring exercise," said Celcom in a statement,
without providing details. Mr Tajudin, chairman of Naluri
and Celcom, as also of MAS and TRI, will meet with
reporters to discuss the debt plans this evening.

Resolution of the debt repayment problem, stemming from
Malaysia's recession and decade-high interest rates in
1998, will help the companies reverse three years of losses
as they take advantage of the country's economic recovery.

On Friday, Naluri shares rose two sen or 1.3 per cent to
RM1.52, its first gain in four days. MAS shares fell 6 sen
or 1.8 per cent to RM3.36, its second day of decline. TRI
shares fell 15 sen or 2.8 per cent to RM5.25, its second
day of decline.

Naluri's debt plan is expected to include the sale of a
part of its controlling 29 per cent stake in MAS, said C
Rajandram, chairman of the government's Corporate Debt
Restructuring Committee in March. The debt mediator is
helping Naluri resolve its debt woes.

Naluri's debts are in the form of redeemable bank-
guaranteed bonds worth RM600 million that will mature on
June 12. The banks provided the backing by securing some of
Naluri's equity investments. The company's other businesses
include helicopter operations, property development, hotels
and construction. Naluri's loss narrowed to RM45.5 million
in 1999 from RM316.3 million a year ago.

For Celcom, some 42 banks will probably agree to reschedule
RM1.3 billion of debt over the period from 2001 to 2004,
Jardine Fleming Research said in a recent note to clients.
Resolving Celcom debt would help TRI push closer to
resolving its own debt woes.

Jardine expects TRI to get approval to defer the repayment
of its Eurobonds by two years, with "bullet payments and
interest to be serviced during the period".

That would help TRI focus on boosting its earnings. TRI's
losses widened to RM344.3 million in 1999 from RM42.6
million in the previous year, primarily because of higher
depreciation charges and provisions for its Eurobonds.
(Business Times  15-May-2000)

PROTON HOLDINGS: Hicom negotiations on EON sale still on
Talks between Malaysia's national car maker Proton and
Hicom Holdings Bhd over the sale of car distributor Edaran
Otomobil Nasional Bhd (EON) were still on, a newspaper said
on Saturday.

Malaysian state oil firm Petronas, which plans to buy a
controlling stake in Proton, said early this month talks
had stalled on the sale of Hicom's key stake in EON to
Proton.  But the New Straits Times newspaper quoted DRB-
Hicom group chairman Mohamed Saleh Sulong on Saturday as
saying that negotiations had not stopped.

"It is just protracted. But the negotiations are ongoing,"
Mr Saleh was quoted as saying. He said the stalemate
between the two parties was over the pricing of EON, which
he said should be more than the RM11 per share currently
offered by Proton. EON shares closed at RM14 on Friday.

The sale of EON to Proton was one of the conditions imposed
by Petronas as part of its purchase of a controlling stake
in Proton from Hicom, which is divesting all its interests
in the car project.  The restructuring plan was announced
in 1998, but discord over the pricing of Hicom's stake in
EON, the largest distributor of Proton cars, has
continually bogged down the talks.

Petronas signed an agreement in March to buy Hicom's
controlling 27.2 per cent stake in Proton, but no pact was
reached on the EON stake.  Speculation has mounted that
EON, which also owns a bank, may be left out of the
Petronas deal and end up losing its lucrative car
distribution rights.  (Reuters, Business Times  15-May-

TIME dotCOM: Japan's NTT may be eyed as partner
Japan's Nippon Telegraph & Telephone Corp (NTT), which is
negotiating for a stake in Telekom Malaysia, may be
approached to become the foreign strategic partner of Time
Engineering's telecommunications arm, Time dotCom, the
Business Times newspaper reported Friday.

The report comes amidst confirmation by Time that its
planned tie-up with Singapore Telecommunications has been
aborted. Time dotCom may also be merged with Telekom, the
report said.  Quoting unnamed sources, the report said the
Malaysian government's investment arm Khazanah Nasional
plans to acquire 20% in Time dotCom and divest part of the
stake to a strategic partner.

"As Khazanah would be the common shareholder in both
Telekom Malaysia and Time dotCom, the strategic partner
(for Time) might very well be NTT and the two companies
(Telekom and Time dotCom) merged," the sources said.

Khazanah holds 36.09% of Telekom and is talking with NTT to
divest part of it. Market talk is that Khazanah will sell
20% to the Japanese company. The report quoted a source
close to NTT as saying Telekom and Time dotCom may be
merged to prevent a company like Singapore
Telecommunications (SingTel) from coming into the market to
erode Telekom's market share.

It said Khazanah will buy the Time dotCom stake at the same
valuation of the company that was made by Singapore
Telecommunications (SingTel), which is 8.3 billion ringgit
(U.S. $2.18 billion). (The Edge  12-May-2000)

TIME ENGINEERING: Revamp set to go on, say analysts
Time Engineering Bhd's debt restructuring scheme, which is
backed by the Corporate Debt Restructuring Committee
(CDRC), will go on as planned and so will the listing of
Time dotCom Bhd even without Singapore Telecommunications
Ltd (SingTel) as its strategic partner, according to

Time said in a statement to the KLSE yesterday that the
heads of agreement signed between Renong Bhd, Time and
SingTel had lapsed and would not be extended.  Time had
earlier rejected a proposal from the Sapura group to take
over Time dotCom.

A new chapter in the Time saga will unfold on June 8 when
the group's creditors meet to decide on its debt
restructuring scheme and debate the merits of any new
initiative that may emerge over the next few days with
SingTel now out of the picture.  And while the entry of a
strategic partner is an important part of the Time revamp
scheme, its absence is not seen as fatal to the plan which
involves the listing of Time dotCom.

"Investors should get their priorities for Time in
perspective. The repayment of the Time debts is still the
main priority, not securing a foreign partner. And securing
a foreign partner, while adding more merit to its initial
public offering (IPO) for Time dotCom, is not a pre-
requisite of the IPO," HLG Securities head of research Yee
Yeng Chien said.

Yee said that as long as the IPO went through with the
creditors being repaid, Time dotCom could be more
aggressive in its business rollout plans, even without
having a foreign partner by its side at the initial stage.

"With a clean slate, attracting a foreign partner should
not be a problem, and we are maintaining a buy on Time," he

The proposed entry of Khazanah does carry a lot of weight.
The market is abuzz with talk that Khazanah will take up a
stake in Time dotCom.  But the speculation does not end
there. It has been suggested that NTT of Japan may come in
as a strategic partner in both Time and Telekom Malaysia

Another suggestion is that Telstra of Australia is also
interested in participating in Malaysia's
telecommunications industry. As for the creditors' meeting,
sources said over two-thirds were in favour of Time's own
restructuring plan as they want their monies back within 30
days, although a few creditors may opt for Time dotCom

"Creditors will vote on June 8 based on their exposure and
the class they are in, and the voting process must go ahead
as scheduled as it is ordered by the High Court. If all the
creditors vote in favour of the scheme, it will be
implemented as outlined, but some modifications could be
made if there are objections from one or two parties," the
source said.

According to analysts, there are two main reasons Time is
still a very much prized asset despite its heavy debt
burden.  First, after the settlement of its debts, Time
will be operating on a clean slate because it will not have
to account for depreciation in value since its assets have
all been written off and whatever profits it makes will go
straight to the bottom line.

Second, to get involved in the telecoms industry in
Malaysia, Time is the only company available in which a
foreign party can still take a meaningful stake.  Time is a
full-fledge telecoms operator with the second largest fibre
optic cable network in the country after Telekom.  As it
is, all the local telcos have foreign partners besides
Telekom, whose owners are in talks with NTT of Japan for
the latter to take a 20% stake in the giant telco.

The revised proposal submitted by Commerce International
Merchant Bankers Bhd on behalf of Time values Time dotCom
at RM8.25bil, and reputable firms such as Rothschild & Sons
and Credit Suisse First Boston have put a value of RM8.5bil
to RM10.3bil on Time dotCom.  Yee felt that this was fair
value based of the value of its assets and future cashflow
projections. (The Star  13-May-2000)


ASB GROUP: Begins paying debts
The ASB Group of Companies, through a third party,
yesterday started paying over P35.5 million to over 700
private lenders on a pro-rata basis following the
creditors' heated confrontation with company officials a
few days ago.

On Tuesday, creditors angered by a 60-day debt reprieve
granted by the Securities and Exchange Commission forcibly
entered the offices of ASB head Luke Roxas and demanded
payment of part of the P3.9 billion that the company owed.
The SEC released the decision after Roxas promised to pay
his creditors.

Witnesses said the creditors hurled insults and threw
crumpled papers at Roxas after breaking down one of the
doors of the ASB Center in Makati. They were only appeased
when Roxas promised to come up with an initial payment.

ASB has filed a motion asking the SEC's permission to
release, as partial payment, some P71 million to individual
creditors under a repayment plan earlier presented.
However, without waiting for the commission to act on its
request, the company started paying its creditors yesterday
morning through funds put up by an unidentified third

In a letter to creditors, Roxas explained that his counsel
advised that ASB could not make any payment to its
creditors because it would violate the suspension order
issued by the SEC.

"Fortunately, one lender, whose identity was requested not
to be divulged, has agreed to advance the amount to you so
that you can be paid your pro-rata share of the first
tranche of P35.5 million," Roxas said in his letter.

In an interview, lawyer Francis Lim, who is helping Roxas
come up with a "commercial solution" to the debt woes of
ASB, explained that the advance was meant to place money in
the hands of the creditors because these individuals badly
needed the cash.

Under the repayment plan presented by Roxas and ASB
financial advisor Sycip Gorres Velayo & Co. to individual
creditors last April 29, ASB promised to pay P35.5 million
to creditors on May 9 and one tranche each of P17.5 million
by June and July 28 this year.

Many creditors, however, felt betrayed when the next
working day after the meeting, ASB filed a petition with
the SEC asking for a 60-day suspension of its debt payments
and the appointment of a rehabilitation body.

The SEC granted the 60-day debt reprieve and appointed
former SEC Commissioner Monico Jacob as head of the interim
receiver for ASB. Jacob is supervising the recovery of
steel giant National Steel Corp.

Besides obligations to individual lenders, ASB also owes
over P5 billion to several banks, including Allied Banking
Corp. and Metropolitan Bank and Trust Co.  At the third
floor of the ASB Center yesterday morning, individual
creditors were quietly filling up forms for the release of
their share of the P35.5 million that ASB owes.

Creditors who wanted to receive partial payment were asked
to sign conformity to certain terms and conditions. The
terms and conditions provided that if the SEC approves the
motion for the partial payment, the third party lender will
be repaid the first P35.5 million by way of assignment of
the proceeds to the party without need of any further
document or act.

If the SEC does not approve the motion for any reason, a
portion of the credit to ASB Holdings Inc., a member of the
ASB Group, equivalent to the pro-rata share of the P35.5
million would be automatically assigned to the third party.

Creditors were also required to surrender old checks that
had been replaced before the group called for a debt
moratorium last March 28.  Those who agreed to the terms
and conditions were able to pick up the checks for their
share of the P35.5 million.  (Philippine Daily Inquirer  

NATIONAL STEEL CORP.: Dutch firm outlines sale conditions
Dutch firm Ispat International NV will start talks with the
owners of National Steel Corp. (NSC) for the possible
purchase of a controlling stake in the debt-saddled steel
firm, but it comes to the negotiating table with specific

Finance Secretary Jose T. Pardo said Ispat has outlined
three conditions before it makes any commitment to buy an
interest in the ailing steel producer.

"Ispat will discuss certain conditions for the purchase,
some of them doable some are not," he told reporters last

Among the conditions for the purchase set by the Dutch
company is for the government to press with antidumping
protests on the import of Russian steel goods.
NSC officials have said the deluge of Russian steel
products in the country contributed to the collapse of the
company's operations.

Ispat also wants NSC to work out a new credit restructuring
scheme for its 16-billion-peso (US$385.8 million at
PhP41.474:US$1) debt.  And lastly, the Dutch firm wants the
government to set tariff levels for the firm at a minimum,
Mr. Pardo said.

As a come-on, he said the government is willing to allow
the new owners to register the steel company with the Board
of Investments (BoI) so it could avail of generous fiscal
incentives from the government.  NSC suspended operations
in November last year due to financial problems highlighted
by its failure to repay its debts to 14 local creditor

At present, the Philippine government, which formerly
controlled NSC, owns only 12.5% of the beleaguered firm. In
1995, the government sold majority interest to Malaysian
firm Wing Tiek Holdings Berhad, which later sold the shares
to Hong Kong-based Hottick Investments Ltd.  Some quarters
have alleged that these firms failed to infuse fresh
investments to reinvigorate NSC operations, leading to its
current woes.

NSC's creditor banks earlier moved for foreclosure
proceedings against the steel firm, but this did not
prosper as Hottick succeeded in asking the Securities and
Exchange Commission for a debt relief.  Other companies
reported to be keen on buying majority interest in NSC are
Swiss firm Duferco and Paris-based Pentium Group. Some
downstream steel industry players have also been reported
to be joining forces to bid for Hottick's shares in NSC.
(Business World  15-May-2000)

PHILIPPINE NAT.BANK: Gov't,Tan fail to agree on sale date
Beer and tobacco magnate Lucio Tan will only agree to
postpone the sale of semi-private Philippine National Bank
(PNB) to June 15 from the original schedule of May 26 if
his conditionalities are first satisfied.

According to Finance Secretary Jose T. Pardo, a meeting
with Tan last night failed to result in a firm agreement
even on the June 15 date because of Tan's demands. Pardo
said Tan's major demand is for the government not to pull
out its deposits from PNB after the bank is fully
privatized. Pardo pointed out that government had already
agreed to maintain its deposits with PNB for another three

The government wants to postpone the sale of PNB to allow
interested buyers to complete their due diligence as well
as to await the signing of the revised General Banking Act
which would allow foreign banks to own up to 100 percent of
a local bank.  However, Pardo said, Tan does not seem so
keen on allowing a longer postponement as Tan believes that
there are no additional interested buyers for the PNB

"Tan may not be really keen on a joint sale because Tan
already has an interested buyer who is willing to buy only
the 46-percent stake of the taipan," he explained.

The finance chief said he had reported the outcome of the
talks to President Estrada and the President is expected to
convince the taipan to agree to the June 15 date.  Tan did
not want to be tied down to the government if there is a
failed bidding because, according to Pardo, there is
reportedly a Hong Kong-based group which has approached the
business tycoon about buying his 46-percent stake in PNB.
(Philippine Star  13-May-2000)

PHILIPPINE NAT.BANK: RCBC pursues bid to acquire 80% stake
The Yuchengco group's Rizal Commercial Banking Corp. is
pursuing a bid for 80 percent of Philippine National Bank,
one of the country's largest bank, a source privy to the
bidding said.

The source said that RCBC was one of several groups that
officially registered an expression of interest to bid for
the 80-percent stake in PNB.  RCBC has also accomplished
the following requirements: payment of a P200,000 fee,
submission of necessary information about the bank and
plans for PNB and submission of a signed confidentiality

A government official confirmed that as of last week four
groups have submitted their expressions of interest for
PNB.  Earlier, Finance Secretary Jose Pardo said that a
local bank, a Canada-based bank and a non-bank financial
conglomerate based in the United States was interested in
bidding for PNB.  Out of the 80-percent stake to be sold by
June at the latest, the government owns 30 percent, tobacco
tycoon Lucio Tan controls 46 percent and RF Investments
Inc., a unit of the PNB Retirement Fund, has 3.6 percent.

Pardo, however, has disclosed plans of postponing the
bidding to June 26 in order to give prospective buyers more
time to conduct a due diligence. On the other hand, today
is the deadline for interested parties to pre-qualify for
bidding.  RCBC is a medium-sized universal bank largely
owned by the Yuchengco family, which has interests in
construction, insurance, auto dealership, property and
educational institutions.

Based on end-March figures, a merger between PNB and RCBC
would make the merged institution the third biggest bank
after Metropolitan Bank and Trust Co. and Bank of the
Philippine Islands, respectively.  Metrobank's planned
merger with Solidbank will allow the former to regain its
position as the country's largest bank and to surpass BPI,
which earlier this year absorbed Far East Bank and Trust

A banking analyst said that on the surface, a match between
PNB and RCBC was complementary since the banks seemed to
have different markets.  PNB has large corporate accounts
as well as a broad-range of small and medium corporate
clients. On the other hand, RCBC's market includes
significant Chinese-Filipino and Japanese clients aside
from a major middle market base.

The analyst said that the benefits PNB can offer are its
large remittances business, good franchise and extensive
branch network. Insufficient capital and the highest non-
performing loan ratio among its peers, however, have bogged
down the bank.  RCBC vice chair Alfonso "Tito" Yuchengco
III earlier said that the bank was looking to build its
already solid remittance business and was interested in
acquiring a bank if a good opportunity presented itself.

Last year, RCBC failed in negotiations for a merger with
FEBTC and in a bid for 72 percent of Philippine Commercial
International Bank, which was acquired by Equitable Banking
Corp. PNB last year posted a net loss of P9.88 billion,
larger than the P7.25 billion recorded in 1998. It has a
capital base of P14.7 billion. (Philippine Daily Inquirer  

UNIWIDE HOLDINGS INC.: PNB criticizes rehab plan
Partly state-owned Philippine National Bank said it wants
changes made to the rehabilitation plan of debt-laden
retailer Uniwide Holdings Inc. to give more protection to

The bank, which is among Uniwide's major creditors, said
instead of a debt-for-property swap under the current
rehabilitation plan, some of the retailer's assets should
be sold and the proceeds used to pay creditors.

Uniwide's debts total 11.1 billion pesos ($268.2 million),
which it incurred through an ill-timed expansion into the
real-estate market just before the outbreak of Asia's
regional economic crisis in mid-1997. For its part, PNB is
heavily exposed to a number of debt-laden and financially
troubled local companies; it has the highest level of
nonperforming loans in the country's commercial banking

Uniwide was granted a debt-payment moratorium last year.
Manila's Securities and Exchange Commission is overseeing a
program to restructure the company. PNB, along with other
creditor-banks, was given ownership of some of Uniwide's
shopping malls under the rehabilitation plan.  However, PNB
said the arrangement harmed its interests because the bank
has no expertise in managing malls.

"Equity and fair play dictate that the approved
rehabilitation plan must be modified or altered to accord
real meaning" to the SEC's main objective of protecting the
rights and interests not only of troubled companies seeking
debt relief, but also of their creditors, said the bank.

PNB didn't disclose the extent of its exposure to Uniwide,
although it said it is owed 318 million pesos in unpaid
interest as of March 31. (The Asian Wall Street Journal  

URBAN BANK: Deposits increase raises doubts on 'bank run'
Even as it went on a bank holiday last April 26, publicly
listed Urban Bank may not have actually experienced a bank
run, analysts said.

Its statement of condition as of April 25, the last day of
its operations, showed Urban Bank had a deposit base of 8.6
billion Philippine pesos (PhP) (US$207.4 million at
PhP41.474:US$1), 8.57% or PhP679 million ($16.4 million)
higher than its PhP7.921-billion ($191 million) deposit
level as of March 27.

Demand deposits went up to PhP1.11 billion ($26.8 million)
from PhP838.877 million ($20.2 million) during the period;
savings deposits grew to PhP4.411 billion ($106.4 million)
from PhP4.04 billion ($97.4 million); and time deposits,
PhP3.1 billion ($74.7 million) from PhP3.042 billion ($73.3

"There was an improvement in deposits It did not appear as
if they had a huge run," a bank analyst noted.

But while the steady growth in deposits of a bank
supposedly experiencing a rash of heavy withdrawals was
already raising eyebrows, viewed as the "biggest
abnormality" in its statement of condition was the "surge"
in Urban Bank's loan portfolio.

From March 27 to April 25 -- a span of nearly a month --
the bank's net loans surged 54.52% to PhP8.554 billion
($206.2 million) from PhP5.536 billion ($133.5 million).
"There was massive release in loans. The bank should not
have been closed if not for massive lending...," an
analyst, who declined to be named, said.

"The Philippine banking industry is hardly lending. Growing
(your loans by) more than 50% in one month is unbelievable.
The bank cannot do that through normal lending activities."

Largely due to loan growth, Urban Bank's assets grew 30.48%
or by PhP3.5 billion ($84.4 million) in a month, to
PhP15.063 billion ($363 million) from PhP11.544 billion
($278.3 million) as of March 27.  Urban Bank may have
funded the surge in lending by issuing manager's checks
(MCs) and heavily borrowing from other banks, since the
growth in deposits are far lower than the rise in loans.

"The massive run-up of loan portfolio was funded by growth
in deposits, but mostly by interbank loans and MCs
(manager's checks). That is very imprudent," the analyst

Funding of long-term loans through short-term interbank
loans creates a maturity mismatch and is likewise deemed
more expensive.  As of April 25, Urban Bank's interbank
loans payable totalled PhP1.481 billion ($35.7 million), up
from PhP520 million ($12.5 million) last March 27. Its
manager's checks have run up to PhP2.092 billion ($50.4
million) on the liabilities side, with no adequate liquid
funds left to cover its asset side, the analyst said.

Funds due from the Bangko Sentral (Central Bank of the
Philippines) have dwindled to less than PhP100 million
($2.4 million) to an "under-reserved position" of about
PhP84 million ($2 million) from PhP395.249 million ($9.5
million), while cash and other cash items are down to
PhP44.126 million ($1 million) from PhP82.88 million ($1.9

"Urban Bank was massively issuing checks and borrowing from
interbank to fund loan portfolio in spite of the fact that
they were in a negative CB (central bank) balance," the
analyst said. "Normally, managers checks comprise only 3%
to 5% of the deposit level. That day, they must have issued
a lot of MCs for withdrawals. It's also possible they were
buying loans of their investment house and issuing MCs,"
the analyst said.

"They should have just let the investment house go down by
itself. Why did they declare a bank holiday? Where was the
bank run?"

The Bangko Sentral earlier said the bank run actually
started in Urbancorp Investments, Inc. and infected its
parent firm, Urban Bank.  As of April 25, Urban Bank's
capital base declined to PhP2.209 billion ($53.3 million)
from PhP2.438 billion ($58.8 million) last March 27.
(Business World  15-May-2000)

WESTMONT INVESTMENT CORP.: Given cease-and-desist order
The Securities and Exchange Commission (SEC) issued a
cease-and-desist order on Friday against Westmont
Investment Corporation (Wincorp) for failing to abide by
securities rules when it issued short-term commercial
papers to thousands of investors.

In an audit conducted by the SEC, it showed that Wincorp
violated rules on short-term commercial papers when it
failed to register the issuance with the SEC.  Under the
rules, debt instruments are exempted from SEC registration
if they do not exceed P5 million and are issued to not more
than 10 investors.

The SEC audit showed that Wincorp issued an average of P7
billion worth of commercial papers a month to some 2,200
investors.  The SEC also said that Wincorp failed to hold
the debt instruments up to their maturity periods - another
violation of commercial paper rules.

The cease-and-desist order was issued to stop Wincorp from
further soliciting investments from prospective investors
dealing in loan agreements and promissory notes. The SEC's
Brokers and Exchanges Department (BED), responsible for
ensuring the smooth operations of investment houses, has
submitted to the Prosecution and Enforcement Department
(PED) - SEC's investigation arm - for the possible filing
of criminal charges against Wincorp officials responsible
for the illegal issuance.

Earlier, Wincorp investors said the investment house made
it appear that it only acted on behalf of the borrowers and
lenders but actually deposited the funds in its own
account.  The group of investors, which earlier filed a
complaint before the SEC, also asked the agency's PED to
look into the possible extension of credit lines between
Westmont Bank and Wincorp.

The credit-line extension reportedly violates prudential
limits on credit to directors, officers, shareholders, and
related interests (DOSRI). (ABS/CBN News Channel  12-May-


PADAENG INDUSTRY: Belgians pay Bt1.1B, take 33% stake  
Padaeng Industry Plc, the sole zinc producer in Southeast
Asia, has secured a new strategic partner in Belgium,
replacing Western Metals, the Australian firm which
abruptly terminated a share purchase deal early last year.

Shortly after the Australian firm revoked the deal, Padaeng
began looking elsewhere, selecting Union Miniere after
negotiations with several companies. The contract was
sealed on Friday.  Union Miniere will buy 75.1 million new
shares for 1.103 billion baht (US$26.7 million), making it
the largest shareholder in Padaeng with a 33% stake.

Padaeng said the partners would use their strengths to make
the Thai mining firm a key player in Asia. They would
combine Padaeng's upstream mining and smelting activities
and its location in Asia with Union Miniere's expertise in
primary and secondary zinc smelting and its experience in
value-added downstream zinc products.

Proceeds of share subscription would help Padaeng to
resolve debts totalling 1.14 billion baht, he said.
Padaeng agreed with its nine creditors in 1998 to pay back
2.2 billion baht over three-and-a-half years from its
operating cashflow, and the balance of 1.14 billion baht
from the proceeds of selling new shares to its new partner.

Previously, Western Metals had agreed to buy 81.6 million
new shares at 14 baht each for a 36% stake in Padaeng.
However, the Australians scrapped the deal after paying 91
million baht for 6.5 million shares for a stake of 4.3%.
Its holding now stands at 13-14% after buying additional
shares on the stock market

Western Metals cited the slowness in obtaining additional
mining licences from the authorities as the reason for
terminating the deal.  However, Padaeng said its financial
position was not affected by the Australian firm's
departure. Later, Padaeng's creditors agreed to defer 1.4
billion baht in debt repayments to Sept 15 this year.

Union Miniere is involved in several industries including
zinc, copper and precious metals, advanced materials and
technology and related services.  Padaeng, established in
1981, was awarded a 25-year zinc ore mining concession and
operates a zinc silicate mine in Mae Sot, Tak province. As
of January this year, the mines contained 4.7 million tons
of proven and probable reserves with 13% zinc content.

The smelter in Tak has an annual capacity of 100,000 tons
of zinc ingots and is partly supplied by 135,000 tons of
imported zinc calcine per year from Padaeng's roaster in
Rayong.  After the Asian financial crisis, Padaeng posted
net earnings of 152 million baht in 1999, up from a net
loss of 314 million baht in 1998. (Bangkok Post  15-May-

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

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

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