TCRAP_Public/000525.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                            A S I A   P A C I F I C

             Thursday, May 25, 2000, Vol. 3, No. 102


* A U S T R A L I A *

AIRCHIEF: Aquarium contractor goes into liquidation
HOLDEN: May halt production, stand down 3500
ON TIME BUSINESS SOLUTIONS: Calls in administrator
SPORTSGIRL-SPORTSCRAFT: Manufacturing unit next on market

* C H I N A  &  H O N G  K O N G *

CENTURY CITY INT'L HLDGS.: Suffers $93M setback
CHI CHEUNG INVEST.CO.LTD.: Restructuring deadline extended
NAM FONG INT'L HLDGS.: Reports winding-up petition to HKSE
WAH NAM GROUP: Winding up announcement to HKSE

* I N D O N E S I A *


* J A P A N *

KURARAY CO.: To pull out of rayon business operations
NTT DATA CORP.: Posts 18B Yen group net loss
SAKURA BANK: To join write-off of 1.15B yen in bad loans
SEIKO CORP.: Loss narrows at Seiko
SUMITOMO BANK: To join write-off of 1.15B yen in bad loans
TOKIO MARINE AND FIRE INSUR.: In red after stock losses

* K O R E A *

CHO HUNG BANK: Recapitalization plan faces Gov't objection
DAEWOO GROUP: Blame sought for bailout program going adrift
HYUNDAI GROUP: Automobile units set to spin off
SEOUL BANK: Deutsche Bank's Kang to head bank

* M A L A Y S I A *

CELCOM SDN BHD: Reaches deferred payment deals
NALURI BHD: Reaches deferred payment deals
TECHNOLOGY RESOURCES INDUS.: Reaches deferred payment deals

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

ASB GROUP: Creditor banks block Group's debt payment
ASB GROUP: Bank files PhP780-M claim against it
BENGUET CORP.: Net losses down 33%
NATIONAL POWER CORP.: Posts PhP5.9B loss - biggest ever
NATIONAL STEEL CORP.: Submits plan for rehabilitation
PHILIPPINE NAT.BANK: 3 prequalify for PNB bidding
SELECTA DAIRY PRODUCTS: To turn over debts to parent RFM
VICTORIAS MILLING CORP.:Officials oppose amended rehab plan
WESTMONT INVESTMENT CORP.: Investors on horns of a dilemma

* S I N G A P O R E *

VIKAY INDUSTRIAL LTD: Finalizing investor deal this week

* T H A I L A N D *

20,000 DEBTORS: SCB launching legal attack on debts
MODERN HOME DEVELOPMENT: Posts 1st quarter loss
SIAM SYNTECH CONSTRUC.: Richee plans for 75% stake
THAI MODERN PLASTIC INDUS.: Explains Q1 poor performance
THAI PETROCHEM.INDUS.: Expects turnaround despite Q1 loss
THORESEN THAI AGENCIES: Trading to be suspended, delisted


AIRCHIEF: Aquarium contractor goes into liquidation
Airchief, the company responsible for installing the air
conditioning in the Melbourne Aquarium, has gone into

The decision was announced on 19 May 2000, after
revelations that Airchief had lent $A900,000 to companies
associated with its owner.  Earlier in March 2000 Tamar Pty
Ltd said it was terminating its service agreement with
Airchief after accounts were left unpaid.

Airchief's administrator, Ken Sellers, has found that some
companies have received preferential treatment by Airchief
for outstanding accounts. (ABIX - World Reporter  20-May-

HOLDEN: May halt production, stand down 3500
Holden could be forced in the next two days to suspend
production at its Elizabeth assembly plant and stand down
3500 car workers without pay.

An industrial dispute at a Victorian component supplier is
threatening to halt production of the Commodore and
Statesman models for domestic and export markets.  A
shutdown at the plant would cost Holden $18 million a day.

Toyota Australia yesterday stood down 2000 workers at its
Altona plant in Victoria and suspended production of the
Camry and its soon-to-be released new big car, the Avalon.
The dispute, involving plastic parts company Socobell, is
understood to be over enterprise bargaining agreements.

A public affairs spokesman for Holden, Toni Andreevski,
said: "Holden is desperately concerned about the dispute
and its potential impact on our workforce. Unless the
dispute is resolved rapidly, Holden is likely to run out of
some plastic parts by the end of the week probably Friday.
We are assessing the situation on a daily basis and we are
yet to make a decision on employee stand-downs."

Mr Andreevski said the company would negotiate with the
trade unions to bring forward rostered days off.
Mitsubishi Motors does not buy parts from the plastic
components manufacturer and is not affected by the dispute.
Socobell supplies include exterior body side mouldings, air
cleaner housings for V6 and V8 engines and the liner on the
centre console of all vehicles. (The Advertiser  24-May-

ON TIME BUSINESS SOLUTIONS: Calls in administrator
On Time Business Solutions has entered voluntary

The company is trading as On Time Copy Centres. The chain
has 17 franchised stores in Queensland. Ferrier Hodgson has
been appointed as administrator. Partner with Ferrier
Hodgson, Greg Moloney, says an administrator has been
appointed as the company is no longer able to pay its
debts. The stores will continue to trade.

Moloney says the major creditors are expected to be Xerox
and company director, Silvio Bevacqua. (ABIX - Info-Link
Magazine  23-May-2000)

SPORTSGIRL-SPORTSCRAFT: Manufacturing unit next on market
Ferrier Hodgson has appointed Hindal Corporate to locate a
buyer for Aywon International. Aywon International is the
manufacturing arm of Sportsgirl Sportscraft.

Aywon wholesales the Carolyn Taylor, Robert Burton, Aywon
and Crestknit brands. The business will be offered as a
complete package and as individual operations. Director for
Hindal Corporate, David Beatty, says the wholesale brands
are well established and have a strong network of
customers. Sportsgirl Sportscraft was placed in voluntary
liquidation by its parent company, Truworths. (ABIX - Info-
Link Magazine  23-May-2000)

C H I N A  &  H O N G  K O N G

CENTURY CITY INT'L HLDGS.: Suffers $93M setback
Century City International Holdings has agreed to pay
HK$93.5 million to Shenyin Wanguo (HK) over a dispute in
the Chengmian Expressway project in Sichuan.

According to an announcement, Century City has settled with
Shenyin over a row relating to the project's share
distribution. Shenyin considered the distribution was
wrongful and caused it a loss.  Shenyin said the
distribution caused the company's attributable interest in
the expressway project to be diluted to 15.71 per cent from
20.66 per cent. The expressway links Chengdu and Mianyang
in Sichuan.

Century City agreed to pay HK$93.5 million for compensation
with interest at prime rate plus 4 per cent from January
16, 1999. However, the announcement indicated that Century
City was experiencing liquidity problems and that Shenyin,
or a third party nominated by Shenyin, would provide a one-
year loan at prime rate plus 4 per cent to Century City to
finance the payment. (South China Morning Post  24-May-

CHI CHEUNG INVEST.CO.LTD.: Restructuring deadline extended
The respective boards of directors of Chinese Estates
Holdings Limited and Chi Cheung Investment Company Limited
announce that certain deadlines under the Formal Agreement
in relation to the restructuring of Chi Cheung have been
extended. Shareholders of Chi Cheung and investors should
exercise caution when dealing in the securities of Chi

Unless otherwise defined, terms used herein have the same
meanings as those used in the joint announcement (the
"Announcement") made by Chinese Estates and Chi Cheung on
10 May 2000 in relation to the Formal Agreement.

Further to the Announcement, the respective board of
directors of Chinese Estates and Chi Cheung announces that
as the terms of the Compromise Agreement are under
discussion with the Creditors and further time is required,
the deadlines for signing the Compromise Agreement and
achieving the events relating to the Capital Reduction
Scheme and Scheme of Arrangement, as referred to in the
Announcement, have been extended by way of an extension
letter signed on 22 May 2000 by Chinese Estates, Chi Cheung
and Billion Up. The extended dates include the following:

Current  Extended
Event                                                              Deadline
Signing of the Compromise Agreement    22-May    26 May
by 75% of the Creditors in value
Signing of the Compromise Agreement
by 100% of the Creditors                             31 May    2 June

The hearing of the winding up petition on Chi Cheung has
been adjourned to 5 June 2000 by the Court. Further
announcement will be made to update the shareholders of Chi
Cheung and investors on the progress when appropriate.  The
Compromise Agreement may or may not be signed by 75% of the
Creditors in value on or before 26 May 2000. Shareholders
of Chi Cheung and investors should exercise caution when
dealing in the securities of Chi Cheung.  (Hong Kong Stock
Exchange  23-May-2000)

NAM FONG INT'L HLDGS.: Reports winding-up petition to HKSE
Reference is made to the Company's announcements dated 24th
February, 2000 and 12th April, 2000 and 17th April, 2000
and 10th May, 2000. At the hearing of the winding-up
petition held to-day, the Court has granted leave for
parties to fix another date for hearing of the winding-up
petition to give evidence. A further announcement on the
progress of the proceeding will be made in due course.

The Directors of Nam Fong International Holdings Limited
("the Company"), through Wong Wah, Chairman, refer to the
announcements made by the Company on 24th February, 2000,
12th April, 2000 and 17th April, 2000 and 10th May, 2000.
At the hearing of the winding-up petition held to-day, the
Court has granted leave for parties to fix another date for
hearing of the winding-up petition to give evidence. A
further announcement on the progress of the proceeding will
be made in due course.

At the request of the Company, trading in the shares of the
Company on The Stock Exchange of Hong Kong Ltd. ("Stock
Exchange") was suspended with effect from 10:00 a.m. on
23rd May, 2000, pending the issue of this announcement. An
application has been made by the Company to the Stock
Exchange for resumption of trading in the shares of the
Company with effect from 10:00 a.m. on 24th May, 2000.
Shareholders and potential investors are advised to
exercise extreme caution when dealing in the securities of
the Company. (Hong Kong Stock Exchange  24-May-2000)

WAH NAM GROUP: Winding up announcement to HKSE
The directors ("Directors") of Wah Nam Group Limited
("Company") report to the Hong Kong Stock Exchange that:

1. Hearings of the two Winding-Up Actions Further to the
announcements dated 10th February, 2000 and 16th February,
2000, the Winding-up Action ("1st Winding-up Action") filed
on behalf of Excel Noble Development Limited and Unbeatable
Assets Limited on 10th February, 2000 were heard on 15th
May, 2000 at the High Court of Hong Kong Special
Administrative Region (the "High Court").

Thereupon, the court ordered that the 1st Winding-Up Action
be stood over pending the outcome of the Winding-up Action
("2nd Winding-Up Action") filed on behalf of HCK China
Investments Limited and Investment Austasia Limited on 23rd
February, 2000. Further to the announcement dated 19th
April, 2000, the 2nd Winding-up Action was now fixed to be
heard on 14th July, 2000.

The Company has filed opposition to the 2nd Winding-up
Action on the ground, amongst other things, that the
alleged debts relied upon by the petitioners under the 2nd
Winding-up Action are subject to set-off and legal

2. Extension of time for Completion of Acquisition of
Property Development Project in the PRCAs disclosed in the
announcements dated 1st March, 2000, 22nd March, 2000 and
28th April, 2000, on 28th February, 2000, the Company has
entered into a property acquisition agreement (the
"Agreement") with Opulent Associates Limited, Early Way
Enterprises Limited, Liu Chiu Kwan and Wong Miu Wan
(collectively, the Vendors") in respect of the proposed
acquisition (the "Transaction") by the Company of the
entired issued shares capital in Beauty Asia Enterprises

Pursuant to the Agreement, completion of the Transaction
was expected to take place on or before 31st May, 2000.
However, in view that the Company is still in the process
of compiling information to be contained in the circular
("Circular") to be despatch to shareholders on or before
31st July, 2000, the Directors has on 23rd May, 2000 signed
a supplemental agreement with the Vendors whereby
completion of the Transaction is allowed to take place on
or before 30th September, 2000.  (Hong Kong Stock Exchange


Some 200 textile companies in the West Java chapter of the
Indonesian Textile Association (API) threatened on Tuesday
to stop production if the electricity rate hike was not
revised within a week.

Secretary of API's West Java chapter Ade Sudradjat said the
threat was issued after negotiations between the
association's members and the West Java branch of the
state-owned electricity company (PLN) failed to reach a
compromise.  He said the companies were willing to pay the
full rate if the government would agree to their proposal
for a gradual hike.

API proposed gradual implementation of the hike, with 20
percent now and an additional 16 percent in six months, Ade
said.  "We would accept a 36 percent increase for this
year. Then next year another gradual increase," he said.

Steel and textile-related industries have also protested
the increase. The government raised the electricity rate an
average of 29.43 percent beginning in April in a bid to
reduce the Rp 13.7 trillion (US$1.83 billion) losses faced
by PLN this fiscal year. The rate for industrial users rose
between 54 percent and 70 percent. Spokesman for the local
office of PLN Sri Djoko MK said the company could not alter
a presidential decree.

"We are a state-owned company with the government as a
major shareholder. The board of directors cannot make any
changes to a presidential decree on their own."

Companies have argued the government's decision to increase
electricity rates is burdensome to their operations. They
complained that many of them did not prepare the budget
because they only received notice from PLN at the end of
April, weeks after the decree took effect. The hike, the
minimum wage increase and the weakening of rupiah to the
dollar would further drain the companies' finances, they

President director of export-oriented textile company PT
Himalaya Bandung Husen Lumanta warned that if the
government did not revise the decree, his 5,000 employees
would be laid off in three months to six months.
(Jakarta Post  24-May-2000)


KURARAY CO.: To pull out of rayon business operations
Kuraray Co. (3405), a synthetic fiber maker, said Monday
that it will withdraw from its rayon business operations,
citing the continued shrinkage in the product's global

Kuraray will terminate rayon production at its Tamashima
plant in Okayama Prefecture in western Japan effective
March 31 2001 and will discontinue rayon sales activities
by the middle of 2001. The plant's annual production for
the year 2000 is estimated around 6,000 tons.

Kuraray said its efforts to reduce costs failed to overcome
a prolonged slump in both domestic demand and exports of
rayon products, making the division loss-making.

In addition, its Tamashima plant is out of date and
requires fresh capital outlays for renewal. But
uncertainties about the future prospects of the business
and difficulties recovering the investment prompted the
company to halt its rayon business.  About 200 workers at
the plant will be transferred to Kuraray and Kuraray's
group companies. (Nikkei  22-May-2000)

NTT DATA CORP.: Posts 18B Yen group net loss
Japan's NTT Data Corp. (9613) Monday reported a group net
loss of Y18.11 billion for the year ended March 31,
compared with net profit of Y16.31 billion the previous
fiscal year.

Extraordinary losses totaling Y63.8 billion dragged Japan's
largest data network services provider into the red. The
losses stemmed from payments to cover pension liabilities
and the writeoff of expenses related to software systems
The company's group pretax profit amounted to Y34.70
billion, an 8.1% on-year decline. NTT Data also reported
group operating profit slipped 10.7%, to Y50.74 billion,
while group revenue edged 2.1% higher to Y725.35 billion.

The company's results for this fiscal year were in line
with earning forecast revisions made on March 31. The
absence of extraordinary losses following this year's big
write-offs, combined with an increase in overall group
revenues, will help the company move back into the black
for the current fiscal year ending March 31, 2001, it said.

NTT Data forecasts group net profit of Y21 billion in the
current fiscal year. It estimates group pretax profit will
amount to Y38 billion.  NTT Data sees group revenues for
the current fiscal year of Y774 billion, an 6.7% on-year
increase. Overall revenue growth is likely to be supported
by 8% growth in orders for its system integration (SI)

NTT Data also forecasts 8% growth in revenues from its
network system services boosted by new Internet-related
business. However, the company anticipates that revenue
from some systems maintenance services will likely fall.
The company also unveiled its mid-term business targets. In
the fiscal year ended March 2003, NTT Data aims to generate
group pretax profit of Y50 billion on group revenues of
Y900 billion.

By fiscal 2002, the company also hopes to raise return on
equity (ROE) to 7.0% and bring its free cashflow into the
black, it said.  At a press conference in Tokyo Monday,
senior company executives said that the company is planning
to improve its cashflow situation by liquidating some of
its assets.  (Nikkei  22-May-2000)

SAKURA BANK: To join write-off of 1.15B yen in bad loans
SUMITOMO BANK: To join write-off of 1.15B yen in bad loans
Sakura Bank (TSE:8314) and Sumitomo Bank (TSE:8318) wrote
off a combined total of nearly 1.15 trillion yen (US$ 10.7
billion) in bad loans in the year ended March 31, earnings
reports released Monday reveal.

The two banks are set to merge in April and are stepping up
restructuring efforts.  Both banks posted pretax profit for
the first time in three years thanks to gains on the sale
of stocks.  In the current year, the banks expect to write
off a combined 400 billion yen in nonperforming loans,
which would clear away almost all of the bad debt that has
plagued their respective operations.

Sakura Bank's net operating profit jumped 89% in fiscal
1999 to 328 billion yen, the highest level since it was
created through the merger of Mitsui Bank and Taiyo Kobe
Bank in 1990.  Profit on its lending spread was plentiful
thanks to a widening of the margin, while labor and other
costs were cut.

The bank wrote off 464.5 billion yen in bad loans -- more
than quadruple the amount originally planned -- including
bad loan disposal assistance to affiliates. Sakura also
booked more than 300 billion yen in profit on stock
sales, lifting pretax profit to nearly 160 billion yen.

Sumitomo Bank enjoyed a 59% jump in net operating profit to
350.5 billion yen. The bank disposed of 680 billion yen in
bad loans but nearly 500 billion yen in profit on stock
sales enabled it to record pretax profit of 176.4 billion
yen.  A Sumitomo Bank spokesperson attributed the
aggressive write-off effort to "a stricter audit of assets
and a proactive approach of setting aside reserves
and disposing of (nonperforming assets)."

That being said, loans to construction firms are going bad
at a rate of more than 200 billion yen per year. (Asia
Pulse  23-May-2000)

SEIKO CORP.: Loss narrows at Seiko
Seiko Corp.'s loss narrowed in the year ended March 31 amid
reduced management expenses and improvements in its cost

The company's group net loss narrowed to 1.38 billion yen
($12.7 million) in the year ended March 31 compared with a
loss of 13.54 billion yen a year earlier.  Seiko said its
group net loss was because of special losses from
subsidiary companies. The sale of marketable securities
produced special profit. (The Asian Wall Street Journal

TOKIO MARINE AND FIRE INSUR.: In red after stock losses
Japan's largest non-life insurer Tokio Marine and Fire
Insurance Co Ltd's earnings for the year to March fell 4.2%
after it suffered investment losses on the stock market.

The insurer said its parent firm's net profit fell to
30.6bil yen (US$291mil) from 32.0bil yen in the previous
fiscal year.  Premium income inched up 0.1% to 1.29
trillion yen. Pre-tax profit plunged 65.6% at the parent
level to 46.1bil yen.  Tokio Marine announces its group
earnings on May 31.

"We reported 130.7bil yen in losses stemming from stock
futures sales," it said in a statement.

For the year to March 2001, the parent company forecasts a
net profit of 48bil yen, premium income of 1.34 trillion
yen and a pre-tax profit of 85bil yen.  Tokio Marine said
the past fiscal year had been a turning point for the
Japanese insurance industry.  Japan's top tier of non-life
insurers have announced a wave of mergers in recent months
following an investigation into their health by the
Financial Supervisory Agency, set up in 1998 to clean up
Japan's financial mess.

But Tokio Marine, which has so far stayed out of the merger
game, has warned that its rivals need to concentrate on
efficiency savings and not just size.

"Reorganisation of the industry has accelerated as non-life
insurers are moving to mergers and strengthening ties
with life insurance firms. Competition has intensified
particularly in the auto insurance sector" as foreign
rivals pour into the Japanese insurance market, it said.

Two weeks ago, a report said Prudential Insurance Co of the
United States planned to take a majority stake in Japan's
struggling life insurer Kyoei Life Insurance Co in May.
On May 1, Dai-ichi Mutual Fire and Marine Insurance Co
collapsed, becoming the first non-life insurer to go under
in Japan since World War II.  Last June, Tokio Marine
announced it was forming a securities firm with US
investment house Charles Schwab and Co to sell products to
Japanese retail investors. (The Star  23-May-2000)


CHO HUNG BANK: Recapitalization plan faces Gov't objection
The Financial Supervisory Service (FSS) dampened the hype
following Cho Hung Bank's announcement of attracting a
foreign investor to wipe out its non-performing loans

The financial watchdog ruled tentatively on May 16 that it
would not allow Cerberus Partners LP, a US based distressed
assets buyer, to make an equity investment exceeding 4
percent in the bank's stake. The FSS cited current law that
bans private foreign investors, other than financial
institutions, from holding more than 4 percent of local
banks' shares.

Still, a Cho Hung Bank official Jung Du-young was positive
about the prospect of the partnership with Cerberus,
pointing out that the law regulating bank ownership has
exceptions for banks facing liquidity problems.

"The FSS will consider the fact that the bank had once
received the directive of management improvement from the
government," he said.

Korea First Bank was granted an exception when taken over
by Newbridge Capital Ltd., a US-based non-banking
investment firm, setting a precedent of the kind. Cho Hung
Bank lost 698 billion won last year as it made large
provisions against distressed loans under government
regulations mandating banks to set aside more capital
against potential defaults.

The bank posted net income of 100 billion won for the first
quarter this year.  Earlier, the US distressed fund buyer
announced plans to invest $500 million to purchase about a
14 percent stake of Cho Hung Bank in a deal that would make
it the second biggest shareholder. Cerberus' share purchase
was supposed to enable it to exert influence on the bank's
management decision-making process.

Under the deal, the bank would sign an agreement to sell
off non-performing loans worth about 1.5 trillion won
(approx. $1.25 billion), increasing the possibility of the
bank's survival in the anticipated financial sector
overhaul. The investment plan was subject to approval by
the government, which currently is the largest shareholder
in Cho Hung, one of the biggest banks in the nation.

Under the agreement reached on May 15, Cho Hung and
Cerberus intended to set up a company to absorb the 1.5
trillion won worth of bad debts. The US-based company opted
for launching a new firm rather than taking over the debts
by itself, intending to gain more from the transaction.

According to the plan, Cho Hung would finish assessing the
value of the defaulted loans to decide on an exact sales
price by the end of this month. Once the price is set, the
US asset buyer would pay half the total amount in cash,
with the remaining half a capital investment in the joint
venture. The bad loans would likely be sold off at below
market price.

The US-based company and the bank would also start a joint
venture with 50:50 stakes to focus on managing investments
in Cho Hung and other Korean enterprises under debt
restructuring programs, officials at Cerberus and Cho Hung
said.  In addition to the initial investment, Cerberus
agreed to provide up to $250 million in working capital for
the joint venture to take off in July or August. This
company would be specialized in consulting on corporate
restructuring while supplying funds required for
restructuring to domestic client companies. (Korea Economic
Weekly  22-May-2000)

DAEWOO GROUP: Blame sought for bailout program going adrift
Besieged by parties who really seem bent on thinking of
nothing but their own interests, the troubled Daewoo group
has made slow progress toward a debt workout, casting a
pall over the nation's corporate and financial

Ten months ago, the government perhaps jumped the gun and
whipped out an array of so-called "workout programs"
intended to pull the ailing Daewoo group out of the
doldrums.  Fearing a slowdown in the recovery of the
nation's economy--which had started getting on its feet
again after the 1997 currency crisis--the government guided
the nation's creditor banks to introduce bailout programs
for the ailing Daewoo group, hoping to restore market
stability and to give confidence over Daewoo's

As a result, the group's 12 debt-ridden subsidiaries were
designated as being subject to "workout" in August 1999, a
strategy designed to help them survive through a sweeping
assistance package including debt-for-equity swaps provided
by creditor banks.  Time has passed, however, without
making things much different for the Daewoo group which
still faces a life-or-death situation, skating on the
thin ice of restructuring for the nation's financial and
corporate sectors.

The varied viewpoints of the government, creditors and
minority shareholders regarding the fate of Daewoo
affiliates and the lack of necessary legal grounds for
action are the main reasons for the slow progress, industry
analysts said.  Singing their own praises, the parties that
vied for the initiative in orchestrating the restructuring
of the Daewoo group are now wondering who to blame for the

The government seems to be paying less attention to the
problem, shuffling out of its responsibility after it
successfully avoided an early liquidity crisis which could
have come with a flurry of sales of Daewoo bonds in the
domestic financial market.  In negotiations with foreign
creditors, the government pledged to purchase 20 - 50
percent of their Daewoo bonds. However, it has not carried
out its promise to date, blocking progress for the workout

Separately, domestic creditor banks--having doubts about
the fate of the group--are delaying the injection of fresh
loans into the Daewoo companies, and this has contributed
to a nosedive in the Daewoo affiliates' share prices and
further compounded the problems.

"In a situation where the fate of the bank is uncertain, an
additional injection of capital into the ailing group is
hard to expect," one official of the banking industry

To make matters worse, minority shareholders have brought a
lawsuit against implementation of the workout programs for
Daewoo Electronics and Daewoo Heavy Industries, halting
restructuring of these two Daewoo affiliates.  Daewoo Heavy
Industries, originally scheduled to be split into two
units--shipbuilding and machinery--and to be designated for
workout as early as this month, was forced to delay
implementation of the program until August.

Meanwhile, Daewoo Motor Co. has been suffering from
prolonged labor problems and annoyed by uncooperative
creditors who did not participate in the workout program.
Taking legal steps to seize the troubled automaker's
property provisionally, these creditors are increasing
efforts to have the government make up for their whole
losses from Daewoo bonds and to pay additional interest of
10 percent, creating much trouble for the Corporate
Restructuring Committee.

Some industry analysts point to the workout program itself
as one of the reasons for slow progress, stressing that a
more cautious approach should have been made at the outset.
Before the crisis, the group took relatively large loans
from foreign creditors and the non-banking financial sector
including investment & trust companies and merchant banks,
but the government-led workout program focused on loans to
Daewoo from the banking industry, following the same track
that is fit for smaller companies under the rank of 6th
in size.

Based on their judgement that the key factor in the
nation's corporate and financial restructuring is to work
out the Daewoo crisis, many industry analysts agree that
the nation's financial sector would experience serious
damage if 70 trillion won worth of Daewoo bonds go into
default. (Korea Economic Weekly  22-May-2000)

HYUNDAI GROUP: Automobile units set to spin off
A few units specialized in automobile manufacturing of the
Hyundai group are likely to spin off from its parent
company as early as this July.

In efforts to carry out its management initiatives aimed at
separating its automobile-related companies--including
Hyundai Motor and Kia Motors--from the group, Hyundai will
straighten out the problems caused by cross-ownership of
shares in group affiliates by the end of May, a high-
ranking official of the group said on May 14.

"We are drawing up the documents for submission to the Fair
Trade Commission and will get the project done by the end
of June," he added, hinting that the group's motor units
will stand on their own feet under an independent group
from the coming July.

During the board of directors' meeting on May 17, Hyundai
Motor decided upon details related to the restructuring,
industry watchers said. The spinoff will include a total of
five affiliated companies including Hyundai Motor, Kia
Motors, Hyundai Capital Services Inc., Hyundai Precision
Co., and Inchon Iron & Steel Co.

"Hyundai Pipe Co. is also likely to join the auto group,"
said Kia Motors which plans to purchase a 12.8 percent
equity of the company.

However, Inchon Iron & Steel will not likely belong to the
auto-related group for long. The steel maker is expected to
go through a second stage of separation to stand alone.
The Fair Trade Commission has strongly urged the Hyundai
group to reduce its shares in the steel producer, pointing
that while the group has a 14.1 percent equity of the
company, much lower than the creditors' 29 percent, the
latter holdings are spread among 19 financial institutions,
which could allow the Hyundai group to play the role of
majority shareholder.

Excluding Inchon Iron & Steel and Hyundai Pipe, the
remaining four motor-related companies posted combined
revenues of 24.3 trillion won last year and held assets of
28.8 trillion won as of end-1999, ranking seventh among the
nation's business groups in terms of revenues and asset

However, there is still a barrier to be overcome. Hyundai
Heavy Industries and Hyundai Construction currently retain
6.77 and 2.76 percent equities in Hyundai Motor,
respectively, while Hyundai Motor has 22.67 percent of
Korea Industrial Development Co. The key to the success
of the initiative is how to lower such cross-ownership
shares below 3 percent.

Hyundai's corporate restructuring committee and Hyundai
Motor reached an agreement that other non-automobile
subsidiaries' stakes in auto-related units would be
transferred to the spinoff group with exception of the
shipbuilding unit which will be permitted to maintain
its equity in Hyundai Motor below 3 percent.

Under the agreement, Hyundai Precision Co. will play the
role of a holding company. The auto parts and general
machinery supplier will increase its stake in Hyundai Motor
to over 14 percent from the current 7.84 percent by taking
the 6.5 percent shares held by Hyundai Heavy Industries and
Hyundai Construction. Hyundai Precision, however, is likely
to suffer a huge loss on purchase of its affiliates stocks
at book value, because their market prices are currently
much lower.

For instance, Korea Industrial Development's shares, which
were estimated at 5,000 won a share by Hyundai Motor,
closed at 1,720 won a share on May 12. (Korea Economic
Weekly  22-May-2000)

SEOUL BANK: Deutsche Bank's Kang to head bank
Deutsche Bank has selected Kang Chung-won, its chief
officer for Korea, as the sole candidate to be posted at
the new president of the ailing Seoul Bank.

The government and creditors of Seoul Bank had commissioned
the German bank to oversee the normalization of Seoul Bank,
part of which entailed the selection of candidates to head
the Korean bank. Seoul Bank said Tuesday that it would
convene a general meeting of its shareholders Wednesday
afternoon to appoint Kang to the bank's board of directors.

A board meeting will immediately be held to approve the
selection of Kang as the bank's president. If all goes
according to plan, Kang will become, at the age of 49, the
youngest president of a Korean bank.

According to reports, there were lengthy negotiations
between Kang and the bank on the issue of his salary, after
which Kang came out with a compensation package worth W560-
million. (Digital Chosun  23-May-2000)


CELCOM SDN BHD: Reaches deferred payment deals
NALURI BHD: Reaches deferred payment deals
TECHNOLOGY RESOURCES INDUS.: Reaches deferred payment deals
Businessman Tajudin Ramli has launched a new technology
firm that will control the Internet assets and ventures of
his debt-laden aviation to telecommunications empire.

The launch of the Internet venture yesterday came a week
after Mr Tajudin unveiled government-brokered deals with
creditors to help restructure his group's towering debts.
The deals allow two of his companies, aviation firm Naluri
and Technology Resources Industries (TRI) mobile-phone unit
Celcom, to defer debt repayment of US$723 million.

Mr Tajudin, a close ally of Prime Minister Mahathir
Mohamad, is still trying to restructure debts of US$531
million owed to TRI bondholders. He said the new company,
Trifinity Networks, would operate an Internet portal
offering e-commerce services in the technology,
telecommunications, travel and tourism sectors.

Trifinity will also provide services for Internet access,
Web portal hosting, e-mail and search engines targeted for
the Asian region.  The information technology
infrastructure and resources of Mr Tajudin's flagships -
Naluri, TRI and Malaysian Airline System - will be placed
under Trifinity's control.

"[Trifinity] is very, very important to tie us together
within the group and to tie the group to the consumers," Mr
Tajudin said at the launch.

Trifinity will launch its portal, in the
third quarter with the rest of the services expected to be
fully operational in the fourth quarter.  Mr Tajudin
expects Trifinity to be profitable by tapping into MAS and
Celcom's existing pool of customers and business partners.

Celcom is the country's largest mobile-phone service, with
about 1.2 million subscribers, while MAS carries more than
16 million passengers a year.  Mr Tajudin said an
announcement on potential partners in Trifinity would be
made "within the next couple of weeks."  (South China
Morning Post  24-May-2000)


ASB GROUP: Creditor banks block Group's debt payment
Three of the 14 creditor banks of cash-strapped property
firm ASB Group have asked the Securities and Exchange
Commission (SEC) Monday to defer the payment of some P70.6
million worth of debts by the property firm.

Metropolitan Bank and Trust Company (Metrobank), United
Coconut Planters Bank (UCPB) and Union Bank of the
Philippines (Union Bank) said the payment that ASB plans to
make will violate a SEC order suspending all claims lodged
against the debt-laden real estate firm.

In a motion filed with the SEC, the ASB Group said it wants
to make an initial payment to creditors despite an existing
SEC order to suspend any claims against the property firm.
ASB said its counsel and consultants have advised to first
seek authority from the SEC before making any settlements
to avoid allegations of favoring other creditors.

ASB's request to settle some of its obligations was part of
ASB's rehabilitation plan that it earlier presented to
creditors.  Under the plan, ASB has committed to pay a
total of P70.6 million to its creditors in three tranches.
The first tranche of payment, which supposedly started last
May 9, is worth P35.5 million, while the next tranches of
payment were scheduled on June 28 and July 28, amounting to
P17.50 million for each tranche.

On May 3, the ASB Group asked the SEC for a moratorium on
payment of its P12.7-billion debt to 712 creditors. The ASB
Group, which is owned by real Estate Developer Luke Roxas,
is comprised of ASB Holdings Inc., ASB Realty Corp., ASB
Development Corporation, Tiffany Tower Realty Corp., ASB
Land Inc., ASB Finance Inc., Makati Hope Christian School,
Bel-Air Holdings, Winchester Trading Inc., VYL Development
Corp., Gerick Holdings Corp. and Neighborhood Holdings Inc.

In its rehabilitation petition filed with the SEC, the ASB
Group called on the SEC to issue to creditors a 60-day
suspension order against the filing of foreclosure
proceedings.  The ASB Group said its assets worth P19.41
billion are more than enough to cover all its debts.

The ASB Group said the slump in the property sector, the
continued weakness of the peso against the dollar and weak
investor confidence in the economy have greatly affected
ASB's financial position. (ABS/CBN News Channel  23-May-

ASB GROUP: Bank files PhP780-M claim against it
It could take more time before the ASB Group of Companies
got out of its financial quagmire, as one of its creditors
recently sought from the Securities and Exchange Commission
(SEC), recognition and repayment of its 780.05-million-
Philippine peso (PhP) (US$18.50 million at PhP42.158:US$1)
exposure to the troubled Roxas-owned firm.

In a formal notice of claims filed with the corporate
regulator recently, the Development Bank of Singapore Ltd.
(DBS) asked that ASB's earlier borrowings of over $11.2
million or PhP470.36 million, plus the bank's indemnity
claims of over PhP307.7 million ($7.30 million) be
recognized in ASB's schedule of debts and liabilities.

DBS said ASB's summary of bank loans as of end March this
year, shows that subsidiary ASB Realty has a loan of
PhP449.75 million ($10.67 million) from Philippine
Commercial International Bank (now PCI-Equitable Bank)
which was secured by a stand-by letter of credit (SLC)
issued by DBS to ASB Realty in January 1999.

Last April, DBS paid PCIBank the amount owed by ASB Realty
and under the SLC Facility Agreement, payment by DBS
constitutes a loan by DBS to ASB Realty.  After three
demand letters, ASB has failed to meet its obligations to
DBS, which has amounted to over PhP470.36 million. This
amount continues to increase as interest accrues until the
debt is paid.  DBS has also filed indemnity claims
amounting to over PhP307.7 million against ASB and its
president Luke Roxas.

Meanwhile, creditor Emmantere Corp. has also filed with the
SEC additional claims against ASB Development Corp. for the
latter's failure to turn over condominium units amounting
to over PhP13.9 million ($329,712). Contractor Hooven
Philippines also pressed for payment of services rendered
to the ASB Group amounting to PhP973,503 ($23,092).

ASB filed for suspension of debt payment and rehabilitation
last May 3, after it failed to meet obligations amounting
to over PhP12.7 billion ($301.25 million). The SEC has
since issued a 60-day debt moratorium to shield the
troubled real-estate developer from the pressing claims of

"The institution of extrajudicial and judicial foreclosure
proceedings and the filing of court actions against (ASB)
will necessarily result in the paralization of its business
operations and its assets being lost, dissipated or
wasted," the Roxas-owned group earlier said.

Despite possessing sufficient property, amounting to
PhP19.21 billion ($455.66 million), to cover its
obligations, the reality firm foresees its inability to pay
its obligations within a period of one year.

ASB attributed the failure to service obligations to the
"massive withdrawal by creditors of their loans, coupled by
the...glut in the real-estate market, the severe drop in
the sale of real properties and decreased investor

"There is a clear, present and imminent danger that the
creditors of (ASB) will institute extrajudicial and
judicial foreclosure unless restrained by the Commission,"
ASB said.

The ASB Group began experiencing liquidity problems after
individual creditors reportedly demanded repayment of their
investments, sources said.  The ASB Group has between PhP8
billion and PhP10 billion ($189.76 million and $237.20
million) in "direct borrowings" to individuals and creditor
banks. Of the amount, about PhP3 billion to PhP4 billion
($71.16 million and $94.88 million) are owed to three to
four mostly Chinese-Filipino investors, sources said. Most
of the loans are secured by the group's real-estate assets.

Meanwhile, along with its petition to be declared in a
state of suspension of payment, ASB submitted a
rehabilitation plan that calls for the disposal of assets
amounting to PhP10 million ($237.20 million) through dacion
en pago or payment in kind.  Also under the interim
rehabilitation plan, payment to creditors will be made on a
pro rata basis on or before July 28.

ASB said a more detailed and comprehensive rehabilitation
proposal will be presented within the next few weeks. The
said proposal may call for the forming of a strategic
alliance with third-party investors, including joint
ventures and similar arrangements, ASB said.  ASB projects
include the BSA Tower and Suites in Makati, The Legaspi
Place, The ASB Malayan Tower and BSA Twin Towers in St.
Francis Square, Ortigas. (Business World  24-May-2000)

BENGUET CORP.: Net losses down 33%
Mining firm Benguet Corp.'s net losses went down by 33
percent in 1999 to P415 million from the previous year's
P620 million.

The company started to incur losses in 1997 due to non-cash
accrued interest expense, depreciation and amortization,
caretakership costs of suspended operations and share in
net losses of subsidiaries, as well as foreign exchange
losses due to revaluation of foreign currency-denominated

Since then, Benguet Corp. has intensified efforts to reduce
its costs. Such move, according to company officials, was
the main reason why Benguet Corp. managed to trim down its
losses for 1999.  The mining firm has just signed a
memorandum of agreement with Gulf Estates Mining
Corporation (GEMCOR) for a joint venture to develop the
latter's mineral and non-mineral properties in Alaminos,

GEMCOR agreed to assign to Benguet Corp. "the sole and
exclusive right to explore, develop, exploit, manage,
operate and commercialize its Alaminos property for the
mutual benefit and interest of both properties."

Benguet Corp. as manager and operator, will provide the
necessary technical, financial and management services to
the venture.  Initial business undertaken by the parties is
the supply of limestone to the coal-fired thermal power
plant in Sual, Pangasinan being operated by Southern
Energy, Inc. under a three-year supply contract.

The Alaminos property covers 1,300 hectares and a resource
potential of more than 100 million tons of good grade
limestone, suitable for cement manufacture.  Apart from
mineral exploration, the other alternative business
opportunities that the parties are considering for the area
are industrial tree farming and reforestation, water
resource development and eco-tourism.

Benguet Corp. was established in 1903 and is considered as
the country's oldest mining company whose principal
products are gold, chromite and copper concentrates.
It just received a two-year extension from the Department
of Environment and Natural Resources (DENR) Mines and Geo-
Sciences Bureau to explore the Kingking Project in Southern
Mindanao. The exploration project should have ended in Feb.
8, 2000 but was extended until Feb. 7, 2002. (The Manila
Times  23-May-2000)

NATIONAL POWER CORP.: Posts PhP5.9B loss - biggest ever
The state-run National Power Corporation reportedly
incurred a net loss of 5.9 billion Philippine pesos ($0.14
billion at PhP42.158=$1) last year -- the biggest in its

The disclosure comes at a time when the firm is set to be
sold to private investors.  BusinessWorld sources from the
government said higher interest payments for its overdue
debt obligations caused the utility's losses to balloon to
PhP5.9 billion ($0.14 billion) from just PhP3.8 billion
($0.09 billion) in 1998.

Adding to this burden was the continued depreciation of the
peso exchange rate which in 1999 fell by three percent
against the US dollar.  Most of Napocor's loans are dollar-
denominated.  The power firm's official financial statement
has yet to be officially released, but the sources said
Napocor registered a "positive" net operating income,
unlike in 1998 when it saw a drastic drop in operating
income due to the long dry spell caused by the El Nio
weather disturbance.

Last year, the state-run power producer had to allot a
bigger budget for debt servicing, which was up 29% to PhP36
billion ($0.854 billion) from PhP28 billion ($0.664
billion) due to higher interest payments and the falling
exchange rate.  As a rule of thumb, every peso fall in the
foreign exchange rate translates to a PhP300-million
($7.12-million) loss for the power firm.

Its loans were pegged at PhP27:$1 rate prior to the 1997
crisis. Some of these loans were restructured, with the
foreign currency component adjusted to the PhP38:$1 after
the peso fell to as low as PhP42:$1.  Napocor allots each
year at least a third of its budget for debt servicing to
interest payments alone since the principal component of
its loan can be recovered through rate adjustments.  But it
seems the government has been prepared for the worst.

In an earlier talk with reporters, Napocor president
Federico Puno said "Napocor's net loss will be higher than
the previous year's despite the fact that there is a two
percent increase in sales."

He added then that the deficit could reach as high as PhP5
billion ($0.119 billion).  The delay in the implementation
of the power rate adjustment may have also contributed to
the huge loss, another source said.  The Energy Regulatory
Board approved Napocor's 7.9-centavo-per-kilowatt-hour
increase only on June last year, when the application was
filed in January the same year.

Meanwhile, Dr. Bernardo M. Villegas, dean of the University
of Asia and the Pacific's School of Economics, said the
government's absorption of the estimated PhP250 billion
($5.93 billion) liabilities of Napocor is necessary to make
it more attractive to prospective buyers.

"If the government does not do that, no one will buy the
firm. And there are a lot of companies waiting. There is a
lot of interest from abroad," Mr. Villegas noted.

He said the debts will not be a "new burden" on taxpayers
in the sense that the government is already shouldering
Napocor's liabilities.  Mr. Villegas cautioned, however,
that because of the Napocor's "big debts" and high
operational costs, its privatization should not be expected
to immediately result in lower power rates.

"In the long run, yes, it will bring down the rates. But in
the short run -- with all of the big debts and the high
costs -- I do not think (so)," he said.  "But the purpose
is not to really bring down the rates immediately, but
relieving the government of such a burden. Whether the
government absorbs it or not, it is the same because if
Napocor is left with the loans, it is still the taxpayers
that will pay...and by absorbing (the liabilities), it
makes Napocor more attractive (to investors)," he added.

Mr. Villegas said Congress should just allow market forces
to determine Napocor's sale and not legislate its
privatization schedule.

"Whether or not there should be four or five (generating
companies), I think (the government) should really allow
market forces to determine (the privatization process). I
am a little apprehensive about legislating the number of
companies," he said.

The other day, the Senate committee on energy adopted a
three- to 10-year timetable for Napocor's privatization.
Under this mode, Napocor must first set up five generating
companies that will operate independently and compete in
the supply of electricity. (Business World  24-May-2000)

NATIONAL STEEL CORP.: Submits plan for rehabilitation
National Steel Corp. has submitted a rehabilitation plan to
Philippine authorities calling for infusion of fresh
capital of as much as $1 billion and debt restructuring.

Documents of the plan, obtained on Sunday, said government
intervention also was essential to ensure the company
doesn't face unfair competition from cheap imported and
dumped steel products.  The country's largest steel
producer halted operations in November after incurring a
large loss. The Securities and Exchange Commission has set
up an interim committee to take charge of its assets and
oversee its operations.

In the rehabilitation plan submitted to the commission, the
steel firm said the entry of a strategic investor,
preferably a slab producer, was critical to the success of
the plan.  The plan also proposed the restructuring of nine
billion pesos ($215.7 million) in debt, which represented
55% of the company's long-term debt of 16.5 billion pesos.

It proposed that 7.9 billion pesos be converted into 10-
year pesos amortizing bonds with a 12% coupon, and 1.1
billion pesos into 10-year dollar amortizing bonds with a
12% coupon. It said the rest of the debt, valued at 7.5
billion pesos, would be converted into equity, and creditor
banks would be given an 87.8% share of the company.
(The Asian Wall Street Journal  22-May-2000)

PHILIPPINE NAT.BANK: 3 prequalify for PNB bidding
Three bidders, a local bank and two foreign groups -- beat
the deadline for the June 9 sale of the combined 80 percent
stake of taipan Lucio Tan and the government in Philippine
National Bank (PNB), Finance Secretary Jose Pardo disclosed

Pardo said Rizal Commercial Banking Corp. (RCBC), of the
Yuchengco group, an American company and a European
consortium submitted their formal offers to bid for PNB,
beating the May 22 deadline set by the government.
Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B.
Buenaventura said one of the two foreign bidders is based
in the United States, but declined to give more details.

Banking sources, however, identified the US bidder as
Beatrice Foods Corp., a US-based conglomerate led by a
high-profile Filipina chief executive, Loida Nicolas Lewis,
widow of Beatrice founder Reginald Lewis. Loida Lewis has
been described as one of America's top lady CEOs.

Analysts said that if RCBC succeeds in acquiring PNB, it
will become the country's third largest bank with assets
totaling P320 billion.  They also cited the fact that only
three groups showed interest in PNB, highlighting the lack
of interest in the bank.

"It is (lack of interest) probably due to the short due
diligence period, its balance that is in bad state, and
they have to capitalize it again," an analyst from a
foreign bank said. He said PNB has among the highest non-
performing loan (NPL) ratio in the industry at 31 percent
as of end-April.

"The bank's finances is among the worst among its peer
banks," another analyst from a local securities firm said.
"It has sustained losses for the past 15 months."

Pardo said the huge capital outlay estimated at $1 billion
has turned off other prospective buyers, including
Metropolitan Bank and Trust Co., which earlier expressed
interest in the bank.  Just to buy out the existing
shareholders, Pardo said, investors will have to shell out
$500 million. Another $500 million, he said, is needed just
to recapitalize the bank so that it could revert back to
profitability after months of sustained losses.

On June 9, the government will auction off its 30 percent
stake in PNB, along with the 46 percent equity of Tan and a
3.8 percent stake held by a PNB pension fund.  The sale was
originally set for late May but was postponed to attract
more bidders.  PNB's privatization was among the conditions
set by the International Monetary Fund under a standby
borrowing program that gave the government access to $1.4
billion in credit. The IMF program which was to end March
31, was extended to June 30.  (Philippine Star  24-May-

SELECTA DAIRY PRODUCTS: To turn over debts to parent RFM
Local credit ratings agency Philippine Ratings Services
Corp. (Philratings) said Selecta Dairy Products, Inc.
(SDPI) is planning to transfer 500 million Philippine pesos
(PhP) (US$11.86 million at PhP42.158:US$1) worth of
outstanding long-term commercial papers (LTCPs) to parent
company food and beverage firm RFM Corp.

Philratings said publicly listed SDPI issued PhP500 million
worth of LTCPs in April last year whose proceeds were used
to augment working capital and pay maturing debts. SDPI's
LTCPs currently have a "PRS Aa" credit rating from

A "PRS Aa" rating means that "fluctuations of protective
elements may be of greater amplitude or there may be other
elements present which make the long term risks appear
somewhat larger." Philratings said SDPI hopes to complete
the transfer of liabilities to RFM by the second quarter
this year.

The ratings agency said the LTCP's current rating may have
to be reviewed due to the proposed transfer of liability to
RFM. There is a need to consider the payment capability of
RFM while SDPI's current rating will have to be withdrawn.
Philratings added that RFM plans to merge SDPI with another
one of its subisdiaries, real-estate firm Philippine
Townships, Inc. (Philtown) with SDPI as the surviving
company. The planned merger will transfer all of SDPIs
liabilities to RFM and the sale of its assets, including
shares of stock in Selecta Walls Inc, Selecta Walls Land
Corp. and WS Holdings, Inc. (Business World  24-May-2000)

VICTORIAS MILLING CORP.:Officials oppose amended rehab plan
In a case of financial rehabilitation, who would know
what's best for the company? The management and staff who
personally experienced the company's financial downfall or
the team of experts tasked to oversee the company's

The Securities and Exchange Commission (SEC) is now faced
with such a dilemma as Victorias Milling Co. (VMC)
president Manuel B. Maalac, in behalf of the company,
challenged the amended rehabilitation plan (ARP) earlier
prepared by the firm's management committee with their own
recovery program.

"We believe that our ARP is the logical rehabilitation plan
to put back Victorias in a financially healthy, operating
condition and resume its leading role in the sugar
industry," Mr. Maalac said in a letter to SEC associate
commissioner Danilo Concepcion.

He added that the VMC management, in developing the ARP,
took into consideration the present condition of the sugar
industry in the country as well as developments in the
international sugar market. To insure the viability of
VMC's rehabilitation, he said the management focused on the
restructuring of debts as well as initiating quasi-
reorganization and restructured capitalization.

To achieve a balance of operating results and cash flow
against the firm's debt servicing efforts, the VMC
management proposed a rational sharing of the loss or
diminution of interest of certain stakeholders,
particularly the shareholders, bank creditors and trade

"Definitely, the diminution of the stake in the company
falls heavily on the shareholders as well as the bank
creditors. We believe that shareholders should not take all
the brunt of the firm's financial debacle. We strongly feel
that the bank creditors should equally share the loss
considering the magnitude of credits extended by these
financial institutions to VMC," the firm's management said.

The VMC management said the banks significantly contributed
to the financial collapse of the company. "The banks
continued lending the company and apparently, there were no
diligent review by the banks of the company's absorption
capacity to take in additional loans coupled with the
review of the capacity to generate revenue and cash flows
to service its debt obligations," it added.

The following are the features of the proposed ARP
presented by the sugar miller's management:
Convert unsecured loan principal amounting to 3.9 billion
Philippine pesos (PhP) (US$92.50 million at PhP42.158:US$1)
to equity equivalent to 1.16 billion shares, representing
70% of total equity, at PhP1 par value, priced at PhP3.38
per share.
Restructure the PhP1.3-billion ($30.83 million) mortgage
trust indenture in 15 years, at 10% interest rate and with
a three-year grace period.
Convert accrued interest of secured loans of over
PhP440.26 million ($10.44 million) to an 8% cumulative,
non-participating preferred bond with balloon payment on
the 15th year.
Convert accrued interest of clean creditors amounting to
PhP1.01 billion ($23.96 million), into a 20-year zero-
coupon bond, redeemable in equal yearly amounts.
Secure a new loan worth PhP400 million ($9.48 million) at
10% interest rate repayable in three years.

In contrast, the rehab plan presented by the SEC-appointed
management committee (mancom) allowed for the increase in
the firm's authorized capital stock to 4.61 billion shares
from 2.56 billion shares. From the new authorized stock,
495.96 million will be issued to existing VMC shareholders
or 2.91 shares for every one existing share held.

"Based on the financial data...the debt level of VMC has
grown due to accumulation of unpaid interest, which should
have been paid from the VMC cash flow if the rehabilitation
plan was implemented earlier," VMC said.

Meanwhile, unsecured creditors of debt-laden VMC, with a
combined exposure of PhP4.2 billion ($99.62 million), have
also proposed to convert unpaid interest into direct equity
to trim down the debt level of VMC, which has reached
PhP6.5 billion ($154.18 million).

"Clean creditors will become majority shareholders. Of the
32 creditor banks, 23 are unsecured," a Businessworld
source earlier said.

Last March 20, the public auction for a controlling 53.35%
stake in the beleaguered sugar miller was deemed a failure
as the two potential investors did not submit a bid. The
bidding of the 567 million new VMC shares was supposed to
raise PhP567 million ($13.45 million) in fresh capital.

To make the rehabilitation plan more viable, the mancom's
revised plan calls for an acceptable joint-venture partner
that will manage VMC and will provide the additional cash
of over PhP300 million ($7.12 million).  The cash infusion
will be used to further reduce the firm's manpower to 1,700
from the present 2,700.

Under the revised plan, the cash infusion will either be in
the form of new equity or three- to five-year advances on a
last-in-first-out basis. The said cash requirement and the
acceptable joint venture partner shall be in place within
20 days from the reconstitution of the new VMC board.
(Business World  24-May-2000)

WESTMONT INVESTMENT CORP.: Investors on horns of a dilemma
Over a thousand mostly Chinese-Filipino investors of debt-
laden Westmont Investment Corp. are torn between the
promise of a repayment plan and filing a case in court to
recover over P7 billion of their money.

Lawyer Florencio Orendain, Wincorp's financial advisor,
presented a repayment plan to the investment firm's
investors last month. The plan called on some of the 20
companies that defaulted on loans arranged by Wincorp to
service a monthly interest of 8 percent per annum and for
the other cash-strapped borrowers to pay a total interest
of 12 percent over two years.

Under the repayment plan, the following firms will pay an
8-percent interest on their corresponding outstanding
debts: Sta. Lucia Realty & Development Inc., P804.4
million; EBE Capital Holdings Inc., P863.69 million; EBECom
Holdings Inc., P52.21 million and Golden Era Holdings Inc.,
P212.7 million. Those who will pay a total interest of 12
percent on their respective debts are Chevy Chase
Development Corp., P56.98 million; Power Merger Corp., P2.5
billion and Westmont Mamburao Beach Resort Inc., P14.9

One Wincorp investor, who asked not to be named, complained
that this plan needed the approval of at least 70 percent
of each of the seven borrowers' creditors and investors.
She added that Orendain failed to provide documents that
showed that these firms that offered to pay their debts
had, in fact, agreed to the plan.

"He should be obligated to be answerable to the plan. Also,
he wants us to sign this (conformity document) but he
showed no documents from the borrowers supporting the
plan," the investor said.

Many investors also doubted Orendain's credibility to act
as Wincorp's financial advisor. Orendain is known to be a
good friend of former Finance Secretary Edgardo Espiritu--
the two are, in fact, fraternity brothers. Most investors
are running after Espiritu and his son, John, although the
elder Espiritu has already stated that he or any member of
his family doesn't own Wincorp. Also, Orendain is himself a
minor and passive stockholder of Wincorp borrower firms
Zipporah Realty Holdings Inc. and Westmont Mamburao. To his
credit, Orendain was very up front with investors and the
public about his closeness to Espiritu and his involvement
in the two borrower firms.

The repayment plan also calls for the conveyance of assets
of the seven borrower firms to a trustee bank, Planters
Development Bank. The assets in terms of book, appraised or
market value should be two to two-and-a-half times the
debts of the borrowers.

However, the assets themselves may already have other liens
on them. Take the case of PowerMerge. The assets put up for
collateral by the firm, which is controlled by investment
banker Luis Virata Jr., include a lot in Pasig and the land
for National Steel Corp.'s steel plant in Iligan. The
rehabilitation of the NSC, itself a debt-laden company, and
the lien of the Development Bank of the Philippines on the
Iligan property have placed a question mark on the strength
of the asset cover PowerMerge would be able to provide to
Wincorp's investors.

Also, how the repayment plan was distributed to investors--
through branches of Westmont Bank (now known as United
Overseas Bank Philippines) highlighted the questionable
connection between the bank and Wincorp.  The Wincorp case
has had its effect on the local financial system. It
triggered a run in other investment firms.

"A domino effect is created once the investment funds are
not paid," Jovis Vistan, an analyst and economist at Wise
Securities, said. He said investors could run out of money
to pay their suppliers who, in turn, wouldn't be able to
pay their creditors.

One businesswoman with money placed in Wincorp said she had
to lay off some of her employees to cut her losses and pay
her suppliers. Vistan said he knew of at least three
investment houses that barely escaped the Wincorp mess.

They survived by tapping short-term facilities.  ASB
Holdings Inc. of developer Luke Roxas and Urbancorp
Investments Inc., the 40-percent-owned investment house of
Urban Bank Inc. were not as lucky. These companies are now
under receivership with debts totaling over P18 billion.

A businessman who wanted to acquire an investment firm and
set up the same "direct matching" scheme used by Wincorp
said the practice was widespread in the industry and was
also very profitable.  Under the "Wincorp-type scheme," a
borrowing firm will tap an investment house to look for
individual lenders who will finance the firm's projects.
The investment house holds a promissory note from the
borrower and gets a commission on the amount of funds it
"brokers" between the borrower and the individual lenders.

More often than not, the investment firms do not fully
disclose the financial state of the borrower and,
unfortunately, investors usually fail to demand financial
statements and other supporting documents that show the
investment firm is authorized to do so.

Under the more professional route, an investment firm will
sell registered commercial papers of a borrowing firm. The
investor is provided protection in the form of more
disclosure on the financial state of the borrowing firm and
the rating of the commercial paper.

Wise Securities' Vistan notes, however, that the investors
themselves should take some of the blame.  Some Wincorp
investors admitted that they knew that Wincorp and Westmont
Bank were offering some form of commercial paper but they
did not look closely at the financial condition of the
borrowing firms.

Securities and Exchange Commission Chair Lilia Bautista has
pointed out that investors and creditors seem to be
attracted to firms like Wincorp because of the tax-free
incentive provided by the products or instruments offered
to them.

The International Monetary Fund has expressed concern over
the brokering activities of investment houses and other
firms. It said other Wincorp-type cases could pose a
"systemic risk" to the country's financial system.
Instead of fighting over the regulation of investment
houses, concerned government agencies are trying to work
out an amicable solution.

Bautista has said she and her fellow commissioners are open
to transferring regulatory authority over investment firms
to the Bangko Sentral ng Pilipinas. (Philippine Daily
Inquirer  24-May-2000)


VIKAY INDUSTRIAL LTD: Finalizing investor deal this week
The judicial managers of Vikay Industrial Ltd will finalise
the terms of the sale and purchase agreement with the new
investor by May 26, a Vikay statement said.

The statement, written by judicial manager Tham Sai Choy on
behalf of Vikay, said the judicial managers have signed a
non-exclusive memorandum of understanding with an
unspecified investor.  Under the MOU, Vikay will dispose of
its dormant subsidiaries, while retaining its operating
businesses in Malaysia and properties in Singapore, Hong
Kong and the UK.

About 95 pct of Vikay's liabilities will be absorbed by the
investor, it said.  The arrangement is subject to the
approval of company creditors, shareholders, the Singapore
Exchange and the Singapore Court, the statement said.
(AFX News Limited  23-May-2000)


20,000 DEBTORS: SCB launching legal attack on debts
Siam Commercial Bank (SCB) has so far taken legal action
against 20,000 of its clients, excluding those covered by
debt restructuring under supervision of the Corporate Debt
Restructuring Advisory Committee.

President of the fourth largest bank Jada Wattanasiritham
said these clients, which were corporations of all sizes,
owed a total of Bt10 billion. Based on the bank's 20,000
debtors, she estimated the total number of failed debtors
with all commercial banks in Thailand to be at least

"The debtors under the committee's supervision are those
with a clear schedule of legal action. Other debtors of the
bank who fail to restructure their debts will have legal
action taken against them," she said.

However, she said the bank would rather not sue anyone
because court procedure took up a lot of time.  Jada said
the bank continued to restructure remaining debts, with
about Bt13 billion having been revamped in the first
quarter this year. SCB planned to restructure an additional
Bt40 billion in debts this year.

At the end of April, the bank's non-performing loans
accounted for 22 per cent of its total loans.
Meanwhile, Jada was at pains to quell market nerves amid
rising oil prices and the upward trend in global interest
rates. In her view, local interest rates would remain at a
low level, because this would be an effective tool to boost
the economy.

Additionally, she said Thailand was unable to afford many
expensive funding costs as the economy was still
recovering, and this made low interest rates a necessity.
Jada said the export-oriented industry showed favourable
signs of growing sharply after export growth in the first
quarter jumped 24 per cent year-on-year.

"What we want to see is how much the export growth expands
to other sectors," Jada said, adding the economy would
experience sustained growth if it did so.

At a meeting on Monday the commerce ministry proposed the
target for export growth this year be boosted to 12 per
cent, up from the previous projection of 6 per cent. (The
Nation  24-May-2000)

MODERN HOME DEVELOPMENT: Posts 1st quarter loss
Modern Home Development reported Q1 net losses of 187m bt,
compared with net losses of 306m bt last year. It cited a
decline in sales and administrative expenses to Bt18M from
Bt128M. It also noted the provision of Bt120M for a decline
in the value of leasehold land of SPL Development Co, taken
into account in Q1 1999, leading to a decrease in net
losses in Q1 2000. (Bangkok Post  23-May-2000)

SIAM SYNTECH CONSTRUC.: Richee plans for 75% stake
Richee Ventures Ltd plans to take a 75% stake in Siam
Syntech Construction Plc after the Central Bankruptcy Court
approves debt-ridden Syntech's petition for business

Richee Ventures plans to invest an initial 400 million baht
to revive the company. Richee currently holds 74% of Siam
Syntech Planner Co, the planner of Siam Syntech
Construction's rehabilitation proposal.  The remaining
stake in Siam Syntech Planner is held by Arthur Andersen,
designated by creditors to help draft the rehabilitation

An informed source said Richee Ventures would invest in
Siam Syntech Construction at an initial stage through a
mutual fund pattern.  Under the rehabilitation scheme, the
fund plans to inject 400 million baht of which half would
be used to settle debts with financial institutions and the
balance as working capital.

The source said the fund was also ready to add 395 million
baht to the company's registered capital, which currently
stands at 600 million baht, if the court approves the
business rehabilitation plan.  This, coupled with the
initial injection, would bring the Richee Ventures' total
equity in Siam Syntech Construction to 75% with 24% held by
creditors and the rest by existing shareholders.

Richee Ventures hopes to receive an annual return on
investment of at least 25%. The company was willing to have
existing shareholders buy back equity on negotiable terms
and conditions, said the source.  Siam Syntech submitted
its rehabilitation petition to the court in April, after
failing to get the required 75% support from creditors.
Central Bankruptcy Court was to hear the petition for the
first time yesterday. (Bangkok Post  23-May-2000)

THAI MODERN PLASTIC INDUS.: Explains Q1 poor performance
Thai Modern Plastic Industry PCL, through Hugh William
Mosley for South Sathorn Planners Co., Ltd.
plan administrator, reports that for the first quarter of
2000 it had a net loss of THB 273.44 million, which was
less than the operating performance of the same quarter in
1999 amounting to THB 228.31 million, or 505.87%. This loss
was included loss on disposal of non-core assets amounting
to THB 252.62 million. ( TMP auctioned machines, spare
parts and tool and electric system as well as office
furniture at Bangplee Plant, which was closed in May 1998.
Book value of these assets was THB 280.65 million. The
proceed of this auction was THB 28.03 million.)

Excluding this loss on disposal of THB 252.62 million, the
loss form operation activities was THB 22.93 million, which
compares favorably with the prior year loss of THB 45.13
million. (Stock Exchange of Thailand  22-May-2000)

THAI PETROCHEM.INDUS.: Expects turnaround despite Q1 loss
The Thai Petrochemical Industry group posted a 977 million
baht operating loss in the three months to March, but chief
financial officier Wachirapunthu Promprasert believes the
company will show a healthy profit for the whole year's

He said the group was quite confident about a financial
turnaround, especially if Effective Planner completed the
rehabilitation process by the third week of July and
creditors approved the rehabilitation plan on August 23.
Once approved, the group could clear a defaulted interest
repayment of 800 million baht incurred by Thai
Petrochemical Industry Plc and TPI Polene Plc, the group's

As well, a 16 billion baht debt could be swapped for equity
at US 50cents a share, thereby enabling the group to reduce
debt and subsequent interest repayments.  With the forecast
debt reduction and incoming revenue, the group will
immediately return to profit this year.

The group faced an accumulated loss of 61 billion baht in
the first quarter this year, but following a default on
interest repayments and a deal to swap outstanding debt for
equity, the accumulated debt was reduced to 30-40 billion
baht.  The group hopes the balance of accumulated debt
would be totally cleared by 2001 or 2002.

According to the ruling of the Central Bankruptcy Court,
the rehabilitation plan is required to be implemented by
the third quarter this year, around September or October.
During this period, the group's accounting status will be
changed and the company's operation will consequently

Mr Wacharapunthu said the group believed it was impossible
that the creditors would not vote for the rehabilitation
plan because Effective Planner was chosen by the creditors
to oversee the process, coupled with the group's healthy
profit outlook.  He cited the group's 2.95 billion baht
profit before expenditure in the first quarter this year,
exceeding a target of 2.7 billion baht and the profit
before expenditure of 1.4 billion baht in the same quarter
last year.

Chief executive Prachai Leopairatana said although the
stronger US dollar had drove up oil prices, it did not pose
a problem to the group or erode its competitiveness because
every other petrochemical firm had also suffered a rise in
raw material prices.  He said the group also gained most of
its revenue in US dollars from exporting products and was
largely unaffected by currency exchanges.  (Bangkok Post

The Central Bankruptcy Court yesterday ordered Thonburi
Automotive Assembly Plant into business rehabilitation.
PricewaterhouseCoopers Restructuring was named planner for
the company, which faces total debt of 27.43 billion baht.
The court also ordered Wongpaitoon Group to enter business
rehabilitation, with Wongpaitoon Planner Co in charge.
(Bangkok Post  23-May-2000)

THORESEN THAI AGENCIES: Trading to be suspended, delisted
Thoresen Thai Agencies Public Company Limited, through M.R.
Chandram S. Chandratat, Chairman, and Mr. Arne Teigen,
Managing Director report that the last exercise date of
TTA-W which is scheduled on 30 June 2000. The Company also
fixed the date of closing the Warrant Registered Book of
TTA-W which is 8 June 2000 at 12.00 noon until 30 June

In order to comply with the settlement system of SET, the
Company requests SET to suspend the trading of TTA-W
(posting "SP" sign) from 5 June 2000 at 12.00 noon until 30
June 2000. The TTA-W will then be delisted from SET from 3
July 2000. (Stock Exchange of Thailand  23-May-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
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Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
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Jover and Cristina Pernites, Editors.

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

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