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     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, June 13, 2000, Vol. 3, No. 114

                                    Headlines


* C H I N A  &  H O N G  K O N G *

AGRICULTURAL BANK OF CHINA: Taken-over assets to be sold
BANK OF CHINA: Taken-over assets to be sold
CHINA CONSTRUCTION BANK: Taken-over assets to be sold
INDUS.&COMMER.BANK OF CHINA: Taken-over assets to be sold


* I N D O N E S I A *

PT SIPATEX PUTRI LESTARI: Gets IBRA okay for debt rehab


* J A P A N *

HIKARI TSUSHIN INC.: Sells MTI stake to improve liquidity
IKEGAI CORP.: Posts 3.1B yen group net loss
KUMAGAI GUMI: Posts deeper group loss
ORIENT CORP.: Post 161.5B yen group net loss


* K O R E A *

CHO HUNG BANK: Less than thrilled about a merger
DAEWOO GROUP: Gov't to buy back 4T won in CPs
HANVIT BANK: Less than thrilled about a merger
HYUNDAI MOTOR: To seek split-off from parent this week
KOREA EXCHANGE BANK: Less than thrilled about a merger
MAXON ELECTRONICS: Sewon Telecom tabbed preferred partner
MIDOPA DEPT.STORE: Denies Lotte Group takeover rumors
SAMSUNG MOTORS: Minority s'holders facing big losses
SSANGYONG MOTOR: Cho Hung Bank working on fresh funds


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

ASB GROUP: SEC asked for hold-departure order for officials
NATIONAL STEEL CORP.: 4 parties showing interest
PHILIPPINE APPLIANCE CORP.: Receives feeler offers
PHILIPPINE NAT.BANK: Gov't to hold stake `for now'
PHILIPPINE NAT.BANK: Gov't may sell 30% stake to L.Tan


* S I N G A P O R E *

SINGAPORE PRESS HOLDINGS: Refocusing, expects losses


* T H A I L A N D *

BANGKOK MASS TRANSIT SYSTEM: To meet with creditors
UNITED COMMOS.INDUS.: Prospects unclear despite merger


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

AGRICULTURAL BANK OF CHINA: Taken-over assets to be sold
BANK OF CHINA: Taken-over assets to be sold
CHINA CONSTRUCTION BANK: Taken-over assets to be sold
INDUS.&COMMER.BANK OF CHINA: Taken-over assets to be sold
---------------------------------------------------------
The mainland's asset-management companies are preparing to
sell assets taken over from the debt-laden Big Four state
banks, according to a report.

Asset-management firms China Huarong and China Great Wall
would soon finish taking over non-performing loans from the
Industrial and Commercial Bank of China and the
Agricultural Bank of China, the China Daily Business Weekly
said yesterday.

"Ninety per cent of the planned purchases have been
completed," Yang Kaisheng, president of Huarong, was quoted
as saying.

Beijing set up four asset-management companies last year to
tackle more than one trillion yuan (about HK$930 billion)
of non-performing loans at the main state banks, which also
include China Construction Bank and the Bank of China, and
force state-owned enterprises to reform.  The paper did not
mention the other two asset-management firms, Cinda and
Orient.

Modelled on the Resolution Trust Corp, which cleaned up
after the savings and loan scandal in the United States in
the 1980s, the mainland asset firms aim to repackage part
of the debt as equity and sell shares to domestic and
foreign investors.

"We will complete all the debt-to-equity swaps before the
end of June," Mr Yang said. "We will start with the easier
methods such as auctions to dispose of the assets."

In late May, media reported that Huarong had auctioned the
first non-performing asset, in Guangzhou, for 55 million
yuan. The asset-management firms would dispose of the
assets mainly through auction, credit and stake transfers
and asset restructuring, the newspaper quoted Mr Yang as
saying.  Measures such as bankruptcies and securitisation
were not the best methods and would not be frequently
applied, Mr Yang said, but the report did not elaborate.
Huarong and Great Wall would welcome participation of
foreign investors in disposing of non-performing assets.

"Foreign investors are welcome to enter all industries
except for those concerning state safety or receiving state
priority," Mr Yang was quoted as saying. "They can also
control an enterprise if policy permits."  (South China
Morning Post  12-Jun-2000)


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

PT SIPATEX PUTRI LESTARI: Gets IBRA okay for debt rehab
-------------------------------------------------------
PT Sipatex Putri Lestari has obtained approval from the
Indonesia Bank Restructuring Agency (IBRA) to restructure
its Rp155.46 billion (US$ 1.828 million) and US$ 24.37
million in debts.

IBRA said that under the approved restructuring scheme,
Sipatex would convert all of its rupiah debts to US dollars
at a conversion rate of Rp8,580, leaving Sipatex with debts
of US$ 42.49 million.

IBRA said that as part of the restructuring deal,
shareholders of Sipatex agreed to inject fresh capital of
Rp25 billion into the company last year. The funds were
immediately used to pay off part of its rupiah denominated
debts.

In addition, Sipatex shareholders committed to injecting an
additional Rp2.5 billion in cash within two months of
signing of the Memorandum of Understanding with IBRA on May
31.  But IBRA did not explain in its statement how the
company would repay its $42.49 million outstanding debts.
(Asia Pulse  12-Jun-2000)


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

HIKARI TSUSHIN INC.: Sells MTI stake to improve liquidity
---------------------------------------------------------
Hikari Tsushin Inc. sold its 5.25 percent stake in Mobile
Telecommunications International Ltd. (MTI) to raise its
liquidity on hand.

MTI's stock had mirrored the share downtrend of Hikari
Tsushin since the end of March when Japan's largest agent
for mobile phone services revealed poor earnings. MTI
favored the sale because the two companies have no business
relationship.  Hikari Tsushin was MTI's third-largest
shareholder. The actual purchase price is unknown, but it
is estimated to have been about 2 billion yen.

A sales agent for cellular phones, MTI was established in
1996 by President Toshihiro Maeta, a former Hikari Tsushin
employee, and others.  Hikari Tsushin held a 30 percent
stake in the company when it was formed, but had reduced it
to 14.08 percent by the time it registered on the over-the-
counter market last October.

IKEGAI CORP.: Posts 3.1B yen group net loss
-------------------------------------------
With its consolidated sales plunged 25 percent to 14.65
billion yen in the year ended March, machine tool
manufacturer Ikegai Corp. has posted a group net loss of
3.11 billion yen.

The loss represents a substantial widening of its 724
million yen loss the previous year.

Sales of machine tools fell 33 percent, while industrial
machinery sales leveled off. Sales of engines and castings
declined as well. Additionally, the parent company booked
an extraordinary loss of just under 1.8 billion yen from
inventories.

Ikegai posted a group operating loss of 240 million yen
compared with a profit of 128 million yen in fiscal 1998.
It was unable to cover its sharp decline in revenues by
reducing fixed costs.

KUMAGAI GUMI: Posts deeper group loss
-------------------------------------
General contractor Kumagai Gumi Co. posted a group net loss
of 4.62 billion yen for the fiscal year ended March 31,
deeper than a loss of 2.53 billion yen a year earlier.

It was the seventh consecutive year that the company has
suffered a group net loss, the company citing a huge
valuation loss on its property assets held for resale as
the primary cause.  Despite efforts aimed at improving it
profitability and sales of securites holdings, Kumagai Gumi
was unsuccessful in offsetting a slump in sales.

The company's consolidated pretax profit during the just-
ended fiscal term tumbled 88.1 percent to 727 million yen,
while its operating profit declined 38.7 percent to 17.27
billion yen.
Group sales totaled 799.07 billion yen, down 20 percent due
to weak construction orders amid the economic recession.

During the latest fiscal year, the company booked a
valuation loss of 17.55 billion yen on its real estate
holdings.  According to a company official, as of March-
end, the company had group interest-bearing liabilities
totaling 1.06 trillion yen, up 137.9 billion yen from a
year earlier, a company official said. The group's
accumulated deficit stood at just under 122 billion yen at
the end of March, up from 108.34 billion yen a year ago.

Kumagai Gumi aims to slash its group interest-bearing debt
by 11 billion yen this fiscal year.

ORIENT CORP.: Post 161.5B yen group net loss
--------------------------------------------
Consumer credit company Orient Corp. recorded a group net
loss of 161.5 billion yen for the year ended March.

Reporting for the first time in a consolidated business
report, Orient posted an extraordinary loss of 349.9
billion yen, 324.3 billion yen being bad-loan reserves for
property-backed loans extended through its financial
subsidiaries. Its loss also included 14.5 billion yen
incurred to cover the devaluation of real estate assets
held for sale. Additionally, the company had bad-loan
reserves totaling 130 billion yen in sales and general
administration costs and fund-raising costs of another 71.1
billion yen.

The losses were partially offset by an extraordinary profit
of 75 billion yen using money for credit guarantees.
Orient actually posted a group pretax profit of 3.5 billion
yen on operating revenues or sales of 348.6 billion yen.


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

CHO HUNG BANK: Less than thrilled about a merger
HANVIT BANK: Less than thrilled about a merger
KOREA EXCHANGE BANK: Less than thrilled about a merger
------------------------------------------------------
The government is apparently set on merging Cho Hung,
Hanvit and Korea Exchange Banks in which it has injected
public funds but the financial institutions have been cool
to such prospects.

None of the three have made their positions clear but they
have indicated one way or another that there will be
potentially serious problems in such a merger. Through
various channels, bank executives have said the focus of
business should be on reducing non-performing loans and
otherwise improving their financial structure rather than
opt for a merger.

The merger, if it happens, promises to create a superbank
with total assets of 206 trillion won and 23,000 employees,
ranking it as the world's 55th largest financial
institution.  President Kim Dae-jung has time and time
again emphasized the need for the creation of superbanks
which can compete at the international level and so the
government move does not come as a surprise.

While strong on assets, the merger of the three banks also
naturally increases their bad loans which combine for
nearly 20 trillion won, Hanvit bringing in the most of 8.6
trillion won.  According to one top Cho Hung official,
merging the three banks will mean that some 70-80 percent
of all corporate loans will be concentrated in a single
financial institution.

"Should the three banks be merged, it will be adversely
impacted when the object economy is not doing well. On the
other hand, instability in the financial sector will
strongly influence the object economy," the official said.

He went on to say that computerizing the three banks into a
single entity will take at least three years during which
time they must independently work on improving their
financial structures.

"With the non-performing loans as heavy as they are, it
will be difficult to expect a strong synergy effect from
the merger. Prior to such a merger, the government should
consider setting up a bad bank to help the banks get rid of
their non-performing loans," said one senior official of
the Korea Exchange Bank.

As for the Hanvit Bank, it could have a chance to take the
initiative in the merger since it is the biggest but it is
still experiencing the aftereffects of having merged with
the Commercial Bank of Korea and the Hanil Bank.

"This is certainly not an issue that a few people can sit
down and decide on. There has to be lots of studies,
debates and public hearings to establish a firm consensus,"
one Hanvit official said.

One official of Commerzbank, currently assigned to the
Korea Exchange Bank, also pointed out that any reason for
such a merger will have to be purely commercial and free
market-oriented.  The senior officials of the three banks,
asked to be more clear on the merger, said the government
has not made a formal announcement and this makes it
difficult to say what their positions are.

"We have to admit that the market has been positive to the
possibility of a merger and we will be working closely with
the government to adopt an effective direction for
restructuring," one official said.  (Korea Times  12-Jun-
2000)

DAEWOO GROUP: Gov't to buy back 4T won in CPs
---------------------------------------------
The government has decided to buy back W4 trillion in
commercial papers (CPs) issued by Daewoo, going through the
Korea Asset Management Corp. (KAMCO).

The nation's 38 financial institutions had extended that
amount in funding to the Daewoo business group, which had
backed up the deal with W10 trillion worth of collateral
that has since shriveled up to be worth just W1 trillion.
Since the government announced last week that it would be
buying back the W2.3 trillion portion of the total CP
amount that had been purchased by investment trust firms,
other financial firms such as banks and insurance firms
that had also purchased the CPs at the behest of the
government, had raised their voices at being left out.
(Digital Chosun  11-Jun-2000)

HYUNDAI MOTOR: To seek split-off from parent this week
------------------------------------------------------
Hyundai Motor, whose plan to separate from the parent group
has been delayed due to the complex nature of its
ownership, will seek to do so this week, company sources
said yesterday.

They said most details concerning the break-up have been
completed and a formal application will be filed with the
Fair Trade Commission before the end of this week, they
said.  To meet fair trade requirements, Hyundai Motor has
reduced its stake in the Hyundai Unicorns and Hyundai
Research Institute, in which it had 45 and 50 percent
respectively, to below 15 percent.

At the same time, it is continuing negotiations with its
sister companies to dispose of the 22.7 percent it has in
Korea Industrial Development although talks with Hyundai
Engineering and Construction have apparently broken down.

"There are still problems concerning the 6.9 percent that
Hyundai founder Chung Ju-yung owns and another 2.8 percent
held by Hyundai Engineering and Construction but that can
be sorted out later," a company official said.

He went on to say that such details can be worked out while
the application is being processed and that papers will
have to be filed this week if the break-up is to be
completed by the end of this month.

Turning Hyundai Motor into a separate entity with only
limited ties to other Hyundai companies is an essential
part of restructuring the nation's largest conglomerate
whose owners, including the senior Chung and chairman Chung
Mong-hun, recently resigned from all management
responsibilities.  (Digital Chosun  12-Jun-2000)

MAXON ELECTRONICS: Sewon Telecom tabbed preferred partner
---------------------------------------------------------
One of Korea's leading CDMA terminal manufacturers, Sewon
Telecom, announced Sunday that it has been chosen as the
preferred negotiation partner to take over Maxon
Electronics, which has been placed under a workout program.

Sewon said it plans to sign a memorandum of understanding
with the creditors of Maxon Electronics to takeover shares
of Maxon. The deal will go through with the approval of 75%
of Maxon Electronics' creditors.  With Maxon currently
producing about 4 million cell phones a year, Sewon­_s
total production would go up to 8 million units per year
once the takeover goes through, making Sewon second in the
country only to Samsung Electronics for the production of
cell phones.  (Digital Chosun  11-Jun-2000)

MIDOPA DEPT.STORE: Denies Lotte Group takeover rumors
-----------------------------------------------------
Midopa Department Store yesterday dismissed as groundless
rumors of a takeover by the Lotte Group.

"We have never had any contact with Lotte regarding sales,"
said a Midopa official.

While acknowledging that its Metro Store, in downtown
Seoul, is in the process of being sold off, the official
added that it does not concern a particular company.
Midopa Department Store was requested by the Korea Stock
Exchange to make a disclosure regarding the takeover
rumors.  (Korea Herald  13-Jun-2000)

SAMSUNG MOTORS: Minority s'holders facing big losses
----------------------------------------------------
Tens of thousands of minority Samsung Motors shareholders
are facing the bleak outlook of losing millions of dollars
following the sale of the bankrupt automaker.

According to stock market officials yesterday, 143,200
minority shareholders hold Samsung Motors securities worth
245.3 billion won (about $200 million).  The total number
of shareholders of Samsung Motors stands at 143,209 with
143,200 or 99.98 percent being minority shareholders. The
minority shareholders' shares account for 30.5 percent of
the 161.1 million existing shares.

At face value, the minority shareholders' stocks have an
estimated worth of 245.3 billion won.  At present, there
appears to be no way for the minority shareholders to
receive any form of compensation for the Samsung Motors
stocks in their possession.

Samsung Motors has debts outweighing assets and unless the
creditors come up with a method to compensate the minor
shareholders at their expense, they are destined to see
their shares reduced to a pile of worthless paper.
The minority shareholders of the unlisted Samsung Motors
mainly comprise employees and investors who bought the
shares in over-the-counter trading.  (Korea Times  12-Jun-
2000)

SSANGYONG MOTOR: Cho Hung Bank working on fresh funds
-----------------------------------------------------
With the liquidity problems of the nation' two auto
manufacturers that have been placed under workouts --
Ssangyong Motor and Daewoo Motor -- exacerbated by strikes,
their creditor banks have been kept busy extending funding
to keep them afloat.

Cho Hung Bank, the major creditor of Ssangyong Motor, said
Monday that it has been talking to other creditor banks to
put together a packing of new funding worth an additional
W150 billion. The creditors group of Ssangyong Motor
provided a bail-out package to the company last year when
it was first placed under a workout, with the package
including the rescheduling of W1.7 trillion in loans and
the conversion of W130 billion debt into equity.

Around the end of last month, the creditors of Daewoo Motor
provided W310 billion in emergency funds to ease a cash
crunch at the firm following strikes by union workers.
(Digital Chosun  12-Jun-2000)


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

ASB GROUP: SEC asked for hold-departure order for officials
-----------------------------------------------------------
The Securities and Exchange Commission has asked the
Department of Justice to issue a hold-departure order
against officials of ASB Holdings Inc. to prevent them from
evading their responsibilities which include the payment of
P12.7 billion in liabilities to over 700 creditors.

In a letter to Justice Secretary Artemio Tuquero,
Securities Investigation and Clearing Department director
Daisy Besa-De Asis sought the issuance of a hold-departure
order against Luke Roxas, owner and president of ASB
Holdings, Evelyn Nolasco, Eden Lim, Ireneo Marasigan and
Rolando Domingo.

The ASB Group last month sought debt reprieve from the SEC
for the payment of its multi-billion peso debts due to
tight liquidity problems brought about by the sudden non-
renewal and massive withdrawal of investments by its
creditors.

"Considering the widespread solicitation of investments and
the substantial amount actually sourced from banks and 700
individual investors, its gradual impact on the public
interest and economic stability are gradually surfacing,"
De Asis said in her letter request.

Individual creditors of ASB Holdings Inc. earlier asked the
SEC to compel the debt-ridden company to submit an
accounting of the P3.9 billion in placements it "illegally"
solicited from them to determine where the money went.
In a joint motion filed with the SEC, about 153 individual
creditors said ASB Holdings never informed them that their
money would be channeled to other members of the ASB Group
of Companies consisting of ASB Realty Corp., ASB
Development Corp., ASB Land Inc., and ASB Finance Inc.
On top of its financial difficulties, ASB Holdings Inc. may
face administrative sanctions for possible violation of
rules on commercial papers should the Department of Justice
rule that post-dated checks could be considered commercial
papers. ASB Holdings was reported to have issued post-dated
checks to a number of investors.

These post-dated checks should have been registered with
the commission since they fall under commercial papers, an
evidence of indebtedness.  Other companies under ASB Group
include ASB Realty Corp., ASB Development Corp., Tiffany
Tower Realty Corp., ASB Land Inc. and ASB Finance Inc. Its
affiliates, on the other hand, include Makati Hope
Christian School, Bel-Air Holdings, Winchester Trading
Inc., VYL Development Corp., Gerick Holdings Corp. and
Neighborhood Holdings Inc.

The ASB Group was given a 60-day debt payments reprieve by
the SEC last May 4 while finding merit in its petition. The
suspension order has in effect barred creditors from
instituting foreclosure proceedings against the assets of
the ASB Group.  Among its creditor-banks, Metropolitan Bank
& Trust Co. of tycoon George Ty, has the biggest exposure
in the ASB Group of Companies with loans amounting to P1.35
billion followed by Allied Banking Corp.   (Manila Times
13-Jun-2000)

NATIONAL STEEL CORP.: 4 parties showing interest
------------------------------------------------
The Netherlands-based Ispat International NV has joined
several groups keen on National Steel Corp. (NSC), bringing
to four the number of interested investor groups.

Ispat recently submitted to the NSC interim rehabilitation
receiver (IRR) its proposal for the possible purchase of
the controlling stake in the debt-saddled steel company.
Other companies that have expressed interest in NSC are
Swiss-based Duferco Group and Paris-based Pentium Group.
Some downstream steel industry players have reportedly
joined forces to bid for Hottick Investment Ltd.'s stake in
NSC.

Ispat submitted the highest bid of $100 million and has
promised to bring in the said amount in escrow once they
are awarded controlling stake in NSC, Securities and
Exchange Commission (SEC) chairman Lilia R. Bautista said
in a press briefing. Ispat submitted its bid in cooperation
with US fund firm Pentium Capital.

Duferco is considered "the best one" among companies
interested in buying the shares from Hottick Investments
Ltd. because it is the only one that can assure NSC with
stable supplies of slabs needed in the plants operations,
said a government official involved in discussions to help
make NSC attractive to prospective buyers.

Duferco is represented by Credit Agricole in negotiations
to purchase Hottick's shares in NSC. The European firm is
engaged in trading of steel products such as tin plates,
special steel, and raw materials including coal, coke,
scrap, iron ore and pig iron.  The source said it is best
the shares are sold soon because the NSC plant in Iligan
City can deteriorate if it takes much longer to resume
operations.

The government official said it is possible Duferco will
just infuse $15 million "and this is only to restart
operations."  Earlier, Finance Secretary Jose T. Pardo said
the new private sector owner of NSC needs to put in $130
million to make the integrated steel firm viable again.
Representatives of Duferco, however, "feel there is no need
for that much money," said the source.

Duferco earlier met with NSC creditor banks and the banks
apparently arranged for the meeting with the Malaysian
owners, the source added.  Among concerns interested
investors wanted the government to clarify was the status
of dumping petitions against Russian goods that compete
with NSC in the Philippine market.

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

NSC officials, however, have insisted the deluge of Russian
steel products in the Philippines contributed to the
collapse of the company's operations.  To avoid a repeat of
this situation, the government is planning to get the new
owner to register with the Board of Investments which
grants fiscal incentives and monitors actual investments of
registered firms.

As far as the dumping issue is concerned, Ms. Bautista said
she has already forwarded the same to the Department of
Trade. Barring imports, however, may be a different story
said the former trade undersecretary, since doing this
would go against the principles of the world trade
organization.

NSC suspended operations in November last year due to
financial problems highlighted by its failure to repay
about 16 billion Philippine pesos (PhP) (US$376.3 million
at PhP42.521:US$1) with 14 local creditor banks. The steel
maker asked to be declared in a state of suspension of
payment and rehabilitation last December 28, after it
failed to service its debts.

In its rehabilitation plan, NSC also pointed out the need
to restructure part of its PhP16.5-billion long-term debt
that could be serviced by the projected annual cash flows
and convert the balance into equity.

"The conversion of long-term debt is imperative as after
May 7, 2000, there is no active management or
organizational structure which necessitates the immediate
action from the creditor banks to preserve the value of the
company," NSC added.

Under its proposed rehab plan, PhP9 billion ($211 million)
of NSC's total long-term debt will be retained as debt, of
which PhP7.9 billion ($185.8 million) will be restructured
into 10-year peso amortizing bonds, and the remaining
PhP1.1 billion ($25.9 million) will also be restructured
into 10-year dollar amortizing bonds, both at 12% coupon.
The rehab plan further proposes to convert the remaining
PhP7.5 billion ($176.4 million) into equity, calling for
the revaluation of the firm's assets.

The debt-to-equity conversion will give the creditor banks
an 87.8% share of the company.  Assuming that the company's
trade receivables of over PhP271 million ($6.4 million) are
collected within 60 days, NSC will be requiring around
PhP1.89 billion ($44.4 million) for working capital.
(Business World  12-Jun-2000)

PHILIPPINE APPLIANCE CORP.: Receives feeler offers
--------------------------------------------------
Financially troubled consumer durables manufacturer
Philippine Appliance Corp. (Philacor) has received feelers
from groups interested in investing in the firm, a
development welcomed by the present shareholders,
reportedly including General Electric Co. (GE). A Philacor
executive, requesting anonymity, said "there are interested
parties, prospective buyers but there have been no formal
talks (yet)."

Even GE, which stands as the current single largest
shareholder of Philacor, is open to the possibility of
getting a new investor even if this may mean lowering its
stake in the company, the source told reporters. Philacor
has stopped manufacturing activity in the last two months
due to liquidity problems.

"We have to have more local and foreign investors in the
company and this may mean GE (which holds 37.9% shares)
taking a sacrifice. Their shares can be diluted in the
process and will end up equal that of the Alvendia and
Santos families (that each own about 23% of the firm)," the
source explained.

It would be noted though that Philacor president and chief
executive officer Dante G. Santos stressed in an earlier
press briefing that that company would not be needing new
investors to rescue company viability. Philacor's financial
woes are due to an ambitious expansion project involving
the construction of a new plant in Calamba, Laguna for
which the company incurred debts of about 1.7 billion
Philippine pesos (PhP) (US$40 million at PhP42.521:US$1).

It manufactures and distributes home appliances under the
brands of GE and White Westinghouse and has dominated the
domestic market until it ceased manufacturing activity when
it was forced to set aside funds to settle obligations that
matured in May this year.  (Business World  12-Jun-2000)

PHILIPPINE NAT.BANK: Gov't to hold stake `for now'
--------------------------------------------------
No longer bound by an end-of-the-month deadline from the
International Monetary Fund (IMF) and the World Bank, the
National Government has decided to maintain its holdings in
semi-private Philippine National Bank (PNB) -- "for now" at
least.

The government will also allow its 30% stake in the bank to
be diluted further once tycoon Lucio C. Tan calls for fresh
capital from shareholders, Bangko Sentral (Central Bank)
Gov. Rafael B. Buenaventura, speaking in behalf of the
government, told reporters last Friday.  Mr. Buenaventura
said he had already spoken with World Bank country
representative Vinay Bhargava last week to discuss the
recent failed PNB bidding.

He said the multilateral funding agency has agreed to give
the government enough "breathing space" for it to improve
its selling price later.  "If they set a definite date for
our exit (from PNB), we would get screwed," Mr.
Buenaventura said.

The Department of Finance (DoF) had earlier expected to
generate as much as 9.6 billion Philippine pesos ($0.226
billion at PhP42.521=$1) from the PNB sale to meet its
PhP22-billion ($0.517-billion) privatization target this
year.  The department, however, admitted the failed bidding
might derail the privatization program and its ability to
plug an expected PhP62.5-billion ($1.47-billion) budget
deficit for the year.

Mr. Buenaventura said maintaining the government's
ownership level in PNB by subscribing to any new capital
call is not an attractive option, especially since its
thrust is to get out of the commercial banking business.
"It is dangerous for the government to put in more funds at
this time," he said. PNB needs to raise PhP6 billion
($0.141 billion) to PhP10 billion ($0.235 billion) in fresh
capital to comply with central bank-prescribed capital
adequacy ratios, as well as to be operationally viable
again.

"Hopefully, the price appreciation (resulting from the
rehabilitation) will more than compensate for the dilution
(in the government's stake)," the central bank chief said.

The Bangko Sentral chief said the government has yet to
receive formal communication from the tobacco and beer
magnate, who is reportedly mulling over another stock
rights offer.

"Any action we take will be affected by what he does," Mr.
Buenaventura said. "We do know that Lucio Tan wants to
stay, but we have to get confirmation from him."

He estimated the government's stake will be reduced to
around 20% if the bank calls for a stock rights offer.
While it still intends to sell is stake in PNB before the
year ends, the government may "stay in the bank
temporarily," just enough for it to reap the benefits of
Mr. Tan's rehabilitation plan, Mr. Buenaventura said.

"We may stay depending on the viability of his
rehabilitation plan," he said. "Anyway, we can veto his
plan with the 34% stake we hold."

At present, the government holds 30.39% in PNB and another
3.8% through the PNB Retirement Fund, Inc. of bank
employees.  The Bangko Sentral chief ruled out a negotiated
bidding as a means to dispose of the government's stake.

"It has to be an open bidding to make it transparent," he
said. "It's difficult to make a negotiated sale
transparent."

While the government can team up with Hong Kong-based
Templeton Asset Management Ltd., which owns 12.9% of PNB,
to match the Chinese-Filipino tycoon's 46% stake, the move
will result only in a stalemate.

"We can sell with Templeton for a total of 46%, but that
would only result in a stalemate in the bank's board. We
don't want to go back to square one," Mr. Buenaventura
stressed.

Meanwhile, even before Mr. Tan has agreed to sell his 46%
stake in PNB together with the government's 30%, efforts
toward risk management control in the bank have already
begun, as recommended by international auditing firm
PriceWaterhouseCoopers.  Based on its December 1999 audit
report, PNB should put priority on a substantial re-
planning and management information system (MIS) rebuilding
effort.

The auditing firm said constraints in information
technology (IT) are the reason for PNB's lack of progress
in the introduction of new products, for its lack of
methodology in updating operating manuals and for its
difficulty in obtaining consolidated information.

"Where systems are undergoing conversion and where systems
are new, delays in the production of management information
may be somewhat inevitable and we noted evidence of this in
our reviews," the auditing firm said.

Incumbent PNB president Feliciano L. Miranda, Jr. said
management is addressing these problems. He said PNB is now
able to regularly submit to the Bangko Sentral statements
of assets, liabilities and capital accounts within the
mandated period.

"We've been able to comply now...There were delays in the
past...But I wouldn't say we are fully computerized," he
said.

Though PNB is not yet fully computerized, he said 308 out
of the listed bank's 324 branches are now on line with the
head office. All foreign branches and remittances offices
are on line, he added.  PNB began converting from largely
manual systems only a few years ago.

Before its privatization in 1996, procuring capital
equipment had been "difficult," the auditing firm observed.
Tony U. Limtong, Jr., PNB IT Group first vice-president,
said the remaining 16 branches of PNB which are not yet on
line are those located in far-flung provinces such as
Basco, Batanes (in extreme northern Luzon).

"Of these, four have conferred we can get lines...This is
with Destiny Domestic Satellite. They are the only ones
which can provide the link... Hopefully by... early (June)
the four will be on line," he said.

Mr. Limtong said the bank targets to have all its branches
on line within the year.  Mr. Miranda also said PNB now has
central liability ledgers. Total loans granted to a
particular entity in all the branches are now centralized
in one account, he explained.

"Almost 92% has been captured. Only eight percent remains
to be completed. But the eight percent represents very,
very small amounts. It does not really affect the validity
of the total exposure to any particular party," he said.

Since February, Mr. Miranda said the bank's executive
committee has been meeting every week to monitor the bank's
loan collection efforts.

"The principal comment of PriceWaterhouseCoopers is that
the quality of the loan portfolio is something to be
worried about. That's why we are concentrating on how we
can improve the status of its loan portfolio. We review the
collateral behind these loans...While all past due loans
are monitored, more focus is given to loans worth PhP10
million ($0.235 million) and above. The smaller loans are
assigned to operating officers, he added.

Up to seven weekly reports are now being required by
management, he said. These include total loans collected
during the week, loans that have been renewed or extended
during the week, status of past due accounts, status of
collateral deficiencies, whether they have been corrected
or which deficiencies remain to be collected, and referral
to the legal counsel for possible action against the
borrower.

PriceWaterhouseCoopers likewise recognized the risk
management initiatives during the administration of former
PNB president Benjamin P. Palma Gil.  Initiatives done
under Mr. Palma Gil's term include:
--Introduction of a compliance function responsible for
complying to the Bangko Sentral's guidelines, the
maintenance of policy and procedure manuals and the
dissemination of a compliance culture to all Bangko Sentral
offices;
--Awareness for better risk management by the board and the
subsequent establishment of a risk management function,
including the Board Level Investment & Risk Management
Committee;
--Reactivation of the Asset and Liability Committee (ALCO)
as a separate and focused committee;
--Changes in the information available and the reports
generated covering funding management and performance
management;
--Analysis of the return on capital from the bank's various
investments and business lines; and
--Commencement of computerization of large portions of the
processing and reporting processes.

But while the commitment to change is "laudable,"
PriceWaterhouseCoopers said decision alone is not enough.

"It is a continuous process...PNB needs to focus efforts
toward the development and enhancement of management
information. This will be a significant project requiring
continuous commitment from senior management."

PriceWaterhouseCoopers said other specific information that
should be produced are:
--A balance sheet that shows maturity breakdown with a
weighted average interest rate, identification of fixed
rate and floating rate items, and a summary of off-balance
sheet exposures. The reports should preferably be produced
for each currency in addition to a consolidated report;
--A comprehensive and accurate gap report;
--A report monitoring the loan portfolio for exposures to
type/industry of the collateral in addition to the industry
of the borrower;
--A report showing the country of exposure for credit and
trading facilities. While foreign exposure may be small for
the majority of the peso loan portfolio, the information is
relevant for import/ export transactions, for counter-
parties used in the Treasury area and in the overseas
offices;
--Consolidated VAR calculations;
--Information regarding overseas offices, including the
consolidation of the positions of overseas offices into the
gap report; and
--Analysis of divisional or product profitability, since
all reporting is geared toward performance by branch rather
than analysis on profitability. Branch reports containing
transfer pricing information are scheduled for 2000.
(Business World  12-Jun-2000)

PHILIPPINE NAT.BANK: Gov't may sell 30% stake to L.Tan
------------------------------------------------------
The government may consider an offer from taipan Lucio Tan
to buy its 30-percent stake in Philippine National Bank if
he pays the minimum floor price agreed upon for their
combined stake in PNB.

Finance Secretary Jose T. Pardo said he would "seriously
consider" it if Tan offers to buy government's stake at the
agreed floor price.  However, if there is no such offer,
Pardo said government's first preference is to conduct
another bidding for its 30-percent stake in PNB, probably
within the next 60 days before Tan makes a capital call.

Pardo also indicated he would talk to Filipina-American
businesswoman Loida Nicolas-Lewis and Rizal Commercial
Banking Corp. (RCBC) about their interest in PNB.
Pardo said he can now talk to the two interested parties
after the failed public bidding for PNB.  Lewis had said in
a prepared statement that she is willing to negotiate with
the government for PNB.

RCBC, on the other hand, is not interested in merely
getting the government's 30-percent stake, especially if
they still have to contend with Tan.  Tan, for his part,
had earlier stated that he is still willing to sell his 46-
percent stake in PNB if the price is right.  There had also
been some reports that Tan intends to hold on to PNB and
eventually merge it with his Allied Bank.

Bangko Sentral ng Pilipinas (BSP) Gov. Rafael B.
Buenaventura earlier said that government must secure a
formal confirmation from Tan on his plans for PNB.
(Philippine Star  13-Jun-2000)


=================
S I N G A P O R E
=================

SINGAPORE PRESS HOLDINGS: Refocusing, expects losses
----------------------------------------------------
Top Southeast Asian publishing group Singapore Press
Holdings (SPH) is branching out aggressively into the
Internet and broadcasting as it faces the end of its
lucrative newspaper monopoly.

In a span of a week, SPH floated its Internet portal,
unveiled plans for two new dailies, and formed a
broadcasting unit after the government shook up the
industry by vowing to issue new print and broadcasting
licenses.  SPH posted net profits of S$201.59 million
(US$117.88 million) in the six months to February, up 44
percent from a year ago on the back of an improving economy
and expected better performance this year.

Strong growth in its newspaper division will tide over
expected initial losses of the two new dailies, broadcast
unit SPH MediaWorks, and the SPH AsiaOne Internet portal,
officials said.

"These are investments for the future. There will naturally
be start-up losses in the first few years, but these will
be mitigated by the strong growth in the newspaper business
on the back of an economic recovery," said Tjong Yik Min,
group president of SPH.

The group has invested $50 million each in MediaWorks and
AsiaOne, more than a million dollars in the free commuter
newspaper Streats, while declining to say how much it has
spent on Project Eyeball, which combines a print version
and constantly updated website.  Investors were impressed
by SPH's ability to adapt to the changes in the media
environment, and its share price jumped to as high as
$29.80 on Thursday before closing at $29.20 on, up $3 from
the previous week, as foreign funds bought up the stock.

Tjong said MediaWorks and AsiaOne were the group's
"building blocks to help achieve our long-term vision to
become a regional media player providing quality content
and services to consumers."   AsiaOne hosts the online
editions of the group's six newspapers, including its
flagship English daily the Straits Times and Chinese, Malay
and Tamil newspapers.

The government move to gradually liberalize the media
industry has its share of supporters and sceptics.
"Benefits include the obvious economies of scale for the
players, the capacity to compete with big foreign players,
more advertising space and time for the advertisers, and
more variety in content for viewers and readers," Arun
Mahizhnan, an associate professor at Nanyang Technological
University's School of Communication Studies, told the
Straits Times.

"The downside is, it is the same old duopoly. This is no
inspiration to those who were looking for a wider editorial
spectrum or broader industry capacity," he added.

The other half of the duopoly is dominant broadcaster Media
Corporation of Singapore (MediaCorp), owned by state
investment arm Temasek Holdings.  MediaCorp is making its
foray into SPH's turf, announcing plans to launch its own
free tabloid called Today with a working capital of up to
$20 million.  Vijay Menon, secretary general of the Asian
Media Information and Communication Center, in a published
interview hailed the government's liberalization process as
"a positive step."

"Normally when markets open up too quickly, you get
situations like in Malaysia where new entrants bring in too
much foreign content," Menon said.

Foreign newspapers and magazines as well as cable news
channels are freely available in Singapore, but the
domestic media are regarded by officials as a strategic and
politically sensitive industry.  (Business Day  12-Jun-
2000)


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

BANGKOK MASS TRANSIT SYSTEM: To meet with creditors
---------------------------------------------------
Bangkok Mass Transit System Plc (BTS), the operator of
Thailand's only skytrain system, is to propose a new
marketing strategy to its creditor banks this week as it
struggles to restructure Bt2 billion of its debts due for
repayment at the end of June.

Dr Karoon Chandrangsu, executive director and chief
operating officer of BTS, said the company is exploring
possible ways of restructuring its debts.
The first option is to reschedule the interest payments.
The second is to convert the debt into equity. The third
option is debt rescheduling and a debt-to-equity
conversion.

"The decision will depend on the outcome of negotiations
with the creditors on June 14," Karoon said.

Major creditor banks include Siam Commercial Bank Plc,
Kreditanstalt fur Wiederaufbau (KfW) and the International
Finance Corporation. Karoon said that debt restructuring is
necessary because the service has only carried an average
of 150,000 passengers a day since it started. This only
provides daily revenue of Bt5 million, which only covers
operational and maintenance costs.

This, he said, is significantly lower than the projected
revenue of Bt13 million a day.  Due to low revenue and weak
stock market sentiment, Karoon said the company has decided
to delay its planned initial public offer of about 400
million shares.  With the first interest payment due on
June 30, BTS urgently needs to negotiate with its creditors
to avoid a technical default on the debt.

However, if no agreement on the debt restructuring is
reached, BTS will have to borrow from other financial
institutions to make its interest payments.  The company is
showing a current net loss of Bt2 billion.

"We hope that we don't have to borrow as it will make the
company's debt-to-equity-ratio which is currently about
1.7, too high," Karoon said.

BTS has a total debt burden of Bt35 billion, Bt11 billion
of which is baht-denominated loans and a US$600 million
foreign currency loan. The company has a three-year grace
period before starting to repay the principal sum that
began when firm started operations.  The interest payments
are due every six months and its debt-to-equity-ratio must
not rise above 1.8.

Currently, Tanayong Plc is a major shareholder in BTS,
Keree Karnchanapart alone holds a 51 per cent stake.
However, if part of the debt is converted to equity, it
will dilute Keree's stake in the company.  Karoon said that
in order to get approval from its creditors the company has
formulated a marketing strategy aimed at generating its
revenue target within five years.

He said that the plan consists of five main elements:
The company is to offer more promotions to expand its
passenger base.  BTS will modify its ticketing system to
make travelling easier for passengers. A bus shuttle
service will be provided for commuters.  The company will
provide public transportation interchanges (PTIs) such as
parking areas at stations. BTS will provide footbridges
between stations and buildings for greater passenger
convenience and also provide more elevators for passengers.

Karoon said that BTS requires about Bt300 million to
implement the new marketing strategy. Some of the funding
will come from the company's revenue and the rest will be
borrowed from financial institutions.  As a result, the
company expects that the number of passengers will increase
to around 300,000 per day and will generate daily revenue
of about Bt7 million a day.  The plan will be implemented
within two months if approved by the creditors.

"I would say that since the skytrain commenced operations,
we estimate that it has carried about 150,000 passengers a
day, of which 40,000 are car owner, so we are alleviating
the number of the cars on the roads," Karoon calculated.
"If the creditors approve the debt restructuring plan,
skytrain will be one of the best ways for Bangkokians to
avoid the traffic jams," he added.  (The Nation  13-Jun-
2000)

UNITED COMMOS.INDUS.: Prospects unclear despite merger
------------------------------------------------------
Despite its success in forming an alliance with Norway's
Telenor, United Communication Industry Plc (Ucom) remains
unattractive to investors because of its unclear business
data and debt-restructuring plan, Merrill Lynch Phatra
Securities Plc (MLP) says.

"We rate Ucom shares for intermediate-term accumulation and
for neutral in the long term. The Telenor deal proved to be
very positive, but the growth prospects of Ucom's data
businesses remain unclear, in our view," MLP said in a
recent report.

Ucom recently announced a partnership with Telenor. Under
the deal, which is expected to be completed by the end of
the year, Telenor is to spend about US$720 million (Bt28.10
billion) to acquire stakes in Ucom and Total Access
Communication Plc (Tac). The shareholding of Ucom's
founding family, the Bencharongkuls, will be diluted to
22.4 per cent while Telenor Asia will become the company's
largest shareholder with a 24.8-per-cent stake, followed by
Somer of the UK at 22.6 per cent.

MLP said the deal would provide an opportunity for Ucom to
rejuvenate itself into a viable firm since proceeds
injected by the former would bring Ucom's debt-to-equity
ratio down significantly.  In spite of the announced deal,
Ucom was last traded at Bt35.25 last Friday against the net
asset value of Bt47, assuming that the value of its holding
in Tac and InterWave is at US$3.75 (Bt146.36) per share
minus Ucom's adjusted net debt and contingent liabilities.

KGI Securities One Plc even predicted that the Ucom share
price should reach Bt49 per share, a 53-per-cent increase
from its earlier expectation, given the Telenor acquisition
deal.  On May 23, Tac's share price reached nearly US$3
(Bt117.09) per share on the Singapore Stock exchange while
InterWave was trading on the Nasdaq at US$9.50 (Bt370.78)
apiece.  Ucom's and Tac's share prices should move up when
the milestone deal is completed, MLP predicted.

"Ucom's percentage holding in Tac will be 40 per cent
[after the Telenor transaction], and Ucom holds 1.5 million
shares of Interwave," the report said.

MLP adjusted the net debts for Ucom by subtracting Bt10.5
billion in cash proceeds to be received from Telenor from
the Bt17 billion in net debt Ucom previously had at the end
of the first quarter of this year.  The MLP report also
estimated that Ucom had Bt2.9 billion in contingent
liabilities, deriving mostly from the investment in Iridium
and ABCN satellite projects. The company has already booked
a Bt1.5-billion loss on the Iridium project during the
first three months of 2000.

MLP forecasts that Ucom's net profit this year will be
Bt5.801 billion, up from Bt375 million in the previous
projection, attributable mainly to the realised gain of
Bt1.246 billion from InterWave in the first quarter of this
year and the expected gain on the sale of Tac shares.
An analyst with Capital Nomura Securities Plc confirmed
MLP's consensus, saying that even though the company's
business outlook was good, Ucom was not suitable for long-
term investment because of many uncertainties.

"Ucom's business risk remains, since the leftover portion
of its debts [foreign debts] may be negatively affected by
currency volatility. The trading price of Interwave on
Nasdaq would also impact Ucom's share price," the analyst
said.

According to the firm's debt-restructuring plan, its
repayment period ends in 2006. In addition Capital Nomura
noted that Ucom needed more time to clean up Bt15 billion
in accumulated losses.  (The Nation  13-Jun-2000)


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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