/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/000710.MBX T R O U B L E D C O M P A N Y R E P O R T E R A S I A P A C I F I C Monday, July 10, 2000, Vol. 3, No. 132 Headlines * A U S T R A L I A * ALPHA HEALTHCARE: Hope deal rids debt ills EDGE GROUP: Creditors vote to liquidate GREYHOUND PIONEER: New fight shapes up in coachline bid NORMANDY MINING: Ripens for bid PETER TILLI: Faces wind-up action, creditors * C H I N A & H O N G K O N G * CHARK FUNG SECURS.: Lawsuit challenge may upset cash hunt CHINA PACIFIC INSUR.: Penalized for irregularities CHINA PING AN INSUR.: Penalized for irregularities GUANGDONG INVESTMENT: Debt plan needs written support PEOPLE'S INSUR.CO. OF CHINA: Penalized for irregularities THEME INT'L HLDGS.: Reports rehab pact progress to HKSE ZHUHAI HIGHWAY CO.: Moody's, S&P downgrade bond ratings * I N D O N E S I A * BANK ASPAC: IBRA to take legal action vs. owners BANK BALI: Recapitalization vs. liquidation decision soon BANK CENTRAL DAGANG: IBRA to take legal action vs. owners BANK DEWA RUTJI: IBRA to take legal action vs. owners BANK ORIENT: IBRA to take legal action vs. owners PT BALI NIRWANA RESORT: FSPC approves restructuring * J A P A N * DAI-ICHI HOTEL: Hankyu Corp. to assist with rehab LIFE GROUP: Shinsei Bank to bid for it SNOW BRAND MILK PRODUCTS CO.: May close plant,chief to quit SOGO CORP.: To close flagship Singapore store * M A L A Y S I A * PANCARAN IKRAB: SC approves restructuring scheme PERWAJA STEEL: Corruption probe to take "few more months" TIME dotCOM: Control squabble ahead? * P H I L I P P I N E S * ALL ASIA CAPITAL & TRUST: To sell assets to raise cash ALL ASIA SECURITIES: Fails to timely pay SCCP fine CAMP JOHN HAY DEVELOPMENT CORP.: Seeks lease restructuring FIRST WOMEN'S CREDIT CORP.: SEC upholds creation of mancom JAKA SECURITIES CORP.: Fails to timely pay SCCP fine MONDRAGON INT'L PHILIPPINES: Rehab plan submitted PARIBAS ASIA EQUITY: Fails to timely pay SCCP fine PHILIPPINE NAT.BANK: Gov't offers its stake to L.Tan URBAN BANK : Bancommerce wins bid to rehabilitate URBANCORP.: Asks SEC to extend debt payment * T H A I L A N D * JASMINE INT'L OVERSEAS: Set to sign debt deal M GROUP PLC: New bankruptcy action filed by SCB PRECIOUS SHIPPING: Debt revamp delayed SIKARIN PLC: Reports progress on rehabilitation to SET ================= A U S T R A L I A ================= ALPHA HEALTHCARE: Hope deal rids debt ills ------------------------------------------ Alpha Healthcare may have resuscitated its fortunes against the backdrop of a cautiously improving industry outlook by selling and leasing back the bulk of its private hospitals to mend its debt-laden balance sheet. The $30 million sale of four NSW private hospitals to Australian Unity Healthcare Property Trust, an unlisted fund owned by the Australian Unity health fund, will remove most of Alpha's debt burden. The fund will issue a prospectus to allow retail investors to invest in the $105 million trust. Alpha's debt includes a $13 million loan from building materials company James Hardie Industries due later this year, the $7.5 million balance owing on a convertible note held by Alpha's troubled major shareholder, Sun Healthcare, and other bank debt. Sun went into Chapter 11 bankruptcy protection last year. Australian Unity will get first rights of refusal to buy the 136-bed Alpha Westmead Private Hospital in Sydney, a co-located hospital due to open in October. Apart from a $4 million interest-free loan and project funding for the Westmead hospital, Alpha will be debt-free. While larger rival Mayne Nickless for several years has talked about moving its properties off balance sheet and focusing on operating its hospitals, a deal hasn't materialised. But Alpha will achieve just that when the transaction is completed in September. Asset writedowns saw Alpha post a $21.3 million net loss for the year to June 1999; unlike many other private hospital operators, Mayne has not written down the value of its hospitals. This could be one tactic employed by Mayne's new chief executive, Mr Peter Smedley, to clean the slate ahead of more wholesale changes. Most analysts, including ratings agency Standard & Poor's, expect private hospitals to negotiate higher fees over the next few years as Government incentives swell private health fund membership. Alpha shares rose 3c to 23c. (Sydney Morning Herald 06-July-2000) EDGE GROUP: Creditors vote to liquidate --------------------------------------- At a meeting on Tuesday, creditors voted to formally place Edge in liquidation. Edge Group administrator Armstrong Wily has estimated the debt of the Australian-based PC vendor at A$36 million, but says only about $1.5 million is likely to be recovered. Several creditors are considering suing Edge director Johnson Wang for insolvent trading, according to APC Publishing's online Newswire report - if they can locate the elusive Wang, believed to be in China. Edge had considerable interests in the US, as well as Australia. Earlier this year the Dallas sheriff was reported to have seized and sold off office furniture of Wang's Edge Corp. for US$55,500 after his North American companies were sunk with estimated debts of between US$8 and 10 million. The raid followed a judgment in favor of National Semiconductor which sought US$1.5 million damages for unpaid processor bills. Microsoft is said to have been owed more than US$12 million. Global Edge revenues dropped from A$390 million in 1998 to only $51.5 million in the last eight months, according to Armstrong Wily. (Newsbytes News Network 07-July-2000) GREYHOUND PIONEER: New fight shapes up in coachline bid ------------------------------------------------------- Four companies are locked in a takeover bid war for Australian coachline Greyhound Pioneer, which is in receivership. Nowra Coaches has already tendered a supplementary bid with receiver Ferrier Hodgson. McCafferty's Express Coachlines is expected to revise an earlier bid on 6 July 2000, while it was reported on 5 July 2000 that a Malaysian group and the DD Travel Club are also interested. McCafferty's and Nowra were involved in separate bids for the coachline in June 2000 when Greyhound Pioneer was put into receivership by its chief shareholder and creditor, Duncan Saville. The McCafferty's bid reportedly calls for ownership of the company and is valued at $A9.2m. (The Courier Mail 06-July-2000) NORMANDY MINING: Ripens for bid ------------------------------- Normandy Mining is believed to have finalised the sale of its $150 million industrial minerals business - as talk that the company is set to be snapped up by gold giant AngloAmerican intensifies. Normandy shares closed 2c, or 2 per cent, up at 98c on heavy turnover of 10.8 million shares, amid keen rumours of an impending $1.30-a-share agreed bid from Anglo. Securities analysts said the takeover bid was set to be announced last week but the closure of Normandy's Bronzewing gold mine in Western Australia, following the death of three workers, had delayed the process. Anglo has told analysts it intends to make two acquisitions in Australia this year and Normandy Mining, Newcrest Mining and Delta Gold are believed to be at the top of its shopping list. The sale of Normandy's industrial minerals business, which includes its Larvick Pigment, Omya Southern and 37 per cent owned Queensland Metals Corp, is part of the company's push to focus itself as a pure gold play and gain a re-rating in the market. The collapse of Normandy's share price to under $1 has left the company vulnerable to a takeover, though the complex ownership structure of its various goldmines and non-gold interests has been seen as a deterrent to a takeover. But Normandy's clean-up of the ownership of Great Central Mines and the hiving off of the non-gold assets makes the company more appealing. Analysts suggested AngloGold's parent company AngloAmerican was the likely buyer of Normandy's industrial minerals assets, given the company's knowledge of the assets, having folded them into Normandy when it was a controlling shareholder. The acquisitive Rio Tinto and Billiton were also considered potential buyers. Analysts also noted that a bid for Normandy could emerge from a South African group like Goldfields or a North American company such as Homestake or Placer, given the consolidation of the global industry. (Sydney Morning Herald 07-July-2000) PETER TILLI: Faces wind-up action, creditors -------------------------------------------- A leading figure in the 1987 collapse of the Teachers Credit Society in Western Australia, Peter Tilli, is under siege from creditors. It involves his property development group, and comes after also being embroiled in the finance brokers scandal. Two of his three main property companies, Pieros Corporation Pty Ltd and Radarn Pty Ltd, face winding-up proceedings in the Western Australian Supreme Court. His third property company, Castlecity, is being sued for more than $A550,000 by creditors who provided finance through collapsed broker Blackburne & Dixon. (The West Australian 05-July-2000) ============================== C H I N A & H O N G K O N G ============================== CHARK FUNG SECURS.: Lawsuit challenge may upset cash hunt --------------------------------------------------------- Liquidators attempting to claw back Chark Fung Securities funds face a showdown with former executives of the collapsed brokerage if they win the right to challenge a HK$97 million lawsuit. Key evidence showing cash payments to the brokerage could have a large impact on the outcome of the litigation, but has been ignored by liquidators KPMG, it was claimed yesterday. As a result, the figure of HK$97 million is inaccurate, it is argued by the defendants - Ming Fung Goldsmith, a company owned by Chan Kwong-hung; and his wife Lau Miu-king. Appeal judges voiced concern that liquidators may have chosen to "cherry-pick" bank records to back up their claims. "I am worried because you found a ledger and focused on one amount," Mr Justice Roberto Ribeiro told the court. "There's a whole mass of material that no one has accounted for." He was referring to records which allegedly show cash payments made by the defendants to the Ming Fung companies. Their defence hinges on these documents. The papers may also shed more light on HK$300 million of transactions the liquidators attempted to investigate when the group collapsed. They were forced to be "fairly conservative" and limit their claim against the defendants to HK$97 million, barrister Jonathan Harris said. "I cannot say that [the liquidators] are 100 per cent certain that lurking in a godown somewhere there are not records which show other sums should be taken into account," Mr Harris told the court. The defendants claim that these papers show "very significant" cash payments to the Ming Fung companies. This could result in substantial credits to the defendants, bringing down the sum sought by liquidators. The judges expressed concern that the liquidators had restricted their efforts in tracing funds to the period of January 1997 to May 1998. Mr Justice Anthony Rogers said this could "distort the picture." They were told by Mr Harris that it was "simply not practical" for KPMG to reconstruct every transaction at the group over the past five to six years. "We don't have endless resources," he said. At this stage, any defence of the lawsuit is academic as Ming Fung Goldsmith and Ms Lau claim to be financially barred from doing so. They must pay HK$10 million into court if they wish to defend the action, an order they sought to quash yesterday. The judges have reserved their decision. Liquidators took out a lawsuit against Ming Fung Goldsmith, Ms Lau and Link Standard last year following the 1998 collapse of four companies in the group, including the brokerage arm, Chark Fung Securities. They claimed in a High Court writ that the sum was taken to bolster the personal finances of Mr Chan and his family. On one occasion, the writ said, money was paid by Ming Fung Bullion - the group's leveraged foreign exchange arm - to cover the tax bill of Mr Chan's son. The collapse was the largest in unified stock exchange history, with about 2,000 complaints from clients and compensation claims of up to HK$490 million. At the time of the crash, Mr Chan was the majority shareholder in the Ming Fung Group of companies. (South China Morning Post 07-July-2000) CHINA PACIFIC INSUR.: Penalized for irregularities CHINA PING AN INSUR.: Penalized for irregularities PEOPLE'S INSUR.CO. OF CHINA: Penalized for irregularities --------------------------------------------------------- Four mainland firms have been penalised by the China Insurance Regulatory Commission (CIRC) for irregularities in the vehicle insurance business, Xinhua (the New China News Agency) reported on Thursday. China Ping An Insurance branches in Nanjing and Tianjin, the China Pacific Insurance branch in Nanjing and a Yunnan provincial branch of the People's Insurance Company of China have been suspended from motor insurance business for three months. The companies were charged with mismanagement, paying illegal commissions and discrepancies in financial management, the CIRC said. (South China Morning Post 07-July-2000) GUANGDONG INVESTMENT: Debt plan needs written support ----------------------------------------------------- Creditors of Guangdong Investment (GDI) have to give a written response to the company's debt-rescheduling proposals by July 25, according to sources. GDI made the announcement at a meeting with creditors in Hong Kong to explain the debt-restructuring proposal made by the company. Sources close to the company who attended the meeting said they were "quietly hopeful" the proposal would be accepted. "We think it passes the make-sense test," one source said of the debt-restructuring plan. The company hopes an agreement with all the creditors can then be signed on August 8 and debt rescheduling completed within a few weeks. "Basically the idea is to get about 45 per cent of the debt repaid over the next five years," one source said. The GDI debt proposal depends on the successful injection of the Dongshen Water Supply Project, which is aimed at bolstering the company's cash flow. Creditors of Guangdong Enterprises (Holdings) (GDE) - which holds a 40.54 per cent stake in GDI - need to approve the broader debt workout proposal for GDI's plan to proceed. GDE creditors are expected to hold a similar meeting within one to two weeks. GDE, one of the largest businesses of the Guangdong provincial government, ran up US$5.59 billion of debt in the 1990s. The group then suffered from a credit crunch after the People's Bank of China ordered the closure of the provincial government's investment vehicle, Guangdong International Trust and Investment Corp, in October 1998 amid much uncertainty about whether creditors would be repaid. Investors in other government-related companies - especially GDE - panicked, which precipitated the government's appointment of Goldman Sachs to advise on a debt-restructuring proposal of which locally listed GDI's workout plan is an important part. GDE's restructuring is viewed as a litmus test of Beijing's credibility in safeguarding the interests of creditors of companies with heavy debt loads. (South China Morning Post 08-July-2000) THEME INT'L HLDGS.: Reports rehab pact progress to HKSE ------------------------------------------------------- Theme International Holdings has reported to the Hong Kong Stock Exchange that it and High Fashion are finalizing a composite document related to Theme's proposed restructuring and that it expects to dispatch copies to the shareholders of Theme together with a notice to convene a Special General Meeting of the shareholders of Theme to approve various matters required under the Restructuring Agreement on 13 July 2000. The Composite Document will contain details of the Capital Reorganisation, Debt Restructuring and the Whitewash Waiver. In view of the complexity in the preparation of the business plan and the working capital statement in the Composite Document, Theme was unable to despatch the Composite Document to its shareholders on 6 July 2000 as required under the Listing Rules and the Code. (Hong Kong Stock Exchange 07-July-2000) ZHUHAI HIGHWAY CO.: Moody's, S&P downgrade bond ratings ------------------------------------------------------- Moody's Investors Service and Standard & Poor's have lowered the ratings of Zhuhai Highway Company Limited's senior and junior lien revenue bonds. Moody's lowered the senior lien revenue bonds to Caa1 from B1 and the company's junior lien revenue bonds to Caa3 from B3. It also established the bonds' ratings outlook as negative. Moody's based the downgrades on the non-payment of interest on the junior bonds when due this week. Though interst payments on the senior bonds were made, the downgrade also reflects the Moody's strong expectation interest payments next due in 2001 on the senior and junior bonds will not be met. Standard & Poor's, meanwhile, lowered its ratings on the company's US$85M senior notes due 2006 and its US$115M subordinated notes due 2008. It was S&P's second downgrade in little more than a week, having reduced Zhuhai's senior note rating last Thursday. Standard & Poor's first lowered the rating on senior notes to "CC" and subordinated notes to "D." Both sets of ratings for the senior notes warn that the company is highly vulnerable to default and there may be present elements of danger with respect to principal or interest. ================= I N D O N E S I A ================= BANK ASPAC: IBRA to take legal action vs. owners BANK CENTRAL DAGANG: IBRA to take legal action vs. owners BANK DEWA RUTJI: IBRA to take legal action vs. owners BANK ORIENT: IBRA to take legal action vs. owners --------------------------------------------------------- The Indonesian Bank Restructuring Agency (IBRA) must take legal action against the owners of four closed down banks within the week, according to the secretary of the Financial Sector Policy Committee (FSPC), Saefuddin Tumenggung. Saefuddin said on Thursday that the FSPC had classified the former owners of the now defunct Bank Aspac, Bank Dewa Rutji, Bank Orient and Bank Central Dagang as uncooperative in settling their obligations to the government. "The FSPC has told IBRA to take legal action against the owners of the four closed banks because they've been uncooperative," he told a news conference following a meeting of the FSPC. The FSPC is led by Coordinating Minister for the Economy, Finance and Industry Kwik Kian Gie and its members include several senior economics ministers. "IBRA has been given a week (to take the legal measure). The agency will then hand the case over to the Attorney General's Office," Saefuddin added. The four banks were part of the 39 banks closed down by the government last year due to various reasons, including violations of banking rulings and the inability of their owners to provide the finance required to recapitalize the banks. But prior to their liquidation, the government injected massive liquidity support between 1998 and 1999 to support the banks when confidence in the industry plunged. The owners of the banks which violated banking rulings, particularly the legal lending limit, must repay the liquidity support they received. The four closed banks owe the government a combined total of Rp 4.67 trillion (US$536.78 million) IBRA said earlier this week that the owners of 25 of the 39 banks had agreed to settle their obligations by surrendering their assets. The banks owe the government a total of Rp 10.5 trillion. The agency also said that owners of three banks had agreed to repay their obligations in cash. But IBRA added that the shareholders of the remaining seven banks had no obligations under the agency's shareholders settlement program, because the banks had not violated the legal lending limit ruling. In the past, most of the country's banks channeled the bulk of their money to affiliated business groups. (The Jakarta Post 07-July-2000) BANK BALI: Recapitalization vs. liquidation decision soon --------------------------------------------------------- According to the secretary of the Financial Sector Policy Committee (FSPC) Saefuddin Tumenggung, the FSPC has told IBRA to come up with a recommendation by the middle of this month on whether to recapitalize or liquidate publicly listed Bank Bali. "IBRA will submit its assessment on whether to recapitalize or liquidate Bank Bali to FSPC in the middle of July," Saefuddin said. He also reaffirmed that the government would not recapitalize the bank if its legal dispute with Bank Bali former owner and CEO Rudy Ramli had not been settled. The government initially planned to complete the recapitalization of Bank Bali by the end of last month, but it was canceled due to the legal dispute. The recapitalization cost was estimated at Rp 4.99 trillion. Rudy has filed a legal suit against IBRA and Bank Indonesia for their decision to nationalize his bank in 1999. The Jakarta Administrative Court ruled that the Bank Bali takeover by the government was illegal. Both IBRA and Bank Indonesia have appealed, and the case is currently being processed. Sources said that the government and Bank Indonesia were negotiating over an immediate out of court settlement to allow the recapitalization of Bank Bali to proceed. The government has said that the recapitalization cost of Bank Bali would inflate by about Rp 40 billion for each month of delay. The government now expects to be able to recapitalize Bank Bali in September, if the legal dispute can be resolved this month. Under the country's bank recapitalization program, the government will inject bonds into recapitalized banks. Minister of Finance Bambang Sudibyo said recently that a liquidation measure would cost the government some Rp 6 trillion in cash, not bonds, including a guarantee of depositors' money in the banks. (The Jakarta Post 07- July-2000) PT BALI NIRWANA RESORT: FSPC approves restructuring --------------------------------------------------- IBRA deputy chairman Irwan Siregar said at a same news conference that the FSPC had approved the debt restructuring proposal of PT Bali Nirwana Resort, a unit of the Bakrie Group, which is one of the agency's top 21 debtors. Irwan said that Bali Nirwana owed the agency some $166.3 million. He said that the debt restructuring was divided into four tranches, through a combination of debt rescheduling and debt to equity swaps. (07-July-2000) ========= J A P A N ========= DAI-ICHI HOTEL: Hankyu Corp. to assist with rehab ------------------------------------------------- Bankrupt Dai-Ichi Hotel Ltd. is set to begin rehabilitating itself with a helping hand from Hankyu Corp. The Tokyo District Court approved the hotel chain's reconstruction plan Tuesday and appointed two business administrators for the company, including Hankyu President Taro Ohhashi. Both companies already have strong links. The railway operator announced a plan to assist the hotel operator, in which it is the second-largest shareholder, when Dai-Ichi Hotel applied for court protection from creditors in May. Hankyu Chairman Kohei Kobayashi is also chairman of Dai-Ichi Hotel. (Asia Pulse 05-July-2000) LIFE GROUP: Shinsei Bank joins bidding for it --------------------------------------------- Shinsei Bank, formerly Long Term Credit Bank and rescued from insolvency itself when US private equity group Ripplewood Holdings bought it in 1999, will join in the bidding for the bankrupt consumer credit company Life Co. Life Co. filed for court protection in May due at least in part to massive nonperforming assets, listing liabilities of 966 billion yen. Shinsei (LTCB) was the group's largest single lender. Shinsei's bid will be only one of ten others, including GE Capital Services Corp., which broke off negotiations on a capital tie-up just before Life Co. went under. Bidders appear to view as feasible the rehabilitation of Life's credit card business, dependent upon expectations its debts will be slashed by the bankruptcy court. SNOW BRAND MILK PRODUCTS CO.: May close plant,chief to quit ----------------------------------------------------------- Snow Brand Milk Products Co. is considering closing its Osaka plant in light of the recent outbreak of food poisoning caused by milk products shipped from the plant. Additionally, company president Tetsuro Ishikawa intends to resign in September, as a step in taking responsibility for the mass poisoning, which sickened more than 11,000 people in western Japan. The poisoning incident is negatively impacting Snow Brand's business. The nation's largest manufacturer of dairy products is seeing supermarkets and convenience stores nationwide remove its products from their shelves. The poison outbreak struck last week as people began falling ill upon consuming low-fat and calcium-enriched milk produced at the Osaka plant. It was subsequently determined the mile was contaminated by a toxin-producing bacteria, staphylococcus aureus. On Wednesday, the Tokyo Metropolitan Government ordered Snow Brand to shut down a holding tank at its processing plant in Hino, western Tokyo, after health inspectors found no cleaning records being maintained at the facility. Government health officials conducted simultaneous inspections of Snow Brand factories around the country following food-poisoning outbreak. Nothing unhygienic was found in the Hino milk tank, and Snow Brand officials maintained that the Hino factory workers clean the milk tank manually daily. But health officials ordered the company to cease its use when cleaning records could not be found. The government also ordered municipalities to stop using products from Snow Brand's Hino plant for school lunches. The products had been used at 174 schools in western Tokyo. Some municipalities -- including Yao, Ikeda and Toyonaka, all in Osaka Prefecture -- have decided to stop using Snow Brand products at city-run schools, nurseries and hospitals. Meanwhile, Snow Brand's regional office in Nagoya has retrieved some 11,000 cartons of low-fat milk and a yogurt drink following the food-poisoning. The products were shipped to seven prefectures in central Japan: Gifu, Mie, Fukui, Ishikawa, Toyama, Shizuoka and Aichi. No reports from consumers of illness or food poisoning in those prefectures have been received by the company, despite numerous inquiries. SOGO CORP.: To close flagship Singapore store --------------------------------------------- Financially strapped Japanese department store chain Sogo Co. plans to close its flagship store in Singapore when its lease in the Raffles City mall expires in December. The Raffles City building is owned by Raffles Holdings Ltd., which owns a 15 percent interest in Sogo's Singaporean unit. New tenants -- including local retailer Robinsons and Co. -- will take over the space. The Osaka- based Sogo has announced plans to trim unprofitable operations at all of its overseas outlets, except for those in Hong Kong and Kuala Lumpur. Suffering from massive debts, Sogo has asked its 73 creditor banks to waive collection of 631.9 billion yen in loans. Sogo has said its liabilities exceeded assets by 580B yen at the end of February. =============== M A L A Y S I A =============== PANCARAN IKRAB: SC approves restructuring scheme ------------------------------------------------ The Securities Commission has approved Pancaran Ikrab Bhd's proposed restructuring scheme comprising a capital reduction, debt restructuring exercise, scheme of arrangement and acquisition of Premonade Hotel Sdn Bhd. The price tag for Premonade Hotel to be acquired from Tokojaya Sdn Bhd by Newco has been revised downwards to RM130.78 million from the proposed RM150 million. Newco will also take over the listing status of Pancaran Ikrab. Under the scheme, Newco will acquire Pancaran Ikrab's subsidiaries for RM11.27 million besides proposing a restricted three-for-one offer of up to 14.25 million Newco shares to existing shareholders, a public offer of 29.50 million shares, and a restricted offer of 29.5 million to Tokojaya. In an announcement to the Kuala Lumpur Stock Exchange today, the company said the issue of 100 million new Newco shares and RM30.78 million unsecured loan stocks would satisfy the purchase of Premonade. The capital reduction will see four existing shares being consolidated into one share by canceling 75 sen of the par value while Pancaran Ikrab's debt of RM28.56 million will be settled by cash, new Newco shares and loan stocks. Pancaran Ikrab's present paid-up capital is RM19 million. Under the proposed scheme, Tokojaya has also provided a pre-tax profit guarantee of a total of RM33.73 million for three financial years until Dec 31, 2002. (The Edge 07- July-2000) PERWAJA STEEL: Corruption probe to take "few more months" --------------------------------------------------------- The Anti-Corruption Agency (ACA) is expected to wind up its three-year-long investigation into irregularities at loss- making Perwaja Steel "in a few more months". ACA investigations division director Abdul Razak Idris said investigations were now focused abroad and that Malaysia did not have mutual assistance agreements with some of the countries involved. Abdul Razak said the ACA was looking into questionable payments amounting to 76 million ringgit made to people in Japan and not at the three-billion- ringgit losses incurred by the steelmaker. He added that some of the suspects were among the company's top management but none were politicians. (The Edge 05-July- 2000) TIME dotCOM: Control squabble ahead? ------------------------------------ Time Engineering Bhd welcomes the Sapura group's investment in its subsidiary Time dotCom Bhd but will not give up control of the company, Renong Bhd executive chairman Tan Sri Halim Saad said. "If they (Sapura) want to invest, we welcome them. But Renong and Time will not give up control of Time dotCom, that is for sure," Halim said at a press conference after the launch of Time dotCom's Time Gold VOIP (voice over Internet protocol) service yesterday. Renong has a 46.8% stake in Time, which holds the entire equity in Time dotCom, of which Halim is also managing director. Halim said Time would welcome any party wishing to be an investor in Time dotCom. "We shouldn't refuse if anyone wants to invest (in Time dotCom)," he said. Halim added that Time had not been informed by Sapura or Khazanah Nasional Bhd of any deal which involved their teaming up to take a 30% stake in Time dotCom. Khazanah announced in May it would take a 30% stake in Time dotCom and become its strategic investor. "So far, we have not heard from Sapura or Khazanah about an offer. . .nothing else has changed," Halim said. Star Business reported on Tuesday that Khazanah and the Sapura group would team up to jointly take a 30% stake in Time dotCom. Under that arrangement, Khazanah has valued Time dotCom at RM7.1bil and would pay about RM2.1bil for the 30% stake. And of the 30%, Sapura would take 7.5% through a debt-equity deal with Khazanah whereby it would transfer its RM495mil loans (including interest). Creditors of Time will meet on July 12 to vote on the firm's debt restructuring scheme announced on Jan 28. Asked whether he foresaw any hitches at the meeting, Halim said "If the creditors get paid, I do not see why they should refuse. . .a year ago, they would not have got anything." Time is currently in discussions with British cable operator NTL Corp in which France Telecom has a 30% stake on the possibility of it becoming Time dotCom's technical partner, with the blessings of Khazanah. Halim confirmed that such discussions were under way but declined to give details. Asked to comment on the Star Business report that Sapura was understood to be also looking for a technology partner for Time dotCom, he said: "It cannot be one party's decision. It has to be a board decision on who the technology partner should be." Meanwhile, Commerce International Merchant Bankers Bhd (CIMB), on behalf of Time, said the Securities Commission (SC) had approve the group's restructuring, including the listing of Time dotCom. According to a CIMB statement, the SC approval is subject to the following conditions: A definitive agreement with a strategic investor who will take a stake in Time dotCom must be executed before the prospectus for the listing of Time dotCom is issued. If the strategic investor does not have expertise in the telecoms business, Time dotCom has to sign a technical agreement with a party with such expertise which will add value to the company's business. Time also has to provide a concrete plan to enable it to fully redeem approximately RM3.99bil in two-year promissory notes and must have a contingency plan to fully redeem US$250mil in bonds before implementing its debt restructuring scheme. The SC also has revised the utilisation of the RM511.5mil proceeds expected from the Time dotCom listing, with RM451.5mil for financing the company's telecoms project and RM60mil for listing expenses. And Time dotCom is required to comply with the SC's guidelines on public offering of securities of infrastructure project companies under which the key licence held by Time dotCom must not be less than 15 years from the time the proposals are submitted to the commission. IMB said the Time board was considering whether to accept or appeal against some or all the SC conditions. (The Star Online 07-July-2000) ===================== P H I L I P P I N E S ===================== ALL ASIA CAPITAL & TRUST: To sell assets to raise cash ------------------------------------------------------ Cash-strapped All Asia Capital and Trust Corp. will dispose of its non-core businesses, including its wholly owned subsidiary All Asia Life Insurance and its stake in Asian Terminals Inc. (ATI) as part of twin measures to raise much-needed funds and recapitalize the company, industry sources told The STAR yesterday. At the same time, sources said the firm is still looking for a permanent chairman and chief executive officer (CEO), a post currently held by one of its biggest shareholders, Ramon Abaya, who replaced Roland Young. Sources said Abaya does not want to hold on to the post permanently since he is busy with the family's business in Cagayan de Oro. Abaya represents Cagayan Electric Power and Light Co., one of the major shareholders of All Asia Capital. He was elected into the post last week. "The consensus among shareholders is to infuse new strength into the company. This includes disposal of non-core businesses like the insurance company and its shares in ATI. All Asia holds one (board) seat in ATI," sources said. Aside from selling its assets, All Asia has also asked its shareholders to infuse fresh funds. However, sources said they have yet to agree how much capital would be put into the company. It was estimated that between P1.2 billion to P2.5 billion is needed to recapitalize the company. "All proceeds (of the sale) will go to All Asia Capital. We want to do these (twin measures) very soon," sources said. Aside from Cagayan Electric, other stockholders of All Asia Capital include International Finance Corp, the private investment arm of the World Bank, Lombard Asian Private Investment Corp., the Tanco family which owns ATI, Land Bank of the Philippines, and the Alcantara family of Alsons. The firm is now searching for a new chairman and CEO. It has already shortlisted several senior executives from other financial institutions. "Mr. Abaya is just a hold- over chairman. We are still looking for a new chairman and CEO. I think Mr. Abaya is very busy in Cagayan de Oro," sources said. Aside from the selling its assets and raising capital, the firm expects to finalize a deal with the Bankers Association of the Philippines within the month for emergency financial assistance. All Asia will be the first company to access the liquidity pool set up by the BAP to help troubled financial institutions. All Asia has reportedly pledged its triple-A debt papers to enable it to borrow from the BAP's liquidity pool set up only last May. All Asia suffered liquidity problems after its jittery investors preterminated their investments after the collapse of another investment house, Urbancorp Investment Inc., a subsidiary of Urban Bank. Unlike banks, investment houses cannot access funds from the central bank to meet emergency requirements. Thus, it has to rely on the BAP. "We expect to get assistance from BAP within the month," the sources said. (The Philippine Star 05-July-2000) ALL ASIA SECURITIES: Fails to timely pay SCCP fine JAKA SECURITIES CORP.: Fails to timely pay SCCP fine PARIBAS ASIA EQUITY: Fails to timely pay SCCP fine ---------------------------------------------------- In compliance with earlier directives by the corporate watchdog, the Securities Clearing Corp. of the Philippines (SCCP) -- the clearing house of the Philippine Stock Exchange (PSE) -- fined 21 brokerage firms for violating settlement rules in the last two months. In a status report filed with the Securities and Exchange Commission (SEC) last Monday, SCCP chief operating officer, Carlos L. Velayo, Jr. said SCCP has imposed sanctions and collected fines and penalties based on its rules and operational procedures, effective last April 17. As of June 29, SCCP reported 41 instances of settlement violations by 21 brokers. "All fines due for payment have been settled except for three recorded overdue accounts," Mr. Velayo said. The brokerage firms that failed to meet the deadline for paying the fines are Paribas Asia Equity, All Asia Securities and Jaka Securities Corp. Total fines imposed by SCCP against the 21 brokers "based on the 11 a.m. settlement deadline on T+4 (four-day settlement period) for cash payments and securities delivery" amounted to over 455,000 Philippine pesos (PhP) (US$10.44 million at PhP43.563:US$1). (Business World 05-July-2000) CAMP JOHN HAY DEVELOPMENT CORP.: Seeks lease restructuring ---------------------------------------------------------- Camp John Hay Development Corp. (CJHDC) has requested for a restructuring of its 25-year lease contract with the Bases Conversion Development Authority in view of the continuing economic downturn and the unforeseen delays in project implementation. It said the delays were caused by the processing of the necessary permits and the failure of the government to deliver 38 hectares of land. The private consortium led by Fil-Estate Management Inc. has proposed a restructuring of its lease payment of P425 million due this year by paying only P150 million this year and paying the balance of P275 over five years from 2004 to 2008. CJHDC has likewise asked for a restructuring of last year's rentals--P150 million cash; P200 million to be paid over five years from 2003 to 2007; P75 million in the form of 30 golf shares and 14 condotel units; and 12 percent a year interest until a memorandum of agreement has been signed. The group has also asked the BCDA to restructure future lease payments--P425 million a year up to 2001 and P150 million or a percentage of revenues (whichever is higher) for the remainder of the contract-"should the economic situation fail to improve." A BCDA spokesman said the proposal was now under study and being seriously considered. The spokesman added that the terms to be agreed upon would have to be reviewed by the Office of the Government Corporate Counsel (OGCC) and to be approved by the Office of the President. CJHDC was awarded the contract to develop the former American rest-and-recreation facility in Baguio City shortly after the Asian financial crisis struck in July 1997. After paying its lease for the first year, CJHDC got a reprieve on its rentals in 1998. The group said it has been having difficulty keeping up with the rentals because of the Asian crisis, which has delayed the start of development work on the project. It said that it took a year and a half to obtain an Environmental Compliance Certificate which normally takes about 120 days under the Department of Environment and Natural Resources policy. Aside from an ECC, CJHDC said Camp John Hay was not declared a special economic zone so it had to secure all permits from the local government agencies which took months to be released. CJHDC complained that the BCDA failed to deliver 38 hectares of Camp John Hay that were covered by the lease agreement. These areas are the DENR research station along Loakan Road; part of a barangay in the Camp John Hay reserve occupied by residents; part of the property of National Food Authority; and part of the US ambassador's estate which has not been turned over to the Philippine government. It took three years for the CJHDC and BCDA to resolve the shortfall in land delivered when the government agreed to swap the lots with a 31-hectare property in the Voice of America compound. Despite problems in paying its lease payments, CJHDC said development work on the project has been continuing. It has invested P1.2 billion for the development of facilities such as the golf course, golf clubhouse and country homes (all of which have been completed) and the 187-unit John Hay Manor Hotel, which will start operating this year. (Philippine Daily Inquirer 06-July-2000) FIRST WOMEN'S CREDIT CORP.: SEC upholds creation of mancom ---------------------------------------------------------- The Securities and Exchange Commission en banc has upheld the creation of a management committee for the distressed First Women's Credit Corp. of rock performer turned businessman Ramon Jacinto. In its order, the SEC in effect rejected Jacinto's petition contesting SEC's creation of the management committee. SEC approved the creation of FWCC mancom in orders dated Nov. 17, 1999 and Dec. 22, 1999. "We, therefore, sustain the findings of the (SEC) hearing officer in the creation of the interim mancom. The appellants' arguments praying for the dissolution of the mancom, notwithstanding, being insufficiently persuasive, failed to evoke a favorable view," the SEC decision stated. "Equally, the petitioners' claim of grave abuse of discretion on the part of the hearing officer in the issuance of the Nov.17, 1999 and the Dec.22, 1999 orders find no apropos merit. "The (SEC) hearing officer was within his authoritative discretion in the formation of an interim mancom in an effort to forestall the imminent danger of dissipation, loss, wastage or destruction of assets or other properties of FWCC, the massive reduction in the loanable funds of FWCC," the SEC decision continued. "As borne out by the evidence on record and by the admission of the parties, the prevailing internal dispute and feud between the FWCC stockholders/officers has resulted in the paralysis of FWCC's business operations and nil collection efforts, and if the same is left unattended, shall ultimately, be detrimental to the interest of stockholders." Jacinto, in a petition for certiorari filed on Dec.27, 1999, said that the decision creating the mancom was done in "an arbitrary and whimsical manner with grave abuse of discretion amounting to lack of or excess jurisdiction." He also stressed that the orders creating the mancom "do not amount to any dissipation as defined by law and evidence since there is no imminent danger of dissipation, loss and wastage of corporate funds." But last June 5, the interim mancom filed a Manifestation detailing findings made by auditing firm Carlos Valdez and Co. on the "questionable and irregular use of funds of FWCC." (The Manila Times 06-July-2000) MONDRAGON INT'L PHILIPPINES: Rehab plan submitted ------------------------------------------------- The group of businessman Antonio Cojuangco has offered a rehabilitation plan for Mimosa leisure estate operated by Mondragon International Philippines Inc, sources involved in the formulation of the rehabilitation plan said. The sources said the rehabilitation plan involves a minimum cash infusion of 400 mln pesos and the transfer of secured liabilities. They said state-owned Clark Development Corp, lessor of the estate, is evaluating the proposal submitted by the Cojuangco group. (AFX News Limited 06-July-2000) PHILIPPINE NAT.BANK: Gov't offers its stake to L.Tan ---------------------------------------------------- Controversial business tycoon Lucio C. Tan may yet control a much bigger chunk of the Philippine National Bank (PNB), as Finance Secretary Jose T. Pardo yesterday said the government has offered its 30% stake for 5.3 billion Philippine pesos ($0.121 billion at PhP43.851=$1) to Mr. Tan. "I've talked with his group. We are trying to get him interested," Mr. Pardo told reporters. The Finance chief said the International Monetary Fund (IMF) and the World Bank have already given their "seal of approval" to Mr. Tan's possible acquisition of more PNB interest. But representatives of Mr. Tan said the tycoon is not likely to consider the offer until after a stock rights offering this September. "They want to do it at a later date, when they finish the capital build-up," Mr. Pardo said. Mr. Tan is expected to scoop up more PNB shares after the government decided to waive its preemptive rights over the bank's stock rights offering. PNB, already 46% owned by Mr. Tan, plans to raise about PhP10 billion ($0.228 billion) in fresh capital through a stock rights offering, to make it operationally viable. Last week, the bank's board approved a reduction of the bank's par value to PhP60 from PhP100 in preparation for the rights offering. To prevent a dilution of its shareholdings as a result of the stock offering, the government wants to sell its 30% stake beforehand. In the end, however, the government may be forced to hold on to its shares should the planned public bidding on July 19 fail. "If there are no buyers (of the government's shares), we will hold on to (it), sell at a later time, wait for a better price," Mr. Pardo said. He said the capital infusion should "clean the books" of PNB, allowing an increase in its share price. Still, the government is also hopeful it will be able to sell its stake. Mr. Pardo yesterday said the New York-based Filipina businesswoman Loida Nicolas-Lewis may team up with investment bank JP Morgan to buy the 30% stake. "(JP Morgan officials) were quick to call me. They expressed interest to buy PNB. I was also in a long distance call with Loida," he said. In yet another bid to get rid of its stake in PNB, the government has offered to sell the block for PhP6.2 billion ($0.141 billion), or PhP100 per share, through an installment plan over one and a half years, without interest. If paid in cash, the government is willing to sell the block, equivalent to 62 million shares, at a reduced price of PhP5.3 billion, at PhP85 a share. A government official privy to the bank's rehabilitation efforts, justified the government's plan to offer its PNB stake on an installment basis, saying it is an attractive option for both buyer and seller. "On an installment basis, the government will be charging an effective interest rate of 12% annually," the official said. "On the other hand, the buyer will have enough time to source the rest of the required funds." The government expects to earn PhP5.2 billion ($0.119 billion) by selling its PNB stake on a cash basis, and PhP6.2 billion if done on a cash basis over the next 18 months. The July 19 auction will be the government's second shot at disposing its stake in PNB. The government is under pressure to sell its stake to fulfill a commitment with multilateral lending institutions. At the same time, it expects proceeds from the PNB sale to help finance a PhP62.5-billion ($1.425-billion) budget gap for the year. Meanwhile, prospective investors in PNB will be required to vote in favor of the stock rights offering so as not to derail its rehabilitation. BusinessWorld learned investors will be asked to sign an agreement that will bind them to the rehabilitation plan expected to be passed by PNB's board. "The buyer must sign an agreement that (he/she) will side with the bank on the issue of the rehabilitation," a government official privy to the bank's privatization said. He said this move aims to ensure the bank's rehabilitation plan will be implemented smoothly. "The government wants to make sure its stake will not be bought by someone with the sole intent of blocking PNB's rehabilitation." The government's 30% stake will allow whoever buys it a "blocking minority," able to oppose any decision by the Tan-dominated board. Recently, Hong Kong-based fund manager Templeton Asset Management Ltd., which holds a 12.9% stake, said it is opposing the rehabilitation plan, especially the PhP10-billion stock rights offer and the reduction in the bank's par value. Templeton also urged the other minority shareholders, including the government, to oppose the rehabilitation plan, claiming it will be detrimental to minority shareholders. (Business World 07-July-2000) URBAN BANK : Bancommerce wins bid to rehabilitate ------------------------------------------------- The Bangko Sentral (Central Bank) yesterday approved the bid of Bank of Commerce (Bancommerce) to buy and rehabilitate Urban Bank, a little over two months after its closure. "The Monetary Board approved in principle the bank that will now oversee the rehabilitation of Urban Bank," Finance Secretary Jose T. Pardo yesterday told reporters. "Hopefully, this will lead to a reopening by the first week of September." Mr. Pardo also sits on the Bangko Sentral's policy-making Monetary Board. The Finance chief said a due diligence by Bancommerce on Urban Bank will begin today, with the purchase agreement expected to be signed by July 10. The findings of the due diligence procedure will be presented to the bank's staff the following day, and then to its affected depositors by July 17. The plan requires the approval of all Urban Bank depositors. The bank will be turned over to Bancommerce by August 15, with its commitments to the Social Security System (SSS) expected to be settled by Aug. 25. The bank regulators expect Urban Bank to reopen under Bancommerce management by September 4. Mr. Pardo said Bancommerce offered a three- year deposit payout period that will give an interest of four percent above the average 91-day Treasury bill yield. "There will be no haircut (on interest payments)," he said. Bancommerce will infuse a total of 1.65 billion Philippine pesos ($0.038 billion at PhP43.851=$1) into Urban Bank. Meanwhile, Philippine Deposit Insurance Corporation (PDIC) president Norberto C. Nazareno said the state insurer still hopes to reopen Urban Bank's doors by its original target of July 26. "But a lot will depend on whether the depositors and investors agree on the rehabilitation proposal," he said. Mr. Nazareno said Bancommerce edged out Asia United Bank (AUB) by virtue of its shorter "payout period" of seven years. With this development, Urban Bank should be reopened under Bancommerce's management in 30 days's time, Bancommerce president Raul B. de Mesa said in an interview. "Urban Bank will be reopened by the first week of September at the latest," he told BusinessWorld. Mr. de Mesa said they are looking at six months to fully integrate the operations of the two banks and Urban Bank's investment house Urbancorp Investment, Inc. He said merging with Urban Bank is now the priority of Bancommerce. Bancommerce is still in the process of merging with Traders Royal Bank after more than a year now. "We would still continue the merger," Mr. de Mesa said. It is also set to sign a merger agreement with the Tan Yu's Panasia Banking Corp. (Panbank) on July 15, he added. The acquisition of the three banks will catapult Bancommerce among the top 15 banks in terms of assets, from its 27th spot as of the first quarter. Mr. de Mesa said Bancommerce will be infusing PhP1.65 billion in fresh equity to Urban Bank before it will be reopened. The three major depositors of Urban Bank -- Petron Corp., San Miguel Corp., and Manila Electric Co. -- will sign an agreement with Bancommerce this Wednesday for the conversion of their PhP750-million ($17.103-million) deposits into equity, he said. Mr. de Mesa added the bank is also set to sign an agreement with SSS to formalize the conversion of its PhP600-million ($13.683-million) investment into equity. Within 30 days upon reopening, he said Bancommerce will pay Urban Bank depositors up to PhP500,000 ($11,402), inclusive of the PhP100,000 ($2,280) already serviced by PDIC. The balance, he said, will be paid within three years. For the first two years, 30% each of the balance will be paid while the remaining 40% may be withdrawn at the end of the third year. With Urban Bank's rehabilitation, Mr. de Mesa said all its officers and employees will be "retired" before the end of the month. "Some will be hired as new employees of Bank of Commerce. We don't know yet how many we will need," he added. Mr. de Mesa said Bancommerce will also take over legal cases pending concerning Urban Bank. However, the case filed by Urban Bank against Urbancorp will "no longer be a problem" since Bancommerce will be absorbing both the bank and the investment house, he added. Because Bancommerce proposed to buy Urban Bank and its subsidiaries "lock, stock and barrel," its offer was favored by the central bank. "The second reason was because it will be able to put in more equity, with the conversion of major deposits into equity and the assurance that they will stay longer," a source said. A third major consideration was the shorter repayment period of three years offered by Bancommerce, compared with AUB's seven years. The source said that although the government would have wanted more capital infusion, it relented after Bancommerce proposed to pay creditors and depositors PhP420 million ($9.578 million) on the first day the bank reopens. "The government doesn't want to be superior to depositors. It is willing to be paid in the end," the source said. Meanwhile, to keep its creditors at bay, Urbancorp asking the Securities and Exchange Commission (SEC) for a 60-day extension of its debt moratorium which expires today. The SEC earlier said it is ready to give the green light to the rehabilitation plan of Bancommerce. "We are expecting a positive response from Urbancorp's investors...Although I do not have the exact numbers yet, I can see that most investors have welcomed the rehab plan and we are likely to approve (the said plan) as well," an SEC source said. According to the source, Urbancorp investors found the three-year repayment plan proposed by Bancommerce very appealing. Meanwhile, Bancommerce stressed it will not seek financial assistance from the Bangko Sentral, other than access to a liquidity window as a contingency measure once the Urban Bank branches are reopened. The Cojuangco-controlled bank also said it will undertake a program to review the banking group's equity investments. "The objective will be to sell as many of these subsidiaries as possible, and to liquidate others," it said. (Business World 07-July-2000) URBANCORP.: Asks SEC to extend debt payment ------------------------------------------- Urbancorp Investments Inc., the investment arm of ailing Urban Banking Corporation, has filed a motion with the Securities and Exchange Commission (SEC) on Sunday to extend for another 60 days the suspension order on claims lodged by its creditors. The 60-day loan payments suspension granted to Urbancorp expires on July 8. In its petition, Urbancorp said it only needs more time to pay off debts and prevent creditors from pressing claims or instituting foreclosure proceedings against its assets, pending deliberations on its proposed rehabilitation plan. Urbancorp said its estimated assets of P6.23 billion, of which P5.27 billion comprises assets for its trust operations, are more than enough to cover the investment firm's debts. A SEC official, who requested anonymity, believes that the rehab plan submitted by Bank of Commerce for Urbancorp and Urban Bank will be approved by the SEC, since majority of the creditors do not oppose the plan. BanCom, the banking arm of businessman Antonio "Tonyboy" Cojuangco, is one of only two companies that signified interest in buying Urban Bank and Urbancorp. Asia United Bank is the other bank which also signified interest to purchase the beleaguered bank. The SEC official added that creditors are receptive to the plan and were awaiting the commission to approve it. "If this goes on smoothly, there's a big possibility that Urban Bank might reopen anytime soon. It's just a matter of discussing some minor issues with creditors, management and investors," the official said. Under the rehabilitation plan, BanCom will merge with Urban Bank and Urbancorp, with the first as the surviving entity. The plan also involves the infusion of new capital into BanCom if the merger were to push through to fund expanded operations and to divest non-performing assets to pay off debts. BanCom also intends to sell selected real estate holdings of the Urban Bank group which includes the Urban Bank Plaza, the bank's headquarters; Capital Place, a commercial lot in Fort Bonifacio; a commercial property along Roxas Boulevard; and a 33-hectare lot adjacent to the Tagaytay Highlands resort. Bancom plans to raise at least P1.65 billion in new capital from Urban Bank's existing shareholders (P300 million), the Social Security System (P600 million), and the retirement/pension funds of Meralco, Petron Corporation, and San Miguel Corporation (P750 million). The plan also includes the conversion into negotiable certificates of time deposits all deposits, placements, bills payable, outstanding managers' checks, interbank borrowings, common investment funds, and similar accountabilities as of April 25. Urban Bank, a regular commercial bank, was placed under the receivership of the state-controlled Philippine Deposit Insurance Corporation last April 26 after the bank suffered liquidity problems earlier this year. (ABS/CBN News Channel 08-July-2000) =============== T H A I L A N D =============== JASMINE INT'L OVERSEAS: Set to sign debt deal --------------------------------------------- Jasmine International Overseas Co. Ltd., a unit of Jasmine International Plc, will today sign a US$60-million (Bt2.3 billion) debt-restructuring deal with its 11 creditors. Under the deal, Jasmine Overseas will be granted three and a half years to repay its debts. It must pay the first $8 million this year. Jasmine Overseas said it believes it will be able to pay as much as $15 million this year. Part of this money will come from its earlier sale of a stake in an overseas investment. The company's creditors include CitiBank, Credit Suisse First Boston and Societe Generale. Jasmine Overseas is expected to sell more of its overseas investments to repay its debts. They include a satellite- based mobile phone service, Asia Cellular Satellite System (ACeS); a paging company, Island Country Communication Inc., in the Philippines; and an Indonesia-based trunk mobile business, PT MobileCom Telemindo. Jasmine is expected to also sell its 11.9-per-cent stake in PT Asia Cellular Satellite, which operates ACeS. The shares are worth about $45 million. However, it is expected to retain 100 per cent of Service Co., an ACeS gateway operator in Thailand. Meanwhile, Jasmine International will sign an agreement to restructure its remaining debt of 9.5 billion yen (Bt3.5 billion) with 30 creditors next week. Both Jasmine International and its overseas subsidiaries completed their debt restructuring processes under the supervision of the Corporate Debt Restructuring Advisory Committee earlier this year. They have just finished working out the details of the debt retirement. Jasmine International owns 87.32 per cent of Jasmine Overseas. Jasmine Overseas was especially hard hit by the economic crisis because it had significant investments abroad, including in Indonesia and the Philippines, before the markets collapsed. As a result, the company divested itself of telecom projects in several countries, including the Philippines and India. A telecom stock analyst said Jasmine Overseas would have difficulty making its overseas investments profitable. "This is because of most of its projects would take time before they see returns," the analyst said. A provincial fixed line operator, Thai Telephone and Telecommunication, is the last Thai telecom player yet to complete its debt-restructuring process. It is expected to do so next month. (The Nation 06-July-2000) M GROUP PLC: New bankruptcy action filed by SCB ----------------------------------------------- Siam City Bank has filed a second bankruptcy suit for debts of 241.4 million baht against M Group Plc, a holding company of former media tycoon Sondhi Limthongkul. Last November, the bank filed a bankruptcy suit against M Group and Mr Sondhi for failure to repay a bond worth 150 million baht in April 1997. Siam City Bank had purchased the bond from Siam City Credit. In March, the Central Bankruptcy Court ordered the assets of Mr Sondhi into receivership. However, it dismissed the bankruptcy against M Group because the bank failed to appraise the pledged collateral first. The court ruled that liabilities of both Mr Sondhi and M Group had exceeded their assets and that they did not try to settle their debts with the creditor. The collateral pledged against the loan included ordinary shares of three subsidiaries of M Group-10.2 million shares of Manager Media Group, publisher of Manager newspapers; 400,000 ordinary shares of the International Engineering Plc (IEC); and two million ordinary shares of Wireless Communications Service Co. The shares of Manager Media Group were appraised to have no value as the group was undergoing debt restructuring with its liabilities exceeding its assets by 2.7 billion baht. The shares of IEC were appraised to have a value of 6.17 baht each, compared with a book value as at the end of the first quarter of this year of 9.70 baht. The shares of Wireless Communications Co were valued at 10 baht each. As a result, the total appraised value of the pledged collateral amounted to about 22.47 million baht. Taking into account the outstanding debts of about 241.37 million baht, M Group still owed the bank about 218 million baht. M Group Plc is a holding company with majority shareholding in three companies listed on the Stock Exchange of Thailand. As of July 1998, it had a 50.83% stake in Manager Media Group Plc. As of January this year, it had a 7.24% stake in Eastern Printing Plc, increasing its stake to 16.14% in IEC in March this year. (Bangkok Post 07-July-2000) PRECIOUS SHIPPING: Debt revamp delayed -------------------------------------- Thai handysize operator Precious Shipping's (PSL) debt-restructuring plan has been delayed as it has failed to garner the required quorum at a meeting of its Euro bondholders. A quorum of 60 per cent of outstanding bondholders had been required, but the number which turned up amounted to only 59.35 per cent, falling short by 0.65 per cent. The meeting has been scheduled to July 14. PSL finance director Khrushroo Wadia said the next meeting would require a lower quorum of 30 per cent, so the same proxies and votes, if not revoked or amended, would be valid. "Since all the votes cast for this meeting approved the proposed resolutions unanimously, we are quite confident that we would have a legally binding agreement in place at the adjourned meeting, with the bondholders accepting the restructure," he said. Meanwhile, on July 6, 2000, the Company and certain subsidiaries signed legally binding documents covering the debt restructure of the Company with secured creditors, unsecured domestic bondholders and Bangkok Bank P.C.L. (other unsecured creditor) of the Company. Therefore, the effective date of the restructuring is now subject to meeting all of the conditions precedent by the Company and to be confirmed by the Security Agent after the restructure resolutions are passed by the Euro Bondholders. PSL had originally planned to complete its debt re- structuring, ongoing for more than a year, this month. The process will allow it to focus on its core business in shipping. Last month, a loan agreement was concluded with Fleet National Bank for US$25 million (S$43.25 million), to be disbursed after creditors' agreement to the debt re- structuring plan, with proceeds used to pay out unsecured creditors. (Business Times 05-July-2000, Stock Exchange of Thailand 07-July-2000) SIKARIN PLC: Reports progress on rehabilitation to SET ------------------------------------------------------ Sikarin Public Company Limited has reported to the Stock Exchange of Thailand that the company has appointed Adkinson Securities Public Company Limited to be its independent financial consultant. Presently, Adkinson Securities Public Company Limited and the company are now in the process of preparing the rehabilitation plan, the submission of which is expected to be made on Dec 5,2000. (Stock Exchange of Thailand 06-July-2000) S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter -- Asia Pacific is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Trenton, NJ USA, and Beard Group, Inc., Washington, DC USA. Darryl Henning, Managing Editor, James Philip P. Jover and Cristina Pernites, Editors. Copyright 2000. All rights reserved. ISSN: 1520-9482. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $575 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. 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