TCRAP_Public/000801.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                             A S I A   P A C I F I C

             Tuesday, August 1, 2000, Vol. 3, No. 148


* A U S T R A L I A *

EDGE GROUP: Creditors move on Wang millions
IAMA: Denies banks calling shots on debt
NEWCREST MINING LTD: Shares dive in wake of mining halt
NSW GRAINS BOARD: Losses top $8.5M in past year

* C H I N A  &  H O N G  K O N G *

CHAMPION WIT LTD: Facing winding up petition
CITITOP CONSOLIDATION LTD: Facing winding up petition
ENGLONG INT'L LTD: Facing winding up petition
GIANT EXPLORER (HK)LTD: Facing winding up petition
GILBERT HOLDINGS LTD: Facing winding up petition
HAP YICK INDUSTRIAL LTD: Facing winding up petition
HIN UNION DEVELOPMENT LTD: Facing winding up petition
LUCKY CROWN DEVELOPMENT LTD: Facing winding up petition

* I N D O N E S I A *

PT CITRI MAHKOTA ABADI: Suspension of payments okayed
PT LANDASAN TERUS SENTOS: Court declares bankrupt

* J A P A N *

KANSIA INT'L AIRPORT: Debt-ridden airport sinking fast
NIPPON CREDIT BANK: Gov't team scraps purchase review

* K O R E A *

HYUNDAI ENG'G & CONST: Gov't to probe cross-affiliate aid
HYUNDAI GROUP: Combined debt ratio up to 229%
HYUNDAI MOTORS: $180M in securities to be sold

* M A L A Y S I A *

MALAYSIAN AIRLINES: May spin-off money-losing routes
MALAYSIAN AIRLINES: Qantas set to buy up-to-20% stake

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

ASIASEC: SEC readies charges re BWR
BELLE CORP: To sell non-core assets
CAPITOL WIRELESS: Seeks debt relief
LARRGO SECURITIES: SEC readies charges re BWR
PCCI SECURITIES: SEC readies charges re BWR
PETRON CHEMICAL CORP.: Closes Bataan plant
PETRON CHEMICAL CORP.: Spends P6B on clean-air compliance
PNB SECURITIES: SEC readies charges re BWR
SECURITIES 2000: SEC readies charges re BWR
WEALTH SECURITIES: SEC readies charges re BWR

* S I N G A P O R E *

METALOCK: Chair blames predecessor for past losses

* T H A I L A N D *

THAI AIRWAYS INT'L: Stake sale to raise capital
THAI COPPER: Debt restructure plan likely this year
THAI LUBE BASE: PTT provides cash rescue


EDGE GROUP: Creditors move on Wang millions
The creditors of Mr Johnson Wang's collapsed personal
computer empire, the Edge group, are trying to bankrupt the
failed entrepreneur in an attempt to take control of his
Killara home and his $11.3 million stake in ailing Internet
service eisa.

Yesterday afternoon the liquidator for the Edge group,
Armstrong Wily & Co, filed a petition in the Federal Court
to have Mr Wang and his wife Phynia Wang, declared
bankrupt.  Mr Wang's international PC-making business
collapsed earlier this year owing between $30 million and
$40 million. One of Mr Wang's last remaining known assets
is his majority shareholding in eisa, the publicly listed
Internet service which also collapsed after a failed
takeover bid for OzEmail.

As part of its takeover of eisa, pay TV network Austar has
offered the equivalent of $11.3 million for the eisa stake,
which is owned by a company associated with Mr Wang, KTX
Europe Holdings (Netherlands).  If the bankruptcy action is
successful, Armstrong will attempt to intercept the $11.3
million, which it says rightly belongs to the Edge estate,
since it was sold too cheaply to KTX before eisa's float
last year.

Eisa which was spun off from Edge under its original name,
Edge Internet Service Australia was "undersold" to KTX
Europe Holdings (Netherlands) for just $50,000, before the
public share offer, Armstrong Wily's Mr Alan Topp said

"We're trying to make Johnson bankrupt and the Bankruptcy
Act gives us various powers, one of those is to recover
monies for assets that have been sold at an undervalue,"
said Mr. Topp. "We think we've got reasonable prospects of
securing the $11.5 million for the benefit of Johnson
Wang's creditors."

Mr Topp said he was also aiming to gain control over Mr
Wang's million-dollar Killara house, which is being
repaired after being fire-bombed last year.

"We lodged a creditors' petition for Johnson and Phynia
Wang and the matter will be back in court on August 8.
Johnson's got to turn up or provide evidence as to why the
creditors' petition for bankruptcy shouldn't proceed. If
they defend it, we'll argue it out in court."

Mr Wang's Australian lawyer, Mr Alex Law, said he did not
have instructions from Mr Wang. Austar's chief executive,
Mr John Porter, said the petition would make no difference
to Austar's $24.4 million bid for eisa: "It's not of any
concern. My own speculation is that these proceedings will
dictate to whom or what we pay the money, whether that
person is KTX Holdings or some other supervising entity.
It's really happening peripherally to our action."

Eisa chairman Mr Evan Rees said he was unaware of the Wang
bankruptcy petition.  Eisa is attempting separately to
regain an unknown amount of money from its former chief
executive, Mr Damien Brady, who resigned after meeting with
eisa's lawyers at Allen Allen & Hemsley last Friday.

Eisa has not given a reason for the resignation, which came
a week after the board had suspended Mr Brady.  Mr Brady
could not be reached for comment.  (Sydney Morning Herald

IAMA: Denies banks calling shots on debt
IAMA has defended a move last week to restructure its debt
facilities, denying the move was an indication the rural
merchandiser was at the mercy of its banks.

As the corporate tussle for the company escalated, IAMA
said in a briefly worded statement that it had "accepted an
offer from its bankers of secured facilities, which will
replace the existing IAMA negative pledge facilities."

IAMA said the move "protects customer deposits on an equal
basis", though it is unclear how this is better for IAMA
shareholders. Our concern is to make sure the bank provides
the facilities we need to run the business," IAMA chairman
Mr Neil Roberts said.

He said IAMA's debt facilities included convenants related
to financial ratios that had been breached by the company's
$58.8 million net loss for the March half, substantially
brought about by asset writedowns. The accounts show long-
term borrowings of $150 million.

"[The banks] did not call the shots," Mr Roberts said.
"There is absolutely no cash problem at all."

He said IAMA was in the process of selling some businesses
and generating cash to reduce bank debt even further.  Both
Futuris, a 19 per cent shareholder and owner of rural
merchandising rival Elders, and Sir Ron Brierley, a 5 per
cent shareholder, have complained to IAMA's board about its
plan to merge with rival Wesfarmers-Dalgety. Futuris, which
wants to bid but only if it can conduct thorough due
diligence with IAMA board consent, has started legal action
to gain access to IAMA's books. (Sydney Morning Herald  31-

NEWCREST MINING LTD: Shares dive in wake of mining halt
Shares in Newcrest Mining Ltd closed 10c weaker yesterday
as investors absorbed its shock decision to suspend mining
at its 350,000 ounce per annum Telfer mine in Western

Shares fell to $3.95 in intraday trading before settling at
$4.10 at yesterday's close, after falling 18c on Thursday.

"It has to be Telfer," Bell Securities analyst Mr Keith
Goode said.  "Basically we heard at Diggers (the recent
Diggers and Dealers conference in Kalgoorlie) that Telfer
was all systems go and four days later they closed it."

Newcrest blamed the suspension of mining, which will leave
about 230 people out of work, on spiralling costs.  It
produced 54,663 ounces for the quarter taking annual
production to 267,039 ounces.  But cash and production
costs deteriorated over the quarter rising to $559 and
$712, respectively, compared to $439 and $587 in the March
quarter.  (Border Mail Online  29-July-2000)

NSW GRAINS BOARD: Losses top $8.5M in past year
The NSW Grains Board, the State's monopoly grain exporter,
has lost at least $8.5 million or more than one-third of
its capital base in the past year in a series of bad debts
and inventory losses.

These losses could not come at a worse time for the board
and those supporters of agricultural export monopoly
marketing organisations, like the NSW Farmers Federation
and the Grains Council of Australia.  The NSW Minister of
Agriculture, Mr Richard Amery, has for the past year had a
recommendation sitting on his desk to deregulate the grain
monopoly in NSW administered by the NSW Grains Board. But
due to the politically sensitive nature of deregulation and
the marginal rural seats involved, no action has been

A spokesperson for the NSW Minister of Agriculture said:
"The review is yet to go to Cabinet.  It's been a case of
waiting for a slot in the Cabinet process."

Now, with the NSW Grains Board in financial strife, this
might trigger some political response.  Ironically the NSW
Grains Board itself is the progeny of former NSW
agricultural marketing boards that have fallen on hard
financial times.

Over the past 15 years, the NSW Oilseeds Board, the NSW
Grain Sorghum Marketing Board and the Oats Board all went
belly up. They were folded into a new organisation in the
early 1990s - the NSW Grains Board. The recommendation to
deregulate the NSW grains and oilseeds industry and to get
rid of the NSW Grains Boards export monopoly (single desk)
powers results from an investigation into the NSW
industry under National Competition Policy.

Under this policy, if government monopolies cannot provide
the public with a net benefit then the monopoly should be
abandoned.  The majority of the group reviewing the
marketing of grains and oilseeds in NSW were satisfied
that there was no benefit from continued intervention in
the domestic market for any of the commodities vested in
the board.

Nor did they find that there was any benefit to be obtained
from the maintenance of an export single desk for NSW grain
sorghum, oats, canola, safflower, sunflower, linseed or
soyabean. And the timing of the financial problems of the
NSW Grains Board also does not suit AWB Limited.
Right now the biggest agricultural export monopoly in
Australia, the $3 billion wheat export monopoly
administered by AWB International Ltd, is also under

A number of grain traders and industry insiders say that
the losses by the NSW Grains Board are just the tip of the
iceberg. One industry insider said that current losses on
inventory would be massive if all the inventory was
liquidated now.

The board's capital base has been eroded. Ironically, the
battle against deregulation was one of the factors that led
to poor decisions and large losses, he said. A strong
motivating factor for the NSW Grains Board to increase its
turnover of grain was in fact to demonstrate its importance
to the industry when it was reviewed under National
Competition Policy guidelines.

The NSW Grains Board as at August 31 1999 had funds and
reserves of $25.574 million. Some of the NSW Grains Board's
problems stem from bad debts incurred from grain sales to
Seedex/Meggitt group, oilseeds crushers and traders - and
Water Wheel Mills Pty Limited, millers of grain. The NSW
Grains Board confirmed that as at July 2000, the
Seedex/Meggitt group owed the Board some $5.5 million.

Water Wheel Mills Pty Ltd owes the Board some $3 million,
according to Mr Graham Lawrence, chief executive of the NSW
Grains Board.  Water Wheel was placed under administration
in February this year.  In a bid to regain some of its bad
debts, the NSW Grains Board is becoming closely involved
with some of its debtors, particularly Seedex and Meggitt.

Documents lodged with the Australian Securities and
Investments Commission in April show the NSW Grains Board
bought the debts that Seedex and Meggitt owed to their
holding company, Votraint No. 1042 Pty Limited. These debts
were a minimum of $1.25 million for Meggitt and $3.006 for
Seedex. The NSW Grains Board paid $1 for these debts.

At the same time the NSW Grains Board established a fixed
and floating charge over Better Oil Pty Limited. The NSW
Grains Board said that Better Oil Pty Limited was formed to
take over the core business of the Seedex/Meggitt group.
Better Oil is the trustee of the Better Oil Unit Trust. The
board and Seedex are entitled to the units in that trust,
said the NSW Grains Board.

Profits earned from the Better Oil business will be
applied, in the first instance, to reduce the indebtedness
of the Seedex/Meggitt Group to the Board, said Mr Lawrence
in an email to The Australian Financial Review. Another
creditor of Water Wheel is Derrick and Sons (Grain) Pty
Limited. This group is owed at least $331,961. The NSW
Grains Board had a commercial arrangement with Derrick and
Sons.  (Australian Financial Review 28- July-2000)

C H I N A  &  H O N G  K O N G

CHAMPION WIT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on September 6 on the petition of
Standard Chartered Bank for the winding up of Champion Wit
Limited. A notice of legal appearance must be filed on or
before September 5.

CITITOP CONSOLIDATION LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 9 on the petition of
Philippine Airlines for the winding up of Citicop
Consolidation Limited. A notice of legal appearance must be
filed on or before August 8.

ENGLONG INT'L LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 30 on the petition of
China Merchants Bank for the winding up of Englong
International Limited. A notice of legal appearance must be
filed on or before August 29.

GIANT EXPLORER (HK)LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on September 27 on the petition of
Mr. Ho Hon Chung for the winding up of Giant Explorer (Hong
Kong) Limited. A notice of legal appearance must be filed
on or before September 26.

GILBERT HOLDINGS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 16 on the petition of
The Hongkong and Shanghai Banking Corporation Limited for
the winding up of Gilbert Holdings Limited (In
Receivership). A notice of legal appearance must be filed
on or before August 15.

HAP YICK INDUSTRIAL LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 9 on the petition of
Lee Wing Shing for the winding up of Hap Yick Industrial
Limited. A notice of legal appearance must be filed on or
before August 8.

HIN UNION DEVELOPMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 16 on the petition of
Chu Oi Ying for the winding up of Hin Union Development
Limited. A notice of legal appearance must be filed on or
before August 15.

LUCKY CROWN DEVELOPMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on August 23 on the petition of
Public Bank Berhad for the winding up of Lucky Crown
Development Limited. A notice of legal appearance must be
filed on or before August 22.


PT CITRI MAHKOTA ABADI: Suspension of payments okayed
The Jakarta Commercial Court approved a suspension of debt
repayments by Ongko Group unit, PT Citra Mahkota Abadi.
(AFX News Limited  27-July-2000)

PT LANDASAN TERUS SENTOS: Court declares bankrupt
The Jakarta Commercial Court has declared Ongko Group unit
PT Landasan Terus Sentosa bankrupt following its failure to
repay debts of 270 bln rupiah to the Indonesian Bank
Restructuring Agency.

Presiding judge Syamsudi Manan Sinaga said the court
rejected a petition by the company seeking suspension of
the debt repayments because a debt restructuring scheme
proposed by the company was "unreasonable."  He said
Landasan Terus proposed to reschedule repayment of its
debts over a 30-year period with a five-year grace period.
(AFX News Limited  27-July-2000)


KANSIA INT'L AIRPORT: Debt-ridden airport sinking fast
Without a 20 billion yen reconstruction effort, those who
land at Kansai International Airport may find
themselves having to swim to the passenger terminal. That's
because, six years after it opened, airport officials have
discovered that the passenger terminal is sinking faster
than originally predicted and is now at sea level.

Earlier this month, Kansai airport officials announced the
passenger terminal had sunk by nearly 12 meters since it
was opened in September 1994. While it was expected that
some of the airport facilities would settle a bit,
officials were surprised at the rate at which the terminal
has sunk.

When the airport was being constructed back in the late
1980s, local engineers predicted the passenger terminal
would sink into the reclaimed land by no more than 11.5
meters over 50 years. Local citizens' groups and domestic
and international civil engineers, however, had stated
concerns about the artificial island on which the airport
is built.

To make matters worse, not only is the passenger terminal
sinking into the island, but the island itself is sinking
into the seabed.  Officials have long known that the seabed
under the airport was composed of soft sand that would sink
under the weight of the island, which was built off the
coast of southern Osaka in waters 18 meters deep with
nearly 180 million cu. meters of dirt.

While there is nothing they can do about the seabed, in
order to keep the passenger terminal from sinking further,
airport officials plan to dig a moat around the structure
and the adjacent Aeroplaza shopping center.  The moat will
then be filled with a mixture of concrete and sand to
create a 1 meter thick retaining wall.

"The idea is that horizontal pressure on the wall from the
surrounding ocean will compress the terminal base and
squeeze water trapped underneath the two buildings to the
surface," said a Kansai airport official.

The cost of constructing the wall is estimated at nearly 20
billion yen. The airport plans to use 14 billion yen of its
own money to cover the cost, with the remainder coming from
local governments and private businesses.  For the
financially troubled airport, which has accumulated debts
of 150 billion yen, the announcement that the passenger
terminal needs to be shored up has come at a particularly
bad time.

Over the past three years, several international carriers,
including British Airways and United Airlines, have either
completely stopped or greatly reduced service. At the same
time, construction of a second runway, which will cost 170
billion yen, has begun. Money for second-phase construction
is coming from the central and local governments.

The unexpectedly high operating losses have already forced
the Osaka Prefectural Government to commit an additional
500 million yen in tax revenues to maintaining the current
airport.  Now, faced with shelling out more money to pay
for a retaining wall around the passenger terminal, concern
is growing about the second-runway project.

"At the moment, plans for the second runway call for it to
be built exactly like the first. But given the problem with
the passenger terminal, those plans will have to be
revised. It will be difficult for the runway to open on
time, and any changes will drive construction costs up,"
said a prefectural government official who used to work for
the airport, speaking anonymously.

The second runway, which will be parallel to the current
one, is to be completed in 2007, and there is great
pressure to have it completed before then, partially in
order to compete with the new Chubu International Airport
in Aichi Prefecture, scheduled to open in 2005.

There are also plans for a crosswind runway the officials
hope to have completed sometime around 2015, although
prefectural officials have said that will depend on
financing.  (Japan Times Online  29-July-2000)

NIPPON CREDIT BANK: Gov't team scraps purchase review
A team of legislators from the three ruling coalition
parties Monday decided not to ask a consortium led by
Softbank Corp. to accept a proposal to drop a bad loan-
buyback clause from the contract to sell the nationalized
Nippon Credit Bank (NCB) to the consortium, coalition
officials said.

The team members agreed that it would be difficult for the
consortium to accept the proposed amendment of the
contract, which had been concluded in June between the
consortium and the government's Financial Reconstruction
Commission (FRC), the officials said.  (Kyodo News  31-


HYUNDAI ENG'G & CONST: Gov't to probe cross-affiliate aid
The government yesterday vowed to investigate cross-
affiliate help Hyundai Engineering & Construction might
have enlisted to meet payment requirements for maturing
loans, Saturday and mete punishment for any illegal

"We will not tolerate any illegal cross-affiliate support
for Hyundai Construction," Finance-Economy Minister told
The Korea Times after a meeting with economic editors of
the mass media on Cheju-do.  "I have made a strong
suggestion to the Fair Trade Commission (FTC) chairman Jeon
Yun-chol that it is imperative to check inter-affiliate
dealings at Hyundai and crack down on illegal in-house

Minister Lee indicated that a probe will be launched soon.
Lee observed that the bankruptcy of Daewoo Group is
attributed to the practice of plugging one affiliate's
debts with profits of another, adding that the government
couldn't afford to let the same thing happen to Hyundai.

"We are heading toward a market economy and the government
may not sit by idly, allowing interference in markets to
happen," he said.

Meanwhile, Hyundai Construction paid back maturing loans of
147 billion won on Saturday with funds of its own and
borrowed from affiliates such as Hyundai Corp.  Hyundai and
its main creditor Korea Exchange Bank said yesterday that
it raised a total of 147 billion won, 100 billion won of
its own funds, 20 billion won in promissory bill discounts
and 30 billion from its affiliate to pay maturing loans and
settle payment for its vendors.

Hanvit Bank, one of the creditor banks, repurchased Hyundai
Construction's commercial paper worth 50 billion won on
Saturday following the collective decision of 12 banks to
roll over at the strong urging of the government. Hyundai
officials said that they had to move back the settlement
time by one and half hours to 4 p.m. Saturday before coming
up with the portion that was short, by means of a
promissory note discount.

A KEB official said that Hyundai had a hard time in raising
necessary funds but settled payments without further help
from the banking sector. "Hyundai Construction faces
maturing loans of 50 billion won from banks today but the
banks would extend their maturity. About 10 billion won in
loans from the secondary financial sector is due today," he

Hyundai failed to get fresh funds of 50 billion won from
the National Agricultural Cooperative Federation after a
protracted round of negotiations. Hyundai and the NACF will
meet again this week on the same issue.  NACF officials
said that the failure to reach agreement is attributed to
Hyundai's refusal to put up security for fresh loans.

"Hyundai Construction is below investment grade so any
loans to the firm require security, which it refused to
come up with," the official said.

On Friday, Industrial Bank of Korea and Hana Bank rejected
Hyundai's requests for additional loans.  (Korea Times 30-

HYUNDAI GROUP: Combined debt ratio up to 229%
The crisis-hit Hyundai Group said yesterday that its debt-
to-equity ratio, readjusted under the stricter combined
financial statement, reached 229.7 percent as of the end of

Hyundai's combined financial statement covers its 107
affiliates operating in Korea and abroad, the group said.
The revised debt ratio represents an increase of 48.7
percentage points from the group's previously declared debt
ratio of 181 percent compiled under the conventional
accounting practice. If the group's financial units are
included, the groupwide debt ratio goes up to 296 percent,
it said.

Combined statements prevent chaebol firms from making
double entries or hiding assets and debts.  Large
corporations are obligated to submit their combined
financial statements to the authority today. According to
the financial circles, other large conglomerates reportedly
showed similar increases in debt ratios. Samsung had 195
percent, LG 260 percent and SK 230 percent.

The corporate assets of Hyundai's 107 affiliates added to
100.17 trillion won ($90 billion). They also had 74.77
trillion won in debt and 25.24 trillion won in capital. The
figures decreased from previous announcement as a result of
netting out contribution of funds and liabilities between
the affiliates, Hyundai said. Sales also decreased 38
percent at 69.9 trillion won due to netting of exports via
the group's general trading company.  (Korea Herald 31-

HYUNDAI MOTORS: $180M in securities to be sold
South Korea's largest car maker, Hyundai Motor, has offered
to sell abroad asset-backed securities worth US$180

The move is expected to improve its financial status.
Hyundai Motor's US financial arm has signed a deal to sell
the securities to European investors.  According to Korea's
Yonhap news agency, payment would be made in early August.
The funds will reportedly be used to pay off Hyundai
Motor's liabilities and improve its consolidated financial

Hyundai Motor is a major unit of the country's largest
conglomerate, the Hyundai Group.  It has been squeezed by a
credit crunch and a prolonged family feud.  Hyundai Motor
tried to separate from the group earlier this month, but
the plan has been delayed by a dispute in which founder,
Chung Ju Yung, resisted government pressure to sell down
his stake in the auto unit which is in turn controlled by
his son.

The family feud intensified last week after the group's
profitable shipyard controlled by another son severed ties
with weak companies run by his brothers.  (Channel News
Asia  31-July-2000)


MALAYSIAN AIRLINES: May spin-off money-losing routes
The Malaysian government may spin off Malaysia Airlines'
loss-making domestic operations to spruce up the national
carrier for the entry of a foreign partner to enable MAS to
concentrate on the more lucrative international routes,
according to a Malaysia Business Times article yesterday.

"Sources said Malaysia Airlines can very quickly close the
gap on its biggest competitor, Singapore Airlines, if it
were to concentrate only on international operations," it

MBT said the government was studying the possibility of
using an existing airline to take over the domestic routes
or setting up a new company for the purpose.  Analysts said
candidates for MAS' domestic operations, which lose more
than RM1 million (S$455,600) a day, include Air Asia,
Pelangi Air, Berjaya Air, and Transmile. But it will not be

The small airlines, which service mainly local tourist
destinations like Langkawi and Tioman, may only be keen on
certain domestic routes. Even the most lucrative "domestic"
route -- the shuttle flights between Malaysia and Singapore
-- could be redundant in a few years.

This is because Express Rail Link, which is in the midst of
developing a high-speed train service between the Malaysian
capital and the Kuala Lumpur International Airport, is keen
to extend the track to Singapore.  Besides the proposal to
hive off its domestic operations, the newspaper said MAS
has asked the government for compensation in relocating to
the new airport, tax waiver and a 50 per cent hike in
domestic air fares -- the first in nearly a decade.

Earlier this week, the government allowed MAS to raise its
foreign ownership ceiling to 45 per cent from 30 per cent.
Analysts said the government may approve some of the
requests in a bid to attract a foreign equity and strategic
partner for MAS.  Three foreign parties -- Swissair, Qantas
and the Brunei Investment Agency -- have been cited as
likely candidates for the MAS stake held by Naluri Bhd, the
listed vehicle of Tajudin Ramli.

However, an AFX report yesterday said SAirGroup AG's
Swissair has denied it was interested in buying a stake in
MAS.  Rather, the agency quoted a Swissair spokesman as
saying that it was holding talks about its existing code-
sharing agreement with Malaysia.

Khazanah Nasional -- the investment arm of the Malaysian
government -- is now expected to step in to take over some
or all of Naluri's 29 per cent stake in MAS if the foreign
alliance does not materialise.  (Business Times  29-July-

MALAYSIAN AIRLINES: Qantas set to buy up-to-20% stake
Qantas Airways Ltd. is set to buy up to 20 percent of
Malaysian Airline System Bhd., the country's national
carrier, at between 6.30 ringgit ($1.66) and 7 ringgit a
share, the Malaysian Business Times reported, citing
unidentified sources.

At 7 ringgit, Qantas, which would bring into the
partnership its OneWorld alliance, would have to cough up
about 1 billion ringgit ($263 million) for its stake. The
move would see foreign shareholdings in the carrier rise to
36.57 percent from a current 16.6 percent, which is still
below the 45 percent limit approved by the government last
week, the report said.  On July 19, Naluri Bhd. denied
reports it planned to sell part of its stake in Malaysian
Airline to Qantas.  (Bloomberg  31-July-2000)


ASIASEC: SEC readies charges re BWR
LARRGO SECURITIES: SEC readies charges re BWR
PCCI SECURITIES: SEC readies charges re BWR
PNB SECURITIES: SEC readies charges re BWR
SECURITIES 2000: SEC readies charges re BWR
WEALTH SECURITIES: SEC readies charges re BWR
The Securities and Exchange Commission (SEC) is readying
administrative charges against PNB Securities Inc. and
other brokerage houses that were found to have played a
role in jacking up the share price of property and gaming
firm BW Resources Corp.

The official refused to name the broker firms found to have
violated the know-your-customer rule. Apart from PNB
Securities, other brokerage houses recommended to the
Department of Justice for the filing of appropriate charges
include AT De Castro Securities Corp., Securities 2000, PNB
Securities, Asiasec, Mandarin Securities, PCCI Securities
Corp., Wealth Securities and Larrgo Securities.

The same SEC official said that aside from the illegal
done-thru transactions it had allegedly committed, PNB was
also found to have violated the rules on short selling. The
other broker firms, on the other hand, had breached the
"know-your-customer rule."

The official added that the commission en banc, the SEC's
highest decision-making body, had directed the PED to give
the erring brokers 15 days to submit their case to a formal
investigation or pay the compromise penalty of P50,000 for
the violations committed.

On July 17, the SEC filed before the Department of Justice
its report recommending charges against 39 individuals,
eight broker firms, and two corporations found to have
allegedly engaged in fraudulent acts in connection with the
trading of shares of BW.  Leading the pack of individuals
charged of manipulating the shares of BW are presidential
friend and BW controlling shareholder Dante Tan, Philippine
Stock Exchange chair emeritus Eduardo Lim Sr., Eduardo Lim
Jr., and Tan associates Jimmy Juan and Ramon Lee.

The report of the SEC's investigating team said that at
least six violations had been committed including wash
sales, matched orders, marking the close or painting the
tape, the abuse of the use of private placements, "EQ
trade," and done-thru transactions.  A wash sale is a
transaction that involves no change in beneficial ownership
while marking the tape refers to trades executed at or near
the closing time of trading for the purpose of pegging the
closing price of BW shares for the day.

EQ trades, on the other hand, refers to the transfer of
shares to one broker, who in turn will distribute such to
numerous clients to create a semblance of active trading.
Tan was charged of engaging in manipulative device
including wash sales, matched orders, private placement and
EQ trade allegedly as part of his plan to push up the share
prices of BW.

The report said AT De Castro Securities, Securities 2000
and PCCI Securities executed trades for the account of Tan,
fully aware that such trades are wash sales.  The team also
found Tan and Eduardo Lim Jr., Jimmy Juan and Hermogenes
Laddaran, Jacob Assad, Mario Juan, Dante Tan, Ramon Lee,
Lucio Co, Lilia Gonzales, Christine Jao, and Mary Ann Yu
effecting matched orders which are considered as a
manipulative device under Section 26 of the Revised
Securities Act.

The report showed that AT De Castro Securities and Larrgo
Securities, on various dates from April 23 to Nov. 10,
executed a series of numerous trades in violation of
Section 27 of the RSA. The investigating team noted that
this trading practice sometimes called the marking the
close is a variation of the technique known as painting the

Painting the tape involves the buying activity among
accounts at increasingly higher prices or causing
fictitious reports to appear on the ticker tape.  The
report also said Tan, PCCI Securities, Wealth Securities,
and Janet Que allegedly conspired with one another,
employed and used a private placement scheme to effectively
lock up 15 to 45 percent of BW shares during the period
that the private placement is in effect. This, according to
the SEC, had squeezed the market float of the BW shares.

"With the use of the private placement, they violated the
provisions of RSA Section 26-to effect either alone or with
one or more other persons transactions for the purchase and
sale of any securities registered in the exchange for the
purpose of pegging or stabilizing the price of such
security," the report said.  (Manila Times  31-July-2000)

BELLE CORP: To sell non-core assets
Belle Corp., suffering from some P9 billion in debts and a
soft property market, is selling its non-productive assets
including a stake in US-based firm MagiNet in line with its
financial rehabilitation.

In an exclusive interview, Eric O. Recto, chief financial
officer of Belle Corp., said talks with its creditor banks
were under way for the restructuring of its maturing loans.

"The board is focused on cleaning up the balance sheet of
the company and in line with that, we certainly will want
to identify and get rid of non-productive assets," Recto

Belle, according to Recto, is negotiating with prospective
buyers for its stake in MagiNet, a US-based company engaged
in the pay-per-view business.  "MagiNet is one of the
company's non-core businesses," Recto said.

Belle has total loans payable of P7.318 billion as of end-
1999, P5billion of which represents floating rate notes due
on May 2002. The remaining loans were incurred from banks
such as Allied Bank, Banco de Oro, Bank of the Philippine
Islands (BPI), Far East Bank and Trust Co., Equitable-PCI,
International Exchange Bank, Metropolitan Bank and Trust
Co. (Metrobank), Rizal Commercial Banking Corp. (RCBC), and
Hong Kong Shanghai Rank Co. (HSBC).  The loans bear
interests ranging from 12.5 percent to 16.4 percent yearly.
(Philippine Daily Inquirer  July 27, 2000)

CAPITOL WIRELESS: Seeks debt relief
Capitol Wireless Inc. last Thursday filed with the
Securities and Exchange Commission a petition for
suspension of payments and approval of a restructuring
agreement with creditors.

The SEC declined to release the petition filed by Capwire
to the media, making it difficult to ascertain the
company's liabilities and details of the requested debt
relief.  It was confirmed, however, that the petition had
been filed by the law office where Sen. Raul Roco was a
partner and that the regulatory body had decided not to
take any further action on the petition which, together
with similar cases filed after June 30, would be
transferred to the regular courts once the new Securities
law takes effect on Aug. 8.

Roco oversaw the passage in the Senate of the law, which
provides for the transfer of the SEC's jurisdiction over
intra-corporate disputes and cases of distressed companies
to the regular courts.  The SEC's refusal to act on the
petition seemed highly unusual since the government body
typically acts on such petitions a day or two after the

Just a day before, it had favorably acted on separate
suspension of payments petitions filed in the third week of
July by ailing investment house Corporate Investments
Philippines Inc. and the latter's leasing arm.  Based on
earlier reports, the international gateway operator had
gotten 95 percent of its creditor-banks to agree to the
rehabilitation plan involving a restructuring of the firm's
P938 million in debts.

Capwire was set to conclude a debt restructuring
arrangement with the banks late last month but additional
demands by the state-owned Development Bank of the
Philippines delayed the agreement. The government bank
wanted to have additional mortgage trust indentures.

The telecom firm's biggest creditors included DBP, Land
Bank of the Philippines and Far East Bank and Trust Co.,
which has since been absorbed by Bank of the Philippine
Islands.  The creditor-banks also reportedly wanted a clear
guarantee of the debts from Capwire's parent, Republic
Telecommunications Inc., until the end of the debt
restructuring schedule. Retelco's suretyship commitment,
however, was initially only for a one-year period.

Under the terms and conditions agreed upon by Capwire and
the banks last February, the P938 million in debts would be
paid in two tranches. The first amounting to P703.5 million
would be paid over an eight-year period with a two-year
grace period on principal payments. The second amounting to
P234.5 million was to be paid over nine years with a three-
year grace period on the principal.

Capwire posted a net loss of P13 million as of end-1999.
(Philippine Daily Inquirer  31-July-2000)

PETRON CHEMICAL CORP.: Closes Bataan plant
After months of struggling with high raw material costs and
a supply glut, Petrochemical Corp. of Asia Pacific
(Petrocorp), the country's first polypropylene manufacturer
has finally been forced to shut down its Bataan plant.

Owned by businessman Antonio Garcia, Petrocorp operated for
only a little over a year, producing polymer, polypropylene
(PP) from imported monomer, propylene. Polypropylene, like
other polymers such as polyethylene and polyvinyl, is used
in the manufacture of plastic products ranging from
packaging materials to furniture and to various consumer

Industry sources said Petrocorp has been suffering under
the weight of a persistent slump in the market aggravated
by accumulating oversupply and high cost of imported
monomers.  According to the source, Petrocorp has an
initial rated capacity to produce 160,000 metric tons of
polypropylene a year.

Its only competitor, the Gokongwei-owned JG Summit
Petrochemical Corp., has an annual rated capacity of
180,000 metric tons.  The combined capacity of Petrocorp
and JG Summit, the source said, is more than enough to
supply the annual domestic requirement estimated at 225,000
metric tons.

According to the source, the expected demand did not
materialize, leaving the country's petrochemical companies
with piling up inventories.  This means that even with the
closure of the Petrocorp plant, the market will not feel
any tightening in supply because there are enough stocks to
meet demand until the company reopens its plant in October.

The domestic demand for PP is expected to reach 435,000
metric tons by 2005. In the meantime, however, the weak
demand will continue to affect domestic polymer production
especially with increasing cost of monomers. The source
said the petrochemical sector was one of the worst affected
by the crisis as the operating players (including JG Summit
and Mabuhay Vinyl) continue to suffer losses.

In 1998, the combined losses of Petrocorp and JG Summit
reached an estimated P500 million. The losses were caused
not only by weak demand but by the higher cost of producing
locally as against the flood of cheap imports with barely
any tariff protection.

In the latest tariff adjustment, rates on petrochemicals
were raised to 15 percent from 10 percent effective last
July but the industry has been clamoring for an upward
adjustment of another 10 percentage points to 25 percent.
(Philippine Star  31-July-2000)

PETRON CHEMICAL CORP.: Spends P6B on clean-air compliance
Petron needs to spend P6 billion at its refineries and
depots to eliminate pollutants coming from fossil fuel
complying with the Clean Air Act.

Petron vice president Joey K. Campos said Petron will
comply with the act drawing funds through local and foreign
loans.  "This is not the time to burden the public with
price increases for compliance with the Clean Air Act."

Some P20 million will be lost when Petron reduces the
sulfur content on its diesel product from one percent to
0.05 percent.  Petron reported a  P1.01 billion loss during
the first six months mainly due to rise in crude prices and
the devaluation of the peso to the dollar.  (Philippine
Star  29-July-2000)


METALOCK: Chair blames predecessor for past losses
Metalock executive chairman Kuah Kok Kim has hit back at
predecessor Kurt Lindblad, who aims to oust him from the
marine engineering company's board at its annual general
meeting on Aug 8., saying Lindblad is to blame for the
company's recent losses.

In an open letter to the company's 1,338 shareholders, Mr
Kuah puts most of the blame for the company's woes -
including its accumulated losses of $8.29 million over the
past three years -on Mr Lindblad, who resigned from the
board last September.

Mr Lindblad, who set up the marine engineering firm more
than 40 years ago and is still the single largest
shareholder with a 26.12 per cent stake, wants to remove Mr
Kuah as a director and appoint himself and three others -
Leong Cheng Chit, Stellan Bernsro and Jan G Bernander --
to the board instead.

Mr Kuah, who has a deemed interest of 22.02 per cent in
Metalock, alleges in his letter: "To properly understand
these losses, it will be necessary to look at the losses
and problems we faced over the past three years. These
losses were caused mainly by problems and losses inherited
from the past management, which we have had to deal with."

He cites as an example the provision of $3.12 million for
stocks and stock write-offs relating to cylinder liners
bought from South Korea by the previous management -despite
having a foundry in Ipoh to make such products.

"However, close to $3 million of cylinder liners were
purchased from Korea in 1995 for reasons which are unknown
to me," Mr Kuah says.

He also points out that hardly any of the liners were sold
until he took control of the company in late 1997. While
half have been sold since, substantial provisions have had
to be made for the rest, which are older, he says. Mr Kuah
also refers to a $3.12 million provision to settle
litigation started under Mr Lindblad's management and $1
million provision for doubtful and bad debts.

The letter also says almost $800,000 in fixed assets,
including a mini-submarine bought by Mr Lindblad, had to be
written off, and two loss-making subsidiaries closed at a
cost of $385,000.  Mr Kuah says the company also suffered
net foreign-exchange losses of almost $600,000, including a
loss of $1.22 million for the financial year ended March
31, 1998.

These losses totalled $9.57 million, but there was a write-
back of $990,000 for a government grant received by
Metalock's Portuguese subsidiary and $288,000 from a
debtor.  Mr Kuah highlights his management's achievements
since it took over, pointing to an improvement in the
quality of its receivables, a streamlining exercise which
will result in annual savings of $1 million and an enlarged
earnings base. He says the company has reduced its previous
heavy dependence on the marine industry -from 80 per cent
in 1997 to just 35 per cent now.

He points out that it has also made various investments,
including one in Dynamic Turbochargers Services Group of
Australia. And it is a joint-venture partner with the
Keppel Group, SembCorp Industries and Singapore Computer
System in Omix.Asia.Com, a buyer-driven portal for the
shiprepair industry to be launched in the third quarter of
this year.

Mr Kuah laments in the letter that Mr Lindblad has yet to
reveal why he wants to oust him, despite Mr Kuah's lawyers
having written to the former chairman requesting the
grounds for his action. He also points out that while Mr
Lindblad remained a director of the company for just over a
year after he resigned as chairman and managing director,
he did not attend any board meetings.

"In the circumstances, I question his (Mr Lindblad's)
sincerity in offering his services to the company and his
motives for the resolutions," Mr Kuah says.  (Business
Times  27-July-2000)


THAI AIRWAYS INT'L: Stake sale to raise capital
Ailing Thai Airways International (THAI), whose shares have
declined almost a third this year, expects to raise about
US$400 million from the sale of a 23 percent stake.

THAI also will choose its new president to replace retiring
Thamnoon Wanglee by September, ahead of the long-delayed
share sale.  Asia's sixth-largest carrier, now 93 percent
government-owned, expects to raise about US$400 million
from the sale of a 23 percent stake through a public
offering and a private sale to a foreign airline.

The sale has been postponed several times this year because
of a slump in the country's stock market. The key SET index
has plunged 39 percent this year.  Attracting investors
will be a challenge as the performance of Thai Airways has
slipped in the past several years, especially relative to
Singapore Airlines, said Chatrachai Bunya-ananta, 67, who
was replaced by Wanglee, 60, seven years ago.

"Today, Thai isn't on the top ten list while Singapore is
there right at the top," said Chatrachai, now executive
chairman of PB Air. "Hopefully the new CEO will be the kind
of gentleman who can bring Thai Airways back as quickly as

Earlier, local press reported that Thamnoon was likely to
see his presidency with THAI extended, quoting sources from
the Transportation and Communication Ministry. The source
said that THAI is in a transitional period due to
privatization and therefore management continuity is
important.  (Business Day, Bloomberg  31-July-2000)

THAI COPPER: Debt restructure plan likely this year
PM Group expects to conclude this year the restructuring of
more than Bt10 billion in debt owed by Thai Copper
Industries -- the only company under its umbrella in
financial difficulties.

Once the plan is approved, the company will receive the
funds it needs to complete construction of its copper plant
in Rayong.

"Construction work on Thai Copper's plant in Rayong ceased
more than one year ago. It is 70 per cent complete," said
Prayudh Mahagitsiri, PM Group's chairman and chief

Prayudh and his backers have already invested Bt15 billion
in the project, which was one of the victims of the 1997
financial meltdown. The copper plant, the only one in
Thailand, is designed to have a total production capacity
of 165,000 tonnes.  He said negotiations with creditors to
restructure Thai Copper's debts were proceeding well. The
talks, supervised by the Corporate Debt Restructuring
Advisory Committee, are expected to be finished within the
year. He declined to furnish any more details of the
restructuring plan.

Thai Copper, the debts of which account for 30 per cent of
the group's total liabilities, is the only subsidiary
facing difficulties. The total debt, exceeding Bt10
billion, is owed to local banks.  The baht's depreciation
is the major cause of our financial troubles," said

The other founding shareholders of Thai Copper Industries
are Krung Thai Bank, Bangkok Bank, Thai Military Bank and
the Industrial Finance Corporation of Thailand.
Apart from Thai Copper, PM Group also comprises three other
companies -- stainless steel producer Thainox, Thai Film
Industries and Quality Coffee Products, a producer of

"The other three units are doing very well, especially the
Nescaf‚ business," said Prayudh.

Thainox Steel's operations have improved significantly
since France's Usinor-Sacilor acquired a majority stake,
enabling Thainox to service its debts on schedule.
Prayudh said Usinor was a state enterprise with financial
and technical strengths. Europe's second largest steel
maker, it spent US$40 million (Bt1.64 billion) to raise its
equity in Thainox from less than 50 per cent to 70 per

After recapitalisation of Bt1.6 billion, PM Group saw its
ownership diluted from 31.5 per cent to just 5 per cent. In
spite of this Prayudh retained his position as chairman of
Thainox.  Other shareholders in Thainox, controlling a
combined 25 per cent of its equity, are Nippon Steel,
Kawazaki Steel, Sumitomo Metal Industries, Nippon Yakin
Kogyo, Nisshin Steel and Nippon Metal Industries.  (The
Nation  31-July-2000)

THAI LUBE BASE: PTT provides cash rescue
The Petroleum Authority of Thailand (PTT) has come to the
rescue of Thai Lube Base by lending it US$14 million
(Bt572.6 million) to help the company restart its local

Thai Lube Base expects to resume operations by the middle
of next month after almost two months of idleness. PTT is
one of Thai Lube Base's major shareholders. According to a
company source, the money will be used to import 80,000
tones of residue crude oil, enough to sustain operations
for about 40 days. The cargo is expected to arrive from
August 7-9.

Operations at the base oil plant, which has a capacity of
300 million liters a year, were halted early last month
because of a delay in debt-restructuring negotiations. Thai
Lube Base is trying to restructure $191 million in debt.

"PTT is the shareholder who has continuously provided
support for us despite a difficult period in our business,"
a source said. "If the restructuring plan has further
delays in getting approval from creditors and the crude oil
raw material runs out, we have no other way out but seeking
more financial assistance from PTT."

Thai Lube Base is one of the country's two producers of
base oil, an important ingredient for the lubricant oil
industry. It is also an important supplier for PTT. After
Thai Lube Base stopped its operations last month, PTT was
forced to import more than 10 per cent of its base

The source did not say whether PTT was buying base oil from
the other domestic producer, Thai Petrochemical Industry
Plc. The combined capacity of the two factories exceeds
domestic demand.  The final vote on Thai Lube Base's debt
restructuring has been postponed another week until August
11, the source said. The creditor steering committee, which
holds about 60 per cent of the total debt, has agreed in
principle to the restructuring plan.

The 14 creditors are led by Industrial Bank of Japan, Tokyo
Mitsubishi Bank, Dresdner Bank, Chase Manhattan Bank, Krung
Thai Bank, Siam Commercial Bank, and Thai Farmers Bank.

The debt-restructuring plan has three main components -
capital injection from shareholders, debt-to-equity
conversion, and the rescheduling of the remaining debt by
10 years. Once the plan is approved, the company expects
the total debt to be reduced to $55 million.

PTT owns 30 per cent of Thai Lube Base, while Thai Oil owns
38 percent. However, PTT would become the largest
shareholder after the debt restructuring. Others
shareholders include Nippon Mitsubishi Oil (22 per cent),
BP Oil (5 per cent), and minority shareholders (5 per
cent).   (The Nation  28-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
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Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, James Philip P.
Jover and Maria Vyrna Ni¤eza, Editors.

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

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