---

     T R O U B L E D   C O M P A N Y   R E P O R T E R

                            A S I A   P A C I F I C

             Thursday, August 3, 2000, Vol. 3, No. 150

                                    Headlines


* A U S T R A L I A *

CASELLA GROUP: Five of its companies tote $3.7M in debt
ECORP: Cashflow snags on $4M shortfall
LIBERTYONE: CFO Jack Surdoval resigns


* C H I N A  &  H O N G  K O N G *

APPLEDAILY.COM.HK: Next Media to buy lossmaker
CHINESE BOOKS CYBERSTORE: Book closes on online bookseller
GUANDONG INT'L TRUST: Gitic stakes sold at discounts
HKCYBER.COM: Share value drops
NETEASE.COM: Posts Q2 loss
ZHENGZHOU BAIWEN CO.: On brink of bankruptcy


* I N D O N E S I A *

PT CHANDRA ASRI PETROCHEMICAL CENTER: IBRA to restructure
PT DAVOMAS ABADIA: Court grants payment suspension
PT INDOFOOD SUKSES MAKMUR: Repays US$240M in debts
PT PERUSAHAAN DAGANG: Asks for payment suspension
PT TEXMACO PERKASA ENGINEERING: Declares Rp674B loss


* J A P A N *

AKAI ELECTRIC CO.: Capital deficit in audited '99 rpt
AKAI ELECTRIC CO.: Regulators reject financial report


* K O R E A *

DAEWOO GROUP: Creditors, KAMCO bicker over CP sale
DAEWOO CORP.: Creditor banks moving to sue KEIC
HYUNDAI ENG.& CONST.: Secures loans for paying debts
HYUNDAI GROUP: Gov't issues ultimatums for splitting units
HYUNDAI GROUP: Creditors threated to pull HEC credit line
HYUNDAI INVEST.TRUST & MGMT.: Subject of probe
HYUNDAI INVEST.TRUST & SECS.: Subject of probe
YEUNGNAM MERCHANT BANKING: Suspended,to get public funds


* M A L A Y S I A *

AZMAN HASHIM SDN: Owner sells stake for debt paydown
THE PEOPLE'S INSUR.CO.: Denies rumors of fold-up


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

NATIONAL STEEL CORP.: Given till Aug.16 to answer claims
PHILIPPINE AIRLINES: Argues it could face red again


* T H A I L A N D *

BANGKOK EXPRESSWAY: Revives domestic debentures plan
MUTUAL FUND: Posts Q2 loss
OCEAN SASAKI GLASS CO.: Restructures Bt231M in debt
SIAM CITY BANK: Bt100B loan to be written off
SINO-THAI ENG.& CONST.: Completes rehab plan
SUB ANAN FUND: Posts annual loss
THAI PETROCHEM.INDUSTRY: Creditors ire receiver


=================
A U S T R A L I A
=================

CASELLA GROUP: Five of its companies tote $3.7M in debt
-------------------------------------------------------
Some five Casella companies with debts of $ 3.7 million
will be  eyed for bankruptcy by Commonwealth Bank  with the
appointment of  Mr. Jeff Herbert (a partner of PPB Ashton
Read) overseeing the  process together with Mr. Max
Prentice (a partner in Prentice Parbery & Barilla).

The Australian Taxation Office is pursuing the Casella
companies like Terrace Road, Selec, Garon, Gracewood and
Edgedale. Recently Mr Casella claimed liquidator Mr Herbert
had a conflict of interest because he was also a liquidator
and government-appointed supervisor of Global Finance.

In evidence before the Gunning inquiry into Western
Australia's finance broking crisis in June, Mr Herbert
claimed Mr Casella had been advanced funds from Global to
prop up other loans which were in default, and to meet
overdue interest payments.


Mr Herbert said he would avoid any potential conflicts of
interest by appointing an independent party to adjudicate
on any claims by Global or Global investors against the
Casella companies. (Australian Financial Review  01-August-
2000)

ECORP: Cashflow snags on $4M shortfall
--------------------------------------
Kerry Packer's majority-owned online business ecorp has
reported a $4.04 million deficit in net operating cashflows
for the year on total receipts of $55.8 million, according
to its quarterly cashflow report.

But the bulk of the deficit came in the final quarter, when
a deficit of $3.57 million was recorded and receipts of
$11.4 million obtained.  However, the last quarter was
devoid of receipts from Sharetrade, as ecorp reduced its
holding to 50 per cent as part of a deal to joint-venture
with the United States online broker Charles Schwab.

A spokesman said ecorp also had higher professional fees in
the quarter (it was then seeking a merger with some Cable &
Wireless Optus assets) and extra invoices were received
from the relaunch of the Ticketek website in February. The
company revealed it had a consolidated cash position of
$96.4 million, expanding to $104.4 million if cash held by
its associated entities was included.

ecorp chairman Daniel Petre said that meant ecorp was well
placed to fund itself to a cashflow-positive position and
make new investments without raising extra funds. "Our
significant cash reserves put us in a good position to
continue to grow our business," he said.

The company said it had invested $29.5 million in the year
to June 30 in its associated companies, including buying a
25 percent stake in Wizard Financial Services and forming a
joint venture in the online recruitment business
Monster.com.
That figure included contributions to ecorp's other joint-
venture businesses, ninemsn, online auction business eBay
and online broking company Sharetrade.

Full results will be released on August 23. ecorp closed 10
cents lower at $2.55.  (The Age  01-August-2000)

LIBERTYONE: CFO Jack Surdoval resigns
-------------------------------------
Internet media company LibertyOne said its chief financial
officer Jack Surdoval has resigned, which follows an
announcement last week that the group's managing director,
Graham Bristow, was stepping down.

Surdoval was appointed to the group last November to
oversee its proposed capital raising via a listing on the
Nasdaq national market in the US.

"In light of LibertyOne's recent decision to postpone its
Nasdaq listing, Mr Surdoval has decided to pursue other
business interests," the company said yesterday.  He will
stay with the group in the short term to assist it with its
reorganisation, LibertyOne said.  (Fairfax I.T. 01-August-
2000)


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

APPLEDAILY.COM.HK: Next Media to buy lossmaker
----------------------------------------------
Shareholders of Next Media, a Hong Kong newspaper and
Internet publisher, voted to purchase Apple Daily Online,
the Web site of the Apple Daily newspaper, the South China
Morning Post reported, citing Next's Deputy Chief Executive
Otto Chan.

The transaction will enable Next to publish content from
Apple Daily -- Hong Kong's No. 2 newspaper, which is 99.8
percent owned by Next chairman Jimmy Lai -- on its
appledaily.com website, the paper said.  Chan declined to
say when Apple Daily Online, which has lost money for the
past three years, will become profitable, although he said
the acquisition will help produce greater profitability for
Next.

Last month Lai said next would pay $500 million ($64
million) in stock for the Web site. to view the South China
Morning Post Web site.  (Bloomberg  01-August-2000)

CHINESE BOOKS CYBERSTORE: Book closes on online bookseller
----------------------------------------------------------
Chinese Books Cyberstore (CBC), the online retailer billed
as Hong Kong's answer to Amazon.com, is going into
voluntary liquidation.

The company, which claimed to be the biggest Chinese-
language online bookseller with more than 200,000 titles,
took the decision yesterday after failing to secure further
funding from shareholders.  Its demise may mark the start
of a period of consolidation for Hong Kong's Internet
sector, which has been shaken by the worldwide slump in
technology stocks.

CBC's board made the decision because of its "inability to
continue as a going concern", the company's parent, Hong
Kong-based venture capital firm ITVentures, said.
ITVentures said it had made several attempts in the past
month to put forward recapitalisation proposals that would
strengthen CBC's capital base and meet its financial
obligations.

Liquidation was "the only option" after two out of 15
shareholders rejected a last attempt to save the company on
July 21, it said. The company is believed to have about 100
employees.  Launched 3.5 years ago, CBC was one of Hong
Kong's few Internet success stories in revenue generation.
Its core business was selling books, but it had branched
out into selling music and video discs, Chinese comic
books, and Chinese arts and crafts.

In March, it launched two celebrity Web sites focused on
Canto-pop star Ekin Cheng and actress Shu Qi.  Nasdaq-
listed Australian Internet company LibertyOne acquired a 25
per cent stake in the company last September. Former
LibertyOne chief executive Warren Lee said of CBC at the
time: "With a business model not unlike the one that has
been so successful for Amazon, we're expecting . . . some
pretty phenomenal growth over the next few years."

CBC recorded revenue of HK$20 million last year, an
eightfold increase on the previous year, and planned to
list on the Growth Enterprise Market (GEM) in the first
half of this year.  Problems surfaced in recent months as
the listing failed to materialise amid a slump on the GEM.
Chief executive Philip Leung left in early June, followed
by chief financial officer Anna Tham. Neither had been
replaced.

"I think it's fair to say we can expect to see more of
these liquidations," Salomon Smith Barney vice-president of
regional Internet research David Moy said.  "Until the
capital markets pick up, it's going to be tough for many of
these firms to continue burning cash indefinitely."

Many start-ups had sprung up in Hong Kong at the start of
the year when the markets were strong, Mr Moy said.  "Now
they are going to have a hard time finding capital - they
either have to merge or go out of business."

However, the fundamental Internet market remained strong,
he said.  "I've warned investors many times before that we
are going to see a lot of dotcom crashes," said
GartnerGroup Asia-Pacific research director and Internet
analyst Joe Sweeney. "I've seen so many flawed business
plans and there aren't many solid, sustainable business
models around."  (South China Morning Post  02-August-2000)

GUANDONG INT'L TRUST: Gitic stakes sold at discounts
----------------------------------------------------
The liquidators of Guangdong International Trust &
Investment
Corp., or Gitic, have completed the first auction of the
bankrupt firm's stock holdings, selling stakes in two
listed companies at a discount, an official involved in the
deal said.

Gitic's shares in Guangdong Electric Power Development Co.
and Guangdong Macro Corp. were sold Friday, said the
official, who sits on Gitic's liquidating committee.
Gitic's stake in a third listed firm will be auctioned
today said the official, who declined to give a full name.

Once one of the biggest international borrowers in China,
Gitic was declared bankrupt in January 1999 with $4.7
billion in debt. Its closure jolted the region's lenders,
many of whom are still trying to recover their claims
against the government-owned firm.  The current auctions
represent another small step in the effort to repay those
creditors. However it also shows that Gitic is getting less
than face value for some of its holdings.

Gitic's 1.6% stake in Guangdong Electric and its 0.9% stake
in Guangdong Macro, a maker of water heaters, were both
sold at a discount to their net asset value, bringing in 75
million yuan ($9.1 million), according to state-run
newspaper reports.
Liquidators will sell Gitic's stake in Hubei Xingfu
Industry Co. today, the official said.  (Asian Wall Street
Journal 01-August 2000)

HKCYBER.COM: Share value drops
------------------------------
Newly listed HKCyber.com (Holdings) has become the latest
Growth Enterprise Market (GEM) company to see its shares
fall below issue price on its Hong Kong debut.

HKCyber.com's miserable debut meant 34, or 82.92 per cent,
of the GEM's 41 companies were trading below issue prices
at Monday's market close.  Shares in HKCyber.com, a
Chinese-language Internet news portal operator, opened at
their high of 70 cents against an issue price of 68 cents.

Sell orders rushed in soon afterwards, driving HKCyber.com
down as much as 20.58 per cent from its issue price to an
intraday low of 54 cents.  The counter later strengthened
to finish at 62 cents with 140.27 million shares changing
hands.

The firm raised net proceeds of about HK$158 million
through the initial public offering of 250 million shares.
Friday's 4.66 percent Nasdaq Stock Market fall coupled with
an announcement by the GEM's biggest stock, Tom.com, that
it was sacking 80 staff in a bid to maintain its
competitiveness, were the key factors contributing to
another bad day on the GEM.

The GEM Index fell to 456.77 points, a slip of 4.17 points
or 0.9 per cent. The poor investment in the GEM board has
not kept candidates from going ahead with their listings.
Hong Kong Exchanges and Clearing said that on July 31, 20
candidates for the market were under review, while a
further 16 applicants had received exchange approval for
listing plans.

System integrator Epro is scheduled to start trading on
Tuesday, while Shanghai Fudan University-backed H-share
Shanghai Fudan Microelectronics will commence trading on
Friday.  Speaking after HKCyber.com's listing ceremony, GEM
listing committee member William Lo Wing-yan said other
firms agreed with Tom.com's move to trim staff as the
company was altering strategy and boosting competitiveness.

He expected layoff, merger and acquisition activity among
Internet companies, especially content providers, would
continue in the near future.  HKCyber.com chairman Wong
Yuk-man said the Internet sector was undergoing a
consolidation period.

"It's hard to say how long the consolidation period will
last," Mr Wong said. "I think only eight to 10 [content
providers] can survive till next year."   (South China
Morning Post  01-August, 2000)

NETEASE.COM: Posts Q2 loss
--------------------------
Losses at mainland portal Netease.com widened to US$3.3M in
the second quarter after a previous quarter's US$2.9M loss.

ZHENGZHOU BAIWEN CO.: On brink of bankruptcy
--------------------------------------------
As Lu Yide takes a break between meetings with a bankrupt
subsidiary and angry securities regulators, one of his
assistants nudges him and delivers some perplexing news:
His company's stock is surging.  Slumped in the corner seat
at a coffee shop, the executive shakes his head and
mutters, "There's a lot of confusion in the market."

That's quite an understatement. Mr. Lu's Zhengzhou Baiwen
Co., a government-controlled department-store operator and
household-goods wholesaler, is on the brink of failure. Its
debts are almost double the value of its assets, creditors
are trying to liquidate it, and Baiwen's once vaunted
distribution network is shrinking by the day.

Late last year, Baiwen fell apart. Unable to pay off its
loans, it defaulted on almost $250 million in debt owed to
the Construction Bank, which then transferred Baiwen's debt
to Cinda Asset Management Co. Cinda combed through Baiwen's
accounts, found little of value and filed a bankruptcy
claim against it in a local court in March, the first time
such action has been taken against a company listed on
China's exchanges.

These days, Baiwen's flagship investment, its giant
department store in downtown Zhengzhou, reflects the
company's decline. A rambling series of dank rooms, it is
empty of customers on a recent afternoon, even as dozens of
sales clerks play cards, drink tea and chat. Instead of a
computer, an abacus -- still the company's main accounting
tool -- gathers dust on a checkout counter.

Meanwhile, Mr. Lu has been spending his days crisscrossing
China to close down parts of the company, meet with
creditors and petition his government backers to fund a
bailout. Baiwen, Mr. Lu says, "is a lesson in the problems
facing all of China."

That may be, but investors continue to be mostly in the
dark about the company, whose shares were up 31% from a
month earlier and 56% from a year earlier at Friday's close
of 76 cents. Securities regulators say that with a dozen
listed companies teetering on the edge of bankruptcy, news
of Baiwen's woes could lead to a selling binge, undermining
the government's plan to bail out its uprofitable state
sector by listing even more of it on domestic stock
markets.

They have imposed a news blackout on Baiwen in the Chinese
press, even as the company's stock surges and its market
capitalization approaches $140 million.  (Asian Wall Street
Journal  01-August-2000)


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

PT CHANDRA ASRI PETROCHEMICAL CENTER: IBRA to restructure
---------------------------------------------------------
The Indonesian Bank Restructuring Agency (IBRA) said it
planned to restructure the PT Chandra Asri Petrochemical
Center (CAPC) through a merger with other petrochemical
companies.

IBRA official Amir Sambodo said CAPC had to be restructured
such as through a merger with PT Tri Polyta (JSX: TPIA/JK)
or PT Petrokimia Nusantara Interindo (PENI) to increase its
value.  BP, a merger between BP Amoco and Arco, said a
merger between CAPC and either PT Tri Ppolyta or PT PENI
could increase the price by US$ 300 million.

Amir said that under the present condition, sales of the
government's stake in CAPC would not be likely this year.

"BP offered too low price for the shares of CAPC," he was
quoted as saying by the newspaper Bisnis Indonesia.

He said BP Amoco had also suggested the integration of CAPC
and PT Trans Pacific Petrochemical Indotama (TPPI), an
olefin and aromatic project in Tuban. BP recommended that
the olefin center project of TPPI be moved to Merak to
be close to CAPC where infrastructure is better available,
he said.  The merger of PT CAPC and TPPI was possible, as
the government had a large stake in the two companies, he
added.  (Asia Pulse  01-August-2000)

PT DAVOMAS ABADIA: Court grants payment suspension
--------------------------------------------------
Jakarta Commercial Court has agreed to grant PT Davomas
Abadia temporary suspension of payments to give it time to
initiate negotiations with its creditors to restructure its
32.5 mln usd debts, presiding judge Christi Purnamiwulan
said.

Purnamiwulan said the temporary suspension of payments is
valid for 45 days, after which Davomas creditors -- by
majority vote -- will have to decide whether they will
continue negotiating for a detailed and final debt
restructuring.

Davomas' debt consists of 22.5 mln usd in commercial paper
and 10 mln in medium-term notes.  The company is currently
proposes a debt rescheduling period of up to 7 years.
(AFX News Limited  01-August-2000)

PT INDOFOOD SUKSES MAKMUR: Repays US$240M in debts
--------------------------------------------------
Publicly listed instant noodlemaker PT Indofood Sukses
Makmur said on Monday it had repaid debts amounting to
US$240 million and Rp 625.9 billion ($70 million).

Indofood's chief executive officer, Eva Riyanti Hutapea,
said in a statement that the $240 million installment was
part of a payment on a $300 million syndicated loan raised
by the company in 1995 to partly finance the acquisition of
PT Bogasari Flour Mill. The 1995 syndicated loan, she said,
comprised of BA Asia Limited, Bankers Trust Company, Chase
Manhattan Asia Limited, Fuji Bank Limited, The Bank of
Tokyo, Mitsubishi Limited and Bank Central Asia.

He said the Rp 625.9 billion was paid to service loans from
Bank Central Asia.  Eva said that with the debt repayments,
Bogasari had become a "debt free asset."  (The Jakarta Post
02-August-2000)

PT PERUSAHAAN DAGANG: Asks for payment suspension
-------------------------------------------------
PT Perusahaan Dagang Dan Industri Ometraco said it has
appealed to the Jakarta Commercial Court for a suspension
of payment on its debt, Ometraco's managing director
Djunharbey Anwar said.

Earlier, the Indonesian Bank Restructuring Agency said it
has filed a bankruptcy suit against PT Perusahaan Dagang
Dan Industri Ometraco, holding company of the Ometraco
Group, with the Commercial Court for failure to repay
matured debts worth 22.7 bln rupiah.  (AFX News Limited
01-August-2000)

PT TEXMACO PERKASA ENGINEERING: Declares Rp674B loss
----------------------------------------------------
Despite an aggressive advertising campaing, PT Texmaco
Perkasa Engineering recently reported a Rp 674.96 Billion
net loss for 1999.

According the company's financial report Texmaco Perkasa
suffered a RP 791.58 billion cumulative losses during 1998-
1999
In the meantime, the shareholders' equity has decreased to
around Rp295.75bn, reflecting a 69.53% contraction from
Rp970.71bn as of December 1998. In dollar terms, its equity
shrank by 65.56% to an equivalent of $41.65m, compared with
$120.96m a year earlier.

It's also interesting to note that shareholders' equity in
this firm -- in dollar terms -- has been shrinking by an
average of 36.59% per year during the period between
December 1996 up to December 1999.

The weakening performance of Texmaco Perkasa is clearly
shown in the reality that it suffered Rp66.22bn operating
losses in 1999, whereas a year earlier it still managed to
book Rp320.46bn operating income. Even more, it has to
report a Rp5.54bn gross loss, on a 72.29% plunge in total
revenue while the cost of goods sold only decreased by
42.55%.

The very poor condition was not only because of the huge
losses have eroded its equity rapidly, but also because its
liabilities continued to grow rapidly. Its liabilities were
totaling at Rp4,273.64bn, reflecting a 29.21% surge from
Rp3,307.48bn at end of December 1999. In dollar terms, its
liabilities even soared 46.05% to $601.92m, from $412.15m a
year before.

On top of that, Texmaco Perkasa booked Rp674.96bn net
losses in 1999, an equivalent of $95.07m. Such a huge loss
was mainly due to a Rp490.10bn non-operating expenses,
which in this regard was 14.71% higher than the previous
year's Rp427.23bn non-operating losses.  (Indonesia
Exchange News  01-August-2000)


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

AKAI ELECTRIC CO.: Capital deficit in audited '99 rpt
-----------------------------------------------------
Akai Electric Co. has finally released an audited financial
statement for the year ended in March, which showed a
capital deficit of 48,338 million yen.

The deficit was 3,613 million yen more than declared in an
unaudited statement issued in late June.  The release of
the audited report still left industry analysts wondering
whether the Japanese audio-video equipment maker will stay
afloat.

Key to its survival will be its negotiations with creditor
banks
over a rehabilitation scheme, and the commitment by the
Hong Kong-based parent company, the Grande group, to its
reconstruction, they said.  The Grande group is negotiating
with the creditor banks for agreement to turn their loans
into stocks, Akai Managing Director Koichi Enomoto told a
press conference Sunday.

But he added there are no prospects of reaching any
agreement over the reconstruction scheme by the end of this
year.
(Jiji Press English News Service  31-July-2000)

AKAI ELECTRIC CO.: Regulators reject financial report
-----------------------------------------------------
Japanese regulators Monday declined to accept a certified
financial statement from Akai Electric Co. for the year
ended March 31, the troubled audio equipment maker said.

The Kanto Local Finance Bureau rejected the statement
because the company's parent-only aggregate asset value in
the report was 1.1 billion yen lower than what was approved
by its shareholders in late June, Koichi Enomoto, Akai
managing director, told a news conference.

Akai will continue with talks with regulators Tuesday and
later on the handling of the report, Enomoto said.  Akai
believes that the bureau will accept the statement in the
end, he added.

The financial statement in question, released earlier in
the day, put Akai's excess debt on March 31 at 48,338
million yen, 3,613 million yen larger than what was
announced in the company's uncertified statement in late
June.  Akai is at present in talks with creditors on its
reconstruction. (Jiji Press English News Service  31-July-
2000)


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

DAEWOO GROUP: Creditors, KAMCO bicker over CP sale
--------------------------------------------------
Domestic banks and investment trust companies have been
bickering for some time with the Korea Asset Management
Corp. (KAMCO) over the sale of their holdings of commercial
paper issued by six units of the collapsed Daewoo Group.

The talks between KAMCO and the creditors have been stalled
as both sides are sharply divided over the issue of unpaid
interest on the debt, a creditor bank official said
yesterday.  Banks and investment trust companies demand
that the state resolution agency purchase their Daewoo CP
holdings and the unpaid interest at 80.3 percent of their
face value.

In contrast, the KAMCO insists that the unpaid interest be
excluded from its purchase of the Daewoo debt from the
creditors, the official said. Shortly after the Daewoo
Group sought a bailout from its creditors July 19 last
year, the banks and investment trust companies bought 4
trillion won worth of CP from the six Daewoo units, backed
by collateral of shares in Daewoo affiliates and real
estate which former chairman Kim Woo-choong had donated.

But the six Daewoo subsidiaries were unable to pay interest
of about 300 billion won on the CP as they were placed
under debt workout programs in late August 1999.

"The present value of the collateral is estimated at around
3.2 trillion won," a KAMCO official said. "If a compromise
is reached, the KAMCO will pay the purchase price to the
creditors on an installment basis till the end of this
year."

But the creditors are not happy with the KAMCO's position.
"KAMCO should include the unpaid interest in its purchase
of the Daewoo debt," the creditor bank official said.
"Because the government has pledged to repay Daewoo's
collateralized CP fully before any other claim is met, the
creditors are quite upset with the purchase rate of 80.3
percent itself."

With both sides unlikely to back down from their positions,
analysts said that the government should step in and broker
a deal.  When an agreement is struck on the Daewoo CP, the
banks and creditors will be required to hand over Daewoo
stocks held jointly as collateral to the state agency.
Under the weight of 89 trillion won in debts, the Daewoo
Group, the nation's second largest conglomerate, became
insolvent in late July last year, while its 12 major units
are under rehabilitation programs.  (Korea Herald  03-
August-2000)

DAEWOO CORP.: Creditor banks moving to sue KEIC
-----------------------------------------------
Six creditor banks of Daewoo Corp. are moving to take legal
action against Korea Export Insurance Corp. (KEIC) for its
failure to fulfill its obligations concerning Daewoo's
dishonored trade bills amounting to 450 billion won.

The banks discounted the trade bills, which were guaranteed
by KEIC, in early 1999 in compliance with the government's
export promotion campaign. Although the deal took the form
of trade bill discounting, the banks actually extended
loans to Daewoo taking KEIC's guarantees as collateral.

To boost exports, the government told KEIC to provide
guarantees to trade bill of exporters who lacked collateral
to offer to obtain new loans and finance their export
contracts. But in August 1999, Daewoo Corp., along with
other Daewoo Group units, was placed under a debt workout
program, which made the company unable to honor its bills
when they matured. So the six banks - Hanvit, Cho Hung,
Kookmin, Korea Development, Pusan and Hana - requested KEIC
to pay the bill in Daewoo's place.

KEIC, however, even refused to accept the banks'
application for payment, saying that Daewoo Corp. is under
a workout program. KEIC argues that if it repays the banks,
it has no choice but to exercise its legal rights on Daewoo
Corp. and Daewoo Motor which also provided payment
guarantees. But since its invocation of the legal rights
will disrupt the workout processes of the two companies, it
asserts that the best solution is for KEIC to repay the
bills in installments over several years.

The banks rejected the offer on the grounds that KEIC is
not a signatory to the workout agreement in which all
domestic financial institutions participated. According to
a bank official, the banks requested KEIC to join the
workout agreement in May this year but the corporation
refused it.

"Since KEIC has refused to take part in the covenant, it
has no right to rely on it in refusing to meet our demand,"
the official said. "We want it to pay our claims in their
entirety immediately. Otherwise, we will file suits against
KEIC." The official said the protracted dispute between the
banks and KEIC was one of the issues discussed between the
government and bank trade union leaders during the June 10
bank union strike. The official said the banks have asked
law firms to provide legal advice.

Meanwhile, claims paid by KEIC for its guarantees to short
term export bank credits surged in 1999 due to an increase
in insurance underwriting and a sharp growth in dishonored
bills in the wake of the financial crisis. (Korea Herald
31-July-2000)

HYUNDAI ENG.& CONST.: Secures loans for paying debts
----------------------------------------------------
Hyundai Engineering and Construction (KSE: 00720) will get
new loans from Nonghyup (the National Federation of
Agricultural Cooperative) to pay bills maturing Saturday.
Financial insider said Hyundai is liable to pay off 148.5
billion won (US$133 million) to subcontractors, 50 billion
won of CP to Hanvit Bank and 10 billion won of CP to H&S
Investment Bank.  (Asia Times Online  01-August-2000)

HYUNDAI GROUP: Gov't issues ultimatums for splitting units
----------------------------------------------------------
The government has ordered Hyundai, through the group's
main creditor bank Korea Exchange, to separate Hyundai
Motor
from the conglomerate, clarify management organization and
dismiss those responsible for the company's current crisis.

A financial source said Tuesday authorities demanded an
early separation of Hyundai Motor from the group as Hyundai
had failed to meet its own deadline of late June. The
government also ordered clarification of the command
structure and intensified self-rescue measures to install
professional managers to help the conglomerate overcome
liquidity problems.

Recent revelations - the management feud, Hyundai
Construction's liquidity problems and the manipulation of
Hyundai Electronics' share prices - have pulled down the
credibility of Hyundai as a whole, prompting the government
to request those responsible step down, the source said.  A
high official from the Financial Supervisory Commission
said Hyundai Securities chairman Lee Ik-chi and others
should retire as they have caused the most damage to
Hyundai's reputation.

Meanwhile, the Financial Supervisory Service started to
investigate Hyundai Securities, Hyundai Heavy Industries
and Hyundai Electronics last week for violation of stock
exchange and foreign exchange regulations.  Hyundai Heavy
Industries allegedly omitted a standing guarantee on its
auditing report. Hyundai Electronics and Hyundai Securities
are suspected of not officially registering transactions
aimed at covering losses and violating foreign exchange
laws.  (Asia Pulse 01-August-2000)

HYUNDAI GROUP: Creditors threated to pull HEC credit line
---------------------------------------------------------
Losing patience with Hyundai's slow-paced reforms, Hyundai
creditors yesterday threatened to withdraw their
outstanding credit from crisis-hit Hyundai Engineering &
Construction.

The creditors also said they will consider forcing Hyundai
to sign a new written pledge over key restructuring issues.
Earlier on Tuesday, Korea Exchange Bank, the group's main
creditor, demanded that the separation of Hyundai Motor be
completed by the end of this week, instead of the group-
proposed Aug. 31.

More specifically, Hyundai founder Chung Ju-yung was asked
to sell off 6.1 percent of his 9.1 percent shareholdings in
Hyundai Motor in line with the corporate separation law,
diverting the "personal wealth" to the cash-strapped
Hyundai Engineering & Construction. The bank also demanded
that the Chung family and their "problematic" aides, like
Hyundai Securities Chairman Lee Ik-chi, immediately step
down from management.

Setting a similar deadline of August 6 for the spin-off of
Hyundai Motor, Lee Ki-ho, senior presidential secretary for
economic affairs, asked Hyundai Engineering to cut its
liabilities, estimated at 5.5 trillion won ($4.95 billion)
by 1.5 trillion won by year's end to avert an insolvency
crisis.

According to some sources, the government and creditors are
even pressing the nation's largest conglomerate to sell off
Hyundai Electronics Industries, one of the group's most
profitable units worth about 4 to 5 trillion won, to
overcome the cash flow crisis.

"Hyundai's liquidity crisis stemming from its contractor
unit is feared to spread to Hyundai Heavy Industries,
Hyundai Motor and other healthy affiliates," said a KEB
executive. "To avert the catastrophic outcome, extremely
painful self-rescue efforts are needed."

Meanwhile, Hyundai Group's owner-managers and their top
aides remain silent in the face of intensifying pressures
for speedier restructuring and stronger self-rescue
measures from the government and creditors. None of the
Chung family and their "vassal-like" executives are coming
forward to make any clear commitment.

For instance, Hyundai Asan Chairman Chung Mong-hun, who
quit group chairmanship in May but still holds the
controlling stakes in key group companies, has been staying
in Japan for nearly a month, intentionally delaying return
to Seoul.  Some reports said that Chung Mong-hun was
scheduled to fly to Seoul last night. But Hyundai Group
spokesman Kim Sang-wook said that the former Hyundai
chairman is expected to come back home over this weekend at
the earliest.

In signs of his further disregard for the crisis-related
warnings, Mong-hun will in turn leave for North Korea
August 7, along with Hyundai founder Chung, Hyundai
Securities Chairman Lee and 500 head of cattle. Since early
July, he has been traveling to Singapore, Hong Kong and
Japan for reasons of attracting investments to the group's
North Korean business projects, but no specific
accomplishments have been reported yet.

Mong-hun himself is pressured to sell off his 13.44 percent
stake in Hyundai Merchant Marine, as well as Hyundai
Engineering's 12.6 percent stake in Hyundai Merchant Marine
to rescue the contractor unit from its insolvency crisis.
Aside from Mong-hun, other members of the Chung family and
the controversial Hyundai Securities chairman are
continuing to shun public appearance.

"Hyundai seems to employ a wait-and-see strategy in
anticipation of the imminent cabinet reshuffle," said a
Seoul-based stock-market analyst. "The Chung family has
already lost market confidence over their failure to honor
pledges to retire. But further ignorance of market forces
may bring about tragic results," he warned.

Meanwhile, a top Hyundai executive said that Hyundai
founder Chung may consider depositing 6.1 percent of his
Hyundai Motor stake with creditors, third-party figures or
the Chung family-owned welfare foundation.

"We are determined to clear all remaining hurdles to the
separation of Hyundai Motor as soon as possible," said the
executive. "To the end, the option of the elder Chung
depositing his Hyundai Motor shares with creditor as
collateral for additional loans to other Hyundai companies
and giving up relevant voting rights."

But he flatly denied that Hyundai Electronics and other
core assets would be put up for sale.  (Korea Herald  03-
August-2000)

HYUNDAI INVEST.TRUST & MGMT.: Subject of probe
HYUNDAI INVEST.TRUST & SECS.: Subject of probe
----------------------------------------------
South Korean prosecutors have launched a probe into alleged
insider trading between two financial arms of the country's
largest conglomerate the Hyundai group, reports said
yesterday.

The investigation has focused on allegations that Hyundai
Investment Trust and Securities and Hyundai Investment
Trust and Management were engaged in insider bond trading,
Yonhap news ageny said.  The two firms are suspected of
generating a profit of 200 billion won ($178 million)
through the insider trading of bonds worth five trillion
won, Yonhap said.

Prosecutors are also looking whether the alleged insider
trading was engineered by Hyundai Securities chief Lee Ik-
Chi, who has been caught in a protracted feud between
members of the group's controlling family, it said.
Hyundai Heavy Industries (HHI) last week sued Hyundai
Electronics Industries and Hyundai Securities to retrieve
$220 million it had repaid a Canadian bank on behalf of the
two companies.

HHI, one of the world's most efficient and largest
shipyards, has seen its profits syphoned off by Hyundai's
weaker units and said it was now moving to sever ties with
other group companies.
Meanwhile Yonhap said financial regulators demanded an
early separation of Hyundai Motor from its parent group.

Hyundai Motor tried to separate from the group earlier this
month, but the plan was delayed because founder Chung Ju-
Yung resisted government pressure to sell down his stake in
the auto unit controlled by a son.  South Korean banks have
extended the maturity of loans to help Hyundai Engineering
and Construction ease a credit crunch.  (Business Day 2-
August-2000)

YEUNGNAM MERCHANT BANKING: Suspended,to get public funds
--------------------------------------------------------
The Financial Supervisory Commission said yesterday it will
inject public funds into Yeungnam Merchant Banking, now in
business suspension, before making it a subsidiary of Korea
Deposit Insurance Corp. (KDIC).

The FSC said before the three-month business suspension of
the merchant bank ends late this month, it will confirm
whether its controlling shareholder has the capacity to
expand capital of the insolvent firm.  If the controlling
shareholder is unable to increase capital, the FSC will
have KDIC pump funds into the merchant bank and make it a
subsidiary.

The FSC wanted to find a buyer for the ailing merchant bank
but no investor showed up. The bank's debt has been
assessed to be 120 billion won in excess of its assets. It
will be the first time for KDIC to operate a merchant bank
as a subsidiary.  (Korea Herald  03-August-2000)


===============
M A L A Y S I A
===============

AZMAN HASHIM SDN: Owner sells stake for debt paydown
----------------------------------------------------
Banker Tan Sri Azman Hashim is the seller of a 2 per cent
block of AMMB Holdings Bhd shares that changed hands last
week, the proceeds of which will be used to settle debts.

The 10 million shares, held by his private company Azman
Hashim Sdn Bhd, were sold for RM125 million.

"The placement was made on behalf of the company by
Danaharta to repay loans," a company official told Business
Times.

The shares were registered in the name of Danaharta Urus
Sdn Bhd, the loan management subsidiary of national debt
agency Pengurusan Danaharta Nasional Bhd, according to
company filings.  The block of AMMB shares was crossed
offmarket last Monday at RM12.50 each - 8 per cent below
the stock's last traded price that day - or RM125
million in total. AMMB shares closed at RM12.50 yesterday,
down 10 sen.

Dealers said the proceeds could have gone towards repaying
non-performing loans now taken over by Danaharta from local
banks.  There is still no indication who bought the block,
but according to market talk, it could be the Employees
Provident Fund (EPF).

"There aren't many local players who can take such a
sizeable block right now," said a company dealer.

The EPF currently holds about 20 million shares in AMMB,
the banking arm of Azman's Arab-Malaysian Group. AMMB owns
Arab-Malaysian Merchant Bank and Arab-Malaysian Securities.
The 10 million AMMB shares were not the only notable
transactions last week. Large blocks of AMMB loan stocks
were also crossed offmarket, which market sources now say
may also belong to Azman.

It was speculated earlier that these debt securities were
part of a stake held by AMMB's parent company, Arab-
Malaysian Corp Bhd (Amcorp), which last year sold off a
significant portion of its interest in the company to repay
creditors.

Two weeks ago, it sold RM37.5 million of AMMB's redeemable
unsecured bonds 1997/2002 for RM35.7 million.  In February,
its shareholders approved the sale of 68.2 million AMMB
shares, or about 17 per cent of the company as part of its
plan to raise funds to repay its pressing debts.

Amcorp sought court protection from its creditors under
Section 176 of the Companies Act in the aftermath of the
Asian financial crisis two years ago.  Five million AMMB
irredeemable convertible unsecured loan stocks (ICULS)
1997/2002 were crossed offmarket last Tuesday for RM4.9
million in total. This values each ICULS at 98.7 sen, a 1.7
per cent premium to its closing price of 97 sen.

Moreover, 32.7 million ICULS worth a cumulative RM31.2
million were sold directly to buyers between June 13 and
July 18. The size of the blocks crossed varied between 2.7
million and 10.1 million ICULS.  The movement in AMMB's
ICULS has generated interest among institutional investors
who are looking for good yields on their investments.
AMMB's ICULS carry a 5 per cent coupon, which represents a
better yield than fixed deposits currently, dealers said.
(New Straits Times  01-August-2000)

THE PEOPLE'S INSUR.CO.: Denies rumors of fold-up
------------------------------------------------
The People's Insurance Co (M) Bhd (PICM) has denied rumours
that the insurance company is folding up.

"We would like to clear the air that we are nowhere near
liquidation. We are very much alive. We are very much in
business," said its newly appointed chief executive officer
Majid Mohamad.

Speaking at a press conference in Kuala Lumpur, Majid said
that people should not in any way link People's Insurance
with its parent company, Kuala Lumpur Industries Holdings
Bhd (KLIH), which is now under the special administration
of Pengurusan Danaharta Nasional Bhd. People's Insurance is
a wholly-owned subsidiary of property-based KLIH.

"Although KLIH is our holding company, and we are legally
owned by them, we are definitely separate entities.
e have our own board (of directors). We have our own
business and it is alive and kicking," Majid stressed.

He said PICM was considered a company par excellence
because its shareholders' funds stood at nearly RM100mil
while gross premium had already touched RM185mil at the end
of March this year.

"This places the company among the top 11 insurance
companies in Malaysia," he said.

Majid also said that like any other insurance companies,
PICM was under the central bank's close supervision and
scrutiny and that customers' interests were indeed
protected under the Insurance Act 1996.

"So in this part, our shareholders cannot simply siphon off
money from the company as Bank Negara had done its job as
an effective watchdog," he said.

Furthermore, he said, the company had to comply with
certain regulations to ensure that it had a good spread in
its investments.  Majid added that with shares now being
pledged to Danaharta, PICM would be more than willing to
resume talks with other parties for possible mergers or
acquisitions.

"We are open for talk with any other parties interested,
but with the 'blessing' first from the board members and
Bank Negara," he said.

He said the company also had another option and that was to
go for a KLSE listing, as it had satisfied the necessary
listing requirements.  According to Majid, PICM was
regarded as an established organisation and had been in
local motor insurance for years with a good 60% market
share.

On possible merger or acquisition, Majid felt that it was
the most preferred move for PICM.  "In terms of synergy, it
is good for PICM to team up with finance related
companies," he said.

This, he added, would further strengthen the company's aim
to contribute towards Bank Negara's vision to establish
financial supermarket through consolidation and to serve as
a one-stop financial service centre.  Majid, who joined
PICM last month, said "I came here to work and will do my
best for the company to lift its business," adding that he
intended to continue with the company's "sound policy of
providing good customer relationship and services."

An ex-Bank Negara official, Majid had served Malaysian
National Insurance (MNI) for three years before joining
PICM as a CEO.  He is also instrumental in turning around
the once beleagured Pacific and Orient (P&O) Insurance.
PICM has 2,100 agents nationwide serving some one million
customers.  (Bernama, Star Online  02-August-2000)


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

NATIONAL STEEL CORP.: Given till Aug.16 to answer claims
--------------------------------------------------------
The Securities and Exchange Commisssion (SEC) has given
National Steel Corporation until August 16 to start
addressing claims on some P 16.8 billion in debts from five
major creditor banks amidst labor demands for a seat in the
receivership committee.

Asianbank, Philippine National Bank (PNB), Allied Bank,
Land Bank of the Philippines, and Westmont Bank are aomng
the major creditors  will have to wait 30 days more after
the SEC  pronouncement to process claims on the  estimated
P 28 billion  NSC asset.

Meanwhile the NSC labor union is batting for a seat in the
receivership committee in order to protection the interest
of  workers.  The committee currently is composed of former
Petron Corporation chairman Monico Jacob, former National
Power Corporation chairman Guido Delgado, and Antonio
Arizabal. The receivership committee is tasked to safeguard
NSC's assets. (ABS/CBN News Channel  02-August-2000)

PHILIPPINE AIRLINES: Argues it could face red again
---------------------------------------------------
Flag-carrier Philippine Airlines Inc. (PAL) yesterday told
the Supreme Court that a lower court's decision to grant
higher benefits to retiring pilots may place the flag
carrier in the red anew.

In a petition for review, PAL corporate secretary Eduardo
R. Ceniza asked the High Tribunal to reverse the decisions
of both the Court of Appeals and the Labor department
ordering the payment of higher retirement pay for pilots
for the supposed violation of the effective collective
bargaining agreement (CBA).

Instead, PAL wants pilots who transferred to other airlines
-- after getting multimillion-peso training from PAL -- to
pay for the cost of training.  Mr. Ceniza also begged the
High Tribunal to revert to the CBA provision of giving
those who opt for early retirement 5,000 Philippine pesos
($112 at PhP44.808=$1) for every year of service in lieu of
the 15-day award as required by the Labor Code.

"It must be emphasized here that not even the law's mandate
to afford protection to labor can justify the acts of the
Secretary of Labor and Employment. Protection to labor has
never been intended to distribute charities at the expense
of an employer," said the PAL official.

PAL posted a PhP240.4-million ($5.4 million) profit last
December, despite its rehabilitation plan's projection of a
net loss of P656 million ($14.6 million) for the fiscal
year 1999-2000. The airline reported that operating
revenues reached PhP2.65 billion ($59 million), which is
about 2.3% better than initial estimates. Over PhP400
million ($8.9 million)in finance charges whittled down
profits.

Profit was achieved despite problems PAL faced during the
latter part of 1999. These included the suspension of air
services to Taiwan, the grant of low fares for Filipino
migrant workers flying to and from Hong Kong, as well as
the steep rise in aviation fuel costs.

The PAL corporate secretary said the firm should be allowed
to stick to the CBA to allow it continue to post growths.
PAL embarked on a refleeting program to improve its
services. It acquired new and highly sophisticated
aircrafts. At its own expense, PAL sent its pilots to train
on how to handle the new aircraft at Boeing at Seattle,
Washington.

It claims to have incurred "substantial expenses" for the
training equivalent to nearly PhP1.7 million ($38,000) per
pilot.  Expenses include: $15,000 ground school training;
$1,000 per hour of full flight simulator exercises; $10,000
hotel accommodation and airfare; and nearly $13,000 for
aircraft training.

A labor dispute broke out when Captain Albino Collantes, a
senior pilot who had reached the 20,000-flying hour limit,
was relieved from service. According to the CBA between the
firm and the union, a pilot will be considered retired
either after serving PAL for 20 years or has flown for a
maximum of 20,000 hours.  (Business World 02-August-2000)


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

BANGKOK EXPRESSWAY: Revives domestic debentures plan
----------------------------------------------------
Bangkok Expressway Plc has revived its plan to issue
domestic debentures worth 40 bln baht, the Bangkok Post
quoted a company official as saying.

The planned issue was scrapped earlier after 13 creditors
with loans totalling 40.4 bln baht, led by Bangkok Bank Plc
and Krung Thai Bank Plc, agreed to merge their loans into
one contract with the same payment period and same interest
rate, the report said.

The creditors wanted to keep Bangkok Expressway as a
customer, it added.  Once the company accomplishes the
planned bond issue to refinance the entire debt, Bangkok
Expressway will be free of the obligations to the
creditors, the official was quoted as saying.

"The company has talked with various investment bankers
including our creditors to find one that could achieve our
terms and conditions for the debenture issue," he said.
(Bangkok Post 01-August-2000)

MUTUAL FUND: Posts Q2 loss
--------------------------
Mutual Fund reported a Q2 net loss of 4.7 million baht,
compared with a net profit of 16.6 million baht for the
same period in 1999.  (Bangkok Post  01-August-2000)

OCEAN SASAKI GLASS CO.: Restructures Bt231M in debt
----------------------------------------------------
Ocean Sasaki Glass Co.Ltd (OSC) has reported to the Stock
Exchange of Thailand its debt restructuring agreement with
Thai Restructuring Mutual Funds for the outstanding debt of
231,673,430.50 Baht or USD5,651,950.

In a letter, OSC Managing Director Supawan Kanyaprasith  in
said it had agreed with the terms laid out by Thai
Restructuring Mutual Funds that:

1. On the contract execution date, the debtor pays
   17,480,236.37 Baht for the interest incurred during
   the period of September 30,1999 and July 31, 2000
   (the contract signing date).
2. The  231,673,430.50  Baht outstanding principal
   shall be paid in full, divided into 72 installments,
   and calculated in Thai Baht as at the exchange rate
   dated July 27,2000.
3. In case of debtor is able to pay the whole amount
   of principal by June 30, 2001, the debtor shall be
   entitled to receive the  5% discount out of the
   outstanding principal.
4. The debtor's remaining debts shall be discharged
   as stipulated in the Contract only when all
   obligations are completely performed to the creditor.

The impact to the Company :
The  21%  interest of default of payment, posted in
the Company's account, shall be converted to  MLR + 1
interest and outstanding interest rate, as stipulated in
the Contract, commencing July 31, 2000  upward.  (Stock
Exchange of Thailand  02-August-2000)

SIAM CITY BANK: Bt100B loan to be written off
---------------------------------------------
The Thai government probably will write off some Bt 100
billion in debt loaned by Financial Institution and
Development to Siam City Bank for rehabilitation after no
credible buyer materialized.

There was an attempt at a purchase by Newbridge Capital, a
U.S. fund, but it backed off after evaluating the 90
percent nonperforming loans of the bank and oppositon from
nationalist groups argued that selling to a foreign company
meant surrendering sovereignty.

Recommendations from the Asset Management Corporation calls
for the reduction of employees to 5,000 and the lessening
of the number of branches from the present 2000. (The
Nation 02-August-2000)

SINO-THAI ENG.& CONST.: Completes rehab plan
--------------------------------------------
Sino-Thai Engineering & Construction has completed its
rehabilitation plan and submitted it to the Bankruptcy
Court on July 24, according to a filing to the Stock
Exchange of Thailand (SET).  (The Nation  02-August-2000)

SUB ANAN FUND: Posts annual loss
--------------------------------
Sub Anan Fund reported an annual loss of 67.1 million baht,
compared with a wider net loss of 227.5 million baht in
1999. The narrower loss was due to change in investment
strategies and the improvement of an accounting record to
conform with generally accepted accounting standards.
(Bangkok Post  01-August-2000)

THAI PETROCHEM.INDUSTRY: Creditors ire  receiver
------------------------------------------------
Creditors of the beleaguered Thai Petrochemical Industry
lay claim on loans incurring the ire of the Effective
Planner Co. Ltd., official receiver, but will be discussed
further in the coming days.

According to Anthony Norman, Effective Planner Co managing
director, creditors should follow the rehabilitation plan
which is expected to be completed at the end of August.  He
said the creditors should instead cooperate with
documentation of the outstanding loans. (AFX News  31-July-
2000)


SU 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 Maria Vyrna Ni¤eza, 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.
For subscription information, contact Christopher Beard at
301/951-6400.

              *** End of Transmission ***