TCRAP_Public/000810.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                            A S I A   P A C I F I C

             Thursday, August 10, 2000, Vol. 3, No. 155


* A U S T R A L I A *

CHANNEL E: Expects to post $4.5M annual loss
EISA: Eisa chases ex-exec for cash
LIFESTYLE PROPERTY GROUP: Liquidator pessimistic
MUSEUM OF CONTEMPORARY ART: Rescue plan gets okay

* C H I N A  &  H O N G  K O N G *

ASIAINFO HOLDINGS: May post loss after new investment
DALIAN INT'L TRUST: Near repayment deal with creditors
GUANGZHOU INT'L TRUST: Near repayment deal with creditors
HONGKONG.COM CORP.: First-half loss doubles
SHENYANG SMELTERY: Court closes for polluting

* I N D O N E S I A *

PT SIERAD PRODUCE: Debt-to-shares, bonds part of rehab

* J A P A N *

HAZAMA CORP: Expects to get approval for loan waivers
JAPAN HIGHWAY PUBLIC CORP: Projects put it in debt
SEUBU DEPT.STORES: Gov't bank offers low-interest loan

* K O R E A *

HYUNDAI GROUP: Creditor bank wants managers to resign

* M A L A Y S I A *

SISTEM TELEVISYEN MALAYSIA: Overdue debt rehab plan near

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

CAPITOL WIRELESS: Creditor banks balk at debt relief plea
CAPITAL WIRELESS: To stay true to rehab plan terms
PILIPINO TELE.CORP.: Marubeni still bucks debt scheme
PILIPINO TELE.CORP.: Bondholder steering committee formed

* T H A I L A N D *

BANGKOK MASS TRANSIT SYSTEM: To pay overdue interest
SIKARIN PUBLIC COMPANY: Posts Bt13.6M Q1 net loss
THAI DURABLE TEXTILE: Signs Commercial Term Sheet with BBL
THAI ELECTRONIC: Aug.10 hearing on creditor objections


CHANNEL E: Expects to post $4.5M annual loss
Channel E, the online business and financial news and
information provider currently the subject of a $13.4
million takeover bid, said it expects to make a loss for
the year just ended.

Channel E said it is anticipating its unaudited loss for
the year ended June 30 2000 will be about $4.5 million on
revenues of about $3.8 million.  The loss is because of
restructuring, the write-down of product development costs
and additional amortisation of goodwill and depreciation
expense not recognize before.

My Money Group, a personal finance and business content
provider yesterday announced a bid for Channel E offering
about $13.4 million.  After the takeover, the two companies
would have a combined market capitalisation of about $25
million and employ about 100 people, increasing the
financial resources of both groups.

In June Channel E announced it made an unaudited loss of
$2.9 million for the 11 months ended May 31, 2000,
signalling it would not match its 1999 prospectus forecast
of a $35,000 profit. (Fairfax I.T.  09-Aug-2000)

EISA: Eisa chases ex-exec for cash
Damien Brady says he is being pursued by internet service
provider Eisa for the recovery of "around $230,000" as the
battle between the embattled executive and his former
employer degenerates into a courtroom brawl.

Eisa successfully applied to have Mr Brady's assets frozen
by the Supreme Court of NSW yesterday morning. North Sydney
police are also investigating whether Mr Brady, an
occasional motorcycle racer, allegedly spent company money
on the purchase of personal items, including a competition
motorcycle.  But Mr Brady told The Australian yesterday he
"never deliberately used any company funds for personal

He said he was being pursued by Eisa for no clear reason.
When asked if he may have spent company money
inadvertently, Mr Brady replied: "I'm having a look at it.
I'm investigating the basis of their allegations. I believe
that my ethics, both personally and professionally, are
intact," he said.

Eisa's stand-in chief executive Ian Timmis confirmed that
action had been taken in court. "The purpose of the
injunction is to seek an affidavit from him as to his

The legal stoush between Mr Brady and Eisa follows an
investigation into the former high-flying chief executive
last month that ultimately led to Mr Brady's resignation
and sparked the police investigation.  Supporters of Mr
Brady, 34, claim he is the victim of a smear campaign
following the company's doomed bid to acquire OzEmail's
retail business for $325 million.

Eisa now faces a takeover bid from Austar at 20c a share,
well off its share price peak of $2.75.  "My biggest regret
is that I feel sorry for the shareholders, subscribers and
staff of the company," Mr Brady said.

Lawyers on both sides are probing Mr Brady's activities in
motorcycle racing, trying to find out whether he spent any
company money on his personal activities.  Mr Brady said
that up to and including an Easter event at Mt Panorama,
near Bathurst, in central NSW, he funded his activities and
the sponsorship of the TopRider team, for which he raced.
He said Eisa then stepped in and took over the sponsorship.
(The Australian  08-Aug-2000)

LIFESTYLE PROPERTY GROUP: Liquidator pessimistic
The liquidator appointed to the 54 companies associated
with failed investment group Lifestyle Property Group
yesterday said there was little chance of investors
receiving any money back.

In the Victorian Supreme Court on Friday, Justice Marilyn
Warren ordered that 47 Lifestyle companies, some of which
were already in administration, be liquidated under the
control of Mr Clyde White of MG Merrick Webster. Yesterday,
Mr White said it could be months before the financial state
of the collapsed group was fully known.

But he warned that most of its properties and assets had
charges against them and there was "very little" money in
its bank accounts. The group, controlled by Mr Jon Melville
McKenney, operated a system where it set up investment unit
trusts, the investor funds of which would then be used to
purchase properties.

In court, the Australian Securities and Investments
Commission - which brought the call to liquidate the
companies - said that where investors were told unit trusts
would be limited they were often oversubscribed, and that
where properties were meant to be purchased unencumbered,
the company often took out mortgages over them.

ASIC also told the court that funds from individual unit
trusts appeared to have been "pooled", and it was unclear
where the funds had since gone. Mr White yesterday said
some investors, whom he described as "mum-and-dad
investors", stood to lose up to $880,000 each.

"Many of the investors were introduced to this scheme
through financial planners, accountants and solicitors," Mr
White said. "Some investors may certainly be investigating
whether the advice they received was appropriate."

Mr White did not rule out the prospect of investors
launching legal action against their financial advisers.
Meanwhile, Mr White has more than 140 boxes of the
Lifestyle Group's financial documents to sort through in a
bid to learn what happened to investors' funds.

"I think whatever happens, the distribution to investors
will be very small," he said.

Mr McKenney has had his passport confiscated while ASIC
continues its investigation into the group. (Australian
Financial Review  09-Aug-2000)

MUSEUM OF CONTEMPORARY ART: Rescue plan gets okay
Sydney City Council's $59 million plan to expand the Museum
of Contemporary Art will go ahead after an agreement
between the council, museum and University of Sydney was
announced today.

The three parties have signed memoranda of understanding
which puts the council a step closer to taking over control
of the museum's board from the university.  The future of
the MCA has been under a cloud since last April after the
sudden resignation of its director and reports of financial
problems, when Sydney City Council stepped in with a rescue

Since it won the State Government's conditional backing for
its plans in June, the council has been negotiating with
the university for control of the museum board, as well as
the deferral of a $600,000 MCA loan from the university.
The university is the parent body of the MCA and holds the
lease on the museum's Circular Quay building, formerly
occupied by the Maritime Services Board, until 2039.

The council wants to refurbish the MCA, build a moving
picture museum on a neighbouring site and install a tenant
to underwrite the museum's costs. (Sydney Morning Herald

C H I N A  &  H O N G  K O N G

ASIAINFO HOLDINGS: May post loss after new investment
Internet infrastructure and software provider AsiaInfo
Holdings Inc may suffer losses in the second half of this
year as the company invests in new business, Beijing-based
chief executive officer James Ding said on Tuesday.

AsiaInfo is planning to invest US$2-3 million over the next
12-months to offer application infrastructure provider
(AIP) services in China. It has also earmarked another US$5
million for the AIP venture in the year after, Ding told

"With the potential new investment in (AIP) we will
probably see a loss in the next two quarters," he said.

AsiaInfo in July reported second quarter earnings of
US$430,000 to June 30, down from US$1.25 million a year
ago, on gross revenues of US$51.09 million, up from
US$19.55 million in the second quarter of 1999. Ding
attributed the profit decline on the year to more
aggressive research and development efforts during the
quarter and said he expects his company to return to
profitability in the second half of 2001.

The high-end network solution provider had cash reserves of
US$1.5 million at the end of the second quarter, Ding said.
He also said the company was contemplating a secondary
listing on Hong Kong's Growth Enterprise Market (GEM).

"We realize (there are) lots of benefits to listing in Hong
Kong. We have multiple business lines, if there is a need
to spin-off, that's possible," he said.

The Delaware-registered company listed on the Nasdaq at an
initial public offering price of US$24 per share in March.
The counter closed at US$30- on Monday. AsiaInfo said it
was responsible for building all four of China's existing
national Internet backbones.

The company also has outstanding backbone contracts with
three Chinese telecom operators, China Telecommunications
(Group) Co, China United Telecommunications Corp and China
Network Communications Corp (China Netcom). After
AsiaInfo's number one client China Telecom reorganized last
year, local competition drove down AsiaInfo's market share
in China's high-end network solution market to 60 percent
from 100 percent, Ding said.

Ding has a 15 percent stake in AsiaInfo and Edward Tian
controls 16 percent, according to the company's initial
public offering prospectus in March.  Tian, who is China
Netcom's president and chief executive offer, is also a
founder and current board director of AsiaInfo. (Muzi News

DALIAN INT'L TRUST: Near repayment deal with creditors
GUANGZHOU INT'L TRUST: Near repayment deal with creditors
Two years after the spectacular collapse and closure of one
of China's high-profile investment companies, Guangdong
International Trust and Investment Corp (Gitic), the first
sign of a resolution to a huge overhang of unpaid debt at
the provincial government-backed companies is emerging.

On Friday, Dalian International Trust and Investment Corp
(Ditic) announced that it had reached an agreement with
international creditors and would be offering a 60 per cent
cash settlement on its outstanding loans. This was the
first encouraging sign for overseas creditors - including
prominent European, Japanese and Hong Kong banks - to the
Itics, which channelled overseas loans to local companies.

The announcement of the successful end to negotiations
involving the relatively small investment trust backed by
the Dalian municipal government came amid reports that
another Itic, the Guangzhou International Trust and
Investment Corp (Gzitic), would be offering international
creditors the option of a 40 per cent cash payment on the
principal which is owed to them.

Chinese government regulators have sought to use the serial
debt problems of the investment trusts to try to clean up
the sector. A People's Bank of China (PBOC) official said
on Tuesday that the central bank had completed a new set of
rules to regulate the investment trusts and were now
waiting for its approval by the State Council, China's

Although the regulations will not specify the numbers of
Itics that can remain open, the government may force the
closure of scores of the companies by stipulating a minimum
capital requirement.  The resolution to the Ditic affair
and the relatively high level of repayment - more than 50
cents on the dollar if accrued interest payments are
subtracted - shows a willingness on the part of Chinese
government entities to make a deal.

"The Dalian government were very keen to resolve this. They
didn't want the reputation of the city damaged," said
Richard Taylor, head of investment banking at Credit
Lyonnais Securities Asia, which advised Ditic.

The deal had the approval of Beijing, which is eager to see
a speedy resolution. Creditors have also learned to cut
their losses. Few of the restructurings of debt held by
various Itics are likely to end as well as the Dalian debt
work-out did last week.

It is, for a start, much smaller than the other Itics. The
outstanding loans amounted to only $150m in total. Gitic,
the most high-profile case of them all, had outstanding
loans of $4.7bn and promises to be much more protracted.
Louie Choi, a partner with KPMG in Guangzhou who is
overseeing Gitic's liquidation, said that Gitic creditors
would receive about 3 per cent of outstanding debts in the
first payment in October or November.

They should receive about another 20 per cent of their
debts later, he said, depending on how much money is raised
from the sale of Gitic's numerous holdings in unlisted
mainland companies. In keeping with the problems that still
dog the mainland's non-banking sector, creditors at Gitic
will only receive a small percentage of what they are owed
and have no idea when the next tranche will be forthcoming.

"It could be years," said Mr Choi. Despite the smattering
of good news last week, the long march for overseas
creditors is not over.  (Financial Times  08-Aug-2000)

HONGKONG.COM CORP.: First-half loss doubles
------------------------------------------- Corp, an Internet portal owned by Chinadotcom
Corp, said its losses doubled in the six months ended June
30 compared with the same period a year ago.

The company lost HK$9.1 million (US$1.7 million), or
HK$0.24 a share for the six months ended June 30, compared
with a loss of HK$4.3 million (US$551,000), or HK$0.13
during the first-half period a 12 months ago. Revenue in
the first half soared more than eightfold to HK$36.6
million (US$4.7 million) from HK$431,000 (US$55,200) in the
six months a year earlier, while the operating loss nearly
doubled to HK$7.3 million (US$936,000) from HK$4.3
million(US$551,000). reported a first-quarter loss of HK$11.33
million (US$1.43 million), or HK$0.0032 a share, compared
with HK$2.14 million (US$274,000), or HK$0.0006 a share
during the same period 12 months ago. Revenue was HK$16.31
million (US$2.31 million), compared with HK$173,000
(US$22,000).  The company will not pay a dividend in the
second quarter. (Bloomberg, CNET  08-Aug-2000)

Losses by two dotcoms have poured fuel on investor worries
about the profitability of the Internet sector.

Content-provider had an operating loss -
earnings before interest, tax and depreciation - of
HK$14.43 million in its second quarter to June 30., which listed on the Growth Enterprise
Market on June 1, incurred an operating loss of HK$59.29
million in its first quarter, also to June 30. The result
translated to a HK$60.23 million net loss for the period.
It had a full-year loss of HK$79.8 million last year. The
company, formed by local celebrities, develops
entertainment portals and e-commerce platforms for movie

By contrast, interest income meant had a net
profit of HK$2.26 million. The HK$20.12 million interest
was generated by the HK$1.31 billion raised in its March 9
GEM listing. provides a broad range of
Chinese-language Internet content, distribution channels
and cross-promotional services, and e-commerce.

" is yet to report a real profit," Pacific
Challenge Securities research director Ricky Tam Siu-hing
said. "The company's results are dressed up by interest

Without its interest gain, would have had a
net loss of HK$17.86 million. It would have come on top of
the HK$11.33 million net loss in the first quarter.
However, defended its interest-driven profits.

"Money is money, there is no first-class money, or second-
class money. We will not say 'no' to money," chief
executive Rudy Chan said. "Lucky we got listed in a timely

Sitting on net cash of HK$1.2 billion pledged under low-
risk short-term United States Treasury bills, Mr Chan
expected to continue to benefit from a
significant interest income as the company had no immediate
plan for substantial investments which would eat up large
portions of the cash.

Chairman Raymond Ch'ien said the company was conservative
about cost controls and would look for acquisitions to
enhance revenue growth. The company had reduced marketing
expenses from 81 per cent of revenue in the first quarter
to 66 per cent in the second. Cost reductions had lifted
gross profit margin to 46 per cent in the second quarter
compared with 43 per cent a quarter earlier. said revenue increased 77.6 times to HK$20.28
million in the past three months compared with HK$258,000
in the previous corresponding period. Mr Ch'ien said the
strong earnings growth came from a sharp rise in revenue
from advertising, sponsorships and e-commerce. The company
said it was aiming for operational profits in the near
future, but refused to give a time frame. Shares in edged up 11.6 per cent to finish at 86 HK

Marketing costs were high among contributors to's loss.  It said expenses for branding and
development of new celebrity Web sites had contributed to
its net loss. Chief executive Philip Wong Kun-to said the
company had spent about HK$20 million for marketing and
promoting its brand name in the past three months, while it
had generated only HK$8.4 million in revenue during that

In effect, 2.3 times its revenue had been used for
marketing. Mr Wong said the company aimed to be in the
black by next year, with contributions from online
advertising, entertainment sales over the Internet and
sales of celebrity merchandise. (South China Morning Post

SHENYANG SMELTERY: Court closes for polluting
The Shenyang Intermediate People 's Court today declared
bankruptcy of Shenyang Smeltery, one of the leading
pollutant makers in northeast China's Liaoning Province.

This is the first time that China shut down an ultra-large
state-owned enterprise (SOE) on account of pollution.
The factory, which discharged 42 percent of sulfur dioxide
in Shenyang, reduced its normal production in May. Its
three funnels, which gushed hazardous gas all day long,
ceased operation at the end of June.

Liu Shuying, a resident who lives near the factory for more
than 20 years, said with pleasure, "We can breeze some
fresh air from now on."

Set up in 1936, the Shenyang Smeltery was among China's top
500 SOEs in the 1980's. Its gold, silver, copper, lead and
zinc production used to lead the country at that time.
Nevertheless, the factory discharged large quantities of
waste residue, water and dust, which caused great harm to
the health of local residents.

According to the local environmental protection department,
the factory  discharged into the air 74,000 tons of sulfur,
dioxide and 66.8 tons of heavy metal each year, polluting
50 square kilometers of the city, making up one-fourth of
the total area of this major industrial in north China.
Deputies to the Shenyang City People's Congress, Liaoning
Provincial People's Congress and National People's Congress
time and again appealed for a solution to the pollution of
the plant, and the issue finally aroused great concern of
the central government.

As the factory runs at a loss and produces heavy pollution,
the State Council, China's highest governing body, approved
a decision to gradually reduce its production until its
operation was finally suspended.  When the bankruptcy was
announced at a mass rally this morning, an official
of the Shenyang Intermediate People's Court also pronounced
a proper arrangement for more than 10,000 workers serving
the factory for decades.

Meng Fanguang, a 47-year-old worker, said, "The closure of
the factory is a bad news for me and my colleagues, but
it's great for most of the citizens in Shenyang."

Shenyang, once known as one of the top ten most polluted
cities in the world several years ago, has attached great
importance to the improvement of its environment in recent
years. Last year, it was listed by the United Nations as a
pilot city for sustainable development. (Xinhua News Agency


PT SIERAD PRODUCE: Debt-to-shares, bonds part of rehab
Indonesian slaughterhouse and meat processing company PT
Sierad Produce (JSX:SIPD) has announced plans to convert
US$ 210 million of its US$ 316 million debts into shares
under its debt restructuring plan.

The company will issue convertible bonds to repay US$ 90
million of the remaining debts, company executive FX Awi
Tantra said.  The company still has US$ 16 million in
leasing debts on which negotiations are underway with the
creditors to seek a solution, Tantra was quoted as saying
by the newspaper Bisnis Indonesia.

He said that if the debt conversion went through as
planned, creditors would have 83 percent of the company's
shares reducing the shares of its founders to 17 percent.
The convertible bonds would be denominated in three
different currencies, US dollar, yen and rupiah.  (Asia
Pulse  08-Aug-2000)


HAZAMA CORP: Expects to get approval for loan waivers
According to financial industry sources, struggling
construction company Hazama Corp. is likely to obtain loan
forgiveness from its major creditor banks by the end of
this week.

The sources base their conclusion on the fact that Hazama
is close to finalizing an alliance with another general
contractor. Niigata-based mid-sized Fukuda Corp. is the
most likely candidate among several possible partners, the
sources report.

JAPAN HIGHWAY PUBLIC CORP: Projects put it in debt
The debts of two public corporations that operate major
bridge and road systems are snowballing as traffic
continues to fall far short of initial estimates, a
government inspection report warned Tuesday.

The Honshu-Shikoku Bridge Authority, which operates three
roads and bridges linking Honshu and Shikoku, is saddled
with 4.37 trillion yen in debt, but has assets of only 3.53
trillion yen, the Management and Coordination Agency said.
As of the end of March 1999, it had 837.7 billion yen in
negative net worth.

Likewise, Japan Highway Public Corp., which operates the
Aqualine expressway that runs beneath Tokyo Bay to connect
Kawasaki and Kisarazu, Chiba, has been spending 316 yen to
make 100 yen in revenue, the agency said. Traffic volume on
the Aqualine is 31 percent of what the public corporation
had estimated, the agency said.

"It has become almost impossible to secure income as
planned in the (debt) redemption program," the report says
of the Aqualine.

Pointing out that both operators are having difficulties
covering road maintenance fees, the agency called on the
Construction Ministry to offer guidance to the two
quasigovernmental bodies to improve their management and
introduce cost-cutting measures to make their routes

The report, which analyzes the management of Japan's toll
roads, has been compiled by the agency's Administrative
Inspection Bureau.  Traffic volume on 42 of the 58 toll
highways operated by Japan Highway Public Corp. has proved
to be less than the corporation's predictions, with 26 of
the highways now operating in the red, the report says.
Of the 26, 13 have seen less than half of their forecast
traffic volume, it says.

The report strongly urges the Construction Ministry, which
plans and constructs toll expressways through the
affiliated corporation, to improve the accuracy and
transparency of traffic volume prediction and necessary
investment.  In the case of the Aqualine, an average of
only 11,876 vehicles used the road each day in its first
year. That figure fell to 9,996 in 1998 and 9,651 in 1999.
The first year's figure was just 47 percent of the demand
predicted in 1997, and that fell to 35 percent in 1988 and
31 percent the following year.

In 1987, the corporation predicted daily traffic of 33,000
vehicles during the first year and 64,000 in the 20th year.
Just before its opening in 1997, the original prediction
was revised downward to 25,000 for the first year - a
figure that was also unrealistically high - and 53,000 for
the 20th year, which is considered unlikely.

The Honshu-Shikoku Bridge Authority has revised its
redemption programs and traffic volume predictions twice
since 1988, but real traffic volume has always proved much
less than predicted.  The Aqualine began operating in
December 1997, while the Honshu-Shikoku road-and-bridge
system was completed in May 1999. (Japan Times Online  09-

SEUBU DEPT.STORES: Gov't bank offers low-interest loan
Seibu Department Stores Ltd. plans to take out a 30 billion
yen loan from the governmental Development Bank of Japan to
stabilize its financial wherewithal, industry sources are

Seibu also intends to raise another 78 billion yen from
converting ownership of its main Ikebukuro, Tokyo store
into small-lot securities, for sale to investors. With the
approximate 100 billion yen from the loan and securities
issuance, Seibu plans to fund its debt-reduction plan.

Seibu expects loan contracts with the bank and securities
plans with Merrill Lynch Inc. to be concluded by the end of
this week. A majority of the acquired funds will be used to
reduce Seibu's 440 billion yen in interest-bearing debts.

Meanwhile, the company is mulling an extensive alliance
with fellow department store chain Sogo Co., which declared
insolvency and is being rehabilitated under Japan's new
corporate rehabilitation law. Such a tie-up would further
stretch Seibu's financial condition, however. Seibu also
plans to allocate 50 billion yen to write off losses from
Seiyo Kankyo Kaihatsu, a real estate developer in the
Saison group that applied for special liquidation July 18.

Economists have voiced concerns that rising interest rates
could increase Seibu's financial burden and damage the
department store chain's business performance. In response,
Seibu plans to establish a special purpose company for
purchasing the land and building of the Ikebukuro store and
to issue the securities.  That company will issue corporate
bonds with the Ikebukuro store as collateral and sell the
securities to more than one investors to raise funds.


HYUNDAI GROUP: Creditor bank wants managers to resign
Korea Exchange Bank, the main creditor bank of the Hyundai
Group, yesterday reiterated its demand that Hyundai's top
professional managers responsible for the group's liquidity
crisis step down.

"Hyundai should make good on its pledge to improve its
corporate governance structure by separating management
from ownership and ensuring a system under which top
managers should be responsible for their management
failures," Hwang Hak-choong, a KEB executive said.

Hwang's remark came one day after Lee Ik-chi, chairman of
Hyundai Securities Co., said that he has no willingness to
resign under pressure from the government and Hyundai's
creditors.  Hwang, however, backpedaled from his comment
hours later, saying that the bank had never targeted
certain Hyundai executives.

"The bank's demand pertaining to Hyundai's corporate
governance reform is that Hyundai implement its June
promise to separate management from ownership in a way that
the market can trust," Hwang said.

Hyundai's creditor group and the government had called on
the owner family of the nation's largest conglomerate to
sack professional managers, including Lee, who they think
are responsible for the group's liquidity crisis and a
delay in the spin-off of its auto unit Hyundai Motor Co.
Hwang's negation of his earlier remark came following
reports that the government will leave the Hyundai issue to

Before making a visit to Pyongyang yesterday morning,
former Hyundai Chairman Chung Mong-hun rebutted the demand
and said that the issue should be left to company boards.
Meanwhile, Hwang said that the use of the Chung family's
personal wealth in recapitalizing Hyundai Engineering &
Construction and other units can be considered as a way of
easing the group's credit crunch.

"KEB has not discussed the issue with Hyundai so far, but
it will be a possible means for solving its liquidity

He also stressed that Hyundai should present a self-rescue
package to the creditors at the earliest possible date,
taking into consideration demands from the market.
Hyundai said Monday that it will announce a self-rescue
plan before Aug. 19 at the latest. The conglomerate had
originally planned to unveil the package Sunday.

Hyundai's credit crunch resurfaced late last month as the
group's construction arm came close to insolvency as it
managed to pay bills to suppliers at the last minute.
(Korea Herald  09-Aug-2000)


SISTEM TELEVISYEN MALAYSIA: Overdue debt rehab plan near
The long-overdue debt-restructuring plan of Sistem
Televisyen Malaysia Bhd (TV3), involving loans of RM535.8
million, is nearing completion.

Sources say things should be wrapped up by next month. The
bulk of TV3's borrowings are in short-term loans. It is
understood that the restructuring plan, with the assistance
of the Corporate Debt Restructuring Committee (CDRC), is
likely to involve the issue of bonds worth more than RM300

This is no surprise as an increasing number of debt-
stricken companies in Malaysia are turning to private debt
securities (PDS) as a solution to their debt problems.
The market has long awaited an announcement from the
company, which in February had indicated that it was on the
brink of reaching an agreement with creditors by end-May to
sell assets and restructure its debts.

The company had said it hoped to reduce its debts to a
level where it is "no longer crippled by it." The
restructuring plan is especially crucial for the large
private television station as it has a weak credit profile.
The success of such a plan will be good news for the group,
which suffered greatly during the crisis a period of
soaring interest rates and a sliding currency, which led to
the escalating cost of borrowings.

In addition, a sharp fall in advertising expenditure as
well as intensifying competition contributed to the
deterioration in its bottom line. If its debt plan gets the
nod from creditors, the media group will be able to focus
on how best to enhance the efficiency of its operations to
boost earnings.

In April this year, the group went through a management
change. The new team had remapped the group's future
strategy aimed at creating a strong station identity and
content branding.  The initial excitement stirred by these
positive developments has since fizzled out, however, as
the much-anticipated debt restructuring has yet to

TV3 swung into the red in financial year (FY) ended Aug 31,
1998. It made a loss of RM170.4 million, compared with a
profit of RM14.2 million the year before. For the third
quarter of the current FY, the group incurred a pre-tax
loss of RM15.502 million.

For the first nine months of FY2000, it recorded a loss of
RM21.99 million.  Net loss of RM15.295 million was incurred
in the third quarter and, for the first nine months of
FY2000, the loss stood at RM21.483 million.

The earnings outlook for TV3, however, is improving after
losses narrowed nine months into FY2000. Some analysts
tracking the media sector expect the company to perform
better this year, in tandem with a recovering economy and
rising advertising expenditure.

When contacted, CDRC chairman Datuk C Rajandram said
discussions with the creditors of TV3 are being pursued but
the final report has yet to be received from the
committee's appointed advisers, KPMG Peat Marwick. He
confidently adds: "We should be able to do it in a month."

The CDRC aims to complete the debt-restructuring exercises
that are seeking its assistance by next month. Typically,
the advisers appointed by CDRC come up with a report or a
plan to repay or reschedule the company's, which is then
submitted to creditors for their approval.

Rajandram says this is expected to be carried out soon.
"One must keep in mind that these are voluntary
discussions. All parties must willingly consent to the plan
and we act as the mediator between the creditor and
shareholders," he said.

As such, he added, there are restructuring cases that can
be rather tedious and complex and therefore time-consuming.
Since its inception two years ago, the CDRC has received 74
applications from companies to restructure their debts. Of
these, 27 cases involving RM24 billion worth of debts have
been completed, with 21 cases still in various stages of

These pending cases involve debts totalling RM11 billion
but a bulk of it involves Time Engineering Bhd (RM5.3
billion) and DRB-Hicom (RM4.5 billion). Of the rest, one
was rejected while the remaining was handed over to the
national asset management company, Pengurusan Danaharta
Nasional Bhd.

"So, I think we will be able to complete these cases by
September, except for a few strays here and there," he

Analysts say that more than the positive corporate earnings
story, the market is eager to see some good news from the
restructuring side.

"Sure, we are expecting strong earnings growth for
companies this year. So, unless they perform way above or
below expectations, the market is quite unlikely to react.
The real boon would be successul restructuring stories that
have merely been trickling into the market... Lion Corp's
being the latest."

TV3 is 45 per cent-owned by Malaysian Resources Corporation
Bhd (MRCB), which is also in the midst of a debt-
restructuring exercise that includes the disposal of
assets. It was speculated at one stage that TV3 was one of
the assets up for disposal.

In February, at the height of the technology, media and
telecommunications (TMT) euphoria, the company generated
some excitement on speculation that TV3 and The News
Straits Times Press would form an Internet joint venture
with Time Engineering.  The stock hit a high of RM5.05 on
Feb 23 but has since retreated to a low of RM2.31 on June
23. The stock ended last Thursday at RM2.67. (The Edge 07-


CAPITOL WIRELESS: Creditor banks balk at debt relief plea
It appears that Capitol Wireless, Inc. (Capwire) will have
to work double time to convince creditor banks that the
temporary debt relief it sought and was granted by the
Securities and Exchange Commission (SEC) is to their

Capwire executive vice-president and chief operating
officer Maureen V. Santiago said in a press briefing
yesterday that debt relief is meant to protect creditors
which agreed to a debt restructuring agreement. Two of the
Capwire's 10 creditors begged off from the restructuring

Capwire senior vice-president and chief financial officer
Joel C. Aguilar said Manufacturers Life Assurance Company,
to which Capwire owes some 38.82 million Philippine pesos
($0.865 million at PhP44.882=$1), including interests,
being an insurance firm, has funds locked up and, thus,
would not want to join the nine-year debt arrangement.
Far East Bank and Trust Co., which has a loan exposure of
PhP12.82 million ($0.286 million), also declined to join
since it is still finalizing its integration with the Bank
of the Philippine Islands.

The SEC's approval of the debt payment suspension did not
sit well with Capwire's creditors. Ms. Santiago said that
in a meeting two days ago the banks sought the withdrawal
of the debt payment relief petition.

"We understand the banks' requests...but we have no other
choice at this point. In that meeting, we have already
explained to them the purpose of the filing (for debt
payment relief)," Ms. Santiago told reporters. "A lot of
hard work has been put into the debt restructuring process,
especially by our creditor-banks, so we felt it to be
important that their interest, as well as Capwire's, is

Banking sources said with Capwire's decision to pursue its
petition, its creditor banks will "no longer cooperate with
the restructuring of its debts, as well as the
rehabilitation plans for other Santiago-owned companies" --
the Philippine Telegraph & Telephone Co. (PT&T), which owes
more than PhP7 billion ($0.156 billion), and the Philippine
Wireless, Inc. (Pocketbell), which owes more than PhP2
billion ($0.045 billion).

The sources added creditor banks are likewise planning to
file with SEC a petition for "involuntary liquidation" so
they could close in on Capwire's assets, which are held
under mortgage trust indenture with the Development Bank of
the Philippines (DBP).

"(Capwire has) no more credibility. There is nothing to
talk about," the sources said.

Creditor banks actually gave Capwire until yesterday
morning to withdraw its petition for suspension of debt
payments, saying its decision to run to the SEC was done in
"bad faith" since the two parties were finalizing a debt
restructuring agreement, which they have been working on
for two years now.

The creditors have been losing an estimated PhP300,000
($668) a day in interest payments from Capwire, assuming a
12% interest rate on the loans, one of the sources said.
"The creditor banks will do a concerted effort to hit them
on the three fronts. What they did showed bad faith in
negotiating. We want to teach them a lesson. They should
deal openly and above board. This is a message to all
debtors that they cannot fool around with creditor banks,"
the banker said.

"We have made our position clear. Even the restructuring
(of the obligations) of PT&T and Pocketbell will be
stopped," another source said.

Sources said Capwire decided to run to the SEC after
Manufacturers Life Insurance sued to collect on a PhP34-
million ($0.758-million) debt.

"But that is a flimsy excuse. We have been negotiating for
two years and we have even signed the indicative terms.
Their debt to Manulife represents only five percent of
total. We're 95%," the source said.

Capwire's biggest creditor is state-owned Land Bank of the
Philippines with more than PhP300 million ($6.684 million).
Other creditors are the Philippine National Bank (PNB),
government bank DBP, UOB Philippines, Inc., closed Urban
Bank, Equitable PCI Bank and the former Far East Bank &
Trust Co.

The two parties were supposed to sign a final agreement
last June 27, but did not push through after creditor banks
demanded for additional assets to be placed under mortgage
trust indenture and for the guarantee of parent firm of
Republic Telecommunications Holdings Corp. (Retelco).
Despite the setback, however, Capwire made an initial
PhP16-million ($0.356-million) payment to the creditor

The restructuring program involved PhP908.83 million
($20.238 million), which is to be paid in two tranches. The
first tranch involved PhP681.62 million ($15.187 million),
or 75% of total debts, and the second, PhP227.208 million
($5.062 million). Tranche 3 covered preferred shares worth
PhP53.57 million ($1.194 million).

The repayment schedule under Tranche 1 was eight years,
with a two-year grace period on principal payments while
Tranche 2 had a nine-year repayment term with three years
grace on principal.  Interest rate was based on the 91-day
Treasury-bill yield rate, the benchmark that banks use to
price their loans, plus a two percent spread annually,
subject to quarterly repricing.

The interest rate, however, should not exceed 15% yearly,
subject to the annual review of Capwire's actual earnings
before interest and taxes (EBIT).

Some of Capwire's disgruntled creditors have threatened to
file for insolvency.  But as if testing fate, Capwire did
not only pursue its debt payment suspension petition, it
even sought a 60-day extension of the same.  Ms. Santiago
nonetheless allayed fears of creditors.

"The company remains viable and is in a position to repay
its liabilities without need for additional capital
infusion. And we reiterate our commitment to service all
our debt obligations in accordance with the proposed
restructuring agreement," she said.

To ensure the implementation of its proposed debt-
restructuring plan despite a debt payment moratorium,
Capwire is preparing to disburse funds in line with the
plan.  Ms. Santiago said the company will ask either the
SEC or the regular courts to allow it to pay creditors
based on the pending debt restructuring plan.

Capwire's case was transferred to the regular courts with
the effectivity of the Securities Regulation Code, which
dissolved the SEC's quasi-judicial functions, among others.
According to Ms. Santiago, the motion to disburse funds
would help guarantee payment of outstanding debts.
Normally, companies under debt payment suspension are
barred from disbursing funds outside its normal course of
business unless given the go signal by the courts, she

Meanwhile, Capwire is confident the signing of the final
restructuring plan will pave the way for the entry of a
white knight.

"It would be nice to get an investor and accelerate any
project...about seven firms have approached us but what
will really draw them (to us) is the signing of the
restructuring agreement," Ms. Santiago said.

Capwire, despite a PhP13-million ($0.29-million) loss as of
end-1999, will be relying on internally generated funds for
debt repayment. After restructuring, it will be focusing on
strengthening relationships with international long-
distance partners and add new switching capacities for its
gateway business.  (Business World  09-Aug-2000)

CAPITAL WIRELESS: To stay true to rehab plan terms
Capital Wireless Inc. chief finance officer Joel Aguilar
said Capwire's filing of its loan payments petition with
the SEC had derailed the signing of the proposed
restructuring agreement since the creditors felt they had
been betrayed by the company. Capwire, however, assured its
creditors that it would stick to the provisions of the
restructuring agreement.

Additionally, Capwire may seek court permission for its
plan to settle part of its debts as part of its
restructuring program. Capwire executive vice president and
chief operating officer Maureen Santiago said she has yet
to consult with the company's legal counsel as to which
branch to file the motion seeking the disbursement of the

Santiago said the company also intended to file either with
the RTC or Securities and Exchange Commission a motion
seeking a 60-day extension of an order suspending all
claims against Capwire.  The company said it sought SEC's
intervention to ensure that its operations would not be
disrupted especially during the final phases of its debt
restructuring process.

Two of Capwire's creditors, Manufacturers Life Assurance
Co. and Far East Bank and Trust Co., have posed objection
to Capwire's proposed debt restructuring deal.  Santiago
stressed that Capwire remained capable of settling all its
liabilities without need for additional capital infusion.

"This does not mean we will turn investors away because I
think it's good to take in investors to accelerate the
growth of the company but it's just not part of the plan,"
she said.

Aguilar's seven foreign companies had approached the
company for possible tie-up or investment but no concrete
proposal had been made. He said the company even has plans
to venture into the Internet business to further augment
its earnings.

With the expiration of the debt-relief order granted to
Capwire, creditors of the debt-strapped telecommunications
firm could pursue foreclosure proceeding against the
company. In fact, several creditors had threatened to file
insolvency proceedings against Capwire if the company
refused to withdraw its petition filed with the SEC.

Burdened by its huge debts, Capwire sought a moratorium on
the payment of P1.4-billion debts. Assets of the company
amounted to P1.9 billion.  The commission is required to
turn over to the regional trial courts the cases involving
Capwire's request for suspension of debt payments and
rehabilitation and intra-corporate disputes after June 30
as provided under the new Securities Regulation Code.

In its petition, Capwire said that while it continued to be
an active force in the telecommunications sector it was not
immune to the effects of the Asian currency crisis that
erupted in July 1997. The crisis prompted banks and other
financial institutions to restrict credits.

Capwire was set to conclude a debt-restructuring
arrangement with its creditor-banks late last month but
additional demands by its creditors delayed the conclusion
of a deal. Among the creditor's demands were additional
mortgage trust indenture and a clear guarantee of debts
from Capwire's parent company, Republic Telecommunications
Holdings Inc.

The company has already accumulated overdue interest
payment of P70 million. Capwire's major creditors include
Landbank of the Philippines (P300 million), Development
Bank of the Philippines (P156 million), Philippine National
Bank (P115 million) and Urban Bank (P100 million).
The others include Far East Bank and Trust Co.,
Metropolitan Bank and Trust Co., PCIBank, Westmont Bank,
and Manulife Inc.

Under the terms and conditions of a deal it signed with
creditors in February this year, Capwire offered to pay its
debts in two tranches: 75 percent of loans or P703.5
million over a period of eight years with a two-year grace
period for principal payments and P234.5 million over nine
years with a three-year grace period.  (The Manila Times

PILIPINO TELE.CORP.: Marubeni still bucks debt scheme
Marubeni Corp. of Japan continues to refuse the debt
restructuring program being offered by Pilipino Telephone
Corp. (Piltel), thereby, delaying the completion of the
cash-strapped company's rehabilitation plan.

Napoleon Nazareno, Piltel president and chief executive
officer, said yesterday that Marubeni is seeking a better
deal than what Piltel has offered its creditor banks.
Although Piltel and Marubeni are set to meet again in two
weeks, Nazareno said that they could not give in to the
demands of the Japanese firm.

He refused to explain further although reports said that
Marubeni wants cash payment for the $279-million (P11.2-
billion) loan it provided to Piltel to finance the latter's
local exchange network in Mindanao.

"Marubeni has very little choice. Whatever they want, we
cannot do. The banks have already agreed to our proposal so
we have to sit down with Marubeni and negotiate again to
make them see the terms and conditions set by the banks,"
he explained.

Piltel's mother company, Philippine Long Distance Telephone
Co. (PLDT) already signed a master restructuring agreement
(MRA) with several creditor banks last June.  The MRA
defines the framework and main parameters for restructuring
of Piltel's bank obligations amounting to P13 billion. It
also contains a letter of support from PLDT to be issued
upon effectivity of the transaction amounting to as much as
$150 million.

Nazareno said that Piltel will have to provide similar
terms and conditions to Marubeni and other financial
creditors as well as the holder of the $183-million
convertible bonds guaranteed by the company. So far, he
said the company is only having problems with Marubeni
since the bondholders have already met and are organizing
themselves like the bank creditors, with the aim of having
a steering committee to deal with the matter.

As of end of 1999, Piltel had a total liability of P34
million resulting from its inability to service its
maturing obligations.  (Philippine Star  09-Aug-2000)

PILIPINO TELE.CORP.: Bondholder steering committee formed
PILIPINO Telephone Corp. has moved forward with its debt
restructuring negotiations with bondholders, who have an
exposure of about a third of the company's P34.9 billion in
debts, with the formation of a steering committee for that
group of creditors.

Piltel president Napoleon Nazareno said Monday night during
the inauguration of the cable ship of Philippine Long
Distance Telephone Co. that Piltel expected no problems
with the bondholders.

"They have began organizing themselves and a steering
committee composed of representatives from the group will
soon conduct the negotiations with us," Nazareno said.

He said Marubeni Corp. of Japan, which has an exposure of
$279 million or about a third of Piltel's P34.9-billion
obligations, would also meet with Piltel officials within
two weeks to discuss the debt restructuring.  The amount
Piltel owed to Marubeni involved a turnkey telephone
rollout project in Mindanao.

"Hopefully, by the end of the year we will finish this
(debt restructuring)," Nazareno said.

The official said that in the case of Marubeni, the
Japanese firm had no choice but to give in to a similar
debt-restructuring agreement entered into by Piltel in
March this year with its creditor banks. The definitive
agreement with the banks involved some $332 million in

Marubeni last met with Piltel officials before the signing
of the agreement with the banks.  The Japanese trading firm
was earlier insisting that it be paid in cash immediately.
However, Nazareno said all creditors must be treated
equally and that the agreement with the banks would become
the model for the agreements with the bondholders and

Under the agreement with the banks, about half of the debt
to banks will be converted into peso-denominated Piltel
convertible preferred stock, which can later be converted
into preferred stock in PLDT, Piltel's parent firm. About
25 percent of the debts will have a 10-year maturity with a
"bullet" repayment scheme.

Peso-denominated debt will have an interest rate equivalent
to the 91-day treasury bill rate plus one percent a year,
while US dollar-denominated debts will have an interest
rate equivalent to the Libor rate plus one percent a year.
The "bullet" repayment scheme requires Piltel to pay the
amount in full after the 10-year period.

The other 25 percent of the liabilities will have a 15-year
maturity inclusive of a grace period of four years and with
the same interest rates as the 10-year loan. (Philippine
Daily Inquirer  09-Aug-2000)


BANGKOK MASS TRANSIT SYSTEM: To pay overdue interest
Bangkok Mass Transit System (BTS) yesterday said it
expected to start paying interest to creditors by the end
of this year which had been delayed from the due date at
the end of June.

Anat Arbhabhirama, advisor to the board of directors, said
BTS had sufficient revenue to finance its operations but
not yet enough for interest payments.  Anat said he
expected revenue to increase from Bt5 million to Bt7
million a day in early 2001 on expectations that passenger
traffic would double from 150,000 to 300,000 per day.
BTS said its debt consisted of US$650 million (Bt26.4
billion) in foreign currencies and Bt10 billion in baht in

BTS is in the process of listing its shares on the stock
market, which it hopes to complete by the end of the year.
Anat said BTS needed to raise about Bt4 billion from its
initial public offering.  (The Nation  08-Aug-2000)

SIKARIN PUBLIC COMPANY: Posts Bt13.6M Q1 net loss
Sikarin Public Company Limited (SIKRIN) reports a net loss
of Bt13.6 million for the first quarter ended this year.
The loss has not been divided between its subsidiaries and
cooperative companies.

THAI DURABLE TEXTILE: Signs Commercial Term Sheet with BBL
Thai Durable Textile Public Company Limited has reported to
Stock Exchange of Thailand the signing of the Commercial
Term Sheet with Bangkok Bank Plc. ("BBL") which is a major
step of its Debt Restructuring Plan (the "Plan").

On 3rd August 2000, the company agreed and signed the
Commercial Term Sheet with their sole secured lender &
major banker, BBL, accounting for 85 per cent of the
Company's total outstanding debt. The Plan includes a
proposal for debt rescheduling, forgiveness of a portion of
the debt and new equity provided by a new foreign partner.

The company will also reduce its capital to eliminate its
accumulated losses and increase its capital through debt
conversion and the issuance of new shares by  private
placement to the new investor.  Eventually, the new
investor will own not less than 51 per cent  of the
restructured company.

The company, with the assistance of Allen & Overy
(Thailand) Co., Ltd., working on the drafting of the
Definitive Restructuring Agreement (the "DRA") expects to
complete and sign in late August 2000.  The company expects
to complete our Rehabilitation Plan and submit to the Board
of Directors and Shareholders to approve within September
2000 and October 2000, respectively. (Stock Exchange of
Thailand  08-Aug-2000)

THAI ELECTRONIC: Aug.10 hearing on creditor objections
Thai Electronic Industry reports that the Central
Bankruptcy Court has set August 10 as the date to review
its two major creditors' protests against the company's
petition for its business rehabilitation.

The creditors, Siam City Bank (SCIB) and Bangkok Bank
(BBL), lodged protest against TEIC's petition, submitted on
June 30, one day before the hearing on the petition. The
court also ordered the banks to put their protests in
writing and submit them before August 10. (The Nation  09-

S U B S C R I P T I O N  I N F O R M A T I O N

Troubled Company Reporter -- Asia Pacific is a daily
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Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
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Jover and Maria Vyrna Ni¤eza, Editors.

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

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