TCRAP_Public/000831.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 31, 2000, Vol. 3, No. 170


* A U S T R A L I A *

AIR NEW ZEALAND LTD: Extraordinary item pushs into red
MAYNE NICKLESS: Posts annual loss
NORMANDY MINING: Posts $282M annual loss

* C H I N A  &  H O N G  K O N G *

CARREFOUR (HK): To close its 4 Hong Kong stores
LAI CHEE-YING: Sells Admart stake to cut losses

* I N D O N E S I A *

VDH TEGUH SAKTI: New L&M affiliate sued

* J A P A N *

MITSUBISHI MOTORS CORP.: 7.5B yen scandal damage estimate

* K O R E A *

CHEJU BANK: To submit management plans in Sept.
CHO HUNG BANK: To submit management plans in Sept.
HANVIT BANK: To submit management plans in Sept.
HYUNDAI ELECTRONICS: Embroiled in US lawsuit
KWANGJU BANK: To submit management plans in Sept.
KOREA EXCHANGE BANK: To submit management plans in Sept.
PEACE BANK: To submit management plans in Sept.
SAMSUNG MOTOR: Bank drops objection, Renault sale to go

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

NATIONAL POWER CORP.: Net worth $5 billion upside down
NATIONAL STEEL CORP.: Central Bank pushing liquidation

* S I N G A P O R E *

URACO HOLDINGS: Loss-maker acquisition part of rehab

* T H A I L A N D *

AP NATIONAL ELEC.CO.: Bankruptcy filed in hostile takeover
ELEC.GENERATING AUTH.OF THAI.: To re-fi foreign debt
KGI SECURITIES ONE PLC: Facing writeoff limit, downgrade
MODERN HOME DEVELOPMENT: To file rehab petition
THAI PETROCHEM.INDUS.: Plan submission postponed
THE MUTUAL FUND: Posts Q2 loss


AIR NEW ZEALAND LTD: Extraordinary item pushs into red
Air New Zealand Ltd has slumped into the red for its year
to June with a NZ$600.1mil net loss because of a
NZ$786.2mil one-off accounting charge.

The latest result compares with a NZ$214.38mil net profit
in the previous year.  But the airline, which also owns
Ansett Australia, stressed yesterday that its underlying
performance was sound and its trading performance had
improved during the year despite a difficult environment.

Excluding abnormals, the company said, its earnings before
interest, tax, depreciation, rentals and amortisation for
the year to June had increased by 14.3% to NZ$663.9mil.
Air NZ chairman Sir Selwyn Cushing said the improved
trading performance came despite higher fuel costs,
compounded by a lower exchange rate and intensified
competition on routes between Australasia and the United
States and Europe, as well as across the Tasman Sea and
within Australia.

The accounting charge to recognise full liability for
deferred taxation was the result of bringing the airline's
accounting policy into line with Australian and
international practice after it took over Ansett Australia.
(AFP, Star Online  30-Aug-2000)

MAYNE NICKLESS: Posts annual loss
Mayne Nickless, a health care and transport company,
announced a large loss despite higher revenues for the past
year that ended in July. The company posted an annual net
loss of $174 after tax and extraordinary items. Sales for
the period, meanwhile, rose 11 percent from the previous
year to $3.1 billion.

NORMANDY MINING: Posts $282M annual loss
Normandy Mining, Australia's largest gold miner, announced
that it recorded a $282 million loss for its last fiscal
year. The company attributed the poor results to writedowns
on its Great Central Mines assets acquired at the start of
last year. Before those writedowns, Normandy had recorded
a 36 percent increase in pre-abnormal profits of $138

The company said it is expecting to raise production in the
coming year to 2.2 million ounces of the precious metal. It
therefore was forecasting a 10 percent increase in its

C H I N A  &  H O N G  K O N G

CARREFOUR (HK): To close its 4 Hong Kong stores
Paris-based retailer Carrefour is blaming restrictive urban
development laws and intense competition for too few retail
sites for its decision to close its four Hong Kong

Carrefour, in Hong Kong since 1996, will be closing the
stores from September 18 after failing to expand its
existing business.  A company official in Paris said the
urban development laws in Hong Kong were "very restrictive
for retail" and the group's original plans to expand could
not go ahead.

"In Hong Kong, we had a shortage of places and we had no
sites. It was not possible to find new locations and we
wanted to become a significant size in Hong Kong," the
official said.

However, retail industry sources speculated whether other
retailers had effectively blocked discounter Carrefour from
renting larger sites to stop its expansion.  One Carrefour
supplier also suggested that the spectre of discounting
problems might have again reared its head for Carrefour.

When Carrefour first arrived in the SAR, it attacked the
comfortable duopoly run by the established ParknShop and
Wellcome.  But local suppliers quickly said they would no
longer deliver products unless the French retailer put a
halt to its discounting. At that time the Consumer Council
quizzed 22 firms which had allegedly black-listed

Seven confirmed taking action to enforce minimum prices, 12
denied the charge and three declined to comment on
principle.  Carrefour refused to comment yesterday on
speculation that it had been squeezed out of Hong Kong.
Andrew Brent, marketing director for ParknShop, said his
group might be interested in renting some Carrefour sites.

"We will look at those sites and consider if they are
potentially good investments," he said. He pointed out

ParknShop had not contacted either Carrefour or the sites'
landlords at this time. Meanwhile, the Labour Department
yesterday said about 490 people would be retrenched as a
result of the Carrefour store closures. Hotlines had been
set up to deal with their queries.

Carrefour's Hong Kong managing director Bernard Rolland
said the company was "committed" to helping staff find
alternative employment.

"We regret to have to dispose of our Hong Kong operations,"
he said in a statement.  "We are working closely with the
Labour Department to ensure Carrefour meets the
requirements of the labour law."

Carrefour is one of the largest retailers on the mainland
and it also operates stores in Singapore, Taiwan, Korea and
Indonesia. The group runs 5,246 integrated stores in
Europe, Latin America and Asia. Its four Hong Kong outlets
are in Heng Fa Chuen, Tsuen Wan, Tuen Mun and Yuen Long.

The retail market has proved tough with many Japanese
department stores closing and a fierce supermarket price
war breaking out after the entry of Jimmy Lai Chee-ying's
Admart last year.  (South China Morning Post  30-Aug-2000)

LAI CHEE-YING: Sells Admart stake to cut losses
Media tycoon Jimmy Lai Chee-ying has sold part of Admart in
an attempt to cut losses at his privately owned direct-
sales operation.

Admart unit e-zone, which sells mobile phones and provides
communications services, yesterday announced Mr Lai had
sold all his interest in it.  The company said the buyer of
Mr Lai's holding was a joint venture formed by Singapore-
based mobile-phone retailing chain operator Handphone and
local electronics-maker Titron group.

It did not disclose the terms of the transaction.  Launched
late last year, e-zone at present has 23 outlets in Hong
Kong.  The chain, previously also branded as Admart, was
rebranded in May after a series of negative news reports
about the direct-sales venture such as unknowingly selling
fake cognac and red wine.

Philippe Ravelli, chief executive of e-zone, declined to
disclose how much revenue the company had generated but
admitted it was still making money.  Mr Ravelli said after
the disposal Mr Lai would still hold the remaining part of
the Admart operation.

Mr Lai, who privately holds Hong Kong's second-largest
Chinese newspaper Apple Daily and controls listed company
Next Media which focuses on Internet-related businesses,
was unable to be reached for comment.  However, his group's
vice-chairman Andrew Chow On-kiu said: "We now have the
opportunity to focus on our core high-growth Internet and
publishing operations."

Analysts said the disposal was in line with Mr Lai's target
in March to turn around the operation's persistent red ink
by next year.  According to Mr Lai at that time, Admart was
suffering a loss of about HK$20 million a month.  Tommy Ho
Kin-tak, an investment analyst at Vickers Ballas said he
was not surprised to hear of the disposal.

"It makes sense for the company to sell out the item it is
not really good at," Mr Ho said.

Admart was launched to provide a direct grocery sales
service at competitive prices in June last year.  The
tactic sparked a price war with Hong Kong's two largest
supermarkets Wellcome and ParknShop.  Meanwhile, Mr Ravelli
said after the deal, e-zone would close 13 shops out of a
total 23 and relocate employees to the remaining outlets.

However, employees working under probation would be laid
off, Mr Ravelli added.  Alvin Yip Wai-lun, chief executive
of Titron, said such shop closures did not mean the buyer
planned to slash the operation.

"We closed the 13 shops because we think their locations
are not that good," Mr Yip said.

He said the company planned to expand its network to 40
shops in the coming nine months. The shops would also be
rebranded once again, as Handphone this time, to reflect
their linking with the parent's retailing chain name in
Singapore, Mr Yip said.  Handphone at present has 29
outlets in Singapore, Mr Yip added.  (Hong Kong iMail  30-


VDH TEGUH SAKTI: New L&M affiliate sued
Singapore-listed L&M Group Investments has clarified that
it was an Indonesian company recently acquired by it that
was sued this week for $19 million by Jakarta Depot
Satellite (JDS) - not it.

L&M reported that JDS sued VDH Teguh Sakti, a company
incorporated in Indonesia and purchased recently by L&M
from Van der Horst. VDH Teguh Sakti holds a 32 percent
stake in Van der Horst Indonesia Tbk.

In a clarification made to the Singapore Exchange, L&M
explained that: "The rights of VDH Teguh Sakti to the said
32 percent stake has not been challenged in the proceedings
commenced by JDS."

L&M added that the Indonesian court had issued an interim
injunction against the sale of the 32 percent interest only
"to preserve the assets of VDH Teguh Sakti."

The injunction filed by JDS against VDH Teguh Sakti
pertains to a claim for damages of some $19 million for
earnings allegedly lost from postponement of the two
companies' joint pipeline projects in Jakarta. In its
clarification, L&M said that VDH Teguh Sakti had been
advised by its Indonesian lawyers that the JDS claim was
unlikely to succeed. A counterclaim by VDH Teguh Sakti is
being worked on for filing against JDS, the statement said.


MITSUBISHI MOTORS CORP.: 7.5B yen scandal damage estimate
Mitsubishi Motors Corp.'s lying about hiding customer
complaints that should have led to vehicle recalls in 1997
may eventually cost Mitsubishi as much as 7.5 billion yen
(HK$538.9 million).

Japan's fourth largest automaker is at the center of a
widening probe into its handling of customer complaints in
Japan stretching back as much as 30 years. It faces fines
at a minimum, a government official said at a press
conference in Tokyo.

Mitsubishi Motors president Katsuhiko Kawasoe told the
briefing that the company has increased the total number of
cars it will recall by a third after an investigation into
concealed customer complaints.

Mitsubishi Motors, 34 percent owned by Germany's
DaimlerChrysler, is under pressure to alter its procedures
for handling complaints, with the Yomiuri newspaper last
week reporting the company withheld details that could have
triggered vehicle recalls for the past 30 years.
But some analysts predict the company's decision to come
clean will pay off, limiting damage to its operation.

"Things can only get better from now on," said Kenji
Tanaka, an analyst at Okasan Economic Research Institute.
Seiji Sugiura, an analyst at Nomura Securities, said:
"Hiding claims for a long period of time is bad, but the
problem looks to be a past story. I believe Mitsubishi has
the ability to change itself."

Mitsubishi is no stranger to scandal, with the late 1990s
marred by payoffs to corporate racketeers and an
embarrassing sexual harassment suit at its Normal, Illinois
plant that was settled for US$34 million (HK$265.2
million). Mr Kawasoe, appointed chief executive in late
1997 to clean up, said his pay and that of any executives
involved in the cover-up would be cut.

The carmaker's shares fell as much as 2.7 per cent, or 12
yen (HK$0.86), to 426 yen in morning trading. It last
traded down 2.3 per cent at 428 yen. Mr Kawasoe also
apologised to the government for the cover-up, adding that
it plans to extend the recall by 204,400 vehicles, bringing
the total to more than 800,000 cars in Japan.

The company would have to recall an extra 88,000 vehicles
at home and some 200,000 vehicles in the overseas markets
to conduct various repairs, which will bring the total
recall cost to some 7.5 billion yen. The Transport Ministry
is set to make a decision within a month on how to punish
the company, said Hidemi Tozawa, an official at the
ministry's engineering and safety department, yesterday.
(Hong Kong iMail  30-Aug-2000)


CHEJU BANK: To submit management plans in Sept.
CHO HUNG BANK: To submit management plans in Sept.
HANVIT BANK: To submit management plans in Sept.
KWANGJU BANK: To submit management plans in Sept.
KOREA EXCHANGE BANK: To submit management plans in Sept.
PEACE BANK: To submit management plans in Sept.
Six banks -- excluding Korea First Bank and Seoul Bank --
are expected to submit their management normalization plans
to the Financial Supervisory Commission by the end of next

According to a source at the financial regulator yesterday,
the six banks include Hanvit Bank, Korea Exchange Bank and
Cho Hung Bank, which received public bailout funds. Cheju
Bank, Kwangju Bank and Peace Bank, which were not able to
meet the requirement of the BIS capital adequacy ratio of 8
percent, will be added to the list.

The top financial watchdog will hold a meeting today to
make a final decision on which banks should propose
rehabilitation plans to the FSC, an FSC official said.
With the selection of the six banks, the financial sector
is expected to face another severe round of restructuring,
while at the same time the mergers and acquisitions among
healthy banks will be feasible in the near future.

Meanwhile, it was reported that Seoul Bank and Korea First
Bank, into which public funds were also transfused, have
been excluded from the list on grounds that they have
already launched rehabilitation plans according to
Memorandums of Understanding (MOU) with the top financial

Under the agreement with the Korea Union of Financial Labor
(KUFL) last month, the government promised that it would
sort out the banks that should submit management
normalization plans if their capital adequacy ratios are
below 8 percent.  (Korea Times  30-Aug-2000)

HYUNDAI ELECTRONICS: Embroiled in US lawsuit
Hyundai Electronics has been sued by Rambus Inc. in a
California court in the United States and has had to file
papers in response.

Rambus is a US firm that has developed high-bandwidth chip
connection technologies. It claims that the Korean company
infringed on a technology patent it holds for DDR and SDR
synchronous DRAM chips. It is demanding that Hyundai
Electronics sign a licensing contract.

In its responsive legal papers, Hyundai Electronics
maintains that its manufacturing technologies do not make
use of any Rambus proprietary technology. They further
assert that the Rambus' patents in question are invalid and

Rambus recently filed patent-infringement allegations
against other semiconductor manufacturers, including
Hitachi of Japan. In June, Hitachi settled by agreeing to a
royalty payment scheme.

SAMSUNG MOTOR: Bank drops objection, Renault sale to go
A South Korean bank has dropped its legal challenge to a
plan for French automaker Renault SA to take control of
Samsung Motors, clearing the way for the deal to go ahead
on Friday as scheduled.

State-controlled Housing & Commercial Bank said yesterday
it would drop a legal complaint seeking repayment of 3.4
billion won (US$3.06 million) in loans to Samsung.

"We don't want to disrupt the Renault-Samsung deal," said
Lee Hak-soo, a bank spokesman. "The government has promised
to cover losses stemming from our decision," he said
without elaborating.

Samsung Motors officials said Renault would launch its
automaking joint venture with Samsung on Friday as planned.
The bank had argued that it had lent public funds and
therefore these must be repaid before the deal went ahead.
It had been ordered by a court to write off 81 percent of
the loan and accept the rest in cash and shares of the
joint venture.

The Samsung Group, the second largest conglomerate in the
country, launched an auto unit to produce a mid-sized sedan
in early 1998, in the middle of a deep economic recession.
The car was based on technology bought from Nissan Motor
Renault has since taken a minority controlling stake in
Nissan and in April agreed to take the helm of a joint
venture to continue production at Samsung Motors.

The assets and operations of the debt-ridden automaker will
be taken over by the joint venture, in which Renault will
invest 615 billion won in return for a 70 percent stake.
Financial units of the Samsung Group will retain a combined
19.9 percent stake and creditors led by Hanvit Bank will
hold an aggregate 10 percent.

Samsung Group chairman Lee Kun-hee has offered shares in
unlisted Samsung Life to help compensate for creditors'
losses.  (Reuters, Business Day  30-Aug-2000)


NATIONAL POWER CORP.: Net worth $5 billion upside down
The foreign group tasked to develop a privatization plan
for the National Power Corp. (Napocor) estimates the state-
owned firm's liabilities at more than $15 billion, or $10
billion over its total assets.

Of the total liabilities, $6.77 billion represents the
power firm's current debts while $9 billion consists of
obligations under power purchase agreements (PPA) with
independent power producers (IPP).  The estimates are
contained in an 82-page preliminary draft of Credit Suisse
First Boston (Hong Kong Ltd.) and SGV/Arthur Andersen's
(CSFB-SGV/AA) final report to the Senate energy committee.

BusinessWorld obtained a copy of the confidential report,
which also presented alternative strategies in managing
Napocor's stranded liabilities or obligations that will
remain after its eventual privatization.

"Our preliminary valuation of (Napocor's) assets, as well
as the estimated present value of (Napocor's) financial
debt and PPA obligations, indicates a shortfall of
privatization proceeds against liabilities of between $9.5
billion and $10.5 billion," the foreign group said.

The gap will have to be directly borne by the government or
by consumers through some form of a transition charge added
to the wholesale market price of electricity, CSFB-SGV/AA
said.  The consultancy firm wants the government to retain
Napocor's debts through a board of liquidators instead of
assigning these to generating companies (genco) to be

In its report, CSFB-SGV/AA said assigning Napocor's $6.77-
billion debt to individual operating units has significant
drawbacks that make it relatively less attractive.
For one, assigning a fixed level of debt to each genco
sends a strong signal of expected valuation, which may
detract from value maximization in asset auctions.

It will also result in protracted negotiations since the
government will have to seek the consent of each lender to
transfer the debts to the gencos.

"At a minimum, this process will result in extensive
reviews by the lending institutions and possibly protracted
negotiations," CSFB-SGV/AA said.  "An alternative approach,
assigning debt to individual units with a sovereign
guaranty, is undesirable as it results in the government
extending a guarantee to a private entity."

On the other hand, banks will have little objection to
transferring debt to a liquidators board that is backed by
the republic, the consortium said. It also proposed the
creation of an independent IPP administrator attached to
the liquidators board, which will manage proceeds from the
sale of IPP assets.

"As PPA terms expire and IPP assets revert to government
ownership, the IPP administrator will need to oversee the
sale of these plants to private owners," the group said.

CSFB-SGV/AA advised the government against abrogating
existing PPAs, which it said could damage the country's
reputation in the international financial and political
arenas.  The government may, however, offer incentives to
IPPs to encourage these to renegotiate the power deals.

Napocor inked several long-term power supply deals with
IPPs -- with contract periods lasting from 10 to 20 years -
- during the power crisis in the early 1990s.  Under the
contracts, Napocor agreed to pay for the power, regardless
of whether it is actually produced or consumed, at an
average price of $76 per megawatt-hour.

Senators have sought for the renegotiation of the deals,
which allegedly inflict colossal financial burden on the
public and extend undeserved enrichment in favor of private
IPPs.  CSFB-SGV/AA said Napocor's obligations may be borne
by two constituencies: the government, in the form of
increased taxes or budget deficits, or consumers, through
increased tariffs.

"The allocation of stranded liability repayment between
these two groups is a political decision," the foreign
group said.

CSFB-SGV/AA proposed that the burden take the form of a
universal levy or transition charge applied to each unit of
power sold through the wholesale market.  To reduce
Napocor's total liabilities, the consultancy group is
recommending the following: replacement of Napocor
obligations with sovereign credits; direct negotiations
with IPPs or lenders; privatization-related incentives to
reduce liabilities; and active management of PPAs.

Senators and congressmen earlier deferred proposed reforms
in the power sector in the absence of a clear privatization
plan for Napocor.  Members of the bicameral conference
committee agreed to delay the restructuring and
privatization measures until September, when CSFV-SGV/AA
will have finished its study.  The foreign group submitted
its final report a week earlier that its September 1
deadline.  (Business World  30-Aug-2000)

NATIONAL STEEL CORP.: Central Bank pushing liquidation
The Bangko Sentral (central bank) is pushing for the
"liquidation and reconstitution" of ailing National Steel
Corp. (NSC) into a new company to ease the bad loan burden
of the banking system.

"The resolution of this issue will be a tremendous benefit
to the creditor banks," Bangko Sentral Governor Rafael B.
Buenaventura said on the NSC debt issue.

The central bank chief yesterday met with NSC receivership
committee chairman Monico Jacob to iron out details of the
proposal.  Total non-performing loans (NPLs) of the
commercial banking system stood at 205 billion Philippine
pesos ($4.55 billion at PhP45.043=$1) as of end-June, out
of a total loan portfolio of PhP1.4 trillion ($31.08

Mr. Buenaventura said the resolution of the debt
restructuring cases of NSC and retailer Uniwide Holdings,
Inc. will wipe out some 13.9% from the banking system's bad
loan books.  As of the first half, the banking system's NPL
ratio stood at 14.65% -- its highest level since the start
of the East Asian financial crisis in 1997 -- due to
sluggish loan growth.

"NSC alone will ease the NPLs by about 5%, and will be a
big boost for large creditors like the Philippine National
Bank (PNB)," Mr. Buenaventura said.

Due to the steel maker's troubles and the poor state of the
steel industry, the Bangko Sentral chief believes that
liquidation is the best option available to creditors.
"Liquidating and restarting it as a new entity may be the
only way to go," he said. "Then we can sell the company to
a strategic investor."

All local creditors have signified their intention to
convert their loan exposures into equity in the new steel
company, he said.  "The only obstructions are some legal
entanglements on the Malaysian side," Mr. Buenaventura

Malaysian conglomerate Hottick Investments, Ltd. bought 80%
of NSC from the National Government in 1996 and has since
incurred loans worth PhP16.5 billion from various local
banks.  Aside from PNB, which is NSC's biggest creditor
with PhP5 billion, state-owned Land Bank of the Philippines
also has an exposure of PhP1.2 billion, while 14 other
banks make up the balance.

NSC's Malaysian owners are reportedly opposed to either
infusing fresh equity to resuscitate the steel giant or
allow their ownership to be diluted by other potential
investors.  (Business World  30-Aug-2000)


Hotel group Apollo Enterprises posted a loss of $1.95
million for the six months ended June 30, representing a
loss per share of 1.26 cents, down from 1.51 cents for the
same period last year.  Turnover was up 6.3 percent over
the first-half of 1999 to $26 million.  Net tangible asset
backing per share was $1.27, compared to $1.30 for the same
period previously.

Material-handling systems specialist Inter-Roller
Engineering recorded a $1.49 million loss for the half-
year-ended June30.

The company attributed the loss to a decline in demand and
margins for automation systems contracts. By comparison,
the company had net earnings of $1.07 million for the same
period last year.  Turnover fell 40 percent for the first
half of this year to $14.1 million, down from $23.4 million
for the same period last year.

First-half results translated into a loss per share of 2.1
cents, a turnaround from the profit of 1.5 cents for the
first six months last year. Net tangible asset per share
was 41.3 cents, however, up from 33.9 cents the year
before. No dividend was announced.

Full-year results are expected to be negative, according to
Inter-Roller chairman Lim Yong Wah. The company also
reported that its non-airport related business, such as
factory automation and bulk material handling, had declined
due to a drop in foreign direct investments in the region
since the Asian economic crisis in 1998.

Lim said Asian economies were growing, but not building new
factories, which his company depended on for business. He
also noted that the award of some contracts it had bid for
had been delayed, further contributing to the company's
negative performance.

URACO HOLDINGS: Loss-maker acquisition part of rehab
Disk-drive component manufacturer Uraco Holdings is
spending $57 million to acquire Singapore-based precision
plastics moulding maker, Techplas Industries, as part of a
"strategic shift" that should help nudge Uraco back into
the black in FY 2001.

At a briefing for analysts and the media yesterday, Uraco
also unveiled its revamped management team, led by its new
chief executive officer, CP Goh, and said the group will
make further acquisitions to position itself as "a leading
manufacturing solutions provider."

While wary about releasing growth targets or information on
his key customers, Mr Goh said Uraco aims to pull in
revenues exceeding $500 million by 2003.  He added that
Uraco will be "close to debt free" once it has used the $29
million proceeds from the sale of its 18,000 sq m building
in Serangoon North to Keppel Land to settle part of its
$31.5 million long-term debts.

Turning to its new acquisition, Mr Goh declined to detail
how the group arrived at the $57 million figure to buy
Techplas. However, he said Techplas brings good management,
profitability and provides strong synergies to Uraco's
growth plans.

Founded in 1978, Techplas makes plastic parts used in
industries like the medical, electronics and
telecommunications sectors. Uraco will pay for the one
million Techplas shares of par value $1 each in both cash
and new Uraco shares. Techplas shares are now held by its
current shareholders/vendors Yeo Khee Siang, Tiong Swee Eng
and Lim Lee Kiong.

The group will also issue about 194.8 million new Uraco
shares of 10 cents each, valued at $45 million, based on
the weighted average price of Uraco shares 30 days before
the acquisition was announced. This will give Techplas a
22.7 per cent stake in Uraco.  It also will pay the three
Techplas shareholders $5 million cash, with the balance of
$7 million paid in cash six months after the purchase is

Uraco said it will fund its acquisition of Techplas by
internal resources and will seek shareholders' approval at
an extraordinary general meeting. Once a go-ahead is
received, Uraco expects to sew up the acquisition by end

As part of the deal, Uraco will be appointing Mr Yeo,
managing director of Techplas, as an executive director of
Techplas and vice-chairman of Uraco's board.  Uraco also
announced that its chairman, Chay Kwong Soon, will give up
his executive responsibilities, but will remain as chairman
of the executive committee.

An analyst from a local brokerage said: "Uraco is showing
the first signs of a restructuring. It seems that Chay, who
will soon be in a non-exec role, is willing to let the
experts to do the job. He has garnered a pretty impressive
team of people."

Punters gave a lukewarm reaction to the deal after the
suspension on Uraco shares was lifted after the mid-day
break yesterday. The counter ended 2 cents, or 7.7 per
cent, down at 24 cents, with 2.15 million shares traded.
A day earlier, the counter touched a seven-week high of 26
cents cents as investors loaded the stock on rumours of a
major announcement.  (Business Times  30-Aug-2000)


AP NATIONAL ELEC.CO.: Bankruptcy filed in hostile takeover
The Thai family that is the majority shareholder of AP
National Electric Co's yesterday strongly opposed what it
described as a hostile takeover bid by Matsushita Electric
Co of Japan.

A major manufacturer of home electric appliances bearing
the National and Panasonic brands, AP National Electric is
55% owned by the Aphiphunya family and 45% by Matsushita.

"The parent company in Japan has sued our firm for
bankruptcy. This is not a personal matter but involves
national prestige given the selfish behaviour of
foreigners," said Prapat Aphiphunya, shareholder and
chairman of the 20-year-old Thai firm. "If we don't take
any action, we believe this will set a precedent and other
majority Thai-owned enterprises will not exist in future,"
he said, claiming the takeover bid was well planned to
catch the Thai shareholder off guard.

The rift was sparked by Matsushita's demand that AP
National Electric increase its capital from 40 million
baht. However, the Aphiphunya family rejected the request
and several rounds of negotiations ended in stalemate.
Matsushita responded by seeking a Central Bankruptcy Court
order to reorganise the Thai unit, the only way the
Japanese partner could take over the firm, Mr Prapat

He said AP National Electric was saddled with a huge debt
when Matsushita unilaterally decided to expand the business
by relocating the firm's factory from Samut Prakan to
Chachoengsao at a cost of more than one billion baht.
The company's management team, entirely Japanese, informed
the Thai shareholder after the decision had been made.
Mr Prapat said the Japanese controlled the management of
the firm under the joint-venture agreement, otherwise they
would terminate the firm's licence to use Matsushita

Mr Prapat claimed it was not necessary to expand the firm
at huge cost as the existing plant could have been expanded
to meet rising demand. The large debt could have been
avoided. AP National Electric borrowed US$29.25 million on
a short-term basis in 1990 from Asia Matsushita Electric to
fund the expansion at Chachoengsao.

Revenue and initial earnings increased annually, but debts
arising from the loan meant the firm recorded losses. The
accumulated losses increased to 424 million baht last year
from 12 million baht in 1992. Though the company suffered
losses, the management made no attempt to increase sales or
lift profit, Mr Prapat alleged.

Matsushita Electric extended more loans to the Thai firm in
a bid to salvage the operation. Once liabilities exceeded
assets, the Japanese partners called for a capital
increase. When the Thai shareholder rejected the proposal,
Matsushita told its subsidiary in Singapore to immediately
terminate the loan agreement.

Asia Matsushita Electric (S) Pte, wholly owned by
Matsushita Electric, filed on Tuesday last week for the
reorganisation of the Thai unit and appointment of the
planner for business rehabilitation, citing a default on
debt of US$30.39 million, or 1.25 billion baht including
principal and interest.

According to the petition, the company said it had made
oral and written requests for debt repayment to no avail.
The Thai unit became insolvent due to competitive pressure
and the baht's devaluation, the petition said. However, its
business could be expanded through the investment of new
funds but only under the protection of bankruptcy
reorganisation proceedings.  (Bangkok Post  30-Aug-2000)

ELEC.GENERATING AUTH.OF THAI.: To re-fi foreign debt
The Electricity Generating Authority of Thailand yesterday
received approval to issue 6.1-billion-baht-worth of bonds
maturing over three to five years to refinance existing
foreign debt.

The Finance Ministry, which will guarantee the new bonds,
will be responsible for evaluating conditions of the issue.
The refinancing scheme is expected to result in at least
one billion baht in savings for Egat, due to the lower
interest rates in the local market compared with overseas.
Egat had earlier received approval to borrow up to 20
billion baht in the local market to repay existing foreign
debt, with some 13.8 billion already borrowed.

The refinancing programme will also help Egat reduce its
currency risks. Foreign loans to be repaid through the new
bonds include loans due to the Japan Bank for International
Co-operation, the Asian Development Bank, the World Bank
and state trade finance institutions of Canada and France
(Bangkok Post  30-Aug-2000)

KGI SECURITIES ONE PLC: Facing writeoff limit, downgrade
Securities One Plc (S-One) will not be able to write off
its accumulated losses of more than Bt8 billion within the
next five years, as recently expected, if it is downgraded
as a unit of KGI International Holdings (KGII), the company
said yesterday.

S-One's board of directors met to consider the shift in its
main vehicle as a regional brokerage house from S-One to
KGII, but its executives would not reveal the outcome.
S-One would not be able to curb its massive accumulated
losses as predicted, since under the new shareholding
structure it would not be able to book income from other
brokerage houses in the group in its balance sheet, an
industry source said.

In addition, the gloomy local stock market and tougher
competition in the brokerage industry in the wake of full
liberalisation would put S-One's dream too far out of
reach.  A dark cloud immediately covered the country's
largest brokerage house after its largest shareholder, KG
Investment (KGI) Group of Taiwan, said it might turn to
KGII as its main vehicle for acquiring other brokerage
firms so that KGII will become a regional brokerage house
and replace S-One.

This idea came after the Koos Group planned to merge KGII
with the Sassoon Group of Singapore to complete its
regional brokerage firm.  In February 1998, Taiwan-based
Koos Group injected Bt3 billion to take up 49 per cent in
S-One of Thailand through KGI. S-One's wholly-owned
subsidiary, KGI Securities One International, holds 46.5
per cent in KGII, which presently has a controlling stake
in Cho Hung Securities of South Korea, Seapower Securities
and KGI Securities - both in Hong Kong.

Aside from shifting the main vehicle, cross-shareholding
has been cited as another factor that S-One's Thai
management team has opposed against the company's Taiwanese
majority shareholder.  The management team, led by chief
executive Pakhawat Kovithvathanaphong, said that cross-
shareholding is likely to break the Thai Public Company

Under the deal, KGI will swap its 49 per cent interest
equity in S-One with the same stake in KGII. As a result,
KGII will directly own a 49-per-cent interest in S-One. At
the same time, S-One will retain a 46.5-per-cent holdings
in KGII if the deal is completed. Yet, the Public Act
prohibits companies from doing so.

Another difficult task for S-One's management team is how
to convince more than 20,000 small shareholders to further
support the firm despite no clear vision of when they will
obtain dividends.  Only a month after entering KGI, S-One
raised capital from Bt1.19 billion to Bt16.16 billion, in
which KGI got no less than 420 million units of Warrant No

A year later, S-One increased capital again to Bt31.363
billion, in which KGI was allocated 400 million units of S-
One Warrant No 4.  According to figures provided by the
Thailand Securities Depository Centre, there are 532.41
million and 917.06 million units of Warrants No 3 and No 4,
accounting for 95.89 per cent and 97.2 per cent of Warrant
No 3 and No 4 respectively, in public ownership.  This
indicates that KGI has already sold all those warrants.

Afterward, S-One increased capital twice to Bt59.06
billion, to finance its ambitious plan to become a regional
brokerage house.  Although S-One at this time has lost an
opportunity to be the main vehicle of the group to become a
regional brokerage house, it continues to have an edge over
other rivals here in terms of networks, said an analyst at
a foreign securities company.

"Concentration more on local market is a must for S-One
from now on since it emphasised on its regional-base plan
in the past, resulting its ranke in the industry drop from
1 to 3," he said.

It follows ABN Amro Asia Securities Trading Plc and Jardine
Fleming Thanakom Securities Co Ltd.  Regarding negative
rumours on KGI about siphone off money from S-One, he
commented that KGI would have no such bad intention but it
has had to alter the plan because it breaches the Thai
regulations barring local firms to invest abroad for fear
over capital outflow.

The Stock Exchange of Thailand is mulling whether such deal
is classified as connecting transaction. If it seemed to be
the connecting transaction, KGI- which befit from the deal,
has no right to vote and the deal fate would depend on S-
One's shareholders. The shareholders' meeting is slated for
September 29.  (The Nation  30-Aug-2000)

MODERN HOME DEVELOPMENT: To file rehab petition
Modern Home Development (MHOME) will file a rehabilitation
petition in court and seek to appoint Modern Home Planner
as planner.

MHOME reports that its board of directors reached a
resolution to submit the rehabilitation plan for court
procedure and approved Modern Home Planner to be the
planner.  Meanwhile, all company directors have resigned
inasmuch as MHOME will be subject to court rulings. The
resignations are to become effective on the date of filing
the rehabilitation petition.

Directors involved are Tanom Angkanawatana, Rut Darnkul,
Professor Nipat Jitprasong, Professor Manop Pongsathat,
Tawatchai Pitaktanangkur, Prapat Tantiprapa, Techanan
Techasen and Khunmuang Bamroongpanichtavorn.

THAI PETROCHEM.INDUS.: Plan submission postponed
The Central Bankruptcy Court yesterday approved the request
of Effective Planners to postpone submission of the
business rehabilitation plan of Thai Petrochemical Industry
Plc to Sept 23.

Anthony Norman, managing director of Effective Planners,
told the court that 90% of the plan had been completed, but
that a one-month delay was needed. Some major creditors of
TPI asked for a revision of the plan as there were
significant changes in some factors such as higher oil
prices which resulted in higher operational costs and
tighter cashflows.  The slow pace of economic recovery and
rising total debt also had led to necessary revisions.

Although he did not disclose detail of the changes in the
plan, Mr Norman said the business rehabilitation of TPI
would be completed within five years as allowed by the law.
Mr Norman said delays has been primarily due to the need to
verify the claims totalling 150 billion baht submitted by

Claims totalling 110 billion baht were under particular
examination, due to duplication. Another 10 billion baht in
claims had been lodged by suppliers of TPI, he said.
Mr Norman said he believed the final amount of debt
involved in the restructuring plan would remain almost
unchanged from earlier projections at $3.6 billion.

A final plan was expected to be submitted to the Central
Bankruptcy Court by Sept 11, with a vote by creditors by
the end of September, he said. Shares of Thai Petrochemical
Industry closed on the Stock Exchange of Thailand at 4.2
baht yesterday, up 10 satang, in trade worth 2.97 million
baht.  (Bangkok Post  30-Aug-2000)

THE MUTUAL FUND: Posts Q2 loss
The Mutual Fund recorded a Bt 4.7 million net loss for the
second quarter of this year. For the same period the
previous year, the company posted a net profit of Bt 16.61

For the first half of 2000, The Mutual Fund recorded a net
profit of Bt 69.69 million, an increase in net profit from
Bt 25.40 million for the first half of last year.

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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