TCRAP_Public/000919.MBX      T R O U B L E D   C O M P A N Y   R E P O R T E R

                              A S I A   P A C I F I C

             Tuesday, September 19, 2000, Vol. 3, No. 182


* A U S T R A L I A *

EISA: Austar severs takeover lifeline
FORCE CORP.: Wrtitedowns causes $6.99M loss
HIH INSURANCE: Shares drop 43% in a week
ISIS COMMUNICATIONS: Facing Telco competition for unit
McNASTER PTY.: Placed in liquidation with $A4M debt

* C H I N A  &  H O N G  K O N G *

GUANGDONG ENTERPRISES: To sell Guangdong Brewery?
LEE HING DEVELOPMENT: Records HK$11.4M 1H loss
MUI HONGKONG LTD.: Posts 1H net loss

* I N D O N E S I A *

BANK INDONESIA: Govt to delay recapitalization
INDO. SHIPPING AGENCIES ASSN: 1300 cos. face liquidation
PT BAKRIE NIRWANA: IBRA takes 51% stake
PT DAVOMAS ABADI: Court grants 6-mo. payment suspension

* J A P A N *

SOGO CO: Closure of W.Tokyo store brings in 2.2B yen

* K O R E A *

DAEWOO MOTOR: Sale may be broken up
DAEWOO MOTOR: GM-Fiat,Hyundai move to top of buyers' list
DAEWOO MOTOR: Bidding for it reopened

* M A L A Y S I A *

MBf HOLDINGS: Foreign creditors approve rehab plan

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

MONDRAGON INT'L: Chairman to get chance to rehab firm
NATIONAL STEEL CORP.: SEC extends debt relief order
PHILIIPINE NAT.BANK: Tan pulls out of sale

* S I N G A P O R E *

THAI PRIME FUND LTD: Posts first-half loss

* T H A I L A N D *

BANGKOK MASS TRANSIT CORP: Creditor blocks proposed listing


EISA: Austar severs takeover lifeline
The future of more than 85,000 eisa customers hangs in the
balance after Austar United Communications withdrew its
takeover bid for the troubled Internet service provider.

In a short statement to the Australian Stock Exchange this
afternoon, Austar said at the close of the offer period on
Friday, no binding contracts were formed between eisa the
shareholders who accepted Austar's 20 cent per share offer.
It said at the end of the takeover offer period, Austar
held 19.9 per cent of eisa.

"Austar is not in a position, and does not intend, to
compulsorily acquire the shares in eisa," the company said.
Eisa is expected to appoint a voluntary administrator.
(Fairfax I.T. 18-Sept-2000)

FORCE CORP.: Wrtitedowns causes $6.99M loss
A series of writedowns has left cinema and property company
Force Corporation with a $6.99 million bottom-line loss for
the year-ended June 30. By comparison, the company recorded
a $7.82 million profit the previous year.

Writedowns in the latest period totalled $11.6 million.
Chief financial officer Peter Holdaway said this should be
the end of the non-recurring items.  The cinema business
raised earnings before interest and tax slightly, without
the benefit of any blockbuster movies.

A dispute over selling Auckland's Force Entertainment
Centre has caused a blow-out in borrowing. The ratio of
debt to debt plus equity was 67.3%, with the ratio of
borrowings alone rising from 48% to 60.8%.  Pending the
settlement of the dispute with the buyer, Australia's
MTM Funds Management, Mr Holdaway said the centre was 100%
leased and returning good rental streams, meaning that
interest costs were being readily covered.

At issue is the date of practical completion of the centre.
An independent architect will decide if this was achieved
by December 31, 1999.  If the answer is no, the buyer has
the option of pulling out of the deal. In this case, Force
will have to repay a $50m advance payment and seek other

If the answer is yes, Mr Holdaway said, Force's position
was significantly strengthened in seeking a settlement.
Among the writedowns:

* A $10m provision on properties for sale.

* A net $2.2m loss on goodwill relating to the purchase of
assets by the Village Force Hoyts joint venture. This was
later disbanded, effective on July 1.

* Fees of $491,000 relating to the joint venture merger,
and the failed merger plan with Internet group Ihug.

* Amortising the Planet Hollywood pre-opening expenses, of

* A $3.37m write-off of Force's shareholding in Cinema Plus
Pty, owner of the Imax theatre in the Force Entertainment

Cinema Plus NZ (trading as Imax Auckland) went into
liquidation in May. Force said it had conditionally agreed
to buy the the Auckland business from the liquidator,
subject to royalty and lease agreements with Imax
Corporation in the United States.

The centre's Planet Hollywood restaurant was open for the
second half of the year. Restaurant sales were $2.86m and
merchandise sales $332,000. The trading loss was $256,000.
Force's investment in the Argentinian business Village
Cinemas SA contributed earnings of $993,000, up 52.8% on
the previous year.

Mr Holdaway said the earnings were well short of being an
acceptable return on the $40m investment, but the directors
were confident of its long-term viability.  A final
dividend is not being paid. A fully imputed interim
dividend of 1c a share was paid, compared with a total
dividend last year of 4c.  The net tangible asset backing
was 31.3c a share, down from 39c a year earlier. Force
shares fell 3c to 32c. (West Clip  18-Sept-2000)

HIH INSURANCE: Shares drop 43% in a week
HIH Insurance has ended the most traumatic week in its 32-
year history as its shares dropped 43 percent in value.

Its investors nervously await a review of the company's
credit ratings. Suspicions that the insurer was under-
provisioned were confirmed during the week, when it
announced it was selling its personal lines businesses to
meet new solvency rules.

The embattled company sold home, motor and compulsory
third-party divisions to German insurer Allianz in a deal
which lets it retain an exposure to the offloaded
operations for the next five years.  The deal, announced at
the same time as a disastrous profit result, will see HIH
return to its original focus of corporate insurance.

However, the personal lines businesses were generally
considered HIH's best assets while the remaining corporate
insurance operations were seen as the company's problem
assets.  And the heavy share price fall - from 99› at the
beginning of the week to 56› - implies the remaining
operations are worthless.

HIH, which had predicted a strong result, ended up losing
more than $21.8 million during the second half, slashing
full-year profit to just $18.4 million.  The result was
hurt by the international operations, a blow-out in claims
from FAI and a fall in the company's One.Tel shares.

Former FAI chief executive and current HIH director Mr
Rodney Adler said he was confident HIH would survive.
"We have a future but we have to really buckle down. We
definitely have a future. No question, no doubt, no
ambiguity," he said.

But he conceded that the share-price fall was having an
impact on the company. "One sits around the board table,
and it's not pleasing for anyone. It's not good for morale
in HIH, it's not good for our insurance brokers because it
makes them nervous," Mr Adler said.

HIH's disastrous result was in stark contrast to the
turnaround experienced by other listed general insurers.
AMP, NRMA and QBE all posted improved results and are set
to benefit from an upturn in the insurance cycle.

Following its result, ratings agency Standard & Poor's put
HIH on credit watch with negative implications, meaning the
agency is reviewing the insurer's ratings and they are
likely to be dropped.  S&P said the revised credit watch
reflected "the erosion of group capitalisation following
adverse developments in claims reserves impacting operating
results in the year to June 30, 2000."

S&P insurance analyst Mr Michael Vine said the review was
expected to be completed within two weeks.  If the agency
did downgrade HIH's ratings, that could reduce the number
of insurance portfolios the company was able to write and
could also increase the company's cost of funds, he said.

Under its deal with Allianz, HIH - which was founded in
1968 by current chief executive Mr Ray Williams - will
receive $200 million now plus a second payment of between
$125 million and $500 million, depending on how it
performs.  HIH, which listed in 1992, will retain a 49 per
cent interest in the personal lines businesses. They will
be put in a new joint venture vehicle with Allianz for up
to five years. (Australian Financial Review  18-Sept-2000)

ISIS COMMUNICATIONS: Facing Telco competition for unit
A drop of more than 60 percent in the share price of online
education provider Isis Communications in the past month
has reignited Telco Australia's interest in financial
information outfit Market Faxts.

With shares in Isis closing down 1c at 46c on Friday and
shares in Telco Australia finishing the week at 43c,
Telco's all-scrip bid has nudged ahead in value terms.
Telco is effectively paying 17.2c for each Market Faxts
share, while the Isis bid values it a 15.3c a share.

Market Faxts shares closed unchanged at 13c on Friday.
Shares in Isis plummeted after the company sacked more than
100 staff and announced an operating loss for the six
months to June 30 of $7.1 million - $1.47 million more than
the $5.63 million predicted for the full year.

Telco last week applied to the Australian Securities and
Investment Commission to extend its offer period to October
23 and cut the minimum acceptance level from 50.1 per cent
to 40 per cent. The telecoms equipment supplier had
attempted to withdraw its offer after its bid was trumped
by Isis. ASIC, however, refused.

So far Telco Australia has received acceptances for about 1
percent of Market Faxts. In July it launched a bid for 80
percent of Market Faxts, offering two of its shares for
five Market Faxts shares. Isis is offering one share for
three Market Faxt shares.

Brisbane-based Telco Australia managing director Mr
Siegfried Konig said the changes to its bid meant Telco
Australia's minimum acceptance level now matched Isis'
level - a detail which apparently was a sticking point with
Market Faxts' management.

"We're saying to the directors of Market Faxts it's time to
reassess...which is the better deal and now, it's ours," Mr
Konig said, adding that while Isis may have more in cash
reserves, it "still had a great deal of red ink".

Telco Australia last week posted a net profit for the 2000
financial year of $6.2 million and revenue of $159 million.
EBIT for the period was $10.3 million. Market Faxts
managing director Mr Chris Gosselin, who with chairman Mr
John Mullen owns about 54 per cent of the company, said the
situation would have to be reviewed but he saw more synergy
between Market Faxts and Isis.

Isis managing director Mr Adam Radly said the company would
not be changing its offer. (Sydney Morning Herald 18-Sept-

McNASTER PTY.: Placed in liquidation with $A4M debt
A once highly successful Brisbane construction firm is
blaming the goods and services tax for its demise, as on
Sept. 14 McMaster Pty Ltd was placed into provisional
liquidation with debts totaling $A4 million.

The company asserts that a downturn in the building
industry following the introduction of the new tax scheme
prevented it from making up for recent losses.  The company
has more than 10 unfinished Queensland Government
contracts. Provisional liquidator Paul Sweeney will meet
with the Queensland Building Services Board, which will
decide whether the company can complete its Government

C H I N A  &  H O N G  K O N G

Financially strapped Dalian International Trust and
Investment Corp. (Ditic) will be declared bankrupt after
repaying 60 percent of its US$150 million debts to its
foreign creditors.

The bankruptcy declaration was reported in the South China
Morning Post Sunday, citing acting mayor of Dalian Li
Yongjin. Earlier this year, Ditic reached a loan waiver
agreement with 16 Hong Kong, European and U.S.
banks for US$60 million of debts in arrears. The mainland
China government intends to cut the number of trust and
investment companies, originally set up as funding
mechanisms, from more than 200 to less than 50.

GUANGDONG ENTERPRISES: To sell Guangdong Brewery?
Shares in Guangdong Brewery may attract some speculative
buying. Debt-laden mainland firm Guangdong Enterprise
(GDE), parent of the brewery, has had preliminary talks
separately with China Resources and Tsingtao Brewery about
selling its brewery unit. Any sale is unlikely to be forged
soon, however, until GDE completes its debt restructuring
plan with creditor banks. An analyst's report says its
long-awaited debt restructuring plan is unlikely to be
finalized until November.

LEE HING DEVELOPMENT: Records HK$11.4M 1H loss
Investment company Lee Hing Development Ltd. posted a net
loss of HK$11.4 million for the six-month period ended

By comparison, the company recorded a net profit of HK$15.8
million for the same period a year earlier. Loss per share
was 3.32 HK cents against earnings of 4.56 HK cents per
share the prior first-half in 1999.  Revenue rose 52.9
percent to HK$358.6 million, however. An interim dividend
of 1 HK cent will be distributed.

MUI HONGKONG LTD.: Posts 1H net loss
MUI Hong Kong Ltd., engaged in the travel and hotel
industry, posted a net loss of HK$3.6 million for the six-
month period ended June 30.

That was much narrower than the HK$31.2 million it posted
for the same period a year earlier. Loss per share was 0.37
HK cents compared with 3.39 HK cents a year before. Revenue
fell 3.2 percent to HK$376.4 million. No interim dividend
was proposed.


BANK INDONESIA: Govt to delay recapitalization
The Chairman of the State Audit Agency (BPK) Satrio `Billy'
Budihardjo Joedono said the agency will not recommend the
government recapitalize Bank Indonesia any time soon.

Joedono said recapitalization of BI should be delayed until
the Finance Ministry and the central bank reach agreement
on the amount of Bank Indonesia Liquidity Support (BLBI)
the government will bear.

According to Joedono, no agreement has been reached on the
exact amount of BLBI the government has to bear since the
ministry was headed by Bambang Subianto until the current
minister Prijadi Prapto S took control of the ministry.
Meanwhile BI insisted the government has to bear Rp144
trillion, which is part of the government's responsibility
in carrying out its policies. Joedono said that whatever
amount the government agrees to it will cover the losses by
means of bonds.

INDO. SHIPPING AGENCIES ASSN: 1300 cos. face liquidation
For failing to meet a stipulation made by the previous
government, at least 1,300 Indonesian shipping companies
are facing liquidation.

Under a government regulation issued in 1999, all shipping
companies are required to have ships with a carrying
capacity of at least 5,000 gross register tons (GRT) by
October next year.  Anthon Sihombing, chairman of the
Indonesian Shipping Agencies Association (ISAA), said it is
almost impossible that the 1,310 companies could meet the
regulation in a year from now.

Sihombing said the prices were US$7 million for a second-
hand ship with a 5,000 GRT capacity and US$12 million for a
new one.   "That means the 1,310 companies would need at
US$9 billion altogether to buy second hand ships or US$15
.5 billion for news ones," he was quoted as saying by the
newspaper Bisnis Indonesia.

In addition, the existing facilities would not be adequate
to accommodate 1,300 ships of that capacity, he added.
He said ISAA had called on the government to revoke the
regulation. (AsiaGateway  15-Sept-2000)

PT BAKRIE NIRWANA: IBRA takes 51% stake
The restructuring of US$158.85 million in debt by PT Bakrie
Nirwana Resort has concluded.

Under the scheme, Indonesian Bank Restructuring Agency
(IBRA) has taken over a 51 percent stake in the ailing
hotel and resort area company.  IBRA executive Irwan
Soregar said the rehabilitation agreement contains many
facets of restructuring, including a debt-to-equity swap,
rescheduling of debt and payment by convertible bonds.

With the restructuring, Bakrie Group shares in PT Bakrie
Nirwana Resort, which has a five-star hotel in Bali, were
reduced from 100 percent previously to 38 percent.

PT DAVOMAS ABADI: Court grants 6-mo. payment suspension
The Jakarta Commercial Court has granted PT Davomas Abadi a
six-month debt payment suspension. Judge Kristi
Purnamiwulan said the suspension will allow the company
more time to negotiate with creditors on its final debt
restructuring agreement.


SOGO CO: Closure of W.Tokyo store brings in 2.2B yen
Failed department store operator Sogo Co. closed its 11-
year-old Tama store in western Tokyo Sunday. An estimated
657,000 shoppers flocked to the store looking for bargains
during its last 25 days in which a closing sale was held.
According to Sogo officials, an estimated 20,000 shoppers
helped close the store Sunday, spending 2.27 billion yen in
the process.


DAEWOO MOTOR: Sale may be broken up
Creditors of Daewoo Motor say they may break up the
company's auto-related units and sell them piecemeal if no
buyer is found.

An emergency meeting is to be held on Monday to discuss
this.  Daewoo Motor is South Korea's number two car maker.
Creditors will first try to negotiate with two groups.
One is led by Hyundai and Daimler Chrysler and the other,
US car maker General Motor and Fiat.

Creditors will also decide whether they want to inject
US$134 million in fresh capital every month to prop up
Daewoo Motor until it is sold.  Observers say additional
funding could be difficult as creditors have already spent
US$2.8 billion to keep Daewoo Motor afloat.

Last week, Ford Motors dropped its US$7 billion bid to buy
Daewoo Motor, saying the price was too high.  (Channel News
Asia  18-Sept-2000)

DAEWOO MOTOR: GM-Fiat,Hyundai move to top of buyers' list
General Motors Corp. and Fiat SpA are discussing a renewed
takeover bid for Daewoo Motor Co. after Ford, GM's arch-
rival, abandoned its pursuit of the insolvent South Korean

The U.S. company couldn't make an offer that was
"financially prudent" after going through Daewoo Motor's
books, said Meera Kumar, Ford's spokeswoman in Seoul.
Daewoo's mounting losses, almost US$18-billion of debt, and
militant unions probably deterred Ford, analysts said.

Ford's withdrawal represents a blow to the restructuring of
Daewoo Group, which collapsed last year under US$80-billion
of debt and comes as South Korean prosecutors are expected
to file charges against Kim Woo-choong, founder of Daewoo
Group, and 40 other executives for accounting fraud. The
collapse of the deal, following almost three months of
exclusive talks between Ford and Daewoo's restructuring
committee, also represents a setback for the U.S.
carmaker's Asian ambitions.

Nevertheless, GM and Fiat, alliance partners, indicated
yesterday they remained interested in acquiring Daewoo. "We
are talking to each other and preparing to meet the
relevant Korean officials," a spokesman said.

Korea's Financial Supervisory Commission said it was likely
that creditors next week would select either GM and Fiat or
Hyundai Motor -- in which DaimlerChrysler has a 10% stake
as the new priority bidder. They were excluded from the
bidding process in June after Ford offered US$6.9-billion
subject to exclusive negotiations with Daewoo's creditors.

Hyundai Motor also said it remained interested in acquiring
Daewoo. But its willingness to bid could meet opposition
from DaimlerChrysler, which yesterday said it had no
appetite to acquire Daewoo, citing the restructuring
required to return it to profit.  (National Post 16-Sept-

DAEWOO MOTOR: Bidding for it reopened
In the wake of Ford Motor Co's sudden withdrawal from a
proposed deal to buy Daewoo Motor Co, credit banks Monday
reopened the bidding for debt-ridden South Korean

The five domestic creditor banks said they would evaluate
the new bids and make a decision within a month. GM-Fiat
and a Hyundai-Mitsubishi alliance will both be allowed to
bid for once the second-largest South Korean automaker with
an annual production capacity of 2.1 million vehicles in
local and 11 overseas plants in Poland, India and other
countries, said Uhm Rak-yong, president of the Korean
Development Bank, main creditor of Daewoo Motor.

Analysts said creditors would be required to pour new
finances into the troubled Daewoo Motor, delaying the
country's corporate and banking industry reforms. The sale
of Daewoo Motor was a main part of South Korea's plan to
restructure the country's over-stretched auto industry. In
a panic reaction to a grim outlook over the economic reform
plus high oil prices, the country's main stock market index
nose-dived 8.1 percent Monday.

The Korea Stock Exchange index, already down nearly 40
percent on the year, plunged 4.2 percent again Friday when
the news on the Ford decision rattled the market. Some
analysts warned the market might fall further on concerns
over the delay of restructuring. (United Press Internation


MBf HOLDINGS: Foreign creditors approve rehab plan
Financially-troubled MBf Holdings Bhd is believed to have
secured the approval of its foreign creditors - its final
hurdle of the group's debt restructuring exercise - to
proceed with the plan.

With the approval, MBf Holdings is expected to wrap up the
debt restructuring exercise comprising nine schemes, within
the next six months. Upon the completion of its
restructuring, MBf Holdings will likely see several asset
injections that will turn it into a profitable and viable

Sources say MBf Holdings, which has debts totalling over
RM1 billion, secured the approval from the Korean and
foreign banks on the final scheme of its restructuring
exercise early this week.

"MBf Holdings' debt restructuring scheme received 100 per
cent approval from its foreign creditors at a meeting in
Hong Kong recently," according to one source.

The ailing group owes some US$150 million (RM630 million)
to the foreign creditors while its total exposure to the
domestic creditors in the other eight schemes were over
RM300 million.  Sources say the approvals on the domestic
loans last year and from foreign creditors, were achieved
without many difficulties under its restructuring scheme.

The success of MBf Holdings' restructuring exercise depends
on the approval of the foreign creditors. The exercise will
see the debt being converted into equities in MBf Holdings,
according to sources. With the latest development, MBf
Holdings will start as a clean company. It now only needs
to get the endorsement from the High Court on its
restructuring exercise.

On the group's new business direction after the
restructuring exercise, parties familiar with MBf Holdings
say it will mostly focus on the property and financial
services sectors. The new MBf Holdings will still have its
credit card business under MBf Card Services Sdn Bhd,
Peugeot car franchise, land bank and property projects in
Johor, Penang, Kedah and Kuala Lumpur, and its Australian-
listed MBf Carpenters Ltd. (The Edge  15-Sept-2000)


MONDRAGON INT'L: Chairman to get chance to rehab firm
From the looks of it, Mondragon International Philippines,
Inc. chairman Jose Antonio U. Gonzales will have a shot at
rehabilitating the bleeding casino operator.

A well-placed source told BusinessWorld over the weekend
the Clark Development Corp. (CDC) last week voted in favor
of the 650-million Philippine peso (US$14.25 million at
PhP45.612=US$1) offer of Mr. Gonzales and PentaCapital
Investment Corp. to pay Mondragon's debts as well as get
its casino back in full operation.

The Gonzales proposal bested the PhP400-million ($8.77
million) offer of Bank of Commerce and Antonio "Tonyboy"
Cojuangco who was keen on saving Mondragon. And even if
Malaca¤ang -- which has the final say -- has yet to return
the casino license of Mr. Gonzales, the source said the
approval by the CDC committee which evaluated the two
proposals can be considered final.

BusinessWorld tried to reach CDC chairman Rogelio Singson
for comment, but was not available.  In an earlier
interview, Mr. Singson said the committee will rule in
favor of the party that could provide up-front cash to
guarantee top priority will go to the payment of
Mondragon's debts to the state-owned firm.

"We all know that CDC has been in the red because of
nonpayment so that's a priority for us," he said. Mondragon
owes CDC P325 million in rental fees. Mr. Gonzales himself
confirmed CDC's decision, saying Mondragon is now awaiting
the PhP650-million bridge financing committed by

But if the investment firm fails to deliver the much-needed
cash, the Mondragon chairman said he will not hesitate to
tap other groups.  In fact, sources said, Mr. Gonzales has
been holding talks with various casino groups from the US,
South Korea and Brunei which have shown interest in
investing over PhP600 million ($13.15 million) as well as
putting up more hotels and casinos inside the Mimosa
Leisure Estate in Clarkfield, Pampanga.

"PentaCapital will not pay us until next week. But I have
gotten a lot of offers especially on (the) hotel and casino
(operations). And if somebody comes in earlier, then we
will get them as investors. But Penta will always be
rewarded for its efforts. That's the way we play," he said.

Under their agreement, the investment firm will provide
Mondragon a PhP650-million bridge financing to settle its
obligations to CDC, the Philippine Amusement and Gaming
Corp. and the Bureau of Internal Revenue, as well as fund
working capital requirements to resume casino operations.

However, PentaCapital -- which also serves as Mondragon's
financial advisor -- will infuse the financing only if
Mondragon's creditors approved the proposed rehabilitation
plan involving a six-month payment moratorium and a
repayment period of between eight- and 10-years with
interest of about 8%.

The casino firm will also negotiate for an equity
conversion as well as partial dacion en pago, or asset-for-
share arrangement, involving some of its assets, together
with personal properties of Mr. Gonzales.  But so far, the
investment firm has not been able to convince the creditors
to approve the rehabilitation program. Sources said the
banks have even sought shorter repayment schedules and
higher interest rates.

Mondragon's creditors include Metropolitan Bank and Trust
Co.; Asian Banking Corp.; Asia Trust Development Bank,
Inc.; Bank of Commerce; Chinatrust Bank; Dao Heng Bank;
East-West Bank; Far East Bank and Trust Co.; Bank of the
Philippine Islands; Hongkong and Shanghai Bank; Land Bank
of the Philippines; International Exchange Bank; Mindanao
Development Bank; Bank of Communications; PDCP Bank; the
Philippine Banking Corp.; the Philippine National Bank;
Rizal Commercial Banking Corp.; Solid Bank Corp.; TA Bank
of the Philippines, Inc.; Union Bank of the Philippines;
UBP Capital; Cocobank; Urban Bank; All Asia Capital; First
Metro Capital; and United Pacific Capital. Capital; and
United Pacific Capital. (Business World  18-Sept-2000)

NATIONAL STEEL CORP.: SEC extends debt relief order
The Securities and Exchange Commission (SEC) has granted a
two-week extension of the debt suspension order on National
Steel Corp. to allow its Malaysian owners extra time to
present an alternative rehabilitation plan for the ailing
steel company and bring in two groups of potential
investors that will infuse additional capital.

The suspension order for the payment of NSC's crippling
P16.5-billion debts expired last Friday, Sept. 15. As this
developed, Trade and Industry Secretary Manuel Roxas II
said the government will support Malaysia's Hottick
Investments Ltd., which controls 82.5 percent of NSC, in
its efforts to get new investors for the company.

He said the government is prepared to provide incentives
"to the extent that is possible" to the "white knights" who
will hopefully save NSC from liquidation.  The three-man
interim receivers committee appointed by the SEC to craft a
rehabilitation plan for NSC said they were left with no
choice but to recommend the liquidation of the steel
company's over P20 billion worth of assets after Hottick's
share assignee Perungusan Danaharta Bhd. rejected the
rehabilitation plan.

"There is no concrete proposal to attract investors/white
knights to inject required capital and turn around the
business whilst lending technical and management
expertise," Danaharta said in its petition to the SEC.

SEC Chairperson Lilia Bautista said in the absence of a
white knight or an additional capital infusion from its
stakeholders, then liquidation becomes an option. In a last
minute bid to stave off liquidation, Hottick chairman Abdul
Rashid Bin Abdul Manaff wrote Bautista to seek for an
extension of the debt moratorium and give them time to work
out a new rehabilitation plan.

"At the same time, we are also organizing for the
installation of a working board and management committee
for NSC to facilitate the operations of NSC and
finalization of the rehabilitation plan," he said.

NSC shut down its Iligan plant last November. Roxas said it
is government's primary policy to work for the reopening of
the steel mill and restoring jobs.

"Should a new investor come in, we are willing to offer
incentives to NSC or help to the extent that is possible if
only to make sure that it would survive and turn around,"
he said. "If not, we will line up like everyone else when
the company is liquidated. Since the government is not a
creditor, naturally it will be one of the last in the order
of priorities."

The government, through the DTI-attached agency National
Development Co., still holds a 12.5 percent stake in NSC.
Roxas said the assistance package could range from fiscal
or tax incentives to tariff protection and dumping shield.
The trade department is also considering an earlier
proposal involving the possible imposition of quantitative
restrictions against imports by claiming NSC's case as a
"threatened industry" which under World Trade Organization
rules could be invoked to allow government import
restrictions through higher tariffs and import quotas.
(Philippine Star  18-Sept-2000)

PHILIIPINE NAT.BANK: Tan pulls out of sale
The Philippine government's attempt to sell its 30 per cent
holding in the ailing Philippine National Bank fell into
further confusion yesterday when Lucio Tan, the business
tycoon said he was withdrawing his offer to buy the stake.

Jose Pardo, finance secretary, told the Financial Times
that Mr Tan announced his withdrawal in a letter to the
Department of Finance.  Mr Tan also demanded the repayment
of a 600m peso ($13.2m) down payment he made for the
government stake, Mr Pardo added.

The latest episode in Manila's long-running effort to
divest itself of its PNB holding could be damaging for the
government, which needs the revenue from the sale to help
meet a larger-than-expected deficit. The sale is also a
condition of a substantial World Bank loan.

The government's handling of the affair is also likely to
be seen as a measure of President Joseph Estrada's overall
approach to Mr Tan, who critics see as one of the
president's closest business associates.  Monday was the
deadline for Mr Tan to submit a letter of credit to the
Department of Finance to cover the 6.3bn pesos balance that
Starbuck Equities, a Tan-owned holding company, offered on
July 19 to buy the 30 percent stake.

Mr Tan had last week asked for an extension of the
deadline, but this was turned down by the government.
However, Mr Pardo said Mr Tan had now been given until
September 22 "to comply with the bidding guidelines"
attached to the July sale.  In his letter, Mr Tan said he
was withdrawing because he disagreed with aspects of the
government's handling of the PNB sale, according to Mr
Pardo. He added that a new securities law would put an
extra 1.5bn pesos on the sale.  Mr Tan was unavailable for
comment on Monday.

Mr Pardo said the letter had "no legal basis" and that Mr
Tan would forfeit his down payment if he withdrew.
He added, however, that one alternative being considered
was to re-auction the government stake, along with a 46 per
cent stake that Mr Tan already holds.  This would be a
repeat of the failed joint auction in June between the
government and Mr Tan.

"He [Mr Tan] may be willing to join me again in a joint
sale, but at lower price [than in June]," Mr Pardo said.

Mr Pardo also said Mr Tan may now object to a commitment in
the July sale that he inject 10bn pesos in new capital into
the bank.  Gonzalo Bongolan, of PCCI Securities, said Mr
Tan's withdrawal would reignite concerns over cronyism
between the government and its business contacts. PNB
shares ended trading in Manila down 8.1 per cent at 40
pesos, compared with Mr Tan's agreed offer price in July
for the government stake of 100 pesos. (Financial Times


THAI PRIME FUND LTD: Posts first-half loss
Thai Prime Fund Limited, incorporated in the Republic of
Singapore, recorded an unaudited loss of $67,837 for the
six-month period ended 30 June, up from $58,946 the year

The figures represented a loss per share of 44 cents,
compared with a loss of 38 cents per share the year before.
The company has been granted the tax concession under the
Tax Exemption Scheme for Fund Management, whereby the
Company shall be exempted from Singapore Income Tax on its
profits derived from approved investment assets which
included its investment in the Fund. The company may,
however, suffer withholding tax in respect of income
received from its foreign investments.  The Board of
Directors is not recommending an interim dividend.


BANGKOK MASS TRANSIT CORP: Creditor blocks proposed listing
The parent company of Bangkok's first mass transit system
has been given in-principle approval to list on the Stock
Exchange of Thailand but a creditor of the ailing company
said Friday it was unlikely to go ahead on schedule.

On Thursday the Stock Exchange of Thailand said it had
approved in principle the listing of Bangkok Mass Transit
Authority System Corp., "following determination that the
BTSC possesses the initial qualifications required."

However, a creditor who asked not to be named said BTSC was
not expected to be in a position to distribute shares to
minor shareholders within six months as required by the SET
because it would first need to restructure its debts.

"BTSC has yet to call for a meeting with creditors to
discuss debt restructuring. It is still in the process of
developing a revenue projection plan," the creditor tolf
AFX-Asia, an AFP financial news subsidiary.

BTSC creditors include Kreditanstalt fur Wiederaufbau
(KfW), International Finance Corp, Siam Commercial Bank,
Industrial Finance Corp of Thailand and National Finance
Plc.  BTSC is the parent company of Bangkok's new elevated
light rail operator, popularly known as the "skytrain,"
which finally started operations in December last year
following years of setbacks over construction and
financing problems.

However, Skytrain is faltering as it nears its first
anniversary.  BTSC has asked creditors to revise payment
schedules after it failed to meet two months' debt
repayments on loans of worth about 27 million dollars,
analysts said.  If it defaults on its next debt repayment,
BTSC debt will be classified as non-performing.

The company generates enough revenue to cover daily
operating costs of five million baht, however it owes a
further 10 million a day in interest charges, The Nation
daily reported Friday.  The BTSC has failed to make the
repayments because passenger numbers remain well below
target, the Bangkok Post has said previously.

When the train system was built, the BTSC had projected
passenger numbers of 600,000 daily. Currently the train
averages about 170,000 passengers.  The skytrain reported
losses of 1.6 billion baht (40 million dollars) for the
first half of 2000. (AsiaGateway  18-Sept-2000)

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

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Darryl Henning, Managing Editor, James Philip P.
Jover and Maria Vyrna Ni¤eza, Editors.

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

This material is copyrighted and any commercial use, resale
or publication in any form (including e-mail forwarding,
electronic re-mailing and photocopying) is strictly
prohibited without prior written permission of the
publishers.  Information contained herein is obtained from
sources believed to be reliable, but is not guaranteed.

The TCR -- Asia Pacific subscription rate is $575 for 6
months delivered via e-mail. Additional e-mail
subscriptions for members of the same firm for the term of
the initial subscription or balance thereof are $25 each.
For subscription information, contact Christopher Beard at

                  *** End of Transmission ***