TCRAP_Public/000920.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

             Wednesday, September 20, 2000, Vol. 3, No. 183


* A U S T R A L I A *

EISA: Austar keeps talks open
TELSTRA: Installment receipts plunge

* C H I N A  &  H O N G  K O N G *

CHINA CYBERPORT: Posts HK$14.08M 1H net loss
ING BEIJING INT'L: Records 1H net loss
KADER HOLDINGS: Posts 1H net loss

* I N D O N E S I A *

ASIA PULP &PAPER CO.: To swap up to $3B debt for cash,bonds

* J A P A N *

DESCENTE LTD.: Warns of growing loss
KUMAGAI GUMI: Wins $4.2B debt waiver

* K O R E A *

DAEHAN INSURANCE: Fails to meet solvency ratio
DAEWOO MOTOR CO.: Stricter auction rules ahead
DAEWOO MOTOR CO.: Creditors to grant fresh funds
HANIL INSURANCE: Fails to meet solvency ratio
HUNGKUK INSURANCE: Fails to meet solvency ratio
HYUNDAI INSURANCE: Fails to meet solvency ratio
KUMHO INSURANCE: Fails to meet solvency ratio
LG INSURANCE: Fails to meet solvency ratio
SAMSHIN INSURANCE: Fails to meet solvency ratio
SHINHAN INSURANCE: Fails to meet solvency ratio

* M A L A Y S I A *

LIEN HOE CORP: RAM downgrades loan stocks

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

NATIONAL STEEL CORP.: Asks for reconsideration of lease
UNIWIDE HOLDINGS INC.: Rehab faces further delay

* S I N G A P O R E *

LINKS ISLAND HOLDINGS: Suspended firm loses out on contract

* T H A I L A N D *

PRANDA JEWELRY: Signs debt-restructuring deal
THAI FISHERY: Opposes receivership order
THAI PETROCHEM.INDUS.: Proposes new route for settling debt


EISA: Austar keeps talks open
Struggling Internet service provider eisa could still end
up in the hands of voluntary administrators, even though
Austar United Communications remains keen to acquire the
company's assets.

Regional pay-TV provider Austar said last night it would
continue to pursue the acquisition of eisa's business after
failing to secure enough acceptances under its $24.4
million takeover offer.  Austar is not expected to launch
another takeover bid for eisa, in which it holds 19.9 per
cent. Instead, a direct purchase of the business is likely
- possibly through a voluntary administrator.  Austar's
rescue of eisa came unstuck when it fell 3 per cent short
of its 90 per cent minimum acceptance condition.

"We are sorry that an insufficient number of shareholders
accepted our offer," Austar chief executive John Porter
said. "Austar still believes that eisa's assets are
attractive and offer a strategic fit with Austar's.
Therefore, we intend to continue discussions with eisa with
a view to acquiring the business."

Austar launched its friendly takeover bid for eisa in June,
offering a lifeline to save the company from possible
financial collapse after its $325 million OzEmail bid
failed.  An Austar spokesman said the company would be
interested in talking to an eisa administrator about the
assets. (The Advertiser  19-Sept-2000)

TELSTRA: Installment receipts plunge
Telstra installment receipts plunged to new lows yesterday,
slipping below $3 amid continuing pressure from
institutional investors who are dumping telecom stocks
around the world.

Telstra shares fell below $6 for the first time in two
years as the stock traded ex entitlement to its 10c a share
final dividend. The shares ended 5.8c lower at $6 and the
instalment receipts hit a record low, down 4c at $2.98.
Yet both stocks held up relatively well against a broader
sharemarket that fell 1.6 per cent as world markets
stumbled on fears of escalating oil prices and concerns
that the rising US currency would fuel inflation in Europe
and other developed countries.

Early trading in European markets last night suggested
investors were in for more losses. The decline in the price
of Telstra's instalment receipts, the most widely owned
stock in the market, is causing heartburn in suburbia, with
more than 1.5 million investors faced with paying a final
instalment of $2.90 November 2 against a stock that has
shed more than one-third of its value in 11 months.

Institutional investors who paid $4.75 per instalment
receipt during the Federal Government's $16 billion Telstra
2 share sale last year are 38 per cent in the red on their
investment. Brokers and institutional investors believe the
receipts will continue to tumble for the next six weeks and
do not see any prospect of a significant change in
sentiment for at least six months.

Overhanging the telecom sector are fears that profit
margins are declining under price competition from new
entrants; and that carriers are paying too much for so-
called third generation wireless spectrum. The 3G spectrum
facilitates Internet access over mobile devices.

"The sentiment generally is so bad in the sector - it has
nothing to do with Telstra specifically, although it is of
course the biggest stock in the sector," a senior
institutional analyst said. "The sentiment globally on
telecommunications is just so poor, you are seeing AT&T,
British Telecom and Deutsche Telekom up and down by 2 or 3
per cent each night."

On the Australian Stock Exchange, the Telecommunications
index fell 2.78 per cent to 1559.4 points. Mobile phone
reseller One.Tel was among the big losers, down 7c to 84c,
while Cable & Wireless Optus shed 15.1c to $4.157.
Separately, the Australian Competition and Consumer
Commission said Telstra's requirement to provide untimed
local calls would be among controls to be reviewed
following an order from the Federal Government.

Communications Minister Senator Alston has instructed the
ACCC to hold a public inquiry into whether certain price
control arrangements should continue after June 30, 2001.
"If the ACCC finds there is still a need for price controls
after this time, the direction requires the ACCC to outline
what form it believes any future price control arrangements
should take," the the watchdog said in a statement. Telstra
is subject to a series of ACCC price controls which expire
in June 2001. (Sydney Morning Herald  19-Sept-2000)

C H I N A  &  H O N G  K O N G

Beijing Development (Hong Kong) Ltd., a woolen products
trader and property investor, recorded a HK$11.52 million
net loss for the six-month period ended June 30, down from
a HK$12.54 million net loss for the same period a year
earlier. Loss per share was 13.4HK cents compare to 14.6HK
cents for the period last year.  Revenue rose 49 percent to
HK$90.39 million, but no interim dividend will be distributed.

CHINA CYBERPORT: Posts HK$14.08M 1H net loss
China CyberPort Ltd., a property trader and developer
formerly known as Po Wing Kwan International (Holdings)
Ltd., posted a HK$14.08 million net loss for the six-month
period ended June 30, down from a HK$22.51 million net loss
for the same period a year ago. Loss per share dropped to
1.24 HK cents from HK$2.78 for the same period a year ago.
Revenue declined 0.9 percent to HK$28.41 million. No
interim dividend will be distributed.

China Internet Global Alliance Ltd., a property and
infrastructure investment company also involved in
information technology services, posted a net loss of
HK$150.4 million for the six months ended June 30. By
comparison, the company recorded a net profit of HK$258.5
million for the same period a year earlier. Loss per share
was 3.29 HK cents this first half, compared with 5.77 HK
cents earnings per share the same period a year ago.
Revenue fell 24 percent to HK$1.45 billion. No
interim dividend will be distributed.

ING BEIJING INT'L: Records 1H net loss
Investment company ING Beijing Investment Ltd. recorded a
HK$1.77 million net loss for the six-month period ended
June 30, down from HK$3.49 million for the same period a
year earlier. Loss per share was halved to 0.35 HK cents
from 0.70 HK cents a year ago.  Revenue fell 25.8 percent
to HK$6.67 million. No interim dividend will be

KADER HOLDINGS: Posts 1H net loss
Kader Holdings Ltd., a plastic toymaker, recorded a net
loss of HK$29.7 million for the six-month period ended June
30, up from a HK$9.2 million loss a year ago.

Loss per share also widened to 4.5HK cents from 1.4HK
cents.  Revenue, meanwhile, fell 27 percent to HK$113.4
million. No interim dividend will be distributed.

Pacific Century Regional Developments, which owns 34
percent of Pacific Century CyberWorks, may have to pay as
much as HK$268 million to compensate a Canadian company for
violating their joint-venture Singapore car park
development agreement, according to the online edition of
The Straits Times.

Canadian Imperial Investment successfully sued the Richard
Li company for over S$60 million. Singapore's High Court
ruled that Pacific Century Regional Developments failed to
properly inform the partner when it transferred its 75
percent stake in the joint venture to Tricom Holdings,
now known as Pacific Century CyberWorks. Canadian Imperial
owned the other 25 percent of the venture.

Lawyers for the two sides are negotiating the amount of
compensation, the Strait Times said. (Quamnet News  19-

SmarTone Telecommunications Holdings Ltd., Hong Kong's
third-largest mobile phone operator, recorded a HK$363
million net loss for the fiscal year ended June 30. The
company attributed the loss to increased subsidies on
mobile phones for customers and keen competition. The
company also had an extraordinary writeoff of HK$488
million. Loss per share was 60HK cents. A final dividend of
5 HK cents will be distributed.


ASIA PULP &PAPER CO.: To swap up to $3B debt for cash,bonds
Asia Pulp & Paper Co., one of Asia's most indebted
companies, is planning to exchange $2.5-$3 billion of its
debts for a combination of cash and new bonds.

The New York-listed paper maker, which has most of its
business in Indonesia, plans to offer a mix of cash and
longer-dated bonds to holders of four existing debt issues.
Cash could make up 50 percent of the deal, while the
longer-dated bonds would mature in 2004 or 2005, according
to the Asian Wall Street Journal.

Such a deal could ease investor and analyst concern that
the company, which owes about $10.5 billion, may not be
able to refinance its borrowings. In July, the company
borrowed $100 million at 25 percent interest to avoid
defaulting on an earlier loan. More than $2 billion of its
total debt must repaid by the end of 2001, according to the
company's financial statements. (Bloomberg, Asia Wall
Street Journal 19-Sept-2000)


DESCENTE LTD.: Warns of growing loss
Descente Ltd. expects a larger loss for its first-half than
previously forecast, citing weakness in consumer spending
and sagging sales.

The Japanese sportswear maker is now estimating an 800
million yen ($ 7.5 million) group loss on sales of 29.9
billion yen for the six-month period ending Sept.30.
Previously, it had forecast a 500 million yen loss on sales
of 32.5 billion yen.  It also now projects a parent pretax
loss of 830 million yen on sales of 26.8 billion yen. Given
its expected poor performance, the company will not pay a
dividend for the half.

KUMAGAI GUMI: Wins $4.2B debt waiver
Sumitomo Bank, Shinsei and 13 other banks have agreed to
waive Y450 billion ($4.2 billion) of debts for Kumagai
Gumi, the Japanese construction company.

The waiver is one of the largest in the industry, which,
with more than 10,000 companies and about 10 percent of the
Japanese workforce, is suffering from excess capacity and
severe financial problems.  It follows a string of bail-
outs in the past two years that has hindered consolidation.

Under the restructuring, Taichiro Kumagai, Kumagai
chairman, and Yoshio Matsumoto, president, will resign; the
workforce will be cut by 30 percent to 4,600 in three
years; and total debt will be reduced to Y242 billion in 12

The rescue of a company teetering on the edge of bankruptcy
has caused dismay among some observers.  "Weak companies
should undergo aggressive restructuring and even be allowed
to fail," said Jason Rogers, banking analyst at Fitch, the
international credit rating agency. "In the long term, it
would be a plus for the health of the financial sector and
the economy."

Construction companies have been closely linked to the
ruling Liberal Democratic party and have received strong
political support.  The banks were also eager to lift the
cloud of Kumagai's debt ahead of the mergers next year of
Sumitomo and Sakura Bank (which are both involved in the
Kumagai bailout), and Tokai Bank (another Kumagai creditor)
with Sanwa Bank and Toyo Trust and Banking.

Kumagai will write down its capital from Y65.1bn to Y17bn
to cover losses. It said it would write off Y570bn of bad
debts in the six months to September, leading it to
forecast a group net loss for the half-year of Y465.8bn
compared with its previous estimate of Y5.2bn loss.

"We aren't certain this is sufficient to improve Kumagai
Gumi's financial profile to a satisfactory level to make
investors confident the company will be able to restructure
its business," said Mr Miyakawa at S&P.  "It's hard to see
how it can reduce the rest of its debt - about Y550bn -
given that its cash generation and order activity is so

Under the debt-forgiveness scheme, Shinsei Bank will waive
Y100bn of loans and sell the remaining Y80bn on its books
to Sumitomo Bank, the main creditor. Sumitomo will forgive
Y234bn while 13 other creditors will forgo Y116bn of debts.
Shinsei's response to Kumagai's request has been closely
watched after the bank's refusal to bail out Sogo
eventually resulted in the retailer's collapse in July.
(Financial Times  18-Sept-2000)


DAEHAN INSURANCE: Fails to meet solvency ratio
HANIL INSURANCE: Fails to meet solvency ratio
HUNGKUK INSURANCE: Fails to meet solvency ratio
HYUNDAI INSURANCE: Fails to meet solvency ratio
KUMHO INSURANCE: Fails to meet solvency ratio
LG INSURANCE: Fails to meet solvency ratio
SAMSHIN INSURANCE: Fails to meet solvency ratio
SHINHAN INSURANCE: Fails to meet solvency ratio
Eight out of 21 life insurance companies did not meet the
solvency ratio as of the end of June, though their solvency
power slightly improved.

According to the Financial Supervisory Service yesterday,
such life insurance companies as Daehan, Hyundai, Shinhan,
LG, Kumho, Hanil, Samshin and Hungkuk failed to meet their
solvency ratio of 100 percent as of end-June.

Shinhan and Kumho, however, as of July, were able to pay
insurance money with loans of 10 and 5 billion won,
respectively, through issuance of subordinated bonds.
In terms of solvency ratio, Youngpoong Life Insurance was
the healthiest with a ratio of 22,311 percent, followed by
Prudential with 4,674 percent, ING Bearing with 3,112
percent and Samsung with 1,668 percent.  (Korea Times  19-

DAEWOO MOTOR CO.: Stricter auction rules ahead
The South Korean government on Tuesday imposed stricter
rules for the new auction of troubled Daewoo Motor Co.
saying only binding offers would be accepted to prevent
bidders from pulling out.

The decision is intended to preclude a repetition of Ford
Motor Company's withdrawal from its 6.9 billion dollar bid
for Daewoo Motor, which shocked Daewoo Motor's creditor
banks and wreaked havoc on the Seoul financial market.
Because the bids received in the first auction in June were
non-binding, Ford was able to withdraw from the transaction
without risking penalties, even after being selected as the
primary negotiating partner.

The government intends to push for the auction of Daewoo
Motor to be sealed by October 20, according to a statement.
Ford withdrew from the deal last Friday, no official reason
being given. Analysts have said it could have been caused
by Ford's own troubles or because it considered the price
too high after going through the Daewoo books.

Daewoo Motor's five major creditors and Daewoo's
restructuring committee have sought fresh bids from General
Motors Corp. and DaimlerChrysler, which took part in the
earlier auction with Ford.  The winner will be allowed to
take over Daewoo Motor and make the payment afterwards,
creditors said.

DAEWOO MOTOR CO.: Creditors to grant fresh funds
Daewoo Motor creditors will grant the Korean car maker
additional working capital totaling 500 billion won (S$800
million) to help keep factories operating until its sale is
completed. They may also drop their opposition to a solo
bid from Hyundai Motor.

Creditors aim to sell Daewoo Motor by Oct 22 after Ford
Motor scrapped its US$7 billion (S$12 billion) offer last
week, according to a joint report to President Kim Dae Jung
by South Korea's Finance and Economy Ministries.

"We can't generate enough money from our own operations as
we are selling fewer vehicles than needed to break even,"
said Daewoo Motor spokesman Lee Chang Won.

Daewoo Motor creditors want a speedy sale because the value
of the car maker is falling along with its market share.
The need for creditors to pump in more short-term funds
could, however, leave them with even bigger losses when
they find a buyer.  Daewoo Motor's debts could top 18
trillion won.
The lenders said on Monday they would invite the four car
makers that submitted bids in competition to Ford to make
fresh offers by Oct 2. General Motors and Fiat SpA have
said they are still interested, while DaimlerChrysler has
said it is not likely to resubmit its joint bid with
Hyundai Motor.  With DaimlerChrysler withdrawing, the
lenders may now allow Hyundai Motor to bid alone.
(Bloomberg News, AFP, Straits Times  20-Sept-2000)


LIEN HOE CORP: RAM downgrades loan stocks
The Rating Agency Malaysia Bhd (RAM) has downgraded the
rating of Lien Hoe Corporation Bhd's RM53.82 million
redeemable secured loan stocks (RSLS) from C1 to D.

The action followed Lien Hoe's failure to redeem
outstanding RSLS totaling RM43.82 million on Sept 16, after
they matured Aug 17 and a 30-day grace period expired.

Lien Hoe is undergoing a restructuring, which includes a
proposed warrants issue. Part of the proceeds from the
proposed warrants had been earmarked for the RSLS
redemption. The restructuring is not due to be completed
until December, however.

On July 12, RAM maintained the RSLS rating at C1 in
anticipation of Lien Hoe's ability to generate sufficient
cash flow to support its high debt level, which then
totaled more than RM290 million. The lower D rating
represents that the company already is in default.
RAM confirmed it will continue to closely monitor Lien
Hoe's restructuring progress.


NATIONAL STEEL CORP.: Asks for reconsideration of lease
National Steel Corp has asked major creditor Philippine
National Bank to reconsider its decision to reject NSC's
lease agreement with Allengoal Steel Fabrication and
Trading Co, according to NSC's interim management committee
chairman Ibrahim Bidin.

The lease agreement calls for Allengoal to operate NSC's
steel complex  in Iligan City.  PNB accounts for about 30
percent of NSC's overall debts of 16.5 billion pesos.
Bidin said the arrangement would allow NSC to resume
operation of the plant soon so as to prevent deterioration
at the facilities and dislocation of its workers.

PNB originally objected to the lease agreement due to
Allengoal's failure to provide historical financial data
needed to determine its capability to run NSC's complex.

UNIWIDE HOLDINGS INC.: Rehab faces further delay
The rehabilitation of ailing Uniwide Holdings Inc. is
facing further delay with the closing of the final
agreement between UHI and its creditors, which was
originally slated for this month, expected to be postponed
by another month.

UHI is scheduled to hold its special meeting on Sept. 22 at
the Uniwide Metromall in Las Pi¤as City where the company
would seek its stockholders' approval to the entry of
Casino Guichard Perrachon and to the proposed rehabilita-
tion plan.

In an interview with the INQUIRER, a source from the
banking industry said the banks of taipan Lucio Tan--Allied
Bank and Philippine National Bank (PNB)--have yet to
approve the proposed rehabilitation plan.

"PNB and Allied Bank are still not signing any agreement
with UHI. We have no choice but to move the closing to
October," the source said.

Due to the two bank's apprehensions over the proposed
rehabilitation plan for UHI, state-owned Land Bank of the
Philippines said it was also not signing any agreement with

"We just want to make sure that the deal is above board. We
have to be careful since Landbank is a government bank.
What if another bank got a better deal?" said Alfonso Cruz,
Landbank senior executive vice president for institutional

Only seven banks have so far signed separate memorandum of
agreement with UHI, namely, Equitable PCI Bank, Rizal
Commercial Banking Corp. (RCBC), United Coconut Planters
Bank (UCPB), Global Bank, International Exchange Bank, Bank
of the Philippine Islands (BPI) and East Asia Capital Corp.

The rehabilitation plan proposes to convert the Uniwide
Metromall in Las Pi¤as City into a condominium project
under a special purpose corporation. The shares of the
corporation would be distributed to the creditors as
payment for the outstanding debt.

"The value of the Uniwide Warehouse Club area within the
Uniwide Metromall would be carved out of the total value of
Metromall and the balance will be given by way of dacion en
pago or payment-in-kind arrangement to PNB and Allied Bank.
The PNB and Allied Bank as mortgagee banks of Uniwide
Metromall are concerned over the implementation of the
rehabilitation plan.

"The coastal mall will continue to operate as a warehouse
with the French group taking over. The Metromall in Las
Pi¤as will be converted into a condominium with four units.
One unit will be transferred to the new realty firm of
Uniwide. The three other units will be transferred another
property holding company likewise held by Uniwide," the
source said.

The six banks that signed separate agreement with UHI will
have shares in the property holding firm of Uniwide. A
signing of an escrow agreement would follow the MOAs by all
the creditors of Uniwide with the Citibank as escrow agent,
paving the way for the complete takeover of the company by
Casino Guichard Perrachon.

Last February, Casino Guichard Perrachon entered into a
memorandum of understanding with the Uniwide group for the
infusion into the company of P3.57 billion for an 80-
percent stake in the firm.  The amount to be infused would
be used the P10 billion in loans owed by Uniwide to its
creditor-banks that were not settled by dacion en pago
arrangements. Casino Guichard's investment, however, would
be made only upon the successful implementation of the debt

The Uniwide Group in June 1999 filed a petition for debt
relief with the SEC over obligations from various creditor
groups amounting to more than P11 billion. (Philippine
Daily Inquirer 19-Sept-2000)


LINKS ISLAND HOLDINGS: Suspended firm loses out on contract
Suspended company Links Island Holdings said yesterday it
had lost out on a contract for work at the Southern

Links' wholly-owned subsidiary SLM Holdings was negotiating
with the main contractor for dredging and reclamation works
there. But Links said: "The contract was not awarded due
mainly to pricing difference."

The Southern Islands project was one of three Links was
hoping to take part in. The others are at Jurong Island and
Tuas View. The price of Links shares rose on news of these
three projects coming on-stream and soared on heavy volumes
in the first week of August.

This prompted Links managing director Winstedt Chong to
publicly deny rumours the company was the subject of a
takeover and that it had won an e-banking licence. He even
called the company's share price "crazy."  But the price
continued to climb.

And after a week of heavy trading, Mr Chong and his wife
Cynthia Tan stunned the market by announcing they were
selling most of their stake in the company to an unknown
businessman, Christopher Kou.  Shares of Links Island have
been suspended since Aug 16 and the Singapore Exchange is
investigating if the stock was cornered.

According to SGX rules, a stock is cornered when a single
interest or group has such tight control of the stock it
cannot be obtained for delivery on existing contracts,
except at prices and on terms dictated by that interest or
group. The Commercial Affairs Department has also been
called in to investigate.  (Business Times  20-Sept-2000)


PRANDA JEWELRY: Signs debt-restructuring deal
Pranda Jewelry has signed a debt-restructuring agreement
with 14 creditors who are owed 1.7 billion baht.

Bangkok Bank is the main lender, with 500 million baht
outstanding. Company chairman Prida Tiasuwan said the main
component of the agreement was to extend the loan repayment
schedule to 10 years from one year. Interest will be
reduced, with the first instalment due at the beginning of
the second year.

In addition, repayment of about 138 million baht would be
deferred until after the 10th year, with interest at the
prevailing minimum lending rate. Creditors also agreed to
provide an overdraft line of 114 million baht in the first
year as working capital.

With total annual revenue of 1.5 billion to 1.7 billion
baht, Pranda accounts for a market-leading 11% of
Thailand's total jewelery exports. (Bangkok Post 19-Sept-

THAI FISHERY: Opposes receivership order
Thai Fishery Plc and two of its executives from the
Masyawanich family yesterday appealed against a Central
Bankruptcy Court receivership order granted following a
lawsuit filed by the Export Import Bank of Thailand.

The Exim Bank had sought to recover $10 million from
delisted Thai Fishery, Thai Fishery (Songkla) Co, Dr Marut
Masyawanich and Manit Masyawanich. The funds were revolving
loans for export and loans for discounting promissory notes
for export.  However, the debtors defaulted on repayments.

After reviewing testimony from both sides, the court on Aug
18 ordered that all four debtors be placed in receivership,
with receivership officers to manage the debtors' assets.
Thai Fishery had asked the court, when determining whether
the value of the firm's assets was much lower than its
liabilities, to note that Thai Fishery had filed suit
against the bank in a civil court, citing right to
protection against currency devaluation.

As well, the company claimed a right to claim US$25 million
from James Libar in accordance with a ruling given by a
court in Ontario. The company also claimed a right to ask
the Customs Department for tax compensation of 216 million
baht and rebates totalling 11 million baht from the Revenue

It had asked its lawyer to file a suit against the Canadian
Imperial Bank of Commerce for claims totalling 900 million
baht. However, the court decided that as the rights claimed
by the company were without concrete supporting evidence,
the debtors' assets were well below their liabilities and
ordered that they be placed in receivership. (Bangkok Post

THAI PETROCHEM.INDUS.: Proposes new route for settling debt
In yet another counterattack against its creditors, Thai
Petrochemical Industry Plc (TPI) is proposing a new debt
restructuring plan to replace the existing one which it
finds unacceptable.

Prachai Leopairatana, chief executive of TPI, said the plan
proposed by the creditors would unduly reduce the group's
capital and depreciate the company's asset value. The
creditors' proposal sees a conversion of 75% of unpaid
interest to equity at 5.5 baht a share.

The scheme was different from the previous plan agreed on
in 1998. Previously, the creditors had agreed to let TPI
convert 30% of the debt into equity at 15-16 baht a share.
If the company failed to repay the debt, the creditors
could convert another 45% of the debts into equity without
having to evaluate the share value.

"Converting debt into equity at 5.5 baht a share is
tantamount to reducing capital and forcing us to
recapitalise sooner or later," he said. "In addition, I
would like to ask Mr Chartsiri Sophonphanich, Bangkok Bank
president, that if his bank's capital were reduced one
satang, how would he feel?"

Mr Prachai said TPI's position now did not call for capital
reduction because the petrochemical industry was picking
up.  Based on its books, TPI was worth 20 baht a share, he
claimed, although its market value now stands at only five.
Under TPI's proposed plan, there are a number of points
which are different from the 1998 version.

They are:
- Unpaid interest repayment and collateral fees are
proposed to be rescheduled to January 2001;
- The company proposes that it be given the right to buy
back the debt at a discount rate;
- The sale of the group's assets is proposed to be put off
until 2003; and
- If the planned recapitalisation is successful, the right
of creditors to convert the debt to 45% , if TPI failed to
meet its debt repayment, should be scrapped.

The new proposal also allowed the creditors to raise
capital by not more than US$700 million through the issue
of preferred shares in 2001 at $0.41 per share or 16.9
baht. TPI agreed to sell the group assets totalling $200
million by 2003. The company also agreed to convert about
30% of its unpaid interest to equity.

TPI has an accrued interest burden of $210 million plus
$180 million interest which together falls due in 1999-
2001. TPI also proposed to buy the debt back at a 40%
discount. With a plan to raise $700 million in new capital,
the company would be able to finance a buy-back scheme
worth $1.2 billion.

The money received from selling the group's assets would be
used to repay secured loans and any balance would go to
repay all creditors. Mr Prachai said the plan had yet to be
submitted to Effective Planners for circulation to all
creditors for approval.

Yesterday, Effective Planners called a press conference in
order to explain the creditors' plan to restructure TPI's
debts. But Mr Prachai disagreed with the plan and refused
to attend the meeting, so the conference was scrapped.

He said if TPI's debt restructuring plan was completed
following its new proposed guidelines, it would benefit the
country as it would reduce non-performing loans at banks by
up to 100 billion baht. In addition, Mr Prachai said, the
move would stimulate the Thai stock market.  And it would
strengthen TPI's financial status, with a potential upgrade
to BBB, resulting in the group's share value rebounding to
20 baht per share, he claimed.

"In the first five months this year, TPI paid Effective
Planners around 500 million baht for conducting the plan.
The company will have to pay an additional three billion
baht if Effective Planners is appointed as the company's
plan administrator. It's a pain for a local debtor to have
a foreign company as its debt restructuring planner," Mr
Prachai said. (Bangkok Post  19-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 ***