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     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 26, 2000, Vol. 3, No. 187

                                        Headlines


* A U S T R A L I A *

GREYHOUND PIONEER: Creditors to get $A27M
TELSTRA 2: Investors facing loss situation
Y& B HOMES: Floundering in a sea of red


* C H I N A  &  H O N G  K O N G *

CHINA PETROCHEM.CORP.: Overhaul to cost 100,000 jobs
FAR EAST TECHNOLOGY INT'L: Posts 1H net loss
GOLDLION HOLDINGS: Posts 1H net loss
LAI SUN DEVELOPMENT: To cut debt with property sales
NEW RANK CITY: Posts huge 1H net loss
RYODEN DEVELOPMENT: Posts 1H net loss
SOFTBANK INVESTMENT: Records 15-month loss


* I N D O N E S I A *

PT DHARMALA AGRINDO: IBRA files for its bankruptcy
PT MUARA ALAS PRIMA: IBRA files for its bankruptcy
PT UNITED TRACTORS: Restructures debts


* J A P A N *

DAIWA BANK: Executives appeal ruling
SOGO CO.: Yurakucho store closes


* K O R E A *

CENTRAL BANKING: Viability to be determined by Nov.
CHEJU BANK: Viability to be determined by Nov.
CHO HUNG BANK: Viability to be determined by Nov.
DAEWOO MOTOR: Gov't sets Oct. 31 deadline for sale
HANS MERCHANT BANKING: Viability to be determined by Nov.
HANVIT BANK: Viability to be determined by Nov.
HYUNDAI ENG. & CONSTR.: Viability to be determined by Nov.
KOREA LIFE INSURANCE: Viability to be determined by Nov.
KOREA LIFE INSURANCE: To be sold after recapitalization
KOREA EXCHANGE BANK: Viability to be determined by Nov.
KOREA MERCHANT BANKING: Viability to be determined by Nov.
KWANGJU BANK: Viability to be determined by Nov.
MIJU CORP.: Rehab cancelled, to go bankrupt
PEACE BANK: Viability to be determined by Nov.
SEOUL BANK: Viability to be determined by Nov.


* M A L A Y S I A *

BORNEO PULP: To complete debt-for-equity swap
DRB-HICOM: Wants to re-fi part of RM5B debt by year-end
PERWIRA AFFIN BANK BHD: Posts Q2 loss
PHILEO ALLIED BANK: Posts Q2 loss


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

PHILIPPINE NAT.BANK: Tan gets extension to buy Gov't stake
REYNOLDS CORP.(Phils.): SEC starts price-controversy probe


* T H A I L A N D *

AROMATICS THAILAND: Expansion part of restructuring
BANGKOK MASS TRANSIT: Rift near settlement;rehab plan soon
BANK THAI: Resorts to court to recover debts
KARNCHANA ANAN FUND: Posts Q4 net loss
RAIMON LAND: Working on rehab plan


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

GREYHOUND PIONEER: Creditors to get $A27M
-----------------------------------------
Creditors of Greyhound Pioneer Australia Limited
met Sept. 15 to decide on the fate of the Australian coach
line, voting to accept a takeover bid from McCafferty's
Holdings Limited, in order to save the company from
liquidation.  The company has been threatened with
liquidation since its major creditor RetireWise Capital put
it into receivership for debt default on 23 June. A meeting
of shareholders on 23 October will formally approve the
takeover.  Under the bid, McCafferty's will pay the $A27
million owed to the company's 4000 creditors.
(Australasian Business Intelligence: The Australian
Financial Review  23-Sept-2000)

TELSTRA 2: Investors facing loss situation
------------------------------------------
Brokers are warning small investors to keep their nerve
with paper losses on T2 set to worsen as reminder letters
are sent this week for the second instalment due on
November 2.

Banks, meanwhile, are offering investors the option of
delaying payment for up to three years with instalment
warrants, which allow investors to keep their T2 shares and
any dividends. T2 investors have to pay $2.90 - or $3.05 if
bought in the market - by November 2. A year ago investors
paid $4.50 as a first instalment on T2 "instalment
receipts."

With T2 trading even below the second and final payment,
investors will have paid $7.40 for Telstra shares, which
are currently worth less than $6.00.  Some T2 holders are
selling and taking the loss, which can be offset against
future capital gains tax. But many are using the proceeds
to buy Telstra shares at the lower price in the market,
according to financial adviser Kevin Bailey of Money
Managers Melbourne.

"You end up in the same situation with Telstra shares, plus
a handy tax loss," he said.

Ric Klusman of stockbrokers Johnson Taylor warned that T2
could fall further but said: "We suggest that people pay up
and take up the second instalment for T2 and store it away.
T2 will go lower between now and October 16 (when it stops
trading on the stock exchange) but after November 2 the
shares are expected to rally."

Mr Klusman is advising investors wanting to buy Telstra
cheaply to take advantage of any sell-off in the first
weeks of October.  Arun Abey, executive chairman of
advisers ipac said: "If you want to remain in the Telstra
game, pay up the $2.90-$3.05. Are you likely to get your
money back? The answer is, yes."

Shaw Stockbroking's head of industrial research Scott
Marshall said Telstra was cheap and would remain so until
November 2. While T2 will be out of the way by mid-
November, Telstra is also facing competitive pressures and
the flow-on of the international weakness affecting telco
stocks.

Telstra was still a good buy, said BNP Paribas director
John Bowie -Wilson. "If Telstra was floated today at $6
you'd be killed in the rush to buy it."

Instalment warrants are popular on other stocks because
they are traded on the sharemarket and warrant holders can
quit at any time. For example, Macquarie Bank will this
week offer a warrant delaying payment on T2 until August
2003, when investors have to pay $3.99 to keep their
shares. In effect investors are borrowing at 8.95 per cent.
(Sydney Morning Herald  24-Sept-2000)

Y& B HOMES: Floundering in a sea of red
---------------------------------------
Tasmanian building firm Y & B Homes has called in
an insolvency specialist, while construction of around 50
houses in Launceston, Tasmania and in Hobart temporarily
hasbeen suspended and the Howarth accountancy firm has been
appointed as controlling trustee.

Tasmanian Housing Industry Association director Peter
Geeves says the upturn in business activity following the
introduction of the goods and services tax in Australia is
increasing demand for Y & B Homes. The building rush is
creating a shortage of materials and labour, leading to
delays. As a result, progress payments have not been paid
on time and construction has slowed.  This is placing
pressure on the cash flow of Y & B Homes.  (Australasian
Business Intelligence: The Mercury  23-Sept-2000)


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

CHINA PETROCHEM.CORP.: Overhaul to cost 100,000 jobs
----------------------------------------------------
China Petrochemical Corp (Sinopec) - the mainland's largest
oil refiner - will lay off 100,000 employees, or about 20
per cent of its workforce over five years, as part of its
efficiency drive, according to the company's chairman Li
Yizhong.

The staff-cutting plan followed an announcement earlier
this month by rival PetroChina - the mainland's largest oil
producer - to cut 50,000 staff, or about 10 per cent of its
workforce in the next five years.  Mr Li yesterday said the
plan was expected to cost the company 1.8 billion yuan
(about HK$1.68 billion) but would bring in two billion yuan
of savings over the five years.

"And from the sixth year onward, we are expecting annual
savings of more than one billion yuan," he added.

Sinopec and PetroChina's redundancy plans are part of the
wider state-owned industrial sector's restructuring, aimed
at boosting efficiency in the face of keener foreign
competition following the expected World Trade Organisation
entry.  Sinopec has about 511,000 employees, while its
parent Sinopec Group has about 710,000, according to Mr Li.
He said that the lay-offs were part of a wider cost-cutting
drive aimed at lowering costs by up to US$1.6 billion from
next year to 2003. Of this US$787 million would be reaped
in 2003.

Other cost-cutting measures would include efficiency
improvement in crude oil refining and procurement.
Focusing on the Eastern and Southern mainland markets,
Sinopec is one of the mainland's two umbrella integrated
oil and petrochemical companies.

Last year, the company processed 88.2 million tonnes of
crude oil, or half of the country's total processed volume.
It also accounted for 45 per cent of mainland petrol
production and 50 per cent of diesel production.  Although
international prices of crude oil - the firm's main raw
material - have recently risen to their 10-year highs, Mr
Li said that Sinopec had been able to pass on almost all of
the cost increases to buyers of its products.

He said this was because deregulation of domestic refined
oil products in June this year had allowed the company to
make monthly product price adjustments to levels in line
with international levels.  The company suffered losses in
some of its refining businesses in the first four months
this year, as price increases in refined products did not
match rises in crude oil prices.

Purchased crude oil expenses constituted about 48 per cent
of total expenses in the four months, up from 30 per cent
the whole of last year. But the loss-making businesses
turned profitable from May onwards, according to Mr Li.
He said that the company's overall net profit was expected
to rise "substantially" from last year thanks to the brisk
demand and price de-regulation.

However, analysts were concerned that higher prices for
petrol, diesel and jet fuel would dampen demand of the
overall economy and in turn lower demand for the refined
oil products.  Sales of refined oil products accounted for
75 per cent of Sinopec's total revenues last year and
petrochemicals 19 per cent.

The vast majority of crude oil produced by the company is
used internally for refining and not profit-generating.
Internal crude oil supplies accounted for 31 per cent of
the needs of its refining and chemical operations.  Mr Li
said that when oil prices were stable, every US dollar
price change in each barrel of crude oil would translate
roughly into a 4 per cent change in the company's earnings
before income tax, depreciation and amortisation.

Sinopec's average crude oil purchase price this year is
expected to be about US$26.7 per barrel, with next year's
forecast at US$22 each, he added.  It has planned capital
expenditure of about US$13 billion over the next three
years in order to boost capacity and expand sales. (South
China Morning Post  25-Sept-2000)

FAR EAST TECHNOLOGY INT'L: Posts 1H net loss
--------------------------------------------
Far East Technology International Ltd. (0036), a property
and share investment company, posted a net loss of HK$3.88
million for the six-month period ended June 30. By
comparison, the company recorded a HK$2.99 million net
profit for the same period the year prior. Loss per share
was 1.3 HK cents compared with earnings of 1 HK cent a
share.  Revenue rose 59.7 percent to HK$66.94 million,
however. No interim dividend will be distributed.

GOLDLION HOLDINGS: Posts 1H net loss
------------------------------------
Goldlion Holdings, a distributor of men's apparel and
accessories, recorded a net loss of $136.67 million for the
six-month period ended June 30, a huge turnaround from its
net profit of $36.46 million for the same period a year
ago. The company also had an operating loss of $134.97
million, likewise a turnaround from last year's operating
profit of $34.7 million. The board did not recommend any
interim dividend.

LAI SUN DEVELOPMENT: To cut debt with property sales
----------------------------------------------------
Lai Sun Development Ltd. plans to cut its debt to about
HK$4 billion from more than HK$7 billion over the next two
years by property sales and the listing of its 16 percent-
owned Asia Television Ltd.

According to the Hong Kong Economic Journal, director Wu
Shiu Kee said the company will sell some of its non-core
property to repay debts before two debt payments expire at
the end of the year. It also plans to raise HK$1.5 billion
to HK$2 billion by selling properties, including Kowloon
City Plaza and Causeway Bay Plaza.

Sale of part of the company's 1.67-percent stake in mobile
phone operator Sunday Communications Ltd. is also
contemplated. Its Sun Holdings Ltd. hotel unit will keep
its 9.8 percent stake in Sunday Communications, however, as
a long-term investment.

NEW RANK CITY: Posts huge 1H net loss
-------------------------------------
Chinese property developer and investor New Rank City
posted a $13.81 million net loss for the six-month period
ended June 30, up some 40 times from the $321,000 net loss
for the same period the prior year.  The company had an
operating loss of $4.1 million compared with an operating
profit of $11.31 million last year. Turnover was $1.47
million for the six months. The board of directors did not
recommend an interim dividend.

RYODEN DEVELOPMENT: Posts 1H net loss
-------------------------------------
Ryoden Development posted a HK$16.65 million net loss for
the six-month period ended June 30.  The company attributed
the poor performance to an absence of property development,
negative rental revisions and losses by associates. The
company posted HK$7.26 million for operating loss from
associates and joint ventures, with office and computer
accessories distributor Saggio (Holdings) featuring
prominently. Ryoden's turnover dropped 53.67% from a year
earlier to HK$60.26 million. For the same period the year
before, the company recorded a HK$515,000 profit.

SOFTBANK INVESTMENT: Records 15-month loss
------------------------------------------
Softbank Investment International (Strategic) Ltd.,
international investment arm of Japan's Softbank, recorded
net losses totaling HK$29.8 million for the 15-month period
from April 1999 to June 2000.

For the previous 12-month period, June 1998 to March 31
1999, the company recorded a HK$32.4 million net loss. Loss
per share was 3.1 HK cents in the 15-month period, 5.5 HK
cents for the previous 12-month period. Revenue for the 15-
month period was HK$203.9 million. No final dividend will
be distributed. Additionally, the company changed its
financial year-end to June 30 from March 31, explaining its
most recent 15-month financial reporting.


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

PT DHARMALA AGRINDO: IBRA files for its bankruptcy
PT MUARA ALAS PRIMA: IBRA files for its bankruptcy
--------------------------------------------------
The Indonesian Bank Restructuring Agency (IBRA) said it has
filed bankruptcy suits against two Dharmala Group
subsidiaries, PT Dharmala Agrindo and PT Muara Alas Prima,
before the Jakarta Commercial Court, IBRA's lawyer Berto
Edward said.

Edward said IBRA filed the lawsuit against Agrindo's for
its failure to repay debts of 174.1 bln rupiah. The debts
were originally owed to state-owned Bank Exim, prior to its
merger with Bank Mandiri.  He said Agrindo also owes debts
to other banks including BNP Lippo Bank and Rabobank
Indonesia branch.

IBRA's lawyer in the bankruptcy case against Muara Alas
Prima, Benny Azani Latief, said the company owes matured
debts to three banks worth about 17.7 bln rupiah, with Bank
Rakyat Indonesia owed 5.9 bln rupiah and Bank Exim --
now joined with Bank Mandiri -- 11.8 bln rupiah.
(AFX News Limited  25-Sept-2000)

PT UNITED TRACTORS: Restructures debts
--------------------------------------
PT United Tractor (UT) has signed an agreement with its
creditors on the restructuring of debts valued at
Rp296.5 million.

UT Director Buntoro Muljono said the debts include Rp147
billion or around US$18 million in local currency, adding
that the agreement with 26 foreign creditors and 20 local
creditors was signed on Sept 20.  Under the agreement,
US$94.3 million and Rp49.78 billion of the debts will be
repayable until 2002 with interest to be paid every three
months.  The rest would be repayable until December 2004,
but could be extended for another three years.  Initial
payment was US$5 million and Rp2.64 billion.

Muljono said repayment of the principal debt is made every
semester and the intrest every three months.  He said the
fund for the debt repayments will come from asset sales,
dividend from subsidiaries and rights issue. (Asia Pulse
22-Sept-2000)


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

DAIWA BANK: Executives appeal ruling
------------------------------------
Eleven former and current executives of Daiwa Bank have
appealed a district court ruling ordering them to pay the
bank $775 million (some 83 billion yen) as compensation for
massive losses arising from unauthorized securities trading
at the bank's New York branch over an 11-year period from
1984.

The Osaka District Court on Sept. 20 ordered the 11 execs,
including current President Takashi Kaiho, former Chairman
Sumio Abekawa, former President Akira Fujita and former New
York branch manager Masahiro Tsuda, to pay the sum. The
judgment was the largest amount ever awarded in a
compensation case filed by shareholders against individual
executives in Japan.

Presiding Judge Mitsuhiro Ikeda said he held the executives
responsible for "making extremely unreasonable,
inappropriate management decisions" in failing to swiftly
report the illegal trades to U.S. authorities, which
resulted in a heavy penalty.

SOGO CO.: Yurakucho store closes
--------------------------------
The Yurakucho store of failed department store operator
Sogo Co., located near Tokyo's posh Ginza district, closed
Sunday after nearly 44 years in business.

Closed as part of the Sogo group's restructuring efforts,
the store's closing sale that had been scheduled to last
form Sept. 3 to 17 was extended a week to Sept. 24 as the
result of unexpectedly brisk sales.  The first day of the
sale, the store had more in sales than on any day the past
decade. Sales remained steady throughout the closing sale.


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

CENTRAL BANKING: Viability to be determined by Nov.
CHEJU BANK: Viability to be determined by Nov.
CHO HUNG BANK: Viability to be determined by Nov.
HANS MERCHANT BANKING: Viability to be determined by Nov.
HANVIT BANK: Viability to be determined by Nov.
HYUNDAI ENG. & CONSTR.: Viability to be determined by Nov.
KOREA LIFE INSURANCE: Viability to be determined by Nov.
KOREA EXCHANGE BANK: Viability to be determined by Nov.
KOREA MERCHANT BANKING: Viability to be determined by Nov.
KWANGJU BANK: Viability to be determined by Nov.
PEACE BANK: Viability to be determined by Nov.
SEOUL BANK: Viability to be determined by Nov.
----------------------------------------------------------
To steer ahead with corporate and financial sector restruc-
turing, the government plans to extend active financial
support for troubled businesses that nevertheless show
signs of survival, while liquidating those deemed unable to
get back on their feet.

The government will make a final decision on the prospects
for various businesses before the end of October. Financial
Supervisory Commission (FSC) chair Lee Keun-young said
Sunday that the subsidiaries of the nation's top-four
business groups would be included in the evaluations.
Market analysts say Hyundai Engineering and Construction,
which has been suffering a major cash crunch, could be
among the firms being studied for possible liquidation.

The government also plans to make a final decision on the
health of nine ailing commercial banks by the end of
October before naming the less healthy ones it will order
to merge. The banks to be evaluated include Hanvit Bank,
Cho Hung Bank, Korea Exchange Bank, Seoul Bank, Peace Bank,
Kwangju Bank and Cheju Bank. FSC head Lee added that final
decisions would be made by the end of October on the issue
of the mega-merger of a number of healthy banks into a
superbank that could rank among the world's 50 largest in
terms of assets.  (Digital Chosun 24-Sept-2000)

DAEWOO MOTOR: Gov't sets Oct. 31 deadline for sale
--------------------------------------------------
Government officials overseeing the renewed bidding for
Daewoo Motor reportedly are growing impatient with the
foot-dragging of potential bidders, like General Motors and
DaimlerChrysler, and have set a deadline of Oct. 31 for the
conclusion of the sale.

According to sources, the watchdog Financial Supervisory
Commission asked Daewoo Motor creditors over the weekend to
produce a "visible" outcome by the end of October. In a
meeting with representatives from Korea Development Bank,
Cho Hung Bank and other Daewoo creditors Saturday, Yon Won-
young, a top FSC official, demanded that the sale of Daewoo
Motor be completed by Oct. 31 whatever circumstances or
difficulties there may be.

But the FSC's latest request triggered a controversy, with
fading interest from potential bidders. It also raised
fears that the hasty move would result in Daewoo being sold
at an exceptionally low price.

In a sudden turnabout, GM vowed not to bid for Daewoo
unless the reasons for Ford Motor's abrupt withdrawal last
week from talks with Daewoo creditors are made public,
while DaimlerChrysler remains opposed to buying the entire
Daewoo Motor operations. Hyundai Motor has ruled out a bid
without the support of its partner DaimlerChrysler.
Further clouding the outlook, the New York-based Bridge
News forecast that GM's board of directors may not approve
the acquisition of Daewoo Motor, due to concerns over a
negative impact on share prices.

A Merrill Lynch analyst was quoted by the Bridge News as
saying "From the viewpoint of an Asian strategy, GM's
takeover of Daewoo can be understandable. Realistically,
however, the acquisition will prove difficult. Due to the
scarcity of aspiring bidders, GM will be able to buy Daewoo
at a very attractive price. But any deal with Daewoo won't
be welcomed by its shareholders," the analyst said.

GM shares have crashed since Ford's withdrawal from Daewoo
bidding. In contrast, Ford shares have since recorded
steady gains, reflecting the Wall Street's negative
evaluation of Daewoo.  Industry experts at home and abroad
are thus recommending that Daewoo Motor and its four
affiliates be sold separately to prevent further falls in
company value and a discount sale.

But Daewoo creditors reportedly expressed their objection
to the split-sale scenario to the FSC at the Saturday
meeting. They also voiced difficulties in extending
additional loans to Daewoo, citing extraordinarily heavy
burdens for loss provisions.

"The initiative for the second round of auction is clearly
held by the buyers. The potential buyers are certain to
play for time and take full advantage of Seoul's hastiness
and other weakness, under their bid to bring down the price
to the lowest possible level," said an industry analyst.
"The settlement of the Daewoo crisis will be delayed long
beyond the end of this year, dealing a blow to Seoul's
attempt to speedily sell off Daewoo Motor at reasonable
prices," he predicted.  (Korea Herald  25-Sept-2000)

KOREA LIFE INSURANCE: To be sold after recapitalization
-------------------------------------------------------
The government will put 1.5 trillion won in public funds
into troubled Korea Life Insurance before selling it this
year.

Two leading banks will be launched through the merger of
good banks and bad banks this year.  The Financial
Supervisory Commission (FSC) said yesterday that the ailing
secondary financial institutions will be put under a
financial holding firm or merged in order to contain the
spread of financial ill into the banking sector under the
second round of financial sector restructuring.

Under its plan, the FSC will review progress on the
operational normalization plan of 10 insurance firms that
are not able to cover their entire repayment obligations
and order those found lagging to improve their status this
month.  As for Korea Life Insurance, the FSC plans to
inject 1.5 trillion won in public funds to improve its
coverage for repayment obligations to 100 percent before
selling it to a buyer at home or abroad. Korea Life has
already received 2.5 trillion won in public funds.

Accordingly, Shinhan, Lucky and Hanil Life in self-
improvement efforts, and Hyundai Life as well as Hungkuk
Life, whose financial health has deteriorated after its
failed stock investment, will likely face an order to
improve their operations.  Samshin Life, which has been
already given the second and last order to put its acts
together, might be designated as nonviable and set for a
merger, unless it makes marked progress.

As for the banking sector, the FSC will down-select the
nonviable among the banks that fail to reach the desirable
8 percent capital adequacy ratio or are found not likely to
survive on their own, and put them under a financial
holding firm along with government-invested insurance and
securities brokerages.

The government intends to push for mergers between good
banks andthe government-recapitalized banks to give birth
to two leading banks.  The government also will order all
banks to submit their nonperforming loan reduction plan by
next month in order to see their NPL level go down to 8
percent by the end of this year and further down to 4
percent by the end of next year before meeting the
internationally recognized level of 4 percent by 2002.

The $1 billion in loan the Korea Asset Management
Corporation will borrow from the World Bank will be used to
reduce the banks' nonperforming loans. (Korea Times  24-
Sept-2000)

MIJU CORP.: Rehab cancelled, to go bankrupt
-------------------------------------------
A South Korean construction firm on Monday became the first
victim of the government's new round of economic reforms
intended to ease market concerns that a new financial
crisis is looming as creditor banks called off a debt
rehabiliation program for Miju Corp., an ailing medium-
sized construction company, which had been kept alive with
special loans.

Instead, it will become the first company to be allowed to
go bankrupt under the second round of government reforms.
Miju was one of scores of debt-ridden companies placed
under a government debt workout program last year. The
company were bailed out by banks in return for
restructuring.

"The creditors informed us of their decision. We plan to
ask for court receivership," a Miju spokesman told AFP.

The decision came at a meeting of 19 creditors who decided
Miju was not viable.  Under government guidelines announced
Sunday, banks were required to undertake a debt for equity
swap for companies which had short-term liquidity problems
but strong chances of recovery.  But those considered no
longer viable would go through court receivership or
be liquidated.

"Non-viable firms must be liquidiated quickly to remove
market uncertainty," Financial Supervisory Commission chief
Lee Keun-Young said, urging banks to take action to sort
out ailing firms for early liquidation.

The authorities would inspect major companies in October to
determine their viability and whether they were generating
operating profits and paying interest on debt from their
income.  To promote the stability of the financial market,
viable companies would be firmly supported by creditors but
non-viable companies would be promptly liquidated, he said.

The government set a target date of the end of the year to
quickly restore stability to financial markets by settling
"potential loan losses."  The government's tough stance
followed its decision announced last week to pour another
50 trillion won (45 billion dollars) of public funds into
restructuring the financial system on top of 109.6 trillion
won already spent since late 1997.  (Agence France Presse
25-Sept-2000)


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

BORNEO PULP: To complete debt-for-equity swap
---------------------------------------------
Borneo Pulp, 60-percent owned by debt-ridden Asia Pulp &
Paper Co., with Sarawak Timber Industry Development Corp.
holding another 30 percent and the remainder owned by State
Secretary of Sarawak Inc., is seeking to complete a debt-
for-equity swap.

The Singapore-based company filed documents to exchange as
much as $1.45 billion of debt for a combination of cash,
new bonds that pay more interest, warrants and longer-dated
debt.  It also is asking investors to extend the maturity
on $638 million in floating rate notes due in 2002.

Up to $250 million of these are included in the exchange
offer filed with U.S. regulators.  The exchange offer is
designed to better match the company's debt repayment
schedule with its cash flow, it said.  J.P. Morgan & Co.,
Credit Suisse First Boston Ind. and Goldman Sachs Group
Inc. are handling the exchange offer.  (Bloomberg  25-Sept-
2000)

DRB-HICOM: Wants to re-fi part of RM5B debt by year-end
-------------------------------------------------------
DRB-Hicom Bhd is looking into refinancing part of the
group's RM5 billion debt by year-end, its chairman Tan Sri
Mohd Saleh Sulong said.

"We have not finalised anything yet, but we hope to get
some firm offers (of lower cost of refinancing) before the
end of the year," he told reporters after the group's
annual and extraordinary meeting in Shah Alam today.

He was asked to comment about a recent Press report that
DRB-Hicom might issue RM800 million in bonds. Saleh said
the group wanted to reduce its debts to RM1.75 billion by
the end of the financial year March 31, 2001.  Part of the
proceeds from the sale of its 25.8 per cent stake in
Perusahaan Otomobil Nasional Bhd to Petroliam Nasional Bhd,
and the sale of Credit Corporation Malaysia Bhd to Hong
Leong Bank Bhd will be used to repay the debts.

Saleh said they wanted to reduce a significant portion of
the debt to enhance group profitability. Most of the debts
comprised of trade debts, including overdrafts, letter of
credits and term loans. (The Edge  22-Sept-2000)

PERWIRA AFFIN BANK BHD: Posts Q2 loss
PHILEO ALLIED BANK: Posts Q2 loss
-------------------------------------
Perwira Affin Bank Bhd and Phileo Allied Bank surprised the
market recently by posting losses for their second quarters
compared with good profits in the first quarter, according
to MalaysiaStreet.com.

The losses were attributed to delays in loan restructuring
exercises, which are normally conducted by the Corporate
Debt Restructuring Committee (CDRC), said the local
equities market investment website.

"It raises one question: Might provisions for CDRC loans
become necessary if the current slow pace of restructuring
persists?," asked MalaysiaStreet.com.

A CDRC spokesman said that outstanding CDRC cases have
stayed stubbornly high around RM16 billion since the end of
last year because cases resolved this year were offset by
an equal amount of new applications.  In July alone, over
RM6 billion worth of problem loans were newly referred to
the CDRC, he noted.

"We think the weak stockmarket will hamper CDRC's efforts
because restructurings mostly involve debt-equity swaps,"
he added. "Creditors are willing to accept shares when the
stockmarket is buoyant but they may hesitate if the market
remains weak.  Presently, banks do not need to provide for
CDRC loans. But the longer they remain unresolved, the
greater is the likelihood that Bank Negara may deem
some as recalcitrant and prudently ask banks to start
making provisions."

Some banks have done so -- "for them, the impact will be
minimal. But we suspect they are the minority,"
MalaysiaStreet.com said. "How much provisions will be
necessary? Banks currently provide on average 40 percent
for non-CDRC Non Performing Loans (NPLs). If we apply this
to CDRC loans, the potential provisioning is RM6.4 billion
more than the RM5.3 billion profit that banks made last
year.  Of course, only some CDRC cases may be deemed too
difficult to resolve, but even one-tenth of this could make
the difference between profit growth and profit decline." .

Furthermore, CDRC loans may not be as well collaterallised
as other NPLs - probably why they had to be referred to
CDRC - and so the average 40 percent provisioning level may
be too low, it said.  Lastly, CDRC loans are not evenly
spread out among banks, thus the impact on individual banks
may be much bigger.

MalaysiaStreet.com said that it could not say for certain
that Bank Negara will ask banks to make CDRC provisions but
not to recognise that possibility would be a folly. "We
think the market has not factored this risk, as evident
from broker forecasts which still imply strong earnings
growth for banks," it said.

MalaysiaStreet.com said it has been negative towards the
banking sector for some time because of the likelihood of
higher interest rates. This was later compounded by poor
merger terms for some of the acquiror banks, and the
attendant dislocations and merger costs that will follow,
it added.

The current weak equity market is yet another setback for
banks, it said.  "Not only will it delay restructurings, it
also means lower earnings from stockbroking and corporate
finance activities, more provisions for existing share-
backed NPLs, and diminution in value of investments," it
added. (Malaysian National News Agency  25-Sept-2000)


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

PHILIPPINE NAT.BANK: Tan gets extension to buy Gov't stake
----------------------------------------------------------
Businessman Lucio Tan will get 30 more days to complete his
stalled purchase of the government's 30.4 per cent in
ailing lender Philippine National Bank (PNB).

Finance Secretary Jose Pardo yesterday said Mr Tan had
asked for the extra time. His Starbuck Equities missed a
September 18 deadline for the balance of the 6.26 billion
peso (about HK$1.06 billion) deal and risked forfeiting a
600 million peso deposit.   Privatisation of loss-making
PNB, along with a capital infusion of about 10 billion
pesos, is a key condition for the release of millions of
dollars of loans to the government from the World Bank and
the International Monetary Fund.

Acquiring the government interest in the bank would boost
Mr Tan's stake to about 76 per cent.  Mr Pardo said formal
approval of the 30-day extension would come once the
corporate regulator Securities and Exchange Commission
(SEC) authorised a parallel adjustment to last week's
original timetable for a PNB rights offer.

"If there is an extension of the deadline, I will have to
move also for an extension of the capital call and ask for
the SEC's approval," Mr Pardo said.

Meanwhile, Central Bank of the Philippines governor Rafael
Buenaventura said "The viability of PNB is contingent on
the capital infusion. The ownership issue is irrelevant at
this moment." (South China Morning Post, AFP 25-Sept-2000)

REYNOLDS CORP.(Phils.): SEC starts price-controversy probe
-----------------------------------------==---------------
While the Philippine Stock Exchange (PSE) has yet to submit
its comprehensive report on the stock price manipulation
controversy involving Reynolds Philippines Corp. (RPC), the
corporate watchdog is not wasting any time in initiating
its own probe.

Newly appointed Securities and Exchange Commission (SEC)
prosecution chief, Emilio Aquino said the Prosecution and
Enforcement Department (PED) will proceed with its own
investigation even without a comprehensive report from
the PSE.  The PED's investigation, he said, will be based
on data submitted by the PSE Compliance and Surveillance
Group last Friday and the initial report earlier turned
over by the brokers and exchanges department (BED).

The CSG earlier turned over to the BED its findings on the
case which were later referred to PED. Since then, however,
CSG has postponed the filing of its complete and
comprehensive report on Reynolds for at least three times.

"We cannot just wait and wait..We have to do something and
I have so far assigned an investigating team to look into
the case...perhaps by next week, we also might have
something more concrete," Mr. Aquino said.

The initial CSG report, which was confirmed by the BED,
alleged that Reynolds had a "prearranged deal" with some
buying or selling brokers from May to June this year.
Identified entities are: Profinda Holdings Corp., BPC Power
Corp., RPC Retirement Fund, Francisco Betia, Jerome
Cabaral, Jorge Navarra and Fernando Manotok.

The PSE report also identified foreign brokerage firm DBP
Daiwa Securities (Phils.), Inc. Reynolds is also being
investigated for alleged "kiting" and "wash sale"
activities in the stock market during the said period in
order to purposely influence the movement of its share
price.  Kiting is a practice, which allows the temporary
use of funding or bridge financing through advance payment
of selling transaction. A wash sale, on the other hand,
involves the same buyer and seller in a transaction. Both
practices artificially influence the price of stocks.

Meanwhile, brokers linked to the Reynolds case are: DBP
Daiwa Securities (Phils.), Inc.; Singapore-based G.K. Goh
Securities Inc.; local brokers Mark Securities Inc. of
businessman Mark Dayrit, Guild Securities Inc. of
stockbroker Antonio Alvarez; Magnum International
Securites, Inc.; and First Orient Securities, Inc. owned by
former PSE chairman Trinidad Kalaw."  (Business World  25-
Sept-2000)


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

AROMATICS THAILAND: Expansion part of restructuring
---------------------------------------------------
Aromatics Thailand Plc (ATC) has hired American consultants
UOP to help draft expansion plans for its complex in
Rayong, which expansion will be undertaken together with
the company's debt restructuring in an effort to reduce
aromatics production costs.

President Paibul Panyawut said purchases of oil-based
naptha would be reduced to 10% of its supply of raw
materials for aromatics production by replacing it with
other feedstock.  The company hopes to restructure debt
totalling US$373 million in the next two months, while
production expansion is expected to start early next year
in time for an upward cycle in the petrochemical industry,
anticipated for 2002 and 2003.

"We have to improve our production efficiency in line with
business rehabilitation to make the cost of paraxylene,
part of aromatics, as low as possible and competitive," Mr
Paibul said.

To avoid fluctuations in the cost of raw materials, caused
by swings in oil prices, the company plans to use more
condensate as its main feedstock instead of the more
expensive oil-based naptha. Condensate is now $260 a ton
against $300 for naptha.

Because of a technical problem, condensate could not be
used in making aromatics in the past, Mr Paibul said.
However, the problem had been resolved and Unocal Co had
been asked to control the quality of condensate supplied to
the company.  The complex will be shut down in November for
seven days to pave the way for the installation of a new
mercury removal unit that will help the complex to process
more condensate.

Domestic demand for aromatics is projected to grow 4-8% a
year until 2003 while the prices are expected to peak in
2002.  This year, the price of paraxylene price has
increased to $480 per ton from $360 last year. Mr Paibul
said the company hoped for an improved performance this
year after recording an operating loss of 2.3 billion baht
last year that swelled accumulated losses to 12.85 billion
baht. (Bangkok Post  25-Sept-2000)

BANGKOK MASS TRANSIT: Rift near settlement;rehab plan soon
----------------------------------------------------------
Tanayong Plc, largest shareholder in Bangkok Mass Transit
System Plc (BTSC), expects to settle a share ownership
dispute with Credit Suisse First Boston this month.

Credit Suisse First Boston (CSFB) bought 265 million
shares, a 23% stake in BTSC, for 3.763 billion baht or 14.2
baht each at an auction last November. The sale was held by
Schroder International Merchant Bankers, which auctioned
shares that had been pledged as collateral against the
syndicated loan.

But Tanayong, as the share custodian for BTSC, refused to
transfer ownership of the shares to CSFB, seeing the move
as a hostile takeover bid. CSFB took legal action against
Tanayong to redeem its auctioned shares, 23% of the total
in BTSC.

"I think we (Tanayong and CSFB) can reach a compromise on
the shares. I didn't accept the auction because it was
unfair to us but I would accept transferring some shares to
CSFB," Mr Keeree said.

Observers said Mr Keeree would likely consider transferring
something less than the whole 23% to CSFB, based on a
reassessed share price that has yet to be agreed. Another
possibility is for Tanayong to offer CSFB a special price
on new shares issued by BTSC.  Mr Keeree said CSFB could
become a partner of Tanayong in managing the skytrain, with
Tanayong and its allies maintaining majority control.

However, analysts said it would not be easy to persuade
CSFB to accept Mr Keeree's proposal as CSFB had a legal
right to the 23% stake.  "Negotiations will be time-
consuming, delaying BTSC's listing on the market," one
said.

BTSC has filed a listing plan with the stock exchange,
saying it would float 584.8 million shares at 10 baht par
value, but the timing depends on the market.

Meanwhile, Keeree Kanjanapas, chief executive of Tanayong,
said BTSC would hold talks with creditors and submit its
new debt-restructuring proposal by Saturday. BTSC would ask
local and foreign creditors for a grace period on interest
payments on debts of 11.6 billion baht, mostly borrowed
from Siam Commercial Bank; US$457.6 million in syndicated
loans led by German bank KfW; $80 million borrowed from the
World Bank's International Finance Corporation; and
subordinated loans from suppliers totalling $9 million.

Mr Keeree declined to give more details of BTSC's financial
negotiations with creditors. If successful, talks on the
disputed shares and debt restructuring would pave the way
for BTSC, the skytrain operator, to seek listing on the
Stock Exchange of Thailand in the next six months.
(Bangkok Post 25-Sept-2000)

BANK THAI: Resorts to court to recover debts
--------------------------------------------
BankThai has taken tardy borrowers to court in a bid to
recover as much as possible of 80 billion baht in non-
performing loans.

The bank says it expects to recoup 30% of the money.
Ekachai Tivutanont, senior executive vice-president, said
that all the borrowers taken to the Civil and Central
Bankruptcy courts had provided collateral although it was
now worth much less than the loans.

If the bank won the cases and auctioned the collateral, it
expected to get back 30%, and that would enable the bank to
break even in its overall performance.  If a higher return
was achieved, he said, the bank would have to share the
additional amount with the state's Financial Institutions
Development Fund, which was established to speed up the
disposal of ailing assets of shuttered finance companies.

However, Mr Ekachai said the bank still had 50 billion baht
in unsecured loans that were unlikely to be restructured.
Those loans, and the borrowings subject to court action,
were part of 130 billion baht in non-performing loans
transferred to the bank through the merger of state-owned
Krung Thai Thanakit Finance Plc, Union Bank of Bangkok and
12 other financial companies.

The bank has already foreclosed debtors' assets worth a
total of nine billion baht, and must sell them within five
years as required by the central bank's rules. About half
of the foreclosed assets are in the form of land in the
provinces. Mr Ekachai said that as it was difficult to sell
the land in a depressed market, the bank would ask for the
deadline to be extended. (Bangkok Post  22-Sept-2000)

KARNCHANA ANAN FUND: Posts Q4 net loss
--------------------------------------
Karnchana Anan Fund recorded a net loss of Bt20.1 million
for its fourth quarter ended August 31. No interim dividend
will be paid.

RAIMON LAND: Working on rehab plan
----------------------------------
Raimon Land reported to the Stock Exchange of Thailand
(SET) that progress was being made in talks with an
investor who would assist in completing its proposed
restructuring and recapitalization. The company has asked
the SET to extend the Sept 30 deadline for establishing an
audit committee, pending implementation of the
restructuring plan. Raimon Land said a committee would be
set up as soon as possible once the plan had been achieved.


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

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