TCRAP_Public/000927.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 27, 2000, Vol. 3, No. 188


* A U S T R A L I A *

EMAIL: Smorgon withdraws $785M bid
ONE.TEL: Pulls cash plug on directors
TELSTRA CORP: Investor unrest mounts pressure on mgmt.

* C H I N A  &  H O N G  K O N G *

CHEUK NANG TECHNOLOGIES: Rights offer proceeds to cut debt
e-KONG GROUP: Records wider 1H net loss
FOURSEAS.COM: Posts 1H net loss
FU HUI HOLDINGS: Records HK$ 14.67M net loss
GUANGXI INT'L TRUST & INVEST.CORP.: Shut for irregularities
GUANGXI TRUST & INVESTMENT CORP.: Shut for irregularities
HAINAN INT'L TRUST: Late again with payment
NICE SUCCESS INDUSTRIES: Facing winding up petition
ONGLORY DEVELOPMENT LTD: Facing winding up petition
RICHWIN HOLDINGS LTD: Facing winding up petition
SOUTH CHINA I & T: Posts 1H net loss

* I N D O N E S I A *

PANCA OVERSEAS FINANCE: Contesting bankruptcy action
PT HM SAMPOERNA: To float bonds to reduce debts
PT MAKRO NUSANTARA: Declared bankrupt
TIRTAMAS GROUP: Offers IBRA a debt settlement

* J A P A N *

NISSAN MOTOR: Short-term re-fi loans to reduce long-term

* K O R E A *

CENTRAL BANKING CORP: To become KDIC affiliate
KOREA EXCHANGE BANK: Gov't, Commertzbank to inject W600B

* M A L A Y S I A *

RHB GROUP: Restructure to involve unit separation

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

ASB GROUP: Creditor banks reject rehabilitation plan
MINDANAO PORTLAND CEMENT: Zeus readies PhP1B cash infusion
URBAN BANK: Gov't to put up P1.5B credit facility

* T H A I L A N D *

MODERM HOME DEVELOPMENT: Rehabilitation petition filed
nPATKOL: Reports Bt14.5M loss
THAI PETROCHEM.INDUSTRY: Creditors to vote on Oct 30


EMAIL: Smorgon withdraws $785M bid
Smorgon Steel has withdrawn its $785 million takeover bid
for Email, ending its five-month siege of the company and
placing a cloud over Email's future direction and

But the battle for Email may still not be over, since BHP's
OneSteel is well positioned with its strategic 14 per cent
stake in the group and Smorgon is still expressing interest
in Email's assets. Smorgon chairman Mr Graham Smorgon said
his company could not justify paying a higher price for
Email, believing fair value for the company was below $3 a
share. Shares in Email closed at $2.95 yesterday.

Smorgon Steel's offer, launched more than five months ago,
was valued at a notional $2.89 a share, made up $1.85 cash
and the CAP which has a face value of $1.04. Smorgon
planned to use the CAPs to give Email shareholders a stake
in the appliance arm of Email which would have been spun-
off and floated within three months of the bid succeeding.

"Withdrawing the bid will enable us to investigate
alternatives to our cash and CAPs offer for Email shares,
which has been rejected by Email and its shareholders,
including the possibility of an all-cash offer," Mr Smorgon
said yesterday. He also said he expected Email to honor
existing business agreements with his company. "Smorgon's
interest in Email is, of course, subject to Email
continuing its business in the ordinary course and there
being no material change to existing supply arrangements."

A possible retreat by Smorgon Steel was first flagged
earlier this month when the company said the bid was
looking "complex." Except for a brief dip in May Email's
share price had always traded well above Smorgon Steel's
offer of $2.89 a share, hitting a high of $3.25 in early

The Smorgon bid suffered a major blow when BHP bought the
14 per cent parcel in Email - paying an average price of
$3.27 - mainly to preserve the value of its $2 billion
float of OneSteel later this year. It also was done to
protect BHP's supply arrangements with Email, a key outlet
for its steel division, buying roughly 500,000 tonnes of
steel a year.

OneSteel, which holds the Email shares, declined last night
to comment on the Smorgon withdrawal. A representative of
Email was not available for comment. Smorgon Steel shares
firmed 1c to $1.20. BHP eased 5.8c to $20. (Sydney Morning
Herald  26-Sept-2000)

ONE.TEL: Pulls cash plug on directors
Junior telco One.Tel has bowed to pressure from the
corporations watchdog to suspend further bonuses to its
joint managing directors until a review of their
remuneration packages can be completed.

One.Tel yesterday revealed details of the $US4.5 million
($8.3 million) each in bonuses paid to Jodee Rich and Brad
Keeling last financial year, after the Australian
Securities & Investments Commission questioned why this
information had not been released to the market.

Mr Keeling and Mr Rich were each to be paid $US1 million if
One.Tel hit a market capitalisation of $1 billion by June
2000, another $US2.5 million if One.Tel's market value
reached $2.4 billion by June 2002 and a further $US1
million if One.Tel's value hit $3.4 billion before the end
of the five-year contract.  All three milestones were
reached last financial year.

One.Tel has agreed to suspend two other $US1 million
bonuses which Mr Rich and Mr Keeling could have claimed
last November when its market value topped $4.4 billion and
$5.4 billion.  "In not taking those bonuses we were making
a decision on the sustainability of the market cap," Mr
Keeling told The Australian. "In fact, we were right
because the market later corrected."

One.Tel's market value has more than halved since then and
now hovers at $2.1 billion.  ASIC NSW regional commissioner
Jane Diplock said it had been particularly concerned by the
fact that large bonuses were being paid when the company
was reporting losses. One.Tel reported a full-year net loss
of $291.1 million for the year ending June 2000.

"It wasn't clear to the market on what basis the bonuses
were being paid," Ms Diplock said.

Mr Keeling said: "In hindsight maybe we should have made
them public in November 1998 (when the agreements were
made)." He said future bonus packages would be disclosed to
the market.

Australian Shareholders Association chairman Ted Rofe said
One.Tel should in future ask its shareholders to vote on
executive and board remuneration.  Mr Rofe said he knew of
no other Australian company paying bonuses solely on the
increase in a company's market capitalisation.  As far as
funds managers were concerned, ASIC had acted too late.

"ASIC should be on top of these things before they happen,"
said one funds manager, who declined to be named. "The SEC
(Securities Exchange Commission) in the US would have been
down their throat in an instant."   One.Tel's shares
yesterday closed down 4c at 80c. (The Australian  26-Sept-

TELSTRA CORP: Investor unrest mounts pressure on mgmt.
Pressure is mounting on the executive ranks of Telstra Corp
as the massive decline in the company's share price
continues unabated.

Institutional investors are increasingly dissatisfied with
management initiatives, and investors wiped another
$1.3billion off Telstra's market capitalization yesterday.
Telstra ordinary shares fell 19› to $5.65, its lowest since
November 1998. As 2.1billion T2 shareholders contemplate
the prospect of a further $2.90 a share payment by November
2, the partly paid instalments slumped 21› to a new low of
$2.59, placing investors 42 per cent behind on their
initial investment last November.

"The jury is still out on Telstra and will remain out for
some time on management and on Pacific Century CyberWorks,"
one leading fund manager said. "There is a global industry
thematic out there...but the effective price Telstra gets
into PCCW at is double the price Cable & Wireless sold
for last week."

C&W sold more than 1 billion PCCW shares for $HK9.08 a
share, compared with a strike price of $HK19.52 on the
$US1.5billion ($2.8 billion) PCCW convertible note to which
Telstra will subscribe as part consideration of the deal.
"That reflects on management and whether they are going to
see value out of this deal or not," another fund manager

Telstra stock has now fallen almost 20 per cent since its
chief executive, Dr Ziggy Switkowski, revealed the
company's annual result on August 30. The market is also
pointing to what it saw as the company's disappointing
$3.7billion net profit for the year and the constraints
placed on the business by the Commonwealth's controlling
shareholding in the company.

"It is not too early to talk about a change in the
executive ranks", one fund manager said. "The pressure is
on incumbent management to produce profit growth over the
next 12 months." (Australian Financial Review  26-Sept-

C H I N A  &  H O N G  K O N G

CHEUK NANG TECHNOLOGIES: Rights offer proceeds to cut debt
Cheuk Nang Technologies (Holdings) Ltd., with property
and technology divisions, plans to raise a net HK$52
million through a rights offer, the proceeds from which
will be used to reduce debt.

The company said it would offer 538.8 million rights shares
at 10 HK cents on the basis of one for every four existing
shares. Shareholders will also receive one bonus share for
every rights share they take up. The existing shares go ex-
rights on Oct. 9.

e-KONG GROUP: Records wider 1H net loss
e-Kong Group Ltd.'s net loss for the six-month period ended
June 30 widened to HK$1.28 million from HK$1.01 million in
the same period a year earlier. Loss per share was
0.09 HK cent compared with 0.2 HK cent a year earlier.
Revenue rose 34 percent to HK$29.83 million, but no interim
dividend was proposed.

FOURSEAS.COM: Posts 1H net loss
-------------------------------, an online travel agent, recorded a net loss
of HK$16.8 million for the six-month period ended June 30,
down from a net loss of HK$19.8 million for the six-month
period ended September 30, 1999. Loss per share was
1.79 HK cents for the six months through June, compared
with a per share loss of 2.20 HK cents for the six months
ended September the year before.

The company's revenue was HK$339.3 million for the six
months ended June, compared with HK$264.6 million for the
six months ended September, 1999. No interim dividend was
proposed. also changed its financial year date
to Dec. 31 from March 31.

FU HUI HOLDINGS: Records HK$ 14.67M net loss
Fu Hui Holdings Ltd., a jewelry import and export company,
recorded a net loss of HK$13.05 million for the six-month
period ended June 30, down slightly from a HK$14.67 million
net loss for the same period a year earlier. Loss per share
was 1.79 HK cents compared with 1.94 HK cents. Revenue,
meanwhile, fell 95 percent to HK$1.2 million. No interim
dividend will be distributed.

GUANGXI INT'L TRUST & INVEST.CORP.: Shut for irregularities
GUANGXI TRUST & INVESTMENT CORP.: Shut for irregularities
The mainland's central bank has shut down seven trust and
investment companies in southern China's Guangxi province,
signalling that the government is intensifying efforts to
restructure the debt-laden sector, the Xinhua News Agency
reported on Monday.

The People's Bank of China announced late last week that
seven trust and investments companies including the Guangxi
Trust and Investment Corporation and Guangxi International
Trust and Investment Corporation, had been ordered to close
their doors for restructuring from September 22.  Xinhua
said the closures had followed investigations that revealed
serious financial irregularities and defaults on debt

The moves once again showed the central government's
determination to clean up the mainland's 200 trust and
investment corporations, Xinhua said.  Most of the
international trust and investment companies (Itics) were
set up by the local and central authorities in the 1980s as
non-banking financial institutions, serving as a link
between the governments and the financial markets.

However, most of them have plunged into serious
difficulties due to bad investment decisions, chaotic
management and financial irregularities.  The central
government began a crack-down on the sector in October 1998
when it shut down the Guangdong International Trust and
Investment Corporation (Gitic), after it was unable to pay
US$4.37 billion (HK$33.9 billion) in liabilities.

The central government ordered the Guangxi provincial
government to send in a special task force to assist with
restructuring, Xinhua said, without giving specific
details. (South China Morning Post  26-Sept-2000)

HAINAN INT'L TRUST: Late again with payment
Hainan International Trust & Investment Corp (Hitic), the
fund-raising and investment company of the Hainan
provincial government, has again missed a payment on a bond
in Japan.

An interest payment on a 14.5 billion yen (about HK$1.04
billion) seven-year bond sold to Japanese investors in 1997
was missed on Sunday. Bloomberg quoted Hitic official Hu
Rongshui as saying the firm had yet to offer instructions
to remit the funds.

It is the third time this year Hitic has been unable to
meet a bond interest payment deadline and the company's
tardiness underscores the thorny issues in the government's
attempts to clean-up and consolidate its non-bank financial
institutions in the wake of the collapse of Guangdong
International Trust & Investment Corp in 1998.

Beijing's central bank indicated it would close or merge
most of the mainland's 240 trust companies, leaving about
50 to survive. Despite a pledge to oversee a sector-wide
restructuring by the end of last year, few concrete plans
have been put in place.  One notable exception has been
Dalian International Trust & Investment Corp, which this
year forged an agreement with foreign creditors to repay 60
per cent of US$150 million in outstanding liabilities.

Hainan province's problems have been particularly severe.
For more than a year, the provincial government has
attempted to forge an agreement to merge four debt-plagued
trust companies in the country's first province-wide
restructuring. The effort has been undermined repeatedly as
governments and institutions wrangle over debt
responsibilities and asset prices.

The uncertain situation led Hitic earlier this summer to
twice miss interest payments on a 14.5 billion yen Samurai
bond due in 2001, prompting central bank governor Dai
Xianglong to suggest the firm may wind up in receivership.
In July, it made good on its obligation.  News of Hitic's
interest payment troubles came on the same day an official
mainland newspaper carried an announcement that a small
trust and investment company in central Henan province has
been closed.

Luoyang Trust & Investment Co was closed on August 15, the
company's liquidation committee said in a brief notice
carried by the Financial News.  The committee provided no
information about the company's debts, although it did say
individual depositors would be repaid before October 30.

Analysts said Hitic's missed payment was unlikely to sour a
planned US$1 billion sovereign bond issue expected to
launch in November. That is because the bond will have the
explicit backing of the central government.  Published
reports said Goldman Sachs, JP Morgan and Morgan Stanley
Dean Witter were competing to lead the issue. (South China
Morning Post  26-Sept-2000)

NICE SUCCESS INDUSTRIES: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on November 22 on the petition of
The China and South Sea Bank, Hong Kong Branch, for the
winding up of New Success Industries Limited. A notice of
legal appearance must be filed on or before November 21.

ONGLORY DEVELOPMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 6 on the petition of
Bank of Communications for the winding up of Onglory
Development Limited. A notice of legal appearance must be
filed on or before December 5.

RICHWIN HOLDINGS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 6 on the petition of
Bank of Communications for the winding up of Richwin
Holdings Limited. A notice of legal appearance must be
filed on or before December 5.

SOUTH CHINA I & T: Posts 1H net loss
South China Information & Technology Ltd. recorded a net
loss of HK$1.5 million for the six-month period ended June
30. That was done from the HK$15.3 million net loss
recorded for the same period a year earlier. Loss per share
was 0.2 HK cents, compared with 2.3 HK cents the year
before.  Revenue plunged 86.8 percent to HK$11.3 million.
No interim dividend was proposed.


PANCA OVERSEAS FINANCE: Contesting bankruptcy action
Panca Overseas Finance is asserting that the Jakarta
Commercial Court does not have jurisdiction to try a
US$12.9 million bankruptcy suit filed earlier this month
against the company by the World Bank investment arm
International Finance Corp (IFC).

Panca Overseas cites a 1995 investment agreement between it
and IFC in which both parties agreed to resolve any
disputes "in the courts of the State of New York in the
United States of America," according to a lawyer
representing Panca.  Additionally, the lawyer maintains,
IFC has a 6.06 pct stake in Panca Overseas, which precludes
from suing itself.

PT HM SAMPOERNA: To float bonds to reduce debts
Indonesian cigarette maker PT HM Sampoerna said it plans to
float a new bond series valued at Rp1 trillion (US$ 125
million), repayable in seven years, with an annual interest
of 17-18 percent.

The bonds, rated A Plus by the country's rating company PT
Pemeringkat Efk Indonesia, would be offered in the fourth
week of next month and will be listed on the Surabaya Stock
Exchange in the fourth week of November, a company
executive said.  Finance Director of HM Sampoerna Eka
Dharma Kasih said part of, or about Rp600 billion of the
bond fund would be used to repay short and mid-term debts
to a number of private banks in Indonesia.

The remaining Rp400 billion would be used to strengthen its
working capital, Eka said.  The bond series is to be the
second issued by the company this year after one valued at
Rp1 trillion floated early this year.  The company posted
Rp4.4 trillion in sales in the first half of this year,
or an increase of 26.9% year-on-year.  (Asia Pulse  22-

PT MAKRO NUSANTARA: Declared bankrupt
The Commercial Court has declared Ongko Group unit PT Makro
Nusantara bankrupt, according to Cahyono, the chief judge
in charge of the proceedings.  Makro Nusantara was sued by
Kenya Services Ltd for failure to repay promissory notes
worth 176.7 mln usd. The promissory notes were issued on
Feb 26, 1997 and matured on Feb 26, 1998.

TIRTAMAS GROUP: Offers IBRA a debt settlement
Hashim Djojohadi-koesoemo has offered to hand over the
assets belonging to the Tirtamas Group's Tuban (Trans
Pacific Petrochemical Indonesia) project as part of the
Group's debt settlement program with IBRA.

"The hand over of the Tuban asset was not included in the
previous agreements on the asset handover by the Tirtamas
Group. This is one way we are able to restructure the
company's debt at IBRA, and is what we meant by `new asset
injection'," IBRA Deputy Chairman Arwin Rasyid told
reporters after attending a seminar yesterday.

Rasyid said both parties have not reached a final decision
on Hashim's proposal.  "Discussions are still underway and
a meeting on this matter took place this morning. This
means the asset hand-over has not been realized yet, and it
now depends on whether all parties choose to accept it or
not," he added.

The only way to settle the liabilities of the Tirtamas
Group, said Rasyid, was to include the Tuban project in the
asset sales. "Production from the Tuban project is enormous
and the cash flow reaches hundreds of millions of dollars
per year," he said.  "If the Tuban project is handed over
to IBRA, it will become part of the asset sales program,
although a further market study is needed before the
asset can be released.  IBRA's philosophy is that all
assets must be disposed of. But disposing of assets like
the Tuban project would require an indepth market review."

Tirtamas Group is one of IBRA's 21 largest debtors. From
the company's total Rp3.194 trillion liability, as at
August 25, 2000, Rp1.003 trillion has been approved for
restructuring, while Rp669 billion remains to be settled
via legal action. (Mandiri On Line  26-Sept-2000)


Kawasaki Heavy Industries Ltd. expects to post a 17 billion
yen parent-only pretax loss for the six months ended
September 30.

Sales are project to be 7 percent lower than the same
period a year ago at 340 billion yen, orders beginning to
dry up through the end of fiscal 1999.  The company's
first-half operating loss is expected to be 15 billion yen,
compared to a profit of 600 million yen for the same period
a year earlier. Net loss is expected to worsen to 9 billion
yen, up from 5.8 billion yen in the first half of fiscal

The adoption of new accounting practices will contribute
to the pretax and net loss figures for the first half.
Until fiscal 1999, Kawasaki Heavy booked in the second half
a certain portion of sales and administration costs
incurred in the first half, but that no longer is allowed.

NISSAN MOTOR: Short-term re-fi loans to reduce long-term
Heavily indebted Japanese vehicle maker Nissan Motor Co.,
in which France's Renault has a 36.8 percent stake, has
secured a $1.2 billion revolving credit line from the US
financial group, Citibank.

As part of an effort to clean up its balance sheet by
shifting from long-term to short-term liabilities, Nissan
said it would also set up a three-year 250 billion yen
($2.3 billion) credit line with Fuji Bank, the Industrial
Bank of Japan and Sumitomo Bank.  Fuji and IBJ helped
arrange Nissan's previous short-term commitment line in
October 1998, worth 500 billion yen, which was used
primarily as a stop-gap measure before Renault injected 543
billion yen five months later.

However, the Citibank loan, which is available for one
year, differs from earlier loans in that it is available in
Japan as well as the US and Europe, while the IBJ-Fuji
loans appeared to be available only in Japan.  Nissan's
move comes amid a rapid expansion of the syndicated loan
market in Japan.

Until 1997 the market barely existed, since Japanese
companies tended to raise funds from a "main bank" - with
which they had a long-standing relationship - and the legal
status of syndicated loans was unclear.  However, Citibank
pioneered the market in 1997, and since then banks such as
Fuji and IBJ have rushed in, and now dominate the sector.
Total volume of syndicated loans is expected to reach
$100bn for the year, more than double last year. (Financial
Times  25-Sept-2000)


CENTRAL BANKING CORP: To become KDIC affiliate
The government will inject public funds into two insolvent
merchant banks before incorporating them as affiliates of
the state-run Korea Deposit Insurance Corp. (KDIC).

The Financial Supervisory Service (FSS) said yesterday that
Korea Merchant Banking Corp. and Central Banking Corp.,
whose businesses were suspended for solvency problems, will
be ordered to reduce their capital before receiving public
money next month.  FSS officials said that they completed
the investigations into the two merchant banks' properties
over the weekend and found that their debts exceeded their
total assets.

The officials, however, did not say by how much the debts
exceed the assets. Following the results of the
investigation, the two banks will be designated as
insolvent financial institutions and ordered to reduce
their capital and then to increase their capital.

But as the existing large shareholders have little
financial capability to increase capital, the government
plans to inject public funds to help them meet the Bank of
International Settlement-set capital adequacy ratio of 8
percent before affiliating them into KDIC.  The service
also plans to complete its investigations into Hans Banking
Company as soon as possible and decide whether or not to
inject public funds into the institution and turn it into a
KDIC affiliate.

Under a recently-unveiled blueprint for the second stage of
financial sector renovations, the government plans to
normalize the business of insolvent merchant banks by
selling or merging them with other financial institutions
before affiliating them with financial holding companies.
(Korea Herald 26-Sept-2000)

KOREA EXCHANGE BANK: Gov't, Commertzbank to inject W600B
The Korean government and Commertzbank of Germany are
expected to make a joint capital injection of 600 billion
into Korea Exchange Bank (KEB), a government official
confirmed yesterday.

The official said KEB President Kim Kyung-lim's proposal
for a fresh capital injection from Commertzbank during his
recent visit to Germany got a positive response. However,
Commertzbank feels the burden of putting in 600 billion won
in fresh capital should fall more on the government for a
larger share.

Since July 1998, the German bank has made capital
investments of 784.8 billion won in KEB, holding a 31.6
percent stake. The Bank of Korea owns a 16.3 percent stake
in KEB, while the Export-Import Bank of Korea holds a 15.9
percent interest.


RHB GROUP: Restructure to involve unit separation
As part of its overall restructuring arrangements, RHB
Capital proposed to sell a maximum of 12 percent of its RHS
preference shares to G.K. Goh for cash of up to RM25.2

This would result in G.K. Goh holding 51 percent of RHS
preference shares in issue while the balance held by RHB
Capital.  On the acquisition of SJ Securities, Chartchai
said RHS would acquire the entire interests for RM328
million based on 1.64 x the guaranteed NTA of SJ
Securities of RM200 million as at the date of completion.

Under the Securities Commission guidelines for universal
broker, the license is akin to that of an investment
banking license.  He said that as universal brokers, the
group would be allowed to open an additional branch and
following that another two branches before opening more.

He said the group's securities businesses in Thailand,
Indonesia, Singapore and the Phillipines would also be
under RHB Securities.  The third segment of the
restructuring touched on the separation of BNM
regulated entities in order to comply with the central
bank's guidelines for clear separation of BNM regulated
entities from the non-BNM regulated entities within a
financial services group.

As part of the RHB Capital Scheme of Arrangement, RHB
Sakura proposes to undertake a scheme of arrangement in
that a newco is to be created and named RHB Securities Bhd,
he said.  RHB Securities would hold 100 percent of RHB
Sakura with the listing status of RHB Sakura transferred to
RHB Securities.

As part of the overall arrangement, 49 percent of RHB
Securities shares which are not held by RHB Capital will be
cancelled and re-issued to RHB Capital.  In consideration,
the 49 percent shareholders would receive five new RHB
Capital shares and five new RHB Capital warrants for every
six RHB Securities shares cancelled.

RHB Securities would then propose to transfer its 100
percent interest in RHB Sakura to RHB Bank for a cash
consideration on 1.78 times the NTA value of RHB Sakura as
at the date of completion to be satisfied in cash.  RHB
Sakura's audited NTA as at June 30 2000 is RM654.3 million.

Meanwhile, RHB Capital proposes to transfer its securities
and securities related businesses to RHB Securities for an
indicative total consideration of RM1,655.6 million to be
satisfied by way of cash payment of RM1,017.6 million, a
novation of loan of RM180 million and the balance RM458
million via issuance of 102.526 million new RHB Securities
shares at RM3.80 per share.

RHB Sakura proposes to transfer its 51 percent interest in
RHB Unit Trust to RHB Securities for RM13.1 million cash to
consolidate the shareholding of RHB Unit Trust under RHB
Securities since it forms a strategic part of the
securities businesses apart from being a non-BNM regulated

Chartchai said upon the completion of the securities
business to RHB Securities, there would be a clear
separation of RHB Capital's BNM regulated banking,
financing and insurance businesses which would be held
under RHB Capital via RHB Bank and the non-BNM regulated
securities and securities related business which would be
held under RHB Securities.  The next step in the separation
is RHB Capital's proposed transfer of its 75 percent
interest in RHB Insurance for cash consideration to be
determined based on an independent actuary's valuation.

RHB Capital also proposes to transfer its 70 percent
interest in RHB Leasing to RHB Bank for RM67.8 million cash
based on 1.1 x the NTA of the RHB Leasing as at June 30,
2000.  An offer would also be made to the minority
shareholder of RHB Leasing on the same terms, Chartchai

The next step in the third segment is RHB Capital's
proposed demerger of RHB Securities from the RHB Capital
Group by undertaking a capital repayment exercise via the
distribution of its 100 percent equity interest in RHB
Securities to its shareholders.  The move is to comply with
the Kuala Lumpur Stock Exchange listing requirements and
complete the rationalisation of BNM regulated entities from
the non-BNM regulated entities.

RHB Capital also proposed to raise funds through a one-for-
20 rights issue at RM2.00 per share to raise about RM189.2
million, a convertible bonds issue to raise RM200 million
and a private placement of 60 million new RHB Capital
shares.  RHB also proposed to raise funds through a one-
for-10 rights issue at RM2.00 per share to raise RM92.7
million to finance its subscription for the rights issue by
RHB Capital.

The fourth segment involved steps by RHB Capital to
recapitalise RHB Bank to ensure the bank capital adequacy
ratio is maintained at a healthy 13 percent.  RHB Capital
proposes to subscribe in RHB Bank for RM400 million new
Irredeemable Non-Cumulative Convertible Preference Shares
(INCPS), and RM1 billion of Tier II subordinated debt of
which RHB Capital has made arrangements to place with
institutional investors.

The last segment involved the repurchase of Danamodal
Nasional Bhd's RM1 billion INCPS in RHB Bank for RM1.38
billion, which were issued in conjunction with the rescue
of Sime Bank Bhd by RHB Bank.  Chartchai said the purchase
price was agreed with Danamodal but subjected to the
Finance Minister's approval.  (Malaysian National News
Agency  26-Sept-2000)


ASB GROUP: Creditor banks reject rehabilitation plan
The ASB Group of Companies has failed to convince its
creditor banks of the viability of its proposed
rehabilitation plan.

The banks said the rehabilitation program did not guarantee
the repayment of ASB's obligations and that it failed to
ensure the long-term viability of the distressed companies
owned by property developer Luke Roxas.  These banks
include the Philippine National Bank, United Coconut
Planters Bank, Far East Bank & Trust Co., and the
Development Bank of Singapore.

In a separate filing with the Securities and Exchange
Commission, UCPB said the plan was not comprehensive and
that it failed to address material and relevant matters
pertaining to the financial statements of petitioners. It
said the plan includes adjustments to the financial
statements which are "not realistic but are manipulations
intended to conceal the financial condition of

UCPB said the ASB Group should in fact be liquidated since
it is already insolvent. It claimed that the ASB Group had
a negative net asset of P3 billion.  DBS, for its part,
said the plan failed to provide a material financial
commitment for the payment of secured creditors. Under the
plan, the payment of secured creditors is totally dependent
on the success of the asset pool which is highly

"There is no reasonable certainty that the finished
projects that are to be contributed to the pool will be
completed or that the new projects to be constructed will
materialize. The plan does not provide alternatives in the
event that the asset pool does not generate the projected
revenue or otherwise fails," DBS said. "It is doubtful
whether the terms of the plan would be sufficient to bring
about the rehabilitation of the ASB Group because it does
not provide for the institution of changes in the ASB
Group's management, organization, policies, operations or
finances for the purpose of rescuing or reviving the
petitioning corporations."

PNB said the plan was unrealistic and too prejudicial to
the mortgage banks. It said the proposal of waiver of
interest and charges was too onerous and burdensome
considering that waiver of interest and penalties would
only commence upon the actual turnover of the titles to be
"dacioned" in favor of the bank.

In a motion filed with the SEC, individual-creditors for
their part said the rehabilitation plan should make
provisions for a repayment scheme, specifying those for
interest as distinguished from payments on the principal.
The repayment scheme should also allocate a specific
portion of the amounts realized from ASB's projects to
service its debts to creditors.

The plan, according to individual-creditors, lacks a
material financial commitment for the repayment of debts
and liabilities to the creditors-depositors. Individual-
creditors also said the properties that would go into the
asset pool component of the plan should be evaluated by an
independent and professional appraiser to ensure realistic

They, however, objected to ASB's proposal to offset the
outstanding receivables from Roxas, owner of the ASB Group,
saying it violates generally accepted accounting principles
that dictate that revenues from asset disposition be
recognized only when realized. Individual-creditors said
the P5.23 billion in receivables by ASB from Roxas
should remain as a material asset account in the books and
must be collected from him. (Manila Times  26-Sept-2000)

MINDANAO PORTLAND CEMENT: Zeus readies PhP1B cash infusion
Taking the first step towards rehabilitation, listed firm
Zeus Holdings, Inc. will infuse 1 billion Philippine pesos
($21.70 million at PhP46.091=$1) in additional capital to
cash-strapped Mindanao Portland Cement Corp. (MPCC) to pay
off maturing debts.

In an interview, Zeus Holdings president Renato C. Sunico
said the capital infusion will be the focus this year while
MPCC is waiting for the local cement industry to recover.
"While the operation has been temporarily shut down until
the market picks up, we want to at least work on Mindanao's
debt position because that's overhead for us. We're
paying interest," he said.

Zeus Holdings corporate secretary Jocelyn I. Sanchez-
Salazar said the PhP1-billion infusion will enable MPCC "to
meet the liquidity requirements of its current operations
and the management of its liabilities." (Business World

URBAN BANK: Gov't to put up P1.5B credit facility
The Philippine Deposit Insurance Corp. (PDIC) is planning
to set aside P1.5 billion as liquidity assistance for Urban
Bank that would ensure the viability of the rehabilitation
plan for the defunct bank.

In an interview yesterday, PDIC president Norberto Nazareno
said the loan would be short term, the terms of which would
be based on the interbank call loan market and this was
proposed by the Bank of Commerce.  Bancommerce is the
strategic investor of Urban Bank.

"That is part of their proposal and we are still studying
that. The loan will just be a back-stop for emergency
purposes in case of a reopening, though they told us that
they have the money," said Nazareno, noting that the scheme
does not need the approval of the Bangko Sentral ng
Pilipinas.  "The loan will be used by Bancommerce while
they are collecting the loans and selling the assets of
Urban Bank."

The rehabilitation package includes fresh equity of more
than P1 billion from Bancommerce; conversion into equity of
the exposures of major investors/depositors like the Social
Security System (SSS), the Manila Electric Co., Petron
Corp., and the San Miguel Corp; and P600 million in new
investments by the SSS.

Meanwhile, BSP Governor Rafael B. Buenaventura said that
the target date for Urban Bank's reopening has been moved
to December from September due to technicalities
surrounding the four-way merger of Urban Bank, Bancommerce,
Traders Royal Bank (TRB), and the Pan Asia Bank.
Bancommerce had also acquired the two other banks recently.

"It is true that the BSP and the PDIC were planning on a
reopening date in September. This was postponed (to
October) when it was apparent that the target date could
not be met and now we are talking about being able to do
this by December," said Buenaventura in a statement.

He noted that in the case of TRB, there "are a number of
issues that have to be addressed (and) I understand the
process may take some time."  Nazareno pointed out that the
ownership issue remains contentious. (Manila Times 26-Sept-


MODERM HOME DEVELOPMENT: Rehabilitation petition filed
Modern Home Development PCL has filed petition for
rehabilitation to the Central Bankruptcy Court, the first
hearing date being September 25, 2000.  The court ordered
Modern Home Development PCL  to go for court-supervised
rehabilitation  and appointed Modern Home Planner Co., Ltd.
as planner.  The company will regularly report to the Stock
Exchange of Thailand on its rehabilitation progress.

nPATKOL: Reports Bt14.5M loss
nPATKOL recorded an extraordinary loss of Bt14.54 million
from its recent sale of land and buildings at Wellgrow
Industrial Estate to NS Electronics Bangkok. The sale was
initiated for the settlement of debts. The loss will be
recorded in its third-quarter financial results. The
company also gained Bt161.67 million from the sale of

THAI PETROCHEM.INDUSTRY: Creditors to vote on Oct 30
Creditors are scheduled to meet on Oct 30 to vote on the
business rehabilitation plan for Thai Petrochemical
Industry Plc (TPI).

However, authorities are not certain that they will be able
to finish verifying all the exact debt figures as claimed
by creditors before the scheduled meeting. The amount
claimed by each creditor group determines the proportion of
votes it will have.

"However, the voting rights of the creditors will be
completed before the creditors' meeting," said Chali
Rattananon, senior legal officer at the Business
Reorganisation Office of the Legal Execution Department.
"We cannot assure that the creditors will vote to approve
or postpone the plan."

Debtors, creditors and planners are allowed to revise the
plan as long as all revisions are submitted to the office
at least three days before the creditors' meeting. After
the creditors vote, the plan will be submitted to the
Central Bankruptcy Court, which is expected to issue a
ruling on Nov 9, said another official who asked not to be

The number of creditors claiming to hold TPI debt has been
reduced to 300 from 365 earlier, with trade creditors
accounting for most of those being dropped from the list.
TPI has total debts of US$3.7 billion. Under the plan,
accrued interest of US$754 million would be converted to
equity amounting to 75% of the company's total capital,
with the shares valued at 5.45 baht each. The converted
shares could not be sold until the plan is fully
implemented in 2004.

TPI chairman Prachai Leopairatana would have the right of
first refusal in buying back the converted shares at 5.45
baht each, plus 1.5 times the prevailing interest rate.
After the accrued interest is converted to equity, the
remaining principal is to be repaid in regular instalments
and completed by Dec 31, 2004. (Bangkok Post 26-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

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

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