TCRAP_Public/001011.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, October 11, 2000, Vol. 3, No. 198


* A U S T R A L I A *

HEALTHLAND: Collapse triggers fund cancellation
ONE.TEL: Stock drops further, network could be sold

* C H I N A  &  H O N G  K O N G *

CCT MULTIMEDIA: Share price take a dive
HAINAN INT'L TRUST & INVEST.: Central bank shuts it down
imGO: Posts FY net loss
NANJING PANDA ELECTRONIC: Plans major overhaul
SHANGHAI CHENXUAN ZHINENG: US's P&G wins lawsuit against

* I N D O N E S I A *

PT NIKKO SECURITIES INDO.: SC rejects bankruptcy petition

* J A P A N *

CHUGAI PHARMACEUTICAL CO.: Chiyoda woes brings stock down
KENWOOD CORP.: Chiyoda woes brings stock down
KONICA CORP.: Chiyoda woes brings stock down
TAISEI CORP.: Chiyoda woes brings stock down
TOKAI BANK: Chiyoda woes brings stock down
TOMEN CORP.: Chiyoda woes brings stock down

* K O R E A *

DAEWOO MOTOR: GM and Fiat to start due diligence
DONG AH CONSTRUCTION: To lay off 39% of workforce
KE MONG SA PUBLISHING: Kones eyeing takeover
MIJU CORP: Application for court receivership rejected
SEPONG CO.: Bowater nears takeover deal

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

NATIONAL STEEL CORP.: More investors come forward

* S I N G A P O R E *

ALLIED HPS: To sell off property for loss

* T H A I L A N D *

ITALIAN-THAI DEVELOPMENT: TRIS downgrades to "junk bonds"
LOXLEY PLC: Plans Bt10.47B revamp
RAIMON LAND: Files rehab petition with Central Court
TPI POLENE: Debt Restructuring Progress


HEALTHLAND: Collapse triggers fund cancellation
The collapse of international gym giant Healthland on
Friday has caused syndicator Teys McMahon Investments to
withdraw a $16.175 million public raising from the market.

The syndicate, launched in August, was created to fund the
$32.25 million acquisition of three properties leased to
Healthland on terms of 12 and 15 years.  Teys McMahon
director, Mr Michael Teys, said the company withdrew the
offer on Friday after raising concerns two weeks earlier
about the ability of Healthland's parent company to fund
the chain's aggressive international expansion program.
The Australian company was placed in voluntary administra-
tion on Friday, while its listed parent LeisureNet Ltd
suspended trading on the Johannesburg exchange the same

"The syndicate had received good support and was on track
to achieve its target," Mr Teys said yesterday. "All money
received has been returned with interest paid on

The syndicate - believed to the first in Australia anchored
by a gym operator - was marketed with forecasted returns of
9.2 per cent in year one increasing to 12.3 per cent in its
seventh year.  Mr Teys said the collapse of the fitness
chain after 14 years of operations was "surprising",
particularly since the due diligence period for the
syndicate had included examining audited figures of the
international company which showed it in a "very healthy
financial position."

"It was not a start-up enterprise but an organisation with
a good plan and contemporary product."

Teys McMahon's syndicate was structured to offset the risk
factors usually associated with gym operators and included
an agreement by Healthland throughout its lease terms to
provide an unconditional bank guarantee for an amount equal
to 12 months' rent.  The syndicate had been allocated an A+
rating by analyst Property Investment Research which
highlighted that Healthland's lease terms were longer than
usual and allowed for 4 per cent annual rental reviews.

The research company did, however, point out the risk
associated with the syndicate featuring a single tenant,
PIR managing director, Mr Richard Cruickshank, said
yesterday.  "We considered that Teys McMahon had done
adequate due diligence," he said.

The collapse of Healthland and the syndicate raising would
make the industry "more suspicious of anything other than
mainstream investments in the short term," Mr Cruickshank
predicted. (Australian Financial Review  10-Oct-2000)

ONE.TEL: Stock drops further, network could be sold
The Packer and Murdoch family-backed telephone carrier
One.Tel has signalled it may be prepared to sell the mobile
network it has under construction, so it can focus on
offering mobile services.  One.Tel fell 9c to 66c
yesterday, the lowest level since Publishing & Broadcasting
and News Corp bought in last February. More than 6 million
shares were traded - six times the daily average over the
past two months.

In a briefing session with telecom analysts and fund
managers recently, One.Tel joint managing director Mr Jodee
Rich said he was not locked into owning a network. He did
not rule out the prospect of adopting the same model for
its local mobile business that it intends to roll out in
Europe. There it buys network capacity and sells its own
mobile services and features, also known as a mobile
virtual network operator (MVNO).

However, One.Tel joint chief executive of the Australian
operations, Mr Steven Hodgson, said a sale of the mobile
network, which is costing $1.1 billion to build, was not
planned. Mr Hodgson said that under the arrangement with
network builder Lucent Technologies, the technical support
and day-to-day management of the mobile network would be
handled by Lucent for the next two years, with an option to
extend beyond that.

"We might look at outsourcing the day-to-day operations of
the network, but not [changing] the ownership," Mr Hodgson

Mr Rich and fellow joint managing director Mr Brad Keeling
are overseas. One.Tel shares have fallen from their
adjusted peak of $2.84 last November following the global
sell-off in telecom stocks, with One.Tel's decline
exacerbated recently on fears that it may need to raise
more funds.

Broker Merrill Lynch said in a note to clients last week
that a sale of the local mobile network would "considerably
alleviate these concerns."

Yesterday's share price fall reflected fears that its
largest institutional shareholder, Bankers Trust, was
selling down its 6.5 per cent stake. The US-owned fund
manager bought into One.Tel at $1.50 earlier this year.
The largest trade in One.Tel yesterday was handed by online
institutional stockbroker AOT Stockbroking, which put
through a sale of 2 million shares.

In briefings with fund managers, One.Tel executives have
said it plans to cut back on some expansion plans, in order
to bring forward the break-even date for its operations.
The cutbacks include the planned rollout of DSL (digital
subscriber line) services in Australia and Europe.

As well, One.Tel has ruled itself out of next year's third
generation (3G) mobile phone spectrum auction.
The company has also played down its role in the
forthcoming Swiss 3G spectrum auction. (Sydney Morning
Herald  10-Oct-2000)

C H I N A  &  H O N G  K O N G

CCT MULTIMEDIA: Share price take a dive
CCT Multimedia's share price plunged 34.37 percent on the
news it will buy a music video and karaoke production

The share slid 16.5 HK cents to close at 31.5 HK cents,
making it the biggest loser in the market excluding
warrants.  The company plans to acquire all the shares in
associated company Wellfit Multi Media, in which parent CCT
Telecom holds 25 per cent, for HK$134.4 million.

The remainder of the shares are held by Wellfit's
management, including managing director Siu Chiu-shun, and
independent investor and entertainer Andy Lau Tak-wah. The
price will be settled by an issue of 134.4 million CTT
Multimedia new shares at HK$1 per share, representing 8.68
per cent of the enlarged share capital.

This is a premium of 217.46 per cent compared to the
share's closing price of 48 HK cents yesterday.
Company officials dismissed the market's unfavourable
response to the acquisition.  "We emphasise [CCT
Multimedia's] long-term prospects rather than a one-day
share performance," Mr Siu said.

Clement Mak Shiu-tong, chairman of CCT Multimedia, said:
"We will prove they are wrong [for selling out]."
Mr Mak blamed the plunge on the bad market sentiment
towards technology stocks and investors' unfamiliarity with
the nature of the company.

"CCT Multimedia is not just a dotcom company. In fact, we
are developing the company into a Web-TV operator."
He said the acquisition would enable the company to further
expand into the production, promotion and sale of
television programmes, catering to growing demand from
Chinese-speaking communities around the world.

The takeover was also a part of the group's restructuring
in which the parent CCT Telecom, which makes telecom-
munications products and provides information-technology
infrastructure services, consolidated its multimedia
businesses into CCT Multimedia, Mr Mak said. The
consolidation followed an asset injection by the parent in
July in which it sold all its Internet businesses to the

The assets were mostly in the start-up stage, which
included celebrity Web site, lifestyle site, online talent trainer Star Factory, an image
consultancy and 10 per cent of news site
The company, which claims to produce 60 per cent of
domestic music videos and karaoke content and more than 80
per cent of concert videos in Hong Kong, posted a net
profit before tax of HK$13.18 million for the year to June
30.  (South China Morning Post  11-Oct-2000)

HAINAN INT'L TRUST & INVEST.: Central bank shuts it down
Sources at three large Japanese banks, Sumitomo Bank,
Shinsei Bank and the Bank of Tokyo-Mitsubishi, report that
the People's Bank of China has ordered Hainan International
Trust & Investment Corp. (HITIC) to cease all financial

The creditor banks, issuers of "Samurai" bonds to HITIC,
confirm that they have been informed of the PBOC action by
the Hainan government. The banks published two announce-
ments in the Sept. 29 edition of the Nihon Keizai Shimbun,
confirming the shutdown.

On Sept. 25, an interest payment came due on seven-year
Samurai bonds worth JPY14 billion (US$129 million), their
maturity dates being in September 2004 with an annual
interest rate of 3.4 percent. By Oct. 2, however, the
bondholders had received no payment. The interest totals
about JPY480 million (US$ 4.4 million).

imGO: Posts FY net loss
Wireless technology investment company imGO Ltd., formerly
a medium-sized property development firm named Gucco Land,
recorded a net loss of HK$457.6 million for the fiscal year
ended June 30, That was down from HK$722.9 million net loss
the previous year. Turnover for the year was HK$40.03
million, down substantially from HK$302.3 million the
previous year. Loss per share was 38 HK cents compared with
71 HK cents the year before.  Revenue fell 86.8 percent to
HK$40 million. No final dividend was proposed.

In March, Hutchison Whampoa (Holdings), Swedish holding
company Investor and Ericsson took over Gucco in a HK$1.37B
deal, renaming it in June.
NANJING PANDA ELECTRONIC: Plans major overhaul
Two troubled locally listed state-controlled manufacturing
companies have announced major overhauls of their
businesses in the hope of turning around their fortunes.
Nanjing Panda Electronic and Tianjin Bohai Chemical
Industry (Group) - both of which are listed as H-shares -
yesterday announced what amounts to a significant
transformation of their principal businesses via asset

They are among the first H share companies to dispose of
core businesses.  Nanjing Panda will get rid of its
television business and Tianjin Bohai its chemical
business.  Each had been a core part of their company's
strategy but had become unprofitable. Instead their parents
will inject profitable businesses into them.

It is rare for H shares to diversify beyond their core
businesses due to China's stringent industrial policies.
The restructurings have come as Beijing accelerates its
state sector reforms as part of its entry into the World
Trade Organisation by early next year.  The moves are seen
as enabling both businesses to compete more effectively
with firms from abroad.

Under a HK$1.3 billion asset-swap deal with Tianjin
Municipal Investment Company (TMIC), an enterprise wholly
owned by the Tianjin municipal government, Tianjin Bohai
will dispose of its entire core loss-making chemical
business to TMIC.  In return, TMIC will inject its profit-
making sewage water-processing business, toll road and toll
station businesses into Tianjin Bohai.

As part of the deal Tianjin Bohai's parent, Bohai
Corporation, will transfer its 63.09 per cent interest in
the company to TMIC without a cash consideration.
TMIC will also take up all of the debt of Tianjin Bohai's
chemical business.  Upon completion of the deal, Tianjin
Bohai will replace its heavily indebted and loss-making
chemical business with a new urban construction and
environmental protection business which has a dominant
market position, according to the company.

The company will also replace all existing directors with a
senior management team from TMIC.  Tianjin Bohai is to be
renamed Tianjin Capital Environmental Protection. "We
expect the sewage water treatment operations will improve
performance, profitability, achieve stable returns to
shareholders and improve our cashflow position in the
future," said chairman Gong Suozhu.

The company, one of the mainland's largest chemical
producers, was among the worst performing H shares in the
past two years.  It reported the biggest loss among the 41
H shares for the year ended 1998 as it sank into the red to
the tune of 608.05 million yuan (about HK$569.37 million).
Although the company trimmed its net loss to 364.37 million
yuan last year, it was still among the list of top loss-
making H share companies.

Meanwhile, Nanjing Panda Electronic, which makes television
sets and mobile telecommunications systems, will dispose of
its loss-making television-making assets to its parent
Nanjing Panda Electronic Group.  Television and video
compact disc manufacturing accounted for about 80 per cent
of the company's total turnover in both last year and the
previous year.

But the company's television business lost 596.72 million
yuan in 1998 and 61.31 million yuan last year amid fierce
competition in an industry plagued by severe over-supply.
It is one of the five largest television-makers in the
mainland but its ranking has slipped in the past two years
due to weak new product development and inventory build-up.
In exchange for the disposed assets, its parent will inject
assets relating to the manufacture and sale of
telecommunications and information terminal products and
electro-mechanical products, as well as HK$51.9 million in

The assets to be injected comprise Shenzhen Jinhua Group
and NPMEP Group.  Shenzhen Jinhua makes video telephones,
set-top boxes and distance supervision systems.  NPMEP is a
maker of "high-tech electro-mechanical unity products"
including backflow welding equipment and automated
production lines.

The two companies recorded net profits totalling 13.22
million yuan and 11.49 million yuan respectively.
Nanjing Panda Electronic said it would use the HK$51.9
million cash as working capital. Tianjin Bohai shares rose
2.85 per cent to close at 70 HK cents while Nanjing Panda
jumped 38.64 per cent to HK$1.66.  (South China Morning
Post 11-Oct-2000)

SHANGHAI CHENXUAN ZHINENG: US's P&G wins lawsuit against
United States consumer goods giant Procter and Gamble (P&G)
has won a suit against a Shanghai firm which used its
trademark to increase hits and build advertising revenue on
its website, state media reported yesterday.

The Shanghai No2 Intermediate People's Court ruled that the
website name,, registered by a Shanghai-
based firm, violated China's Trademark Law and Law Against
Unfair Competition, the Shanghai Daily said.  The case was
brought by US-based P&G, which accused the Shanghai
Chenxuan Zhineng Science and Technology Development of
registering the website with intent to misrepresent, and
infringing trademark regulations by using the trademark
Safeguard, which was first registered by Proctor and Gamble
in China in 1976.

The court said information on the website caused confusion
and unfair competition by using the trademark, which is
widely recognised in China because of its use on P&G
toiletry products.  The American company allowed its
Guangzhou and Tianjin branches to use the trademark on
their soap and body lotion products in 1984 and 1994.

The trademark is under state-level protection in China,
Xinhua news agency said in a separate report. Intellectual
property rights have long been a battleground in China
where pirate video compact discs (VCD) and music CDs are
sold on every street corner, and counterfeit packaging

Companies such as P&G are engaged in an uphill struggle to
protect their brands but many big foreign names are hoping
the country's protection will improve following China's
accession to the World Trade Organisation (WTO) in the
coming months.  Chinese authorities have thrown their
weight behind foreign businesses' fight to control the use
of domain names on the Internet as part of a wider campaign
to control the flow of information over the Web in China.

Internet usage in China has almost doubled since the
beginning of the year, rising to 16.9 million users in
August.  The increase continues a two-year trend in which
Internet usage has doubled every six months, according to
the government-run China Internet Network Information
Centre.  (Hong Kong iMail  11-Oct-2000)


PT NIKKO SECURITIES INDO.: SC rejects bankruptcy petition
The Supreme Court has granted a civil review petition by PT
Nikko Securities Indonesia but rejected the bankruptcy
petition by the company.  Consequently, the company no
longer is in the state of bankruptcy and has thus regained
all its competence to act legally based on the applicable
law and regulations. Trading in shares of the company
recommenced on Oct. 5 on the Jakarta Stock Exchange. All
costs of the court proceedings will be borne by PT Nikko
Securities Indonesia.


The chairman of Bridgestone/Firestone Inc., Masatoshi Ono,
is expected to announce his resignation this week to take
responsibility for defective Firestone tires reportedly
linked to more than 100 road deaths in the United States,
sources close to the company report.

CHUGAI PHARMACEUTICAL CO.: Chiyoda woes brings stock down
KENWOOD CORP.: Chiyoda woes brings stock down
KONICA CORP.: Chiyoda woes brings stock down
TAISEI CORP.: Chiyoda woes brings stock down
TOKAI BANK: Chiyoda woes brings stock down
TOMEN CORP.: Chiyoda woes brings stock down
Companies that had Chiyoda Mutual Life Insurance Co. as a
major shareholder fell on concern Japan's No. 12 insurer
may sell its stake to raise capital after filing for
bankruptcy yesterday.

Chiyoda Mutual Life's liabilities exceeded assets at by
34.3 billion yen ($315 million) at the end of last month,
Japan's Financial Services Agency said. Chiyoda Life's
bankruptcy, Japan's biggest post-war corporate failure,
leaves 2.94 trillion yen in liabilities, surpassing Japan
Leasing Corp.'s 1998 collapse under 2.2 trillion yen,
according to Teikoku Databank Ltd.

Taisei Corp., a Japanese construction company, fell as much
as 8 yen, or 4.9 percent, to 156 in early morning trading.
The insurer owned about 41.2 million shares, or 4.3
percent, of Taisei, making Chiyoda its biggest shareholder,
according to the September issue of Shikiho, or the Japan
Company Handbook.
Chugai Pharmaceutical Co., a mid-sized Japanese drugmaker,
fell as much as 3.7 percent, to 1,925. Chiyoda was the
drugmaker's biggest shareholder with a 5.1 percent stake,
according to the Shikiho.

Konica Corp., Japan's second-largest photo paper
distributor, fell as much as 25 yen, or 3.4 percent, to
721. Chiyoda was Konica's No.5 shareholder with 4.4 percent
stake in the photoproducts maker.  Kenwood Corp., a
Japanese audio equipment maker, fell as much as 15 yen, or
3.8 percent, to 382. Chiyoda owned a 5 percent stake in
Kenwood, the second-biggest shareholder.

Tokai Bank Ltd., which plans to merge with Sanwa Bank Ltd.
and Toyo Trust & Banking Co. in April, forming the world's
No.5 lender by assets, fell as much as 6.6 percent to 525.
Chiyoda owned 80 million shares, or 3.5 percent stake of
Tokai, making the insurer the No.2 shareholder of the bank.
Tomen Corp., a Japanese trading company, fell as much as 6
yen, or 4.5 percent, to 127. Chiyoda owned a 3.5 percent
stake in the trading company, its No.4 shareholder.

Chiyoda Life marks the industry's fifth bankruptcy since
Japan's asset bubble burst in 1990. It follows Daihyaku
Mutual Life Insurance Co., Japan's former No. 15 life
insurer, which was ordered by regulators to suspend
operation in May, and Taisho Life Insurance Co., which
collapsed in August with excess liabilities of about 650
billion yen.  The day after Daihyaku was ordered to halt
its operations by regulators, companies that counted the
failed insurer as a major shareholder were also battered.
(Bloomberg  10-Oct-2000)


DAEWOO GROUP: KAMCO buys $3.79B of foreign debts
The Korea Asset Management Corp. (KAMCO) has acquired $3.79
billion in foreign debts of the dismantled Daewoo Group
from foreign lenders. The amount represents about 95.4
percent of $3.97 billion, which foreign creditors have
agreed to sell to the KAMCO at a discount.

KAMCO added that it will purchase the remaining $180
million from foreign creditors within this month, which
will resolve Daewoo's foreign debt problem completely.
KAMCO confirmed it paid $1.61 billion for the $3.79 billion
in Daewoo's foreign debts, or 42 percent of their full
value. Earier this year, the agency agreed to buy Daewoo's
debts at a discount from foreign debtors.

DAEWOO MOTOR: GM and Fiat to start due diligence
General Motors and Fiat, the US and Italian automotive
groups, confirmed plans Monday to conduct preliminary due
diligence at insolvent South Korean carmaker Daewoo Motor.

The two companies said they had reached agreement with
Daewoo Motor's creditors, owed an estimated $16bn, to begin
talks regarding "the acquisition of passenger vehicle
assets and related businesses of Daewoo Motor."

It is understood, however, that neither GM nor Fiat is
committed to acquiring either Ssangyong Motor, Daewoo's
sports utility vehicle partner, or the group's commercial
vehicles operations.  Industry analysts also questioned
whether GM and Fiat - if they decided to bid - would make
an offer for Daewoo Motor's Polish and Romanian plants.

Ford Motor Company, which abandoned a $6.9bn non-binding
offer for Daewoo Motor last month, is thought to have been
deterred by some of the liabilities associated with those
plants.  "One of the most likely outcomes is that GM and
Fiat acquire the South Korean plants and some of the other
trading assets," said one industry analyst.

GM and Fiat declined to comment in detail on Monday on
their plans.  The alliance partners said in a statement:
"Both sides are expected to begin initial discussions
surrounding the terms, conditions and forms of transfer."

Officials at Daewoo said there could be a further statement
this week in which GM would announce it had formally begun
due diligence.  In Seoul, meanwhile, local media reports
suggested that Daewoo's major creditors would hold a
meeting on Wednesday to consider fresh loans to the
troubled carmaker.

The Yonhap News Agency, quoting an official representing
the Daewoo creditors, said seven key creditors - including
state-run Korea Development Bank and Korea Asset Management
Corp (Kamco) - would discuss whether to provide W450bn
($403m) in new loans to Daewoo Motor.  GM and Fiat are
regarded as front runners to acquire most of Daewoo's

Until last autumn, GM was in exclusive talks with Daewoo's
creditors and previously had a 15-year joint venture with
the company, ending in 1992. (Financial Times  09-Oct-2000)

DONG AH CONSTRUCTION: To lay off 39% of workforce
South Korea's Dong Ah Construction Industrial Co. plants to
sell assets and sharply cut the size of its workforce as
part of ongoing efforts to restructure its operations.

In a press release, the company said it will lay off about
1,500 workers, representing about 39 percent of its
workforce, by the end of the year. That move is expected to
reduce labor costs by about 110 billion won ($1=KRW1,118.1)
by 2002.

Additionally, the company intends to sell KRW52 billion in
assets to help ease its liquidity crunch. Dong Ah
Construction said that expects to normalize its operations
by 2002 through continuous restructuring efforts. The
company was placed in a debt-workout program in September

KE MONG SA PUBLISHING: Kones eyeing takeover
Kones, a Kosdaq-listed start-up firm specializing in
creating educational contents for the Internet, reportedly
is seeking to take over Ke Mong Sa Publishing, a KSE-listed
traditional publishing house currently under court

For that purpose, Kones has already formed a consortium
with Welcome Technology Investment Co.  Officials at Kones
and Welcome Technology said that they submitted all the
documents necessary for acquisition of the publisher to the
Seoul District Court on September 23.

"Ke Mong Sa has successfully turned to the black in the
first half of this year and is thought to have enough
potential for a fast recovery with help of restructuring
specialists," they added.

Kones could expect to reap synergy effects from combining
its online expertise with Ke Mong Sa's decades-long
experience in book publishing, its officials speculated.
Creditors of the failed publishing company will enter
negotiations with Kones and Welcome Technology in the near
future, based on the terms the two potential acquirers

Ke Mong Sa, specializing in publishing children's books,
has been under court protection since December 1999. It
posted a half-year net profit of 20 million won on revenues
of 11.5 billion won as of end-June.  (Korea Economic Weekly

MIJU CORP: Application for court receivership rejected
Miju Corp, which has been suspended from a workout program,
confirms that the Seoul district court has refused its
application to enter receivership.

The ailing company now faces the piecemeal sale of its
assets since the court refused to protect it from
creditors. Once creditors learned that Miju's debts
exceeded its assets, they declared the firm bankrupt and
took it out of workout.  The creditors claimed they were
waiting for the court to declare Miju legally bankrupt so
they could begin recouping losses by selling what was left.

The company was once the flagship of the Miju Group, which
included such affiliates as Miju Steel, Miju Metal and Miju
Concrete, among others.  Its annual turnover was 300
billion won (US$267.8 million). (Asia Pulse  10-Oct-2000)

SEPONG CO.: Bowater nears takeover deal
Bowater Inc. of the US, a global leader in newsprint
making, is making moves to acquire the paper operation of
ailing paper maker Sepoong Co.

Cho Hung Bank (CHB), Sepoong's main creditor bank, said
on September 27 that it has wrapped up sell-off talks with
the US newsprint giant and will put finishing touches on
the deal in a few days.  "Under the agreement with ABN
AMRO, underwriter assigned by CHB, Bowater will pay $210
million in cash while assuming no debts. The transaction is
subject to certain regulatory approvals," according to
sources close to the deal.

Since Sepoong entered the government-initiated debt
rescheduling program in 1998, its creditor banks injected
as much as 460 billion won into the heavily-indebted
company to help it get out of the financial mess. Creditors
also swapped 75 billion won worth of debt for equity,
coming to hold 83 percent of Sepoong's stakes.

With this acquisition, Bowater, which had purchased the
one-year old Halla Paper mill in Mokpo, South Cholla
province, in mid-1998, will be able to take No. 2 spot
domestically in terms of market share.  Over the past few
years, Bowater have consistently purchased low-cost,
high-quality assets in the country, while divesting non-
strategic or unprofitable operations.

Sepoong, which has 550 employees, posted 170.6 billion won
in turnover and 91.6 billion won in net losses last year.
(Korea Economic Weekly  09-Oct-2000)


NATIONAL STEEL CORP.: More investors come forward
The corporate regulators' order for the liquidation of
National Steel Corp. may turn out to be a blessing in
disguise as more and more foreign investors have signified
interest in bailing out what used to be the biggest steel
maker in the Philippines.

Securities and Exchange Commission chair Lilia R. Bautista
said two new foreign groups were contemplating buying NSC
even after the commission had ordered the dissolution of
the bleeding steel maker.

"It's good we ordered the liquidation of NSC because those
who are interested are now surfacing. This is certainly a
positive development but we don't know how serious they
are," Bautista said.

Bautista said an Arab-Chinese group which has an existing
local partner in the Philippines, approached the commission
last week, signifying its desire to buy out NSC. "They went
here, asking for the cost and when we told them over P16
billion they did not say anything," she said.

She said that another group based in London had indicated
its willingness to save the steel firm from extinction and
enable it to reclaim its profitability. She refused to
divulge the identities of the two foreign groups but said
they were all engaged in steel manufacturing.  The SEC
chief said the commission could recall its order to
liquidate NSC if in the middle of the liquidation
proceedings, a "white knight" showed up to save the steel

Meanwhile, the SEC directed Monico Jacob, chair of NSC
receiver committee, to submit within 60 days a detailed
plan on how to go about the liquidation of NSC. Jacob was
tapped to undertake the functions of a liquidator.  The
commission also directed all creditors of the steel firm to
submit their updated claims (including interest) within 30
days from receipt of order.

Asked why it would take that long to submit the liquidation
plan, the SEC hearing panel said this was to allow
potential investors to undertake due diligence on NSC and
its equipment.  Under the initial liquidation plan
submitted by Jacob to the SEC, a new subsidiary of NSC will
be created to ensure that its assets are kept whole.

The SEC's rules on corporate recovery allow the liquidator
to create a subsidiary and place the assets in that new
corporation if they are of value.  The liquidator
determines which portion of the entire obligation of NSC
may be converted into equity and whether the new company
can adequately service the remaining obligation.

He then incorporates an NSC subsidiary, capitalizes it at
an amount equivalent to the converted obligations,
transfers all the assets held in trust to the subsidiary
and issues all the shares of the subsidiary to himself.
In converting debts into shares or long-term commercial
papers, the liquidator shall adhere to the requirements of
the Civil Code on preference and concurrence of credits.
Jacob said the plan had been referred to a legal counsel
who had judged it as legally feasible and the most
efficient mode for liquidating the company.  (Manila Times


ALLIED HPS: To sell off property for loss
Allied Components International said yesterday its
subsidiary Allied HPS will sell an industrial property at
Ang Mo Kio for $4.18 million to ST Electronics Systems and
CEI Manufacturing.  ACI expects to record a net loss of
about $95,000 from the sale of the property.

It said money from the sale will be used to repay loans and
invest in plant and machinery to boost production capacity
and efficiency.  Sesdaq-listed ACI said it was selling the
property because Allied HPS is moving its operations to
Malaysia. The property would have been underused, so ACI
felt it would be more cost-efficient to move Singapore
operations to smaller premises in Jurong.

ACI also said it had acquired five new lines of machines
and accessories for around US$2.98 million (S$5 million),
to cater to the increased activities of its wholly-owned
subsidiaries in Malaysia. Its Malaysia operations mainly
produce printed circuit board assemblies and other

Meanwhile, the sale of the Ang Mo Kio property is subject
to approval by the Housing & Development Board.  ACI said
the net book value of the property was about $4.24 million
and the latest open-market valuation, $4.2 million.
It said a desk-top valuation was conducted by Jones Lang
LaSalle.  ACI assembles PCBs and complete products, makes
wire coil products and does plastic injection moulding.
(Business Times  11-Oct-2000)


Final contracts for the sale of Bangkok Metropolitan Bank
to HSBC are expected to be finalised this week and go to
the cabinet for approval on Oct 17.

Directors of the Financial Institutions Development Fund
met yesterday to discuss ways of handling a tax issue that
had threatened to undermine the deal, under which HSBC
would pay $940 million for a 75% stake in BMB. Somchainuk
Engtrakul, finance permanent secretary, said the
development fund had agreed to allow accumulated losses at
BMB to offset any tax liabilities incurred on compensation
paid by the fund.

Under the sale terms, bad loans would be managed under an
arrangement by which the fund would compensate HSBC for
losses on the loans. But the compensation payments are
considered revenue, and thus liable to tax. While the
losses incurred by the bank on the loans would offset this
liability, the time lag and associated carrying costs had
led to fears that the deal would be scuttled if a
compromise could not be found.

Fund directors agreed to accept a proposal from HSBC to
allow the losses to be booked as expenditures to offset
gains, reducing cashflow constraints for the bank. Another
point that had been disputed involved $400 million in one-
to five-year promissory notes paid by HSBC as part of the
purchase price. Thai officials had wanted HSBC Holdings,
the parent company of the HSBC group, to guarantee the

Instead, Mr Somchainuk said the fund had agreed to accept
the notes with no guarantee, but wanted a right of early
redemption if HSBC's equity fell below $5 billion. But one
proposal rejected by fund directors was a request to raise
the ceiling for new non-performing loans that have occurred
over the past year.

Under the original contracts, figures as of June 1999 would
be used to calculate compensation, with up to 15% of new
bad loans after that date accepted under the loss-sharing
scheme. If HSBC accepted the final terms, officials expect
the deal to be concluded shortly, with no further meetings
by the fund's board required. Chakthip Nithibon, assistant
central bank governor, said the deal would go to the
cabinet a week from today.

"We expect that the negotiations between our financial
advisers and HSBC should be finalised within the next few
days," he said. "The central bank would like to receive
approval before the House is dissolved."

If the deal is concluded, BMB would be the third bank to be
privatised after state intervention, following the sale of
Nakornthon to Standard Chartered and Radanasin to United
Overseas Bank. (Bangkok Post  10-Oct-2000)

ITALIAN-THAI DEVELOPMENT: TRIS downgrades to "junk bonds"
Thai Rating and Information Services Co Ltd (TRIS) has
downgraded the rating of Italian-Thai Development Plc
(ITD)'s Bt3.5-billion senior debentures to "junk bond."

The downgrading marked the first time in TRIS's five-year
history that it had issued a warning to investors ahead of
international credit-rating agencies.  The construction
firm's debentures, which are due in 2005, were downgraded
from "C" to "D" because of ITD's failure to make a Bt200-
million interest payment due today on senior debentures.

The failure to make the payment was the result of the
company's proposed debt-restructuring plan, TRIS said.
TRIS, the country's sole credit-rating agency, placed a
negative CreditAlert on ITD's issue on September 29 and
downgraded it from "BBB-" to "C" on October 5. According to
TRIS, "A" is the highest rating, and "D" is the lowest
rating. "D" means the debt instrument is in default.

ITD executives could not be reached for comment.  In
reaction to the news, ITD's share price yesterday fell 2.2
per cent, or Bt0.25, to Bt11. ITD's default helped to
depress the market yesterday as investors' fretted over the
revival of defaults on corporate bonds.

In addition to ITD, investors are concerned about the
likelihood that Loxley Plc will default on its US$100-
million (Bt420-million) euro-convertible debentures, which
are due in January. Loxley's share price has plunged for
four straight days, bottoming out yesterday at Bt12 before
rebounding to close at Bt14.75, a 4.8-per-cent fall on the

The Stock Exchange of Thailand hit a two-year low, shedding
1.65 per cent, or 4.31 points, to finish the day at256.98.
ITD said that apart from the Bt3.5 billion in debentures
its Bt7.5-billion liabilities were being negotiated under a
debt-restructuring plan. The company's previous debt
restructuring was completed only a year ago.

ITD blamed the stagnant economy and the deferment of
Bangkok Mass Transit System Plc's listing for a new round
of debt restructuring.  ITD holds about 10 per cent of the
skytrain operator, which plans to list on the bourse early
next year after a two-year delay.  (The Nation  11-Oct-

LOXLEY PLC: Plans Bt10.47B revamp
Loxley Plc has announced plans for a 10.47-billion-baht
restructuring that includes raising paid-up capital by 1.6
billion to 2 billion baht.

News of the plan helped push Loxley's share price down by
27% yesterday. Holders of the company's euro-convertible
debentures would vote on the plan on Thursday, said Supat
Karachalkul, senior manager for finance at Loxley. He
expressed confidence that the restructuring plan would pass
with few hitches. If the proposal was accepted, existing
management, led by the Lamsam family, would have
responsibility for implementing the plan.

Loxley, a telecoms trading firm, said the two outstanding
issues of ECDs account for total debt of $265 million. A
second group of debt is $11 million in debt to two foreign
banks.  Total debt of the two creditor groups is $276
million, representing 87% of total company debt as of the
end of June. The remaining debt represents working capital
which does not need to be restructured.

ECD holders will convert around $125 million in debt to 85
million common shares at a price of 60 baht per share.
The remaining $140 million in debt to ECD holders will be
repaid over eight years with interest rates set from 7-
8.75% per year. The company will also issue 75 million new
shares, priced at 8.5 baht each. Existing shareholders will
be offered 65 million shares, with the remaining 10 million
privately placed.  Funds will be used as working capital.

The second group of debts, totalling $11 million, will be
reduced by 50% assuming ECD holders accept the plan and
that board and shareholder approval is secured. Mr Supat
denied Loxley was in talks to bring in a new strategic
partner, and said the Lamsam family would remain the major
shareholder with 42%.

The company would revamp its business strategies,
sharpening its focus from 12 business lines to concentrate
on telecommunications and infrastructure, he said.
Loxley posted consolidated first-half losses of 621.8
million baht, compared with profits of 63.3 million in the
same period last year.

Shares of Loxley were briefly suspended yesterday morning
by the SET pending clarification of the debt restructuring
and recapitalisation plan. News of the recapitalisation
pushed shares sharply down once trading opened, with Loxley
closing at 15.5 baht, down 5.75, in heavy turnover worth
99.78 million baht.

One analyst from Capital Nomura Securities said questions
remained about the firm's medium-term business plan.
Interest payments alone would range up to 500 million baht
a year, he said. How the company would streamline
operations and build cashflow to service its debt remained
a question. (Bangkok Post 10-Oct-2000)

RAIMON LAND: Files rehab petition with Central Court
Raimon Land has reported to the Stock Exchange of Thailand
(SET) that it has submitted a business rehabilitation
petition to the Central Bankruptcy Court yesterday. The
court accepted the petition and set a hearing date for
November 6.

TPI POLENE: Debt Restructuring Progress
TPI Polene Public Limited has reported to the Stock
Exchange of Thailand and its investors that the Central
Bankruptcy Court on August 21 appointed TPIPL's existing
management as plan preparer of its business reorganization

Currently TPIPL is in the debt repurchase process, which is
being offered to all financial creditors, as provided for
in the restructuring plan. Under that process, TPIPL will
deposit 10 percent of the settlement value after TPIPL is
notified of the acceptance of such offered debt. TPIPL will
pay the remaining of 90 percent of the settlement value
within 5 business days after TPIPL successfully raises new
money injection from equity-fund-raising exercise of USD
180 million.

It is anticipated that such proceeds will be utilized to
purchase debt back at the principal value of approximate
USD 360 million. TPIPL expects to recognize a profit of
Baht 7.2 million after the completion of such process.

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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