TCRAP_Public/001019.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

             Thursday, October 19, 2000, Vol. 3, No. 204


* A U S T R A L I A *

EISA: Subject of insolvent trading probe
ISIS COMMUNICATIONS: Forecasting nearly $30M loss
RECKON: Warns of $20M loss
SUMICH GROUP: Recapitalization plan before creditors
Y& B HOMES: Buyer steps in to save troubled firm

* C H I N A  &  H O N G  K O N G *

ALPHA PLUS DEVEL.CONSTRUC.LTD: Facing winding up petition
BANK OF CHINA: Rumors of branch consolidation, job cuts
CHU KONG PRINTING & TRADING CO.: Facing winding up petition
DRAGON RIVER FOOD INVEST.CO.LTD: Facing winding up petition
GLORY NICE INDUSTRIAL LTD: Facing winding up petition
LIGA ENGINEERING CO.LTD: Facing winding up petition
PACIFIC CENTURY CYBERWORKS: Short-selling drags stock lower
PACIFIC CENTURY CYBERWORKS: In $3.55B venture to cut debt

* I N D O N E S I A *

PT BIMANTARA CITRA: Selling affiliate in restructure

* J A P A N *

CHIYODA MUTUAL LIFE: Court places in rehabilitation
DAI-ICHI KANGYO BANK: RMB failure wounds it deeply
DAIICHI MUTUAL FIRE: Contracts may go to protection entity
JIJI PRESSJACCS CO: RBM failure wounds it deeply

* K O R E A *

ASIA CEMENT: Oversupply, building slump drag it down
DAEWOO MOTOR: Declining sales spur job cuts
DONG AH CONSTRUCTION: 60 directors resign en masse
HANIL CEMENT: Oversupply, building slump drag it down
SHINHAN BANK: To refinance foreign debts
SSANGYONG CEMENT: Oversupply, building slump drag it down
SUNGSHIN CEMENT: Oversupply, building slump drag it down

* M A L A Y S I A *

CHG INDUSTRIES: Proposes restructuring scheme
LCI PROPERTY DEVEL.: To sell land to reduce borrowings
UCIS SDN: S$4.5M judgment hangs over it

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

NATIONAL POWER CORP.: Claims P411M losses in first half
NATIONAL STEEL CORP.: May seek refuge from Malaysian gov't
PHILPHOS CORP.: 3 bidders eyeing

* S I N G A P O R E *

VIKAY INDUSTRIAL: White knight appears after 3-year wait

* T H A I L A N D *

ANGEL AIR: PB Air sues for Bt20M payments
PRASIT PATANA DEVELOPMENT: Court orders rehabilitation
ROYAL CERAMIC INDUSTRY: Nov. 8 creditor meeting on rehab
SINO-THAI ENGIN.& CONSTR.: Reports on rehab progress


EISA: Subject of insolvent trading probe
The administrator of failed Internet service provider eisa
has begun an investigation into possible insolvent trading,
according to a preliminary creditors' report issued this

Eisa was "inherently unprofitable" and there were "a number
of matters which warrant further investigation, in
particular: insolvent transactions, insolvent trading [and]
the UUnet transaction", says the report by chartered
accountancy firm Ferrier Hodgson.

Eisa collapsed earlier this year after failing to raise
about $325 million to finance the purchase of rival ISP
OzEmail from US telecom company UUnet. A $20 million non-
refundable deposit to UUnet was "a significant contributing
factor" to eisa's collapse, Ferrier Hodgson said.

The report, which was obtained by the Herald, also begins
to unravel the intertwined relationship of eisa and Edge
Technology, the failed PC maker owned by eisa's founder and
majority shareholder, Mr Johnson Wang. Eisa and Edge had
various marketing partnerships by which each would
distribute the other's products.

Edge often owed eisa sums of up to $1 million. Edge
administrator Armstrong Wily & Co has alleged, however,
that when Edge's business began to fail, it made
"preferential payments" to eisa, ahead of other creditors.
Eisa "had knowledge of Edge's insolvency by virtue of the
common directorships of Johnson Wang and the knowledge of
Edge's affairs purportedly held by Mr Sloman", the Ferrier
Hodgson report says.

Mr Jim Sloman was a director of eisa and was formerly
Edge's chief financial officer. Armstrong is claiming
$861,920 from the eisa estate.  Ferrier Hodgson
administrator Mr Andrew Love says in the report that he is
"reviewing the matter with my solicitor."

Mr Wang, who fled the country in June, is due to face
bankruptcy court in Sydney within weeks. Mr Love is also
investigating a $500,000 fee eisa paid to the Royal Bank of
Canada (RBC) to set up a $10 million loan facility that was
never used. The loan was intended to provide eisa with cash
while it was waiting for completion of the OzEmail deal.

But as market conditions soured, eisa was unable to
complete the deal and the $500,000 was lost.
By the time Ferrier Hodgson was appointed eisa's
administrator on September 21, eisa had only $588,000 cash,
"enough to last seven days."   There were no alternate
sources of funding and "the business was [or at least
likely to] beginning to dissipate."

Losses totalled $63 million by the time pay-TV operator
Austar's initial $24.4 million takeover offer was rejected
by a group of recalcitrant eisa shareholders. Within three
weeks, Ferrier Hodgson negotiated to sell eisa to Austar
for a reduced price of $13 million.

After repaying debt due to Austar, which has ballooned to
$81 million, just $4.9 million will be left over for other
creditors and staff.  Creditors will be repaid between 46
and 57 per cent of their exposure. (Ferrier Hodgson is owed
more than $225,000 in administration costs).

Ferrier has also reached a settlement agreement "in
principle" with eisa's former chief executive, Mr Damien
Brady, after concluding it was "not in the interests of
creditors" to continue legal proceedings against him.
North Sydney police, however, have not dropped a parallel
investigation into Mr Brady, who was accused of misusing
$230,000 of eisa's funds.

Mr Love will meet eisa's creditors - including Telstra,
Cable & Wireless Optus, Primus and KPMG - at 10am today to
consider the preliminary report. (Sydney Morning Herald 18-

ISIS COMMUNICATIONS: Forecasting nearly $30M loss
On-line education group Isis Communications has become the
second high-tech outfit in as many days to significantly
scale back profit forecasts.

Yesterday it admitted to investors that it had lost more
than $5 million on staging World Reconciliation Day. The
Isis Foundation, a charitable organisation founded by Isis
Communications to promote IT education in schools through-
out Australia, was a major sponsor of the day, which was
held in Melbourne in August.

It is understood the foundation, which was not mentioned in
the Isis July 1999 prospectus, spent money securing Mr
Nelson Mandela for the event, along with a line-up of other
international and Australian celebrities including Rubin
"Hurricane" Carter, Paul Kelly, Christine Anu and Deborah

Isis Communications yesterday told investors that it was
now forecasting a loss for the 2000 calendar year of around
$29.7 million, including an abnormal loss of $5.01 million
associated with World Reconciliation Day.

"Significantly lower than expected penetration levels for
[online education product] XSIQ" was another factor in the
downgrade, it said in a statement. (Sydney Morning Herald

RECKON: Warns of $20M loss
A slump in post-GST software sales compounded by supply
chain management problems has forced accounting software
group Reckon to dramatically scale back full-year forecasts
just two months after telling investors they would be
revised upwards.

Reckon, which holds the Australasian licence for Quicken
software, yesterday told investors that trading since July
had fallen well short of expectations, resulting in
expected full-year losses "in the region of $16 million to
$20 million."

As recently as August, after posting a net profit of
$37,000 for the June half, Reckon said a GST-related sales
boom meant the group would easily beat the $8.1 million
loss forecast for 2000 in its June 1999 prospectus. It was
also suggested then that Reckon had toppled arch-rival MYOB
as Australia's top seller of accounting software.

Reckon now plans to focus solely on software and related
services. It will cull its workforce by a third, with
management and online employees the first to go. The shock
news saw Reckon's share price more than halve, falling 51
per cent yesterday to close down 39c at 29c after falling
to a record low of 28c.

At yesterday's close Reckon was valued at just $30.7
million. In January, Reckon was valued at $248.8 million.
Analysts said yesterday they were surprised by Reckon's
admission. Just two months ago, buoyed by strong sales of
its GST-related software, the group said it would revise
upwards its 2000 forecast loss. (Sydney Morning Herald 17-

SUMICH GROUP: Recapitalization plan before creditors
A recapitalisation plan is to be put to the creditors of
the failed Perth-based Sumich Group, a horticulture company
that went into receivership in March 1998 owing about
$A21.5 million. The recapitalisation plan will be presented
this month. Under it, according to Sumich administrator
Vince Smith, a Perth investment syndicate plans an initial
injection of $A2.5 million into the group in return for a
controlling stake. The company also is to restore its
listing on the Australian Stock Exchange.

Y& B HOMES: Buyer steps in to save troubled firm
A buyer has been found for Tasmania's principal builder,
Y&B Homes, which was threatened with liquidation in
September.  Horwath's Dean McVeigh was appointed
controlling trustee after Y&B's credit dried up. McVeigh
said in mid-October 2000 a heads of agreement had been
reached with an undisclosed potential purchaser for Y&B,
and this would result in 50 building contracts being
completed.  Y&B's creditors, which are owed a total of
$A1.7 million, would receive $A0.25 for every dollar
recovered. (The Australian Financial Review  16-Oct-2000)

C H I N A  &  H O N G  K O N G

ALPHA PLUS DEVEL.CONSTRUC.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 20 on the petition of
Cheung Damien for the winding up of Alpha Plus Development
Construction Limited. A notice of legal appearance must be
filed on December 19.

BANK OF CHINA: Rumors of branch consolidation, job cuts
The Bank of China (BOC) declined to comment yesterday on
unsourced reports that the consolidation of its Hong Kong
operations with those of 11 "sister banks" in the SAR would
result in 10,000 job losses in China and another 3,000 in
Hong Kong and Macau.

The claim was published in the Ming Pao Daily yesterday.
Presenting the BOC Hong Kong branch annual result for last
year, chief executive Liu Jinbao disclosed that the larger
BOC Group collectively employed 17,393 staff in Hong Kong
and Macau - down 6.16 per cent from the previous year's
18,534.  It also operated 373 branches in Hong Kong and
another 27 in Macau.

Mr Liu made no reference to prospective job losses in his
commentary - at the time of releasing the profit statement
- on the restructuring of the group assets to combine all
12 banks into a single operating unit.  However, it is
clear that considerable job losses are likely to flow from
the process, with China's central bank, the People's Bank
of China (PBOC), having already led by example.

In December 1998, after having reorganised its Beijing head
office and cutting staff levels by 47 per cent, the PBOC
proceeded to consolidate its 31 provincial branches into
nine regional branches, ratings agency Moody's noted.
The BOC consolidation now under way is widely expected to
follow the example set by the PBOC, and large job losses
are likely.

However, the belief that BOC, along with China's other
three state-owned commercial banks, are hugely overmanned
and under-productive does not square with the results of
research by ratings agency Fitch.  In its latest review of
the BOC Group published this month, Fitch notes that the
group's cost-to-income ratio worked out to about 24.5 per

That was well below the 36.2 per cent cost-income ratio of
its peer in the local banking industry, HSBC Group
(including Hang Seng), and a cost-income ratio of 37 per
cent for medium-sized banks in Hong Kong.  "Thanks to its
common infrastructure back-office operations, the BOC Group
and its sister banks have a clear cost advantage over most
Hong Kong banks," Fitch said. (South China Morning Post 18-

CHU KONG PRINTING & TRADING CO.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 13 on the petition of
Leung Hoo Kwong for the winding up of Chu Kong Printing &
Trading Co. Limited. A notice of legal appearance must be
filed on December 12.

DRAGON RIVER FOOD INVEST.CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 20 on the petition of
Leung Sau Kwan for the winding up of Dragon River Food
Investment Co. Limited. A notice of legal appearance must
be filed on December 19.

GLORY NICE INDUSTRIAL LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 13 on the petition of
Chau Yee Mui Sana for the winding up of Glory Nice
Industrial Limited. A notice of legal appearance must be
filed on December 12.

LIGA ENGINEERING CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 20 on the petition of
Chu Wai Lun for the winding up of Liga Engineering Co.
Limited. A notice of legal appearance must be filed on
December 19.

PACIFIC CENTURY CYBERWORKS: Short-selling drags stock lower
Shares in Pacific Century CyberWorks (PCCW) continued to be
hammered Tuesday on the back of heavy short-selling. The
counter fell $0.25, or 3.47 per cent, to close at $6.95.
PCCW has shed 21 per cent this month and 61.6 per cent
since the beginning of the year.

The company's disclosure of a revised deal with Australia's
Telstra had failed to restore confidence in its stock,
according to analysts. About 1.12 million PCCW shares were
sold short yesterday, accounting for 69 per cent of the
total number of short-selling transactions. On Monday, PCCW
stock accounted for 77 per cent, or 1.28 million shares, of
the short-selling total.

"The heavy short selling reflected investors' weak
confidence in the stock," said Alex Wong, head of research
at OSK Securities.

Edmond Lee, vice-president at Sun Hung Kai Investment
Services, pointed out that even though PCCW had ended its
extended talks with Telstra, how it would refinance the
US$6 billion (HK$46.8 billion) loan and raise US$2 billion
for its Internet protocol (IP) backbone joint venture
remained uncertain. Some market participants said that
British-owned Cable & Wireless (C&W) had loaned investors
its PCCW shares to sell short.

C&W obtained about a 20 per cent stake in PCCW as a result
of selling its Cable & Wireless HKT shares to CyberWorks
for the completion of the merger. C&W sold 4.9 per cent of
its CyberWorks stake last month, and it can sell 7.1 per
cent more in February, according to the lock-in agreement
between the two companies.  (Hong Kong iMail 18-Oct-2000)

PACIFIC CENTURY CYBERWORKS: In $3.55B venture to cut debt
Internet group Pacific Century CyberWorks and Australia's
Telstra Corp. have agreed on a $3.55 billion venture that
is calculated to help CyberWorks cut its massive debts.

CyberWorks boss Richard Li reports that the partners are
now poised for "stunning growth in explosive businesses"
with the deal that will give Telstra -- Australia's top
telephone company -- a large mobile phone presence across
Asia.  Analysts continue to express concern about the long-
term viability of CyberWorks, founded last year by Li, the
33-year-old son of Hong Kong's richest man, Li Ka-shing.


PT BIMANTARA CITRA: Selling affiliate in restructure
PT Bimantara Citra is set to sell polystyrene producer PT
Polychem Lindo Inc to PT Adiguna Eka Sentra. The sales
agreement for Bimantara's unit through PT Bina Citra Kimia
will be signed soon according to a report in Bisnis
Indonesia. The sale follows the sales of PT Plaza Indonesia
Realty, PT Bimantara Cakra Nusa and PT Nestle Indonesia by
the parent as part of its debt-restructuring plan.


CHIYODA MUTUAL LIFE: Court places in rehabilitation
The Tokyo District Court will allow failed Chiyoda Mutual
Life Insurance Co to undergo corporate rehabilitation

The company filed for court protection from creditors Oct.
18. Chiyoda will become the first insurer in Japan to
undergo this type of rehabilitation. The District Court
moved quickly to approve the rehabilitation track so as to
minimize damage to Chiyoda's assets.

A court-appointed financial administrator will draw up a
rehabilitation plan, which must be approved by the court.
Chiyoda then is expected to undergo reconstruction under
the umbrella of major US insurance firm American
International Group Inc, which has stepped in to take over
the collapsed firm.

DAI-ICHI KANGYO BANK: RMB failure wounds it deeply
JIJI PRESSJACCS CO: RBM failure wounds it deeply
Jiji PressJaccs Co., a Japanese consumer credit firm, has
confirmed that the amount of credit it extended to failed
beauty salon operator RBM Co. totals some 6 billion yen.
Consequently, the failure may cause JiJi to incur an
operating loss.

Meanwhile, Dai-Ichi Kangyo Bank stands to be a big loser
from the collapse as well. According to Tokyo Shoko
Research Ltd., DKB has 3 billion yen in credits to the
collapsed company.

RBM, operator of the "Esthe de Milord" chain of beauty
salons, filed for bankruptcy Monday with the Tokyo District
Court with liabilities of some 20.5 billion yen.

As underwriters of RMB's corporate bonds, the Bank of
Tokyo-Mitsubishi had 200 million yen outstanding in secured
debentures and Tokai Maruman Finance Co., a Nagoya-based
venture capital firm affiliated with Tokai Bank, had 150
million yen in warrant bonds, both as of March 31.

DAIICHI MUTUAL FIRE: Contracts may go to protection entity
The Non-Life Insurance Policyholders Protection Corp. of
Japan is expected to take over the contracts held by the
failed Daiichi Mutual Fire & Marine Insurance Co.

Bankruptcy administrators of the collapsed Daiichi Mutual,
have been negotiating a possible takeover with U.S.
investment company Ripplewood Holdings LLC. No agreement
has been reached as yet.

The policyholders' protection entity, run by nonlife
insurers operating in Japan, is authorized to take over
contracts of a bankrupt insurance company if no other taker
appears. The administrators, including the Marine & Fire
Insurance Association of Japan, will seek other options if
Ripplewood refuses to make concessions in the ongoing talks, the
sources said.


ASIA CEMENT: Oversupply, building slump drag it down
HANIL CEMENT: Oversupply, building slump drag it down
SSANGYONG CEMENT: Oversupply, building slump drag it down
SUNGSHIN CEMENT: Oversupply, building slump drag it down
Korean cement manufacturers are going through a difficult
period due to over-production and a slump in the
construction industry.  The targeting of a number of major
construction firms for restructuring is likely to further
worsen their troubles.

Cement manufacturing once had been a boom industry,
enjoying more than 90% capacity utilization rate prior to
the 1997 crisis, but this rate plummeted to 69.4% in 1998
following the virtual freezing of the construction industry
due to the outbreak of the financial crisis. The operation
rate has not improved much since then, reaching just 70.8%
in 1999 and 71% this year.

Accordingly, the financial status of cement firms has
worsened, and even a major firm like Ssangyong Cement has
found itself W3.99 trillion in debt, making for a 321%
debt-to-equity ratio as of the end of last year. Although
the debt-to-equity ratios at Hanil Cement and Asia Cement
are both under 100%, these two firms are having
difficulties due to low operation rates.

The current troubles in the cement industry date back to
1997, when domestic cement manufacturers expanded their
production capacity by 5.4 million tons per annum,
misjudging that the construction boom would continue.
Sungshin Cement, for instance, invested W350 billion in
1998 to increase its capacity by 3.3 million tons per year,
but incurred W34.3 billion in losses in the first half of
this year. (Digital Chosun  16-Oct-2000)

DAEWOO MOTOR: Declining sales spur job cuts
Daewoo Motor Corp.'s truck-making unit in Poland will lay
off about one-fifth of its work force due to a drop in
sales that the plant believes its South Korean parent will
not be able to help it overcome.

Altogether, about 1,200 of Daewoo Motor Polska's 6,200
workers will be separated from the company's Lublin-based
plant, according to a written company statement. The Polish
truckmaker confirms it sold 29 percent fewer trucks in
September 2000 than in the same month the previous year.

Korea's Daewoo Motor has been trying to sell assets to
repay $80 billion in debt. The company's financial troubles
have damaged its brand name in Poland, analysts said.
Daewoo Motor has invested more than $1 billion in companies
in Poland that produce cars in Warsaw and trucks in Lublin.

DONG AH CONSTRUCTION: 60 directors resign en masse
The 60 directors of Dong Ah Construction Inc. have tendered
their resignations en masse.  According to the company,
the directors' move was designed to provide more
maneuvering room for Dong Ah Chairman Choi Dong-sup to
effectuate announced self-help measures.

The company already has asked its creditor banks to provide
fresh working capital, and has pledged to cut 1,500
employees (39 percent) from its work force. Dong Ah's
creditors are reportedly divided on providing the requested
loans.  The mass resignation is hoped to provide further
assurance to the company's creditors of its intentions to

SHINHAN BANK: To refinance foreign debts
Shinhan Bank will borrow $200 million in a syndicated loan
from a group of foreign lenders, with a loan contract
scheduled to be signed in Hong Kong Nov. 3.

According to a bank official, the loan will carry an
interest rate equivalent to the six-month Libor (London
Interbank Offered Rate) rate plus a spread of 0.4 percent.
That represents the lowest borrowing rate among domestic
banks since the nation's 1997 foreign exchange crisis.

Bank of America, Hong Kong and Societe General Asia will
lead-manage the syndicated loan, the proceeds from which
Shinhan has earmarked for paying off foreign debts and
extending trade financing to local firms.


CHG INDUSTRIES: Proposes restructuring scheme
Plywood manufacturer CHG Industries Bhd has proposed a
restructuring scheme that will reduce its issued and paid-
up share capital from RM47.85mil, comprising 47.85 million
shares of RM1 each to RM43.065mil, comprising 47.85 million
shares of 90 sen each.

In a statement to the KLSE, CHG said pursuant to the
proposed capital reduction, equity shareholders were
required to give up a 10% value of their share capital.
After the proposed capital reduction, CHG plans to issue up
to 99.5 million iredeemable convertible cumulative
preference shares (ICPS) with up to 39.8 million ICPS
warrants on the basis of five ICPS with two ICPS warrants
for every RM5 of outstanding bank borrowings of CHG and its

CHG is also proposing a renounceable rights issue of 52.6
million rights shares with 23.9 million rights warrants at
RM1 per share, on the basis of 2.2 rights shares with one
rights warrant for every two existing shares held prior to
the proposed capital reduction.  On Oct 16, CHG signed a
conditional share sale agreement with Premier Advance Sdn
Bhd to acquire the entire interest in NLS Sdn Bhd, a
timber-related company, for RM39mil partly in cash and
issuance of shares.

Pursuant to the proposed capital reduction and exercise of
the put/call options in relation to the ICPS and ICPS
warrants, the settlement underwriter will make a restricted
offer for sale to Francis Foo See Yuan and Lum Weng Loy,
the two substantial shareholders of CHG.

At the same time, CHG is also proposing an increase in its
authorised share capital from RM100mil to RM500mil.
The proposed increase in the authorised share capital is to
provide for any future corporate exercise it may undertake.
"Consequent to the recent economic downturn, the group
suffered major losses that resulted in the significant
deterioration of the group's assets value. (Star Online 18-

LCI PROPERTY DEVEL.: To sell land to reduce borrowings
Leader Universal Holdings Bhd confirms that its LCI
Property Development Sdn Bhd unit is proposing to sell a
piece of land in Penang to Asas Dunia Bhd for 26 million
ringgit to reduce its borrowings.

The sale would result in a gain of 4.9 million ringgit,
according to a company statement lodged with the Kuala
Lumpur Stock Exchange. The proposed sale is not expected to
have an immediate effect on the group's earnings or net
tangible assets for 2000, however, as it is expected to be
completed next year. LCI Property acquired the land for
19.731 million ringgit in 1994. The sale is subject to
approval by the Foreign Investment Committee.

UCIS SDN: S$4.5M judgment hangs over it
Bankers and trade creditors are not the only ones
hoping for a successful resolution of the protracted
restructuring exercise at Malaysia's Time Engineering --
the fortune of listed Rohas-Euco Industries (REI) --
controlled by prominent tycoon Wan Azmi Wan Hamzah of
listed Land & General -- is also dependent on the
outcome of Time Engineering's restructuring.

REI yesterday said it had secured a consent judgment
from a company called UCIS Sdn Bhd for a debt of 10
million Malaysian ringgit (S$4.5 million). However,
UCIS has agreed to settle the said sum by assigning
the benefits -- whether in security or cash -- from
Time's scheme of arrangement to REI.

"In the event that the defendant fails to fulfil its
obligations, REI may enforce its rights against the
defendant without further leave of Court," REI said

REI did not give a cut-off date for recovery of the
debt. Mr Wan Azmi, like almost every banker in town, will
just have to pray for a vibrant bourse next month to
resolve the woes of Time, an associate of Renong which
is controlled by Halim Saad.

Central to Time's debt revamp is the listing of Time dotCom
-- which owns a fibre-optics network in Malaysia -- to
retire RM5 billion in debts.  Mr Halim has had to delay the
offer several times. But he is adamant about listing Time
dotCom at RM3.30 apiece, which values the company at over
RM8 billion, despite the recent global meltdown in dotcoms
and telcos.

Mr Halim had originally planned to float Time dotCom
in the middle of this year following a tentative deal
with Singapore Telecom. The deal was scuttled when
Malaysian politicians objected. (Business Times  18-Oct-


NATIONAL POWER CORP.: Claims P411M losses in first half
The National Power Corp. (Napocor) said it lost P411
million in the first six months this year due to "sales

From January to June this year, Napocor's sales efficiency
dropped to 92.16 percent from 93.31 percent in the same
period last year. The difference is equivalent to 233
gigawatthours (gWh) or P411 million in lost revenues.

Inefficiencies were recorded in the Visayan region
particularly in the Cebu, Negros, Panay and Leyte areas.
"The area needs to be monitored and checked to reduce
unnecessary burden to operational efficiency," Napocor said
in a report.

Meanwhile, Napocor reduced its use of fuel oil from 31
percent in the first half of 1999 to 17 percent in the same
period this year as it heeded the call of government to
reduce its dependence on imported fossil fuel. Coal topped
Napocor's main energy source to fire its power plants,
accounting for 38 percent of its generation mix.

Geothermal energy was the second most utilized source of
power, accounting to 29 percent of Napocor's generation mix
while hydro power accounted for 16 percent. In the first
semester of last year, oil accounted for 31 percent of
Napocor's fuel mix followed by the geothermal power source
of 26 percent. Third most utilized power source last year
was coal, accounting for 25 percent of the mix followed by
the 18-percent share of hydro power.

Coal-fired power plants generated a total of 3,446 gWh
while steam-fired plants produced 5,787 gWh of electricity.
Oil-fired plants, mostly fuel oil and diesel, generated
3,446 gWh while hydro powered plants accounted for
3,230 gWh of electricity.

"The drop in the generation of oil-based power plants by
2,671 gWh was due to the decreased generation of various
plants attributed to maintenance and forced outages, annual
over hauling, deactivated shutdowns, contract expirations
and plant rehabilitation," Napocor said in a report.

Sucat IV, Manila Thermal 1 and 2, Bataan 1 and 2 plants
were officially retired early this year while contracts for
Fels Barge II and Van De Horst Barge were terminated on May
this year.  Generation of geothermal and coal plants due to
the full operation of the Masinloc and Sual coal-fired
thermal plants, and the Leyte Geothermal plants in the
later part of 1999.

The slight increase in power generated by hydro power was
due to an increase in generation from the Agus 4 to 7
plants, Masiway and the Pantabangan plants. (Philippine
Star 17-Oct-2000)

NATIONAL STEEL CORP.: May seek refuge from Malaysian gov't
The possible closure of the cash-strapped National Steel
Corporation (NSC) could hit another snag with the Malaysian
government as its Malaysian shareholders threaten to seek
refuge from the Malaysian authority if the Securities and
Exchange Commission (SEC) refuses to lift its order for the
liquidation of NSC's assets.

In a letter to the SEC, National Steel Labor Union
president Simplicio Villarta Jr. said he was informed by
NSC chair and executive director Ibrahim Bidin that Hottick
Investments Ltd., the Malaysian owners of the ailing firm,
said it will take all necessary actions to prevent the firm
from extinction.

"We had the opportunity to talk to Mr. Bidin that Hottick
will exhaust all available legal means to stop the
liquidation of NSC. And not only that, he also insinuated
that our overseas Filipino workers in Malaysia might be
sent home as was told to us by then NSC chief operating
officer Mr. Tom Galanis," Villarta said.

To recall, the SEC wavered on issuing the order for the
NSC's dissolution as such move could involve political
repercussions, possibly straining RP-Malaysian ties. The
liquidation of the steel firm was also seen to aggravate
political and financial woes besetting the country.

The SEC ordered the liquidation of NSC after the company's
Malaysian owners failed to file an alternative plan to
rehabilitate the ailing steel maker. Hottick instead
requested for additional time to work out for NSC's
rehabilitation plan since it was still on talks with
prospective partners.

The SEC, however, believes that "petitioner from the time
it was directed on Feb 28 to submit a more detailed
rehabilitation plan up to the last extension of the
suspension of payments order on Sept 30, had all the time
to iron out and finalize its own rehabilitation plan."

Furthermore, the labor union stressed the SEC should have
consulted first NSC's major stockholders and employees
before it ordered the company's foreclosure.  It added that
the receivership committee had failed to help prevent the
ailing firm from going into dissolution proceedings.

"For the past eleven months, however, all that IRC said
were nothing but empty promises," Villarta said.

The union also expressed its suspicions over the real
motive of Monico Jacob, head of NSC's receivership
committee, in handling the case of NSC considering his
conflict of interest as a shareholder of another giant
company in the country. Jacob is the former chairperson of
Petron Corporation.

"A sensible, intelligent and objective assessment of the
IRC-drafted rehabilitation plan will show that... it was
really designed to be rejected by any thinking majority
stockholder what with its highly skewed provisions
completely in favor of one party and practically shutting
out the other," Villarta said.

Under the IRC-drafted rehabilitation plan, creditors would
convert half of their P16 billion in loans into equity in
NSC with the balance to be repaid within 10 years after the
steel giant resumes its operations. Creditor-banks of NSC
include Land Bank of the Philippines, Allied Banking Corp,
Metropolitan Bank and Trust Co., Westmont Banking Corp.,
Rizal Commercial Banking Corp. and EquitablePCI-Bank.

Meanwhile, Jacob who was also appointed liquidator for NSC,
informed SEC chair Lilia R. Bautista he is currently
studying the different proposals of six investor groups
that have signified interest to take over NSC even after
the liquidation order was handed down by the agency. The
investor groups include an Arab-Chinese group, another
group represented by Citibank, US-based companies together
with a local group, London-based consortium, Duferco, and

The steel manufacturer was forced to seek debt relief after
it shut down operations in November 1999, following a
continued decline in sales due to the influx of cheap
imported steel from Russia and South Korea. Its suspension
of operations has driven 2,000 employees out of work.
(ABS/BN News Channel  17-Oct-2000)

PHILPHOS CORP.: 3 bidders eyeing
The consortium that won the bid for the Philippines
Associated Smelting and Refining Corp. (PASAR) is
targeting another state company -- the Philippine
Phosphate Fertilizer Corp. (Philphos) -- which the
government is putting on the auction block on Oct. 24.

In bid documents for Philphos, the group is referred
to as PASAR Holdings, Inc., formed by chairman and
president Carlos G. Dominguez and Glencore
International AG of Switzerland.  Aside from the
consortium, other interested bidders are Japan's Nissho
Iwai and a company represented by automotive and logging
businessman Jose "Pepito" Alvarez, said Asset Privatization
Trust (APT) chief executive trustee Renato Valdecantos.

APT held a pre-bid conference for Philphos the other day.
In an earlier press briefing, the government through
APT valued its 45% interest in Philphos at 4.2 billion
Philippine pesos ($86.67 million at PhP48.458=$1). This
covers the government's 405,000 shares and receivables
worth PhP42 million ($.87 million).  Philphos is a 50-50
joint venture between the Philippine government and the
government of Nauru.

Established in 1982, the company is touted to be
Asia's largest and most modern phosphatic fertilizer
plant built on a 180-hectare complex in Isabel, Leyte
which is in the Visayas, the central islands of the
Philippines. Plant capacity is over a million metric
tons of high-quality fertilizers.

At present, Philphos buys sulfuric acid which is a
natural waste product of copper smelter PASAR.  APT earlier
engaged the services of PriceWaterhouseCoopers as financial
advisor to prepare a valuation of the national government's
stake in Philphos.  APT officials previously said that the
government of Nauru had expressed willingness to waive
its right of first refusal over the Philippine shares.
(Business World 18-October-2000)


VIKAY INDUSTRIAL: White knight appears after 3-year wait
A timber businessman has emerged as the white knight for
liquid crystal display (LCD) maker Vikay Industrial, which
has been under judicial management since December 1997.

Mr Kea Kah Kim, whose family owns plywood and sawmills in
Indonesia, will take a controlling stake of at least 80 per
cent in Vikay in a deal put together by the judicial
managers.  The acquisition will be made via Mr Kea's
special purpose vehicle, E-Path Developments.

Judicial manager Tham Sai Choy, a KPMG Peat Marwick
partner, announced recently that the judicial managers have
signed an investment agreement with E-Path Developments to
resuscitate the financially troubled company. However, Mr
Kea - a low-profile businessman whose only "visible" asset
in Singapore is the family's K H Kea Building at North
Bridge Road - will not be injecting his family business
into Vikay.

He told The Straits Times that he made the acquisition to
"diversify" his interest from timber-related businesses in
Indonesia.  Despite Vikay's troubled past, he saw a
promising future for the company to remain in its core
electronics business.

"I believe that Vikay's core business of electronic
original equipment manufacturing can be highly visible,
with good potential for strong growth in the future," he
said. "I plan to put a new management team in place that
will have the experience and expertise to turn Vikay

An application to the Singapore Exchange to lift the
stock's trading suspension will be made once his lawyers
have conducted due diligence on the company and its
subsidiaries.  It is understood that Keppel TatLee Bank has
been appointed to handle the relisting application.

Vikay went into judicial management in 1997 after
floundering under a mountain of debt. It owes 24 financial
institutions - mostly Singapore-based banks and leasing
companies - a total of $107 million.  An earlier rescue
attempt by Malaysia's Lantech came to nought after it
failed to carry out its planned purchase of Vikay's
business.  But after three years in the wilderness, the
wait appears to be over for the LCD maker.

However, Vikay's creditors will have to lower their
expectations as E-Path's rescue plan will not cover all the
debts owed to them. The judicial managers say that only 27
cents out of every dollar owed can be realised.

Said Mr Tham, "By the end of this month, a total of 17 per
cent of debt will be paid to creditors from asset disposal
and operations garnered during the ongoing judicial
management proceedings."

In addition, creditors will receive $5 million in cash as
well as shares with a put option worth $5.6 million. All of
this would "add up to a total of 27 per cent of the debt."

According to the investment agreement, E-Path will take
some 76 percent of the company's outstanding debts off the
hands of creditors for $5 million, in exchange for new
Vikay shares. The remaining 24 percent will be converted
into equity, giving creditors a 14 percent stake in the
enlarged share capital of Vikay.

E-Path will also subscribe for new shares by injecting an
additional $7 million into the company as capital. Thus, it
will end up as the controlling shareholder, with an
estimated 80 percent shareholding in Vikay. The agreement
also gives E-Path an option to acquire Vikay shares from
the creditors within three months of Vikay's relisting on

In return, the creditors have the right to sell their Vikay
shares to E-Path on the day exactly 12 months after the
relisting.  As part of the restructuring plan, Vikay will
also undertake a capital reduction exercise. Its issued and
paid-up share capital will be reduced from 170.8 million
shares of 25 cents par value to 170.8 million shares of
half-cent par value.

Thereafter, every 10 shares will be consolidated into one
to raise their par value to five cents each.  The deal is
subject to satisfactory due diligence study by E-Path and
the approval of the Singapore Exchange, Vikay shareholders
and their creditors.  In the end, said Mr Tham, Vikay will
emerge a debt-free company. (Straits Times  15-Oct-2000)


ANGEL AIR: PB Air sues for Bt20M payments
PB Air has filed a criminal charge against Angel Air and
its president, Somchai Bencharongkul, for defaulting on
payment of nearly 20 million baht due for the rent of the
former's aircraft.

PB Air, an affiliate of Boon Rawd Brewery, is believed to
be the first creditor to take action against the troubled
carrier owned largely by Mr Somchai, whose family controls
the United Communications Industry (Ucom) group. Other
creditors including Thai Airways International, the
Airports Authority of Thailand and Aeronautical Radio of
Thailand are reportedly reviewing their options.

The lawsuit was filed on Aug 21 but revealed only yesterday
by frustrated PB Air executives. They accused Angel of
unethical practices that had affected PB Air's cashflow and
hindered its fleet modernisation and route development.
The suit claims Angel Air and Mr Somchai issued a bad
cheque for three million baht. Angel subsequently issued
bad cheques for three million baht in August and for five
million in September, it said.

A payment of six million baht is due on Oct 24. PB Air said
it intended to file a lawsuit for each bad cheque. Angel
Air has issued six cheques, amounting to 22.76 million
baht, as part of the instalment proposal to clear debts
owed to PB Air for using the 75-seat Fokker jets in the
first quarter.

The rent was supposed to be paid in a lump sum in April.
However, Angel Air could honour only the first two of the
six cheques on Oct 5. PB Air president Jothin Pamon-Montri
said attempts to persuade Angel Air to clear the debts had
failed, and that Angel had challenged PB Air to sue.
Mr Somchai maintained that he had tried to negotiate an
amicable solution.

"They refused to talk to me and I was in the dark as to
what to do."He insisted he would take responsibility for
the debts. "I'm not running away." He claimed Angel Air had
been able to reach understandings with other creditors
"without a problem."

PB executives said they believed Angel had enough assets to
turn into cash to settle debts but would not do so.
The troubled airline, which was established in September
1998, was temporarily grounded in June with accumulated
losses of 400 million baht.

It had operated flights between Bangkok and Singapore,
Kunming, Udon Thani, Chiang Mai, Phuket, Chiang Rai and
Luang Prabang. It resumed operations on the Bangkok-Hong
Kong route on July 22. It has leased a 299-seat Lockheed
Tristar from Kampuchea Airlines for one return flight
daily.  PB Air operates flights from Bangkok to Krabi and
Roi Et, as well as charter services using three Fokker
aircraft. (Bangkok Post 18-Oct-2000)

Following a weekly cabinet meeting yesterday, Deputy
Finance Minister Pisit Leeahtham confirmed that the cabinet
had approved the sale of Bangkok Metropolitan Bank to
British international banking giant HSBC Holdings.

Pisit said Thailand's Financial Institutions Development
Fund could proceed with the sale. After the cabinet
approval, both the FIDF and the HSBC group will sign a
share-purchase agreement.

Under the sale terms, FIDF will compensate HSBC for losses
incurred on bad loans, but the payments will be considered
as revenue and would be liable to tax. BMB was nationalized
after the 1997 financial crisis and remains saddled with a
high percentage of non-performing loans.

BMB's non-performing loans amounted to 100 billion baht at
the end of September, according to Manit Wityamen, BMB
executive chairman.  The purchase price of BMB has not yet
been confirmed.

The country's banking sector is mired in massive debts
following profligate lending in Thailand's boom years of
the late 1980s and early 1990s, before the financial crisis
from mid -1997 nearly caused the financial system to
collapse. (Business Day, AFP  18-Oct-2000)

PRASIT PATANA DEVELOPMENT: Court orders rehabilitation
On Oct. 16, the Central Bankruptcy Court ordered that
Prasit Patana Development Public Company Limited be
rehabilitated and PricewaterhouseCoopers Corporate
Restructuring Company Limited be appointed as the Plan
Preparer of the Company.

ROYAL CERAMIC INDUSTRY: Nov. 8 creditor meeting on rehab
Royal  Ceramic Industry Public Company Limited as plan
preparer submitted a business reorganization plan on
October 9. A creditors meeting is scheduled for November 8
at 9:30 a.m. at meeting room number 1104 Bangkok Insurance
Building, 11th Floor, 25 South Sathorn Road, Tungmahamek,
Sathorn, Bangkok.

SINO-THAI ENGIN.& CONSTR.: Reports on rehab progress
Sino-Thai Engineering & Construction has reported on its
rehabilitation progress to the Stock Exchange of Thailand.
It affirmed that the Central Bankruptcy Court granted an
order approving the company's rehabilitation plan, which
was approved at a Sept. 4 Creditors' Meeting. The court
appointed Stecon Administrator Company Limited to be the
Plan Administrator.

Sino-Thai also has:
- Submitted an application for registering of capital
decrease from Baht 750,000,000 to Baht 300,000,000
- Submitted an application for registering of capital
increase from Baht 300,000,000 to Baht 850,000,000, and
- Registered for Modification of the Article of Association
on Foreign shareholder of Company's share: Current
allowance of Foreign shareholder is not more than 39% of
total share; Modified to not more than 49% of total share.

All were submitted to the Registrar of the Public Company,
the Commercial Registration Department, Ministry of
Commerce and have already been approved.

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

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

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

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