TCRAP_Public/001025.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 25, 2000, Vol. 3, No. 208


* A U S T R A L I A *

ONESTEEL: BHP spin-off's debut founder
SOLUTION 6: Stock sinks on lower earnings forecasts

* C H I N A  &  H O N G  K O N G *

PACIFIC CENTURY CYBERWORKS: To raise funds for debt re-fi
PACIFIC CENTURY CYBERWORKS: Shares fall on debt worries

* I N D O N E S I A *

PERTAMINA: Restructure awaits gov't approval
PLN: Settles with OPIC, but debt situation still dire
PT BAKRIE & BROS.: Seeks postponement of US$1B debt pymt.
PT BENTOEL INT'L INVESTAMA: To appeal court s'holder ruling
PT DAYA GUNA SAMUDRA: S&P lowers corporate credit rating

* J A P A N *

INTER-LEASE CORP.: Parent approves Nov. liquidation
KYOEI LIFE: US's Prudential takes reins in revamp
KYOEI LIFE INSUR.: Moody's downgrades strength rating

* K O R E A *

HYUNDAI ELECTRONICS: To sell telecom stakes to pay debts
HYUNDAI ENGIN.& CONSTR.: Layoffs,cuts called `desperate'
HYUNDAI ENGIN.& CONSTR.: Call for workout program
HYUNDAI PETROCHEMICALS: Call for workout program
INDUSTRIAL BANK OF KOREA: To get gov't funds bailout
KOREA ASSET MGMT.CORP: To get gov't funds bailout
KOREA DEPOSIT INSUR.CORP.: To get gov't funds bailout
KOREA DEVELOPMENT BANK: Bad investment causes W3T loss
KOREA INDUSTRIAL DEVELOP.: Call for workout program

* M A L A Y S I A *

ORION-PROMET LTD: Restructures loan
PROMET INT'L LTD: Restructures loan

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

PETRON CORP.: Posts loss for first 9 months

* S I N G A P O R E *

FHTK HOLDINGS: Works out debt rehab plan
GENERAL SECURITIES INVESTMENTS: Directors push liquidation

* T H A I L A N D *

SIAM CITY BANK: Continues to lose; privatization delayed
T.G.PLASTERING CO.LTD: To dissolve, be liquidated


ONESTEEL: BHP spin-off's debut founder
BHP spin-off OneSteel made a disastrous debut on the
Australian Stock Exchange yesterday, with shares in the
company closing at a massive 70 percent discount to the
book value put on the stock by the resources giant.

The day-one performance was a disappointment for BHP chief
executive Mr Paul Anderson, who had said in the lead-up to
the spin-off that OneSteel would make a "great investment."
BHP shareholders were given shares in OneSteel on a one-
for-four basis at a book value of $2.64, and based on
yesterday's closing price of 99›, they are sitting on
collective capital losses of more than $700 million.

BHP created OneSteel as part of its restructuring program
to move about 50 percent of its Australian steel assets off
its books so it could concentrate on becoming a purer
resources-based company. More than 10 percent of OneSteel's
issued capital changed hands as institutional funds dumped
the stock. Some invested the proceeds back into BHP, which
closed up 71› to $18.50.

OneSteel shares traded wildly between a low of 75› and a
high of $1.09. Brokers said index fund managers and retail
investors soaked up the institutional selling yesterday.
BHP based its $2.64-a-share valuation for OneSteel on the
carrying value of the assets included in the spin-off.
BHP had argued that a writedown before the listing was not
necessary. But most stockbroking analysts argued that
OneSteel's earnings profile compared with other steel
companies such as Smorgon justified a much lower share-
price valuation.

Several brokers argued that the market value of OneSteel
was more likely to be closer to $1 a share when it listed.
A BHP spokesperson said that the spin-off created value for
BHP shareholders.  "We are pleased with the upward trend in
OneSteel and BHP shares through the day," she said.

OneSteel chief executive Mr Bob Every said the share price
volatility could continue this week. "It's been an
interesting day," he said.  Some fund managers expressed
surprise that the stock could not hold above $1.

Macquarie Investment Management fund manager Mr Ian
Galloway said the market had been expecting a share price
anywhere between 80› and $1.20. "The $2.64 was just what
they worked out what it was worth. That's fair, but
it's what the market is willing to pay that's important,"
he said.

The OneSteel listing follows other inauspicious starts for
spin-offs this year including Boral's Origin Energy in
February and Amcor's PaperlinX, both of which made
disappointing listings but subsequently found favour with
investors. OneSteel consists of long products and steel
distribution operations.

In the most recent financial year it had annual sales of $3
billion and earnings before interest, tax, depreciation and
amortisation of $268 million.  Mr Every said an offshore
roadshow ahead of the listing had received only a "mixed"

"What we are really seeing is an adjustment of the
shareholder profile from a global resource company like
BHP, which has 37 per cent of its shares held offshore, to
a domestic steel company," he said.

Last week BHP shareholders voted overwhelmingly to support
the spin-off proposal. BHP abandoned a plan earlier in the
year to have a pre-listing bookbuild which may have reduced
yesterday's trading volatility.  Salomon Smith Barney
analyst Mr Ian Maxwell said that the spin-off process
was positive for BHP, in part because it allowed the
company to focus on its core assets.

"It's right to make [OneSteel] stand on its own two feet,"
he said. (Australian Financial Review  24-Oct-2000)

SOLUTION 6: Stock sinks on lower earnings forecasts
Shares in Solution 6 sank to new lows for the year
yesterday as new chief executive Mr Neil Gamble downgraded
full-year forecasts and outlined a strategy of decentral-
ization and divestment.

Mr Gamble told investors that the accounting software and
Internet group would not meet previously indicated revenue
and earnings targets.  He said revenue this financial year
would be between $320 million and $330 million, while a
full year EBITA loss of $16 million could be expected. For
the quarter to September 30, the EBITA loss was $3 million.

Before yesterday, Solution 6 had been forecasting revenue
of $400 million and two months ago said it should make a
net profit before tax this year. The news saw stock in
Solution 6 trade as low as $1.50, closing down 33c at
$1.61, a fraction of the $18.35 high last December.

Mr Gamble, mindful the group needed to become "visible,
accountable and predictable," also advised that while
Solution 6 had no debt, cash reserves had dropped to $67
million. In August, cash reserves had been $113 million.
Taking a swipe at his predecessor, Mr Chris Tyler, Mr
Gamble said the company was not reaching indicated targets
because it had grown too quickly and had not bedded down
the acquisitions in the way it should have. Solution 6
would take a much more disciplined approach to acquisitions
in future.

Time and resources pumped into the three failed
acquisitions - Pegasus, Elite and Sausage Software - were
also factors.  Mr Gamble said acquisitions which were not
performing as well as expected included Lawpoint, Emphasys
and Dataline Systems.  All had been decentralised and
stand-alone management teams had been implemented in the
expectation the three would "provide as soon as possible a
return on the capital we invested during the past 12

"I would suggest that they must get to a profitable level
early in the new calendar year," Mr Gamble said, but there
were as yet no plans to divest the trio.  Solution 6 said
it would sell DCT, its Sydney telephone support centre, for
about $2 million.

Plenty of problems: August -- Solution 6 reports loss for
year of $79.5 million; Mr Neil Gamble made CEO.  September
-- COO and ex-acting CEO Lindsay Yelland leaves. October --
CFO Tom Montgomery resigns. Yesterday -- Earnings revised
downwards to $330 million; new decentralization plan.
Revenue of $330m expected. (Sydney Morning Herald  24-Oct-

C H I N A  &  H O N G  K O N G

Inner Mongolia Oriental Textiles Co Ltd concluded a
settlement arrangement with Everluck, a wholly owned
subsidiary of Fortei Holdings Ltd, on October 21.

Pursuant to the agreement, Everluck agreed to cut the
original $17.67 million debt to approximately $9.64
million, subject to the condition that the debtor repay
Everluck the $9.64 million within one month of the signing
of the agreement.

The amount to be paid under the settlement agreement will
be credited to the accounts of Inner Mongolia and will be
used as working capital by Everluck for further investment
opportunities. Company chairman Chan Yuk-sang said that
full provisions have been made in the annual report of
group accounts for the year 1999 and no extra provisions
will have to be made.

PACIFIC CENTURY CYBERWORKS: To raise funds for debt re-fi
Pacific Century CyberWorks (PCCW) plans to raise as much as
US$1.63 billion (HK$12.71 billion) by selling bonds and new
shares in a move to ease its debt burden.

Francis Yuen, deputy chairman of PCCW, told reporters last
night that PCCW will issue a US$1.1 billion bond, of which
US$500 million will be taken up by the company's chairman
Richard Li Tzar-kai with the remainder fully underwritten
by HSBC (0005) and BNP Prime Peregrine. Sources said the
bond sale will be enlarged by US$200 million depending on
the demand.

At the same time, the company will issue 637 million new
shares to existing shareholders by offering 30 shares for
each 1,000 at HK$6.50, raising about US$531 million.
The source said two warrants with an exercise price of
HK$7.50 will also be given for every share subscribed.
The offering will help PCCW pare its bank debt - which has
been weighing heavily on its share price - to US$4.1
billion from US$5.45 billion.

One analyst, who declined to be named, said: "This whole
thing just highlights the fact that this company has a
problem with its capital structure."

Another analyst said: "If the management is able to place
all the new shares and sell its convertible bond, then I'd
say the management would be successful in reducing its debt
and cash flow burden."

The company has to meet its interest payment in February.
If it cannot meet that deadline it faces an interest rate
payment of 3 per cent over the London interbank offered
rate (Libor), instead of the current 1.15 per cent over the

"They've been pushed into a corner and are hurrying to
raise money in the market and cut debt," said Ambrose
Chang, chief investment officer at Daiwa International
Capital Management (HK), which holds about 1 per cent of
CyberWorks. "I'm not excited by it. This company comes out
with a new financial re-engineering deal every two weeks."

The convertible bond will carry a coupon rate between 3 per
cent and 3.5 per cent and the conversion price would be set
at 21 to 22 per cent premium over the previous closing
price of HK$6.50. According to Mr Yuen, PCCW would continue
to seek to refinance US$5 billion to US$5.5 billion,
although it planned to use the proceeds from bond and share
sales to cut debt to about US$4.1 billion.

"We'd like to have more capital for our business
development," he said. "The sale of convertible bonds had
always been the plan, but it was delayed because of the
delayed completion of the Telstra deal. It had created
uncertainties in the market but hopefully the fund-raising
can quell such uncertainties."

PCCW's share price has dropped nearly 60 per cent in the
last two months. Trading of the stock was suspended
yesterday. One analyst said the price of the rights issue
was not particularly attractive and some shareholders, who
decided not to subscribe, had to sell their holdings,
putting more pressure on the share price.

This is the first time since 1992 in which a blue-chip
company has been forced to raise funds via a rights issue.
Amoy Properties (0101) offered three for ten shares rights
issue in March 1992. The shares offering would reduce the
combined holding of Richard Li and his wholly-owned Pacific
Century Group in PCCW to 30.7 per cent from 36.1 per cent.
Mr Li gained HK$3.79 billion when he sold 240 million PCCW
shares at HK$15.811 each in August.

The share offer will also dilute the holding of British
company Cable & Wireless to 12.3 per cent from 14.5 per
cent. Cable & Wireless received 20.2 per cent of PCCW
shares, which it intended to sell. The rights issue may
send a signal to Cable & Wireless to think twice before it
sells the remaining PCCW shares, analysts said.

Mr Yuen said that Cable & Wireless supported PCCW's offer
of a rights issue, but the telecom giant had not decided
whether it would subscribe to the shares. Cable & Wireless
sold 4.9 per cent in PCCW last month. It cannot sell any
more until February.

PCCW had been seeking ways to reduce its US$9 billion
short-term loan which will be due in February. The revised
deal with Australia's Telstra a few weeks ago will lower
the debt to US$5.445 billion.  However, PCCW lost its
controlling 60 per cent stake of the mobile unit to

The company said it planned to list the mobile and the
Internet Protocol backbone companies in the market in order
to garner more cash. PCCW's debt piled up when it borrowed
US$12 billion to pay for the merger with the fixed-line
operator Cable & Wireless HKT.  It repaid US$3 billion
after the merger from internal resources. (Hong Kong iMail

PACIFIC CENTURY CYBERWORKS: Shares fall on debt worries
Pacific Century CyberWorks Ltd., Asia's second-largest
Internet investment company, dropped as much as 7.7 percent
as investors remained concerned about the company's debt
level, even after it announced a plan to raise up to
US$1.83 billion by selling bonds and shares.

At 12:09 a.m. Hong Kong time, PCCW shares were trading at
HK$6.20, down 4.6 percent from the prior day, on a heavy
turnover of HK$1.27 billion, representing a third of the
market total. They traded as low as HK$6 at the opening


PERTAMINA: Restructure awaits gov't approval
The draft to restructure Pertamina, designed to stamp out
collusion, corruption and nepotism (KKN), has been
completed and that its implementation awaits the approval
of the President.

Secretary of the Board of Commissioners of Pertamina (DKPP)
Iin Arifin Tahyan said here last week "the blueprint calls
for reducing the number of the state oil company's business
units and directors and employees."

Senior official of the mines and energy ministry Rachmat
Sudibyo said the aim of the restructuring is "to raise
efficiency and stamp out KKN."  Iin said the blueprint sees
Pertamina involved in upstream and downstream businesses.
The upstream business entails exploration and production,
with Pertamina becoming a holding company (Pertamina own
operation or POO), he said.

"The downstream business would be managed by a holding
company comprising of one business line that is formed by
merging four businesses," he added. This comprises
processing, shipping, communication and port handling (PKK)
and general (including marketing).

"This means that the number of directors would be reduced."
The streamlining of Pertamina, Iin added, is common
practice in the oil business. "Pertamina must be efficient
and adapt to developments that would make it a
world class company. This means also that its personnel and
directors would have to be better qualified."

As a result, the number of its current personnel, which is
over 25.000, would have to be reduced. "But all this would
be preceded by a period of transition."

Pertamina is said to be preparing to discharge 7.775 people
in the next five years in order to arrive at the ideal
figure of 17.800 in 2005. Pertamina senior official Wawan
Irawan said the current figure of 25.525 people means that
the company is 'too fat', preventing it from earning a

All the more so as 75% of Pertamina personnel have only
senior high school degrees and that 50% of the are over 40
years of age. "The streamlining would be done in a "natural
way" (employees reaching retirement age) and by offering
them early retirement," he said.

To meet fierce competition, said Wawan, many Pertamina
personnel must have university (S1) and Master (S2) degrees
as well as mastery of modern technology. He noted that 2000
is the year when many of its employees enter retirement
age (1.200 people).  The streamlining, said Wawan, would
allow Pertamina to be ready in competing with foreign oil
companies by the year 2010.

Iin did not deny that inefficiency in Pertamina had allowed
KKN to flourish. As such, future recruitment of Pertamina's
board would be done in a stricter manner. "This would be
done to prevent KKN."

Meanwhile, sources say even the current board - led by a
professional, Baihaki H. Hakim- is not free from KKN. This
is attested by the issuance of am instruction to one of its
units, UPPDN III, to increase supply by up to 100% when
fuel prices went up.

Oil expert Bachrawi Sanusi said the extra dropping decision
- to anticipate a rush over high fuel prices - was
"unreasonable" and gave rise to KKN practices. The
instruction could only have been issued, he added, in order
for the extra supply of fuel to be sold outside official
channels. (Bisnis Indonesia  24-Oct-2000)

PLN: Settles with OPIC, but debt situation still dire
The government has agreed on a $290 milion compensation
payment for the US-owned Overseas Private Investment Corp
(OPIC) on behalf of MidAmerican Energy Holdings of the US,
in a bid to settle one of its many disputes over repayment
in hard currency for electricity supply from independent
power producers (IPPs).

The Mid-American case is one of the most high-profile of
the many challenging the troubled Indonesian government.
Government's decision to try and reach an accord already
appears to be creating more problems than it solves. On
October 13, the head of the parliament's economics
commission said the legislature was likely to block
government plans to settle with OPIC, an insurance company
owned by the US government which acts as the guarantor for
US investments in overseas.

Underlying this are fears that the PLN was facing
bankruptcy unless the government wrote off its Rp71tr in
debt.  "Our situation is worsening at the moment, meaning
that we cannot repay our obligations to the government,"
said Kuntoro Mangkusubroto, PLN president-director.

The company posted an H1 2000 loss of Rp11.1tr, and most
of this figure is attributed to foreign exchange losses.
The undisputed payment deal is linked to controversial
power purchase agreements (PPAs) signed by PLN. These deals
were agreed in the boom years that preceded the 1998
collapse of the dictatorial regime of President Suharto.

Many loan repayments were denominated in dollars or other
hard currencies, but these have since become impossible to
repay given the collapse of the rupiah's value during the
recent recession.  PLN in the face of the continuing fall
of the rupiah/dollar exchange rate, has argued for a change
in what has become, for it, punitive agreements foisted on
it by a corrupt regime.

The US and foreign companies such as Britain's National
Power and Power Gen pressed for recognition of the
validity of the original accords. The MidAmerican case
reached notoriety in September 1998 when it filed
arbitration proceedings against PLN for its refusal to pay
for power supplies from its geothermal power plant in
Dieng, Central Java, and the government's decision to
suspend its power plant project in Patuha, West Java.

MidAmerica, one of the 27 IPPs which committed millions of
dollars in Indonesian power projects in the 1990s, called
in its OPIC insurance policy to secure the claim from the
government. Payment terms for the compensation, ordered by
an independent arbitration panel, would be negotiated with
the OPIC, said PLN president Kuntoro.

He disclosed that the government would pay the insurance
claim under the terms and conditions outlined in the Paris
Club agreement signed by the government last April. Under
the Paris Club scheme, the government would pay the OPIC
over 20 years, including a grace period of four years, with
an interest rate of 1% above the rate set by the US Federal
Reserve Bank.

Kuntoro said the government was also expected to pay $15m
to the World Bank's Multilateral Investment Guarantee
Agency (MIGA) which had earlier settled another claim by
Enron -- another IPP -- concerning an East Java 500MW power
project which was suspended by the government.  The IPP
contract failed because PLN had been selling power on the
domestic market in Indonesian rupiah - and at a highly
subsidised tariff level - but buying it from the IPPs in

The recent economic crisis forced the rupiah to depreciate
from Rp2,500 to the dollar in early 1997 to an average of
Rp8,500 this year - it hit 16,000 several years ago at the
worst point of the devaluation.  PLN is now renegotiating
several IPP contracts and has managed to reduce the price
of power supplies from the Chevron and Texaco-owned
geothermal power plant in Darajat, West Java by 40%.

This renegotiated contract will save PLN and the government
$277m throughout the 30-year contracted period. Kuntoro
also disclosed that the PT Paiton Energy contract has also
been renegotiated, so that the PLN is no longer forced to
sell the power from 1,230MW plant at below production cost.

"We are only paying for their coal plus some fixed fees,"
he said. Kuntoro estimates that the government would have
ended up in debt by $133bn to the 27 IPPs for their power
supplies under the existing contracts. "But our goal is to
reduce that amount by around 40%," he added.

Indonesia has agreed to pay a $290m insurance claim arising
from a disputed power plant contract, state-owned
electricity company PLN president Kuntoro Mangkusubroto
said in a seminar here on Oct. 11.  PLN is negotiating
payment terms with Overseas Private Investment Corp., or
OPIC, a US government agency that insures private US
investments in developing countries, Kuntoro said.

US officials have urged Indonesia to speed up talks on
paying the claim and say OPIC has the power to seize
Indonesian foreign assets if its claim isn't paid.
"The mechanism of payment will be similar to the terms and
conditions used by the Paris Club," Kuntoro said, referring
to the rescheduling of Indonesian sovereign debt by foreign

The claim relates to one of several controversial power
contracts signed by former President Soeharto with foreign-
led utilities that soured with the collapse of the
Indonesian economy in 1997-98.  Last year, an arbitration
court ordered PLN to pay $572m in compensation to
CalEnergy, a unit of MidAmerican Energy Holdings Co. (MEC).
(Indoexchange News  24-Oct-2000)

PT BAKRIE & BROS.: Seeks postponement of US$1B debt pymt.
PT Bakrie & Brothers Tbk. (BB) has asked the commercial
court for more time to repay its US$1.057 billion in debt.

Its lawyers Fuady, Tommy and Aji Wijaya hope the cour would
grant the request arguing that the company had suffered a
lot of losses since 1997 when financial crisis hit the
country.  The high bank interest rates and appreciation of
the dollar had put the company in a big problem since then.

But BB is optimistic about being able to redeem all its
obligations given that debt restructuring efforts are being
undertaken by an informal creditors steering committee
comprising 11 creditors.  BB was to have paid a total of
US$1,057,049,967.40 not including claims by creditors.

The company plans to hand over part of Bakrie Electronics
shares to the creditors as a way to settle part of the
debts. (Bisnis Indonesia  23-Oct-2000)

PT BENTOEL INT'L INVESTAMA: To appeal court s'holder ruling
PT Bentoel International Investama Tbk (BINI) is
maintaining that it will continue to appeal a Malang
District Court verdict that rejected its , a move that
surprised many of its foreign investors.

Bentoel President Director Rudy Tanoesoedibjo said he had
found out that foreigners investing in Bentoel were
surprised at the decision.  Robert Appleby, director of
Hong Kong-based Asia Debt Management - Bentoel's
strategic partner - had previously expressed disappointment
at the verdict as was reported recently by the Asian Wall
Sreet Journal.

The lower court rejected BINI's plan to hold a general
shareholders meeting in spite of the fact that this was
proposed by investors holding 75% of the Bentoel Prima's
equity.  BP's gross profit had declined to only Rp 80
billion during the first half of this year as compared to
Rp120 billion it made during the same period last year.
This was apparently the reason of the controversy.

Rudy said his party would process the case at the Office of
the Attorney General. He also plans to bring to the AGO
attention BP's dispute with distributor PT Amiseta. He has
written JSX authorities a letter explaining all these

Nevertheless, lawyers from Sutrisno and partners law office
say the Supreme Court must reject BINI;s appeal given the
fact that it has only based the move on Law No. 1/1995 on
limited liability company whereas actually the law
stipulates that such requests as the one BINI had made for
the holding of shareholders meeting should be voluntary in
nature and has no binding force.

Sutrisno said the Malang District Court had done the right
thing by rejecting BINI's request for convening a general
shareholders meeting on BP. This was because the BP's bard
of directors had performed well thus far and the results of
the board's work had been accepted unanimously during a
shareholders meeting in August. (Bisnis Indonesia  24-Oct-

PT DAYA GUNA SAMUDRA: S&P lowers corporate credit rating
International rating firm Standard & Poor's has lowered its
long-term corporate credit rating on Indonesia's fishing
firm PT Daya Guna Samudra (JSX:DGSA) to selective default
('SD') from double-'C'.

The double-'C' rating on the US$225 million notes due 2007,
issued by DGS International Finance Co BV and guaranteed by
Daya Guna remains on CreditWatch with negative implica-
tions.  S&P said the rating action follows Daya Guna's
failure to repay short-term loans of US$83 million to its
bank creditors sice 1999.

It also said the financial obligation arose from its need
to reimburse creditors under trade receivables discounting
facilities when Daya Guna's customers failed to meet
payments on the receivables to the banks.  The CreditWatch
placement reflects Daya Guna's liquidity problems and lack
of financial flexibility.

The weak credit quality of Indonesia's banking system and
volatility in the rupiah have severely restricted the
company's funding options, and the company has been forced
to fund most of its own working capital. (Asia Pulse  24-


INTER-LEASE CORP.: Parent approves Nov. liquidation
The board of directors of Japan's largest credit card
company, Nippon Shinpan Co. Ltd., has approved the
liquidation of its troubled nonbank financial unit,
indicating the filing would take place next month.

Inter-Lease Corp. had its liquidation approved after
revealing its total liabilities were estimated at 560
billion yen ($5.2 billion). A company spokesman noted that
its leasing business was healthy, but the company was
weighted down by a mountain of bad loans resulting from its
excessive investments in real estate during Japan's vibrant
or so called "bubble economy" in the late 1980s.
Additionally, most of Inter-Lease's 1990s investments went

Nippon Shinpan holds an 8.8 percent interest in Inter-Lease
and is its largest single shareholder. Other shareholders
include Sakura Bank Ltd., Sanwa Bank Ltd., and Tokai Bank
Ltd. On October 13, Nippon Shinpan downgraded its earnings
forecast for the current fiscal year ending next March,
identifying a 137.7 billion yen extraordinary loss item
related to Inter-Lease.

KYOEI LIFE: US's Prudential takes reins in revamp
Prudential Insurance, a US insurance company, has been put
in charge of restructuring Kyoei Life, the Japanese insurer
which collapsed last week. The move was seen as moving it
closer to a full takeover of the country's 10th largest
life assurer.

Japan's courts named the US company as Kyoei's sole sponsor
on Monday after it sought protection from its creditors. It
has liabilities of about 4.6 billion yen, ($42.2 billion)
making it Japan's largest corporate collapse since the end
of the second world war.

While being made sole sponsor does not guarantee Prudential
the right to acquire Kyoei, insurance industry sources said
it would be highly unusual if that were not the case. The
move is the second effective rescue of a failed Japanese
life company by a US corporation in the last two weeks.
American International Group, the world's largest insurer,
has been put in charge of restructuring Chiyoda Life.
Chiyoda, Japan's fourth-largest life company, had
liabilities of 2.94 billion yen.

Prudential already has a 2,400-strong operation in Japan
and is keen to expand in a country which has one of the
highest domestic savings rates in the world.  It is
understood to be unlikely that Kyoei and Prudential's
existing operations in Japan will be merged, given their
differing customer profiles.  Prudential will provide Kyoei
with life products, sales support and training.

The US company declined to discuss financial aspects of the
deal, but it had previously said it was "willing to make a
substantial financial commitment."  The two groups
originally agreed in June to study a possible joint venture
which would have brought Kyoei an equity investment of
Y30bn, but the deal collapsed, prompting the Japanese
company to seek court protection.  Prudential pointed out
that Kyoei had recommended to the courts that the US
company be named its sponsor.

The Kyoei restructuring is the latest in a series of deals
by non-Japanese companies to either take over or acquire
strategic stakes in distressed Japanese companies. Long
Term Credit Bank was taken over by Ripplewood, the US
private equity investor earlier this year while Renault, of
France, Ford, of the US, and DaimlerChrysler, the German-US
carmaker, have linked up with struggling Japanese
automobile companies.  The revamps form part of Japan's
ongoing reforms which have paved the way for increased
access to the country's previously isolated corporate
sector. (Financial Times  23-Oct-2000)

KYOEI LIFE INSUR.: Moody's downgrades strength rating
Moody's Investors Service said it has downgraded the
insurance financial strength rating of Kyoei Life Insurance
Co Ltd (Kyoei Life) to Caa2 from Caa1.

The rating outlook for the company remains developing, it
said. Kyoei Life filed for protection from creditors in
Tokyo District Court on October 20 under a special
exemption of the Corporate Rehabilitation Law, Moody's

Kyoei's policyholders with death benefits will receive full
protection until March 2001, but policyholders of savings-
type products are, in Moody's opinion, likely to see a
reduction of guaranteed rates.  Several companies have
shown their intent to assist Kyoei to reorganize itself
under the Corporate Rehabilitation Law. A quick and
smooth reorganization would contribute to minimizing the
losses of Kyoei Life, and for this reason, the outlook
remains "developing", Moody's said.


HYUNDAI ELECTRONICS: To sell telecom stakes to pay debts
Hyundai Electronics Industries Co., the world's No. 2
memory chipmaker, plans to sell its stake in
telecommunication companies such as Hanaro Telecom Inc. and
unlisted Onse Telecom to help repay debt.

Hyundai Electronics holds 300 billion won ($263 million) of
telecommunication shares in public companies and 700
billion won in unlisted firms, the paper said, citing the
company. The chipmaker has 5.3 trillion won of debt to
repay by the end of next year, according to Chief Executive
Park Chong Sup.

The company may also sell its 36 percent stake in U.S.-
based Maxtor Corp., which recently agreed to by Quantum
Corp.'s hard disk drive group to become the world's biggest
maker of computer hard drives, the paper said. Other plans
to reduce debt include selling Hyundai Electronics' factory
in Wales and issuing 2 trillion won of bonds.

The company posted a third-quarter profit of 66 billion won
on improved sales of dynamic random access memory chips.
Sales rose 13 percent to 2.4 trillion won from the previous
quarter. (Bloomberg, Chosun Ilbo 24-Oct-2000)

HYUNDAI ENGIN.& CONSTR.: Layoffs,cuts called `desperate'
Hyundai Engineering & Construction is to lay off about a
quarter of its 255 executive-level employees and overhaul
its business lines in what analysts called a desperate move
to stay afloat.

"We will cut a combined 63 out of 255 executive-level
officials," the company said yesterday.  The layoff plan is
a follow-up to a fresh self-rescue plan Hyundai Engineering
delivered to creditors last week, pledging 581 billion won
(about HK$4 billion) in new fund-raising and upping its
year-end target for the sale of assets to 1.6 trillion won.

Hyundai also said it would close two domestic offices and
four overseas units, to reduce costs, and introduce
separate accounting for each division in a move to enforce
more responsible management.  It would also actively seek
foreign investment and strategic alliances with foreign

The company did not estimate how much money the executive
layoffs and the closures would save.  Analysts said the
layoff plan was a step in the right direction but warned
cash-generating restructuring steps needed to be realised
in order for the country's largest builder to survive.

"Hyundai's decision to cut executives in the face of
mounting pressure to reduce its debts shows its will to
make every effort for restructuring, but I do not see how
this will help much," said Lee Kye-joon, an analyst at
Daishin Securities.  "The layoffs are a bit far from the
core of its restructuring plan. But if other strong self-
rescue plans are followed later on, it will make a

Fears of liquidity woes at Hyundai Engineering were revived
last week after the construction firm said it had raised
only a third of the 1.5 trillion won it told creditors in
May it would raise this year through sales of shares and
other assets.  A steep fall in South Korean share prices,
which had eaten into the firm's ability to raise promised
funds through share sales, last week forced it to come up
with additional steps.  In August, Hyundai Engineering had
also been forced to pledge further steps after a credit
crunch again forced it to ask for fresh funding.

"The additional plan appears to be the same repertory that
Hyundai Engineering has repeated over the past five months
without actual implementation since its liquidity issue
became known to the market," Merrill Lynch said in a
report. "We are pretty confident that this package will
probably not be enough to allay the market's scepticism
about Hyundai, given the degree of scepticism from market
participants already."

Contrary to the belief of much of the market, Hyundai
Engineering said it was on a steady financial footing with
operating profit expected to reach 800 billion won this
year compared with 401.1 billion last year.  The builder
said its total liabilities were forecast to fall to four
trillion won at the end of the year from 5.4 trillion at
the end of June as the result of self-rescue efforts.
But its optimism failed to convince at least one

"Realistically, Hyundai Engineering cannot be revived
through its self-rescue plans, so creditors and the
government need to come up with a solution as soon as
possible," Kim Mahn-je, a legislator at main opposition
Grand National Party, said in a parliament audit of the
finance ministry.  "Placing Hyundai Engineering under
workout [debt rescheduling programme] and then selling the
company to a state-run construction corporation, or more
can be an option," was his suggested solution. (South China
Morning Post, Reuters  24-Oct-2000)

HYUNDAI ENGIN.& CONSTR.: Call for workout program
HYUNDAI PETROCHEMICALS: Call for workout program
KOREA INDUSTRIAL DEVELOP.: Call for workout program
An opposition lawmaker yesterday urged the government to
put three Hyundai Group companies under workout programs
for sales to domestic and foreign investors.

Rep. Kim Man-je of the Grand National Party (GNP) said
Hyundai Engineering and Construction (HEC), Korea
Industrial Development and Hyundai Petrochemicals should be
placed under workouts because their poor profitability and
excessive debts make their independent existence highly
unlikely.  Kim said creditor banks should divest Chung
Mong-hun, the de facto owner of the Hyundai Group, of his
managerial rights of HEC when putting the company under a
workout program.

He also said HEC should be sold to state-run corporations
engaged in construction, including Korea Housing Corp.,
Korea Land Development Corp. and Korea Agricultural and
Rural Infrastructure Corp.  Kim said Korea Industrial
Development should be sold to Hyundai Heavy Industries,
while Hyundai Petrochemicals should be placed under a
workout program and sold to other firms after banks convert
500 billion won worth of their loans into equity.

The lawmaker said Hyundai Electronics Industries has dim
viability prospects and hence should reduce its debts by
selling off subsidiaries and attracting massive foreign
investments through stake sales.  By comparison, Kim said,
Hyundai Corp., Hyundai Merchant Marine, Hyundai Logistics,
Hyundai Elevator and Hyundai Information Technology appear
capable of staying independent. (Korea Herald  24-Oct-2000)

INDUSTRIAL BANK OF KOREA: To get gov't funds bailout
KOREA ASSET MGMT.CORP: To get gov't funds bailout
KOREA DEPOSIT INSUR.CORP.: To get gov't funds bailout
The South Korean government plans to provide 500 billion
won ($439 million) to Industrial Bank of Korea to help
clean up the lender's balance sheets.  The government hopes
the funds will encourage Industrial Bank to provide more
loans to small- and medium-sized companies, according to a
report to the National Assembly by the Finance and Economy

Also in the report, the government plans to lend 5.57
trillion won to state-run Korea Deposit Insurance Corp. to
help the agency honor maturing debt issues. It also will
provide 20 billion won to state-run Korea Asset Management
Corp. to buy more bad loans, KED said.  The government
plans to spend an additional 50 trillion won to clean up
the financial industry, which is still struggling from
Korea's financial crisis in 1997-1998. It has so far used
about 109 trillion won. (Bloomberg, Korea Economic Daily

KOREA DEVELOPMENT BANK: Bad investment causes W3T loss
Korea Development Bank's (KDB) bailout of Korea Investment
Trust Co. (KITC) at the beginning of the year resulted in a
3 trillion won loss for the bank, causing KDB's BIS capital
adequacy ratio to plunge more than 60 percent.

Based on data submitted to the National Assembly by the
Ministry of Finance and Economy, KDB lost all of its 1.3
trillion won equity investment into KITC and incurred other
related losses of 1.65 trillion won, costing the bank a
total of 2.95 trillion won, 58.2 percent of KDB's 5.72
trillion won paid-in-capital.

Figures also showed that the ill-fated investment caused
KDB's BIS capital-adequacy ratio, a leading measure of a
bank's liquidity, to nose-dive to an alarming 6.53 percent
from an otherwise sound 17.52 percent.  Consequently,
finance ministry figures showed that KDB requested a 1.5
trillion won government bailout to normalize operations for
next year. (Korea Herald  24-Oct-2000)

Chung Hyun-joon, president of Korea Digital Line, took out
illegal loans from two mutual savings and finance firms
totaling 51.4 billion won, but 40 billion won is missing,
according to the Financial Supervisory Service (FSS). The
results of a preliminary investigation by the FSS revealed
that the 40 billion won was not deposited into Chung's or
his acquaintance's bank accounts.


ORION-PROMET LTD: Restructures loan
PROMET INT'L LTD: Restructures loan
Promet Bhd announced yesterday that it has restructured and
settled loans taken up by two of its subsidiaries via
agreements reached with Export-Import Bank of Malaysia Bhd
(Exim Bank).

The company said in a statement that the agreement with
Exim Bank was in respect of a loan amounting to US$6.683mil
(RM25.395mil) taken up by its 70% subsidiary, Orion-Promet
(VBT) Ltd (OPL).  The loan was taken up by the subsidiary
for its Seychelles commercial property development project.

The agreement between OPL and Exim Bank involved the
settlement of the loan amount owing of RM12.697mil via the
issuance of irredeemable convertible insecured loan stocks-
A (Iculs-A) on the basis of one Iculs-A to 92 sen debt
ratio.  The balance of RM12.697mil owed will be settled via
the issuance of Iculs-B on the basis of one Iculs-B to 72
sen debt.

Another agreement was also arrived at with Exim Bank for
the restructuring and settlement of a US$17.655mil
(RM67.089mil) loan taken up by its wholly-owned subsidiary,
Promet International Ltd (PIL).  PIL took up the loan for
its South African residential property development project.
Under the PIL settlement agreement, RM23.544mil will be
settled via the issuance of one Iculs-A for every 92 sen
debt, another RM23.544mil by one Iculs-B to 72 sen debt and
RM20mil by the issuance of Fairoak Investment Holdings
(Pty) Ltd shares in the ratio of one Fairoak share to
RM3.26 debt.

The respective Iculs-A and Iculs-B will be issued by a new-
to-be incorporated company which will also take over the
listing status of Promet pursuant to Promet's proposed
corporate restructuring scheme.  The settlement agreements
were conditional upon the completion of all parts of
Promet's proposed restructuring scheme under section 176 of
the Companies Act which requires approvals of, among
others, the High Court of Malaya, other relevant
authorities, creditors and shareholders.

Fairoak is a 70% owned subsidiary of PIL in the Republic of
South Africa that carries out a residential property
development known as Featherbrooke Estate. Featherbrooke
Estate development project comprises 1,200 units of low
density residential property located in Krugersdorp, about
25 km from Johannesburg.

OPL, incorporated in Seychelles, carries out commercial
property development project comprising shop offices, a
retail shopping complex and a six-storey office block.
(Bernama, Star Online  25-Oct-2000)


PETRON CORP.: Posts loss for first 9 months
Listed oil firm Petron Corp. yesterday disclosed to the
Philippine Stock Exchange (PSE) a 1.3-billion Philippine
peso ($26.45 million at PhP49.143=$1) net loss for the
first nine months of the year, a complete turnaround from
the PhP2-billion ($40.70 million) net income it posted in
the same period last year.

Petron blamed its losses to its inability to pass on to
consumers higher world crude prices.  Petron said since
February 1999, the peso cost of a barrel of crude oil has
increased by 240%, while the wholesale posted price of the
refined petroleum product rose by only 94%.

From only $9 per barrel in February 1999, the Dubai crude
oil, used by the oil companies in price-setting here, has
cost $30 per barrel.  Compounding the problem is the
continued depreciation of the peso against the dollar. From
around the PhP42-level in February last year, the peso has
recently been hitting the PhP48 to PhP49-mark.

Petron chairman Jose A. Syjuco, Jr. said foreign exchange
losses for the third quarter alone amounted to PhP1.5
billion, or almost half of its total foreign exchange
losses of PhP2.8 billion during the nine-month period. The
peso was only at PhP43.25 to a $1 in June then further
deteriorated to PhP46.21 by the end of September.

As a rule of thumb, every PhP1 depreciation translates to a
17-centavo per-liter-increase, while every dollar increase
in crude price translates to a 26-centavo adjustment.
Combined, these factors have led to losses for the oil
companies, not to mention that they also had to contend
with fierce pressure from Malaca¤ang and the public.

The government several times in the has prevailed upon the
oil firms to defer price adjustments. Local oil prices were
even frozen for three months from November 1999 to January
2000 despite the upward trend of prices in the world

"The losses reflect the fact that cumulative changes in
local refined petroleum product prices continues to lag
behind the increases in crude oil prices and the dollar-
peso exchange rate," Mr. Syjuco said in a statement

Mr. Syjuco said the board has decided to defer the approval
of Petron's major capital budget for 2001 until February
next year.  Meanwhile, sales revenues for the first three
quarters of the year rose 44% to PhP62.7 billion from
PhP43.6 billion as a result of the high oil prices. But in
volume terms, there was slight reduction to 38.8 million
barrels from 39.1 million during the period covered because
of National Power Corp.'s dependence on oil as energy
source for power generation. (Manila Times  25-Oct-2000)


FHTK HOLDINGS: Works out debt rehab plan
Fruits and vegetables grower and distributor FHTK Holdings
yesterday announced that it had worked out a debt
restructuring plan to convert some $180 million of debts
due to six bank creditors to equity in FHTK, and start
afresh. The plan paved the way for the company "to start
off on a clean slate," the company said in a statement

"With this deal, FHTK will be debt-free moving forward and
will be relieved of its substantial interest-servicing
burden," said Mr Nicky Tan, partner at Arthur Andersen
Associates which was appointed about five months ago to
assist and advise FHTK and its bank creditors in the debt

Under the deal, the total loan amount including interest of
some $180 million owing to banks will be ""extinguished''
by the issuance of FHTK shares valued at 32 cents per share
to the bank creditors.  The exercise will result in some
562.5 million new conversion shares being issued to the
bank creditors.

As part of the deal, certain shareholders of FHTK were
granted call options to purchase a portion of the
conversion shares at the following exercise prices during a
specified period.  They may purchase: Up to 70 per cent of
the total conversion shares at 33 cents per share during
the first year; Up to 54 per cent of the total conversion
shares at 35 cents per share during the second year; Up to
36 per cent of the total conversion shares at 37 cents per
share during the third year; Up to 18 per cent of the total
conversion shares at 38 cents per share during the fourth

The remaining 30 per cent of the conversion shares will be
released to the bank creditors in equal instalments over 36
months.  The deal is subject to the approval of the
Singapore Exchange and FHTK shareholders.  In August, FHTK
announced that its full-year loss for the period ended Mar
31, 2000 had widened to $51.2 million from $44.7 million
due to increased provisioning for bad debts. (Straits Times

GENERAL SECURITIES INVESTMENTS: Directors push liquidation
Directors of a closed- end fund, General Securities
Investments, (GSI) have urged shareholders to accept a
proposal to liquidate the beleaguered fund.

They have also recommended that GSI shareholders decide at
the outset whether they would like to receive cash for
their holdings or units in an open-ended unit trust, in
order not to disrupt the restructuring of the fund. GSI's
restructuring manager, DBS Bank, made these proposals in a
circular to shareholders dated Oct 23. The bank holds a
41.8 per cent stake in the fund.

Listed GSI proposed last month to liquidate itself in view
of the sharp and chronic discount to net asset value that
its shares are trading at.  The proposal, said market-
watchers, was a long-overdue acknowledgement of the
unpopularity of closed-end funds in Singapore.

Under the proposed plan, the fund would be delisted on Nov
28 this year.  GSI shareholders can vote to receive either
cash for their shareholdings or units in a new GSI Global
Fund to be managed by DBS Asset Management (DBSAM). Long-
term investors should opt to receive units for their
holdings, while those looking to exit the market in the
short term should opt for cash at the outset instead of
opting for the units first and then redeeming them shortly
after, recommended GSI's directors in the circular.

This is because DBSAM needs to get an early indication of
whether the majority of shareholders prefer cash or units.
If the bulk of shareholders prefer cash, DBSAM will proceed
to divest GSI's portfolio of investments in an orderly
manner. If the majority prefer units, then DBSAM will do
the necessary to set up the GSI Global Fund.

But DBSAM can effectively manage the new GSI Global Fund
only if the size of its portfolio exceeds $5 million, the
directors warned.  Redemption of units shortly after they
are issued would make it difficult for DBSAM to maintain
this minimum size, they added.

Closed-end funds like GSI are unlike the open-ended unit
trusts that dominate the market in that shareholders of the
former cannot redeem their units or shares at the net asset
value (NAV) of the fund at any time from fund managers.
Instead, closed-end funds issue a fixed number of shares
that trade like those of ordinary companies.

Because there is not much buying and selling of closed-end
fund shares, closed-end funds usually trade at a discount
to their NAV and are unpopular.  An extraordinary general
meeting will be held on Nov 14 to vote on the matter.
(Straits Times  25-Oct-2000)


SIAM CITY BANK: Continues to lose; privatization delayed
Siam City Bank continues to bleed red as the Thai
government again postpones further privatization efforts
pending selection of a would be buyer.

Executives say things have improved since the cabinet
agreed on Oct 16 not to close the bank, saying it wanted to
protect the state's interests and limit impact on
depositors and staff. "The cabinet decision has helped slow
the number of withdrawals. ... Ever since the Fund floated
the idea about closing the bank, some 30 billion baht in
deposits have been withdrawn," said one bank executive.

The bank last week posted third-quarter losses of 1.2
billion baht, compared with losses of 702.8 million for the
same period last year. Non-performing loans totalled 137.8
billion baht, or 59.46% of total credit.

The Bank of Thailand says it expects to take around two
months before finalizing details on the privatization of
Siam City Bank. M.R. Chatumongol Sonakul, governor of the
central bank, said one prospective bidder included a
coalition of Thai and foreign investors.

Yet according to several sources, investors aren't
necessarily rushing to line up to bid for Siam City Bank.
Besides the tens of billions of baht needed, any buyer
would also have to have a strongly experienced management
team to help restructure operations to allow the bank's
survival amid much stiffer competition.

One bank director said that only Newbridge Capital, a US
investment fund, had actively demonstrated interest in the
bank. Earlier talks with Newbridge had collapsed amid
differences over share pricing and terms of compensation
paid by the Financial Institutions Development Fund on
losses incurred on bad loans.

Regulators want a strategic partner for Siam City rather
than a financial investor such as Newbridge, which was more
focused on short-term profits than the bank's long-term

"If there really are local investors interested in
purchasing Siam City Bank, then that's good. It would help
avoid further delays in resolving problems," said a Siam
City Bank director. "But it still looks as if it will be
the next government that will decide what to do, whether to
sell the bank or to merge it with another state
institution."  (Bangkok Post 24-Oct-2000)

T.G.PLASTERING CO.LTD: To dissolve, be liquidated
Shareholders of T.G Plastering Co.,Ltd., an associated
company of Thai Gypsum Products Public Company, resolved by
special resolution at an extraordinary shareholders'
meeting to dissolve and liquidate the company. Mr. Supachai
Suriya was appointed as liquidator.

T.G Plastering Co., Ltd. was established in September 1990.
It acted as a subcontractor and carried on its business as
TGP's sole distributor of ready mixed plaster, one of TGP's
products. About 7,350 shares of its total 15,000 shares was
held by Gypsum International Co. Ltd, which is a subsidiary
of Thai Gypsum Products Public Company Limited.

The dissolution and liquidation of the company is part of a
strategic policy and cost-reduction plan of TGP for
reinforcing the potential of the competitive gypsum
business. (Stock Exchange of Thailand 23-Oct-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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