TCRAP_Public/001030.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

             Monday, October 30, 2000, Vol. 3, No. 211


* A U S T R A L I A *

EISA: Auspine seeking $40M from it
HIH INSURANCE: Asian plans can't revive HIH shares
MEDIBANK PRIVATE: ACCC accuses it of false advertising

* C H I N A  &  H O N G  K O N G *

DALIAN INT'L TRUST: 40% of foreign debt to go unpaid
GUANGDONG INT'L TRUST: Liquidators OK 21.1B yuan in claims
HAINAN INT'L TRUST: Debt-laden firm facing liquidation
MELODY KNITTING FACTORY CO.LTD: Facing winding up petition
NEW WILL INVESTMENT LTD: Facing winding up petition
PETROCHINA: Plans consolidation for cost efficiency
SHUN CHI GROUP LIMITED: Facing winding up petition
SINOCAN HOLDINGS: Posts another annual loss for 1999
W.HO CIVIL ENG.& CONSTR.CO.: Facing winding up petition

* I N D O N E S I A *

BANK SUMMA: Soeryadjaya seeks personal guarantee annulment
PT CHANDRA ASRI: IBRA reschedules debt repayments
PT DIPASENA: IBRA reschedules debt repayments
TEXMACO: IBRA reschedules debt repayments

* J A P A N *

JAPAN SECURITIES JOURNAL: Files for court protection
MITSUBISHI MATERIALS CORP: Sells plant site to reduce debt
SEGA ENTERPRISES: To post 20B yen group net loss for year
SOGO CO: Seeks 95% debt forgiveness
SONY CORP: Slumps into red
SUMITOMO TRUST & BANKING: Y28.3B exposure from Inter-Lease
TOMEN CORP: May sell steel business as part of rehab

* K O R E A *

DAEWOO MOTOR: To submit self-rescue plan Oct. 31
DAEWOO MOTOR: Volkswagen interested in Polish plant
DONG-AH CONSTRUCTION INDUS.: To layoff 1,500 workers
SAMSUNG MOTOR: Debts continue to snowball

* M A L A Y S I A *

RENONG BHD: Gov't plan would bail out, light rails too

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

BANK OF THE PHIL.ISLANDS: Ratings outlook lowered
DEVELOPMENT BANK OF THE PHILS.: Ratings outlook lowered
EQUITABLE PCI BANK: Ratings outlook lowered
LAND BANK OF THE PHILIPPINES: Ratings outlook lowered

* S I N G A P O R E *

BRIERLEY INVESTMENTS: Files suit against ex-director
CHEW EU HOCK HOLDINGS: Posts $7.9M annual loss

* T H A I L A N D *

ITALIAN-THAI DEVELOP.: Seeking partners to reduce debt
LOXLEY PCL: Bondholders approve $276M debt-equity swap
NATURAL PARK: Creditors to consider rehab plan Nov. 22
THAI PETROCHEM.INDUSTRY: Creditors to reject plan changes


EISA: Auspine seeking $40M from it
Timber group Auspine has stuck to its guns in seeking $40
million in compensation from Email.

The three-year-old argument erupted again this week as the
lawsuit heads for the Federal Court in Adelaide on November
10.  Sydney-based Email this week said Auspine's
compensation claim had no merit and would be vigorously
defended. Email managing director Ralph Waters said Auspine
had sought $8 million in compensation in the Federal Court
and an alternative claim for $25 million on a "no-
transaction basis".

"These claims have been disclosed in Email's annual
report," Mr Waters said. "Email does not expect that any
material liability will arise."

He said Email was confident of success if the matter
proceeds to trial "should the action not be resolved
favorably beforehand." The court action centres on
Auspine's claims it was the victim of non-disclosure of
vital trading details when it purchased the Cowells
Building Products business from Email for $18 million in

Adrian de Bruin, managing director of Mt Gambier-based
Auspine, said the $40 million claim would be pursued
"vigorously and enthusiastically."  Mr de Bruin said the
no-transaction claim - including trading losses since
acquisition, valuation adjustments, funding costs and other
considerations - was now about $31.5 million.

"Together with capital gains tax relief, the claim exceeds
$40 million," he said yesterday.

Auspine launched its lawsuit against the Sydney diversified
industrial in March, 1997. Mediation attempts broke down
early this year.  "This issue has dragged on for long
enough and we are keen to see this matter resolved as soon
as possible," Mr de Bruin said.

The Federal Court hearing next month is expected to set a
trial date for the claim to proceed.  (The Advertiser  28-

HIH INSURANCE: Asian plans can't revive HIH shares
HIH Insurance shares hit new lows yesterday despite signs
the troubled insurer is moving to restructure its Asian

The shares hit a low of 30.5c before ending 3c lower at
33c, with the company's decline accelerating since
September's sale of its Australian personal lines
operations to Allianz Australia. Reports from Korea said
HIH was in talks to buy a share in small Korean insurer
Daehan Fire & Marine, which has a market capitalisation of
just $40 million and incurred a loss in the past year.

A HIH spokesman confirmed the talks but said HIH was
talking to others and there were no concrete proposals.
"It's just a small insurance company we are talking to. We
are talking to others," he said. "Within the context of our
Asian operation, to build in scale or do whatever, we are
unlikely to do that beyond our current scale without doing
something else with the capital structure in Asia. It needs
to double in size and we need to do joint ventures because
there's no way we'll be doubling off our own bat."

But HIH has other problems, chiefly finding a chief
executive to replace Mr Ray Williams, who earlier this
month announced his resignation. Recruitment firm Korn
Ferry has been searching for a replacement for some months.

"We are painfully aware of the fact that the sooner that is
done the better. In the sense to talk about the way going
forward we would prefer that was coming from someone who
has come in and had a look and formed their own
impression," the spokesman said.  "We have not got time to
do a BHP and take 12 months."

Also overhanging the stock is its issue of converting
notes, which convert to ordinary shares with reference to
the market price of HIH. The minimum conversion price is
25c, at which price they would convert into 800 million
shares sharply diluting ordinary shareholders' earnings per

The notes do not mature until June next year at the
earliest but can convert early in circumstances such as a
takeover. There have been suggestions that trading in the
ordinary shares by these holders may be helping to depress
the price. (Sydney Morning Herald  28-Oct-2000)

MEDIBANK PRIVATE: ACCC accuses it of false advertising
The Australian Competition and Consumer Commission has
taken action against health insurer, Medibank Private,
accusing it of false and misleading advertising.

It has instigated action in the Federal Court in Melbourne,
alleging the company advertised no rate increase for some
products this year but then lifted prices in July. The ACCC
has also questioned a second advertising campaign. Acting
chairman Alan Asher says the ACCC is also watching other
health insurers.

"Yes, you can be sure that we are following up a number of
other complaints," he said. "Typically where we take action
in, against one company in an industry, we'll also look at
the behaviour of others. This one also shows sort of
exclusion clauses in advertising, sort of fine print issues
and so we'll also be looking more widely at that too."

The Health Insurance Association says it has heard no
complaints from consumers about false advertising by its
members. Russell Schenider of the Health Insurance
Association says he has heard no complaints about other
insurers. "I have honestly had no complaints from the
public about advertising matters or anything to do with the
lifetime health cover campaign or the actions of related
health funds," he said.  (ABC News Online  29-Oct-2000)

C H I N A  &  H O N G  K O N G

DALIAN INT'L TRUST: 40% of foreign debt to go unpaid
Dalian International Trust and Investment Corp. (DITIC)
plans to repay 60 percent of the 1.5 billion yuan loan it
owew to 18 foreign banks.

Under the debt restructuring agreement reached with the
creditor banks, DITIC will repay 900 million yuan out of
the total debt of 1.5 billion yuan, according to Xia De-
yen, vice mayor of the Dalian city of China. The company
also will cancel its business registration after completion
of the repayment.

GUANGDONG INT'L TRUST: Liquidators OK 21.1B yuan in claims
Liquidators of collapsed Guangdong International Trust and
Investment Corp. (GITIC) will accept 21.1 billion yuan
($2.5 billion) in creditor claims -- just over half the
38.7 billion yuan in total debt claims submitted by GITIC
creditors. Louie Choi, a partner at KPMG Huazhen who leads
the liquidation group, confirmed about 80 percent of all
claims were made by foreign creditors, including those from

HAINAN INT'L TRUST: Debt-laden firm facing liquidation
Hainan International Trust & Investment Corp (Hitic), which
defaulted on yen bonds held mainly by Japanese investors,
probably will be liquidated, according to a provincial
government official, and soon.

Hu Rongshui, who's in charge of Hitic's international
payments, declined to confirm Hitic's liquidation, though
he said all of Hitic's financial services are now being run
through the financial services committee.  Xia Bing, the
People's Bank of China (PBOC) official in charge of
reorganising China's trusts, also declined comment on what
would be one of the industry's biggest failures.

Hitic, which defaulted on a September 25 interest payment
on the yen bonds, had its businesses halted 10 days earlier
on the orders of the People's Bank of China, Mr Wu said.
The PBOC is overseeing the reform of the nation's trust
industry, following the 1998 collapse of Guangdong
province's trust under more than US$3 billion (HK$21
billion) of debt. Guangdong's trust has been administered
by a liquidation committee led by KPMG International for
the past two years.

Hitic owed 4.56 billion yuan (HK$4.3 billion) of debt at
the end of 1998. The company owes 238 million yen (HK$17
million) in interest payments on 14 billion yen of Samurai
bonds, and has been under pressure to meet its obligations
since it missed the September 25 payments. Mr Wu said
outside auditors would be appointed for Hitic, but declined
to comment further.

Hitic's failure to fulfil its obligations to Japanese
creditors came up during discussions last week in Tokyo
between Premier Zhu Rongji and Japanese authorities.
"I hear some ordinary Japanese people hold the bonds and,
given that, I think it's a very serious problem," Mr Zhu
said in Tokyo on October 16. "I will warn them, telling
them it's they who have caused the problem and need to
resolve it."

Following Mr Zhu's comments, Japanese investors "expected
Mr Zhu to do something" such as arranging for the Chinese
government to take over the company's debts, said Akira
Yoshieda, an official at Japan Credit Rating Agency, which
recently downgraded the rating of the company's debt. In
July, PBOC Governor Dai Xianglong threatened to shut Hitic
after it failed to pay interest on another issue of yen
bonds. The company later made that payment.

Hitic has not explained why it's missed its financial
obligations.  The firm is one of eight investment trust
firms run directly by the Hainan government. As trust
firms, they are given the right to borrow foreign loans.
Half of the businesses it owns reported losses, according
to its 1998 annual report. (Hong Kong iMail  27-Oct-2000)

MELODY KNITTING FACTORY CO.LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on December 6 on the petition of
Bank of China for the winding up of Melody Knitting Factory
Company Limited. A notice of legal appearance must be filed
on or before December 5.

NEW WILL INVESTMENT LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance
has scheduled a hearing on December 6 on the petition of
Bank of China for the winding up of New Will Investment
Limited. A notice of legal appearance must be filed on or
before December 5.

PETROCHINA: Plans consolidation for cost efficiency
PetroChina, the mainland's largest oil company, has
embarked on a restructuring of its downstream business to
improve efficiency and competitiveness.

According to industry officials, the company plans to
consolidate its 30 or so such units into three refinery-
petrochemical groups, three chemical groups and one hybrid.
It also would put all refineries, now run by individual
oilfields, under the direct management of the refinery-
petrochemical department and close some small, inefficient

State media report that the refinery and petrochemical
operations of the company, China's biggest oil producer and
second-largest refiner, lost 4.7 billion yuan (about HK$4.4
billion) in the first five months of this year due to high
crude prices and low efficiency.  The company was pushed
into restructuring by competition from China Petroleum and
Chemical Corp (Sinopec) and the prospect of even more from
multinational oil giants after China enters the World Trade

China appears highly likely to join the WTO within the next
few months.  So far PetroChina has completed the formation
of the hybrid group and one chemical group.  In the
northwest province of Gansu, it merged Lanzhou Chemical
Industry and Lanzhou Refining and Chemical into a group
considered both chemical and petrochemical, a company
official said.

The new group had a crude processing capacity of seven
million tonnes a year and that would be expanded to between
10 million and 12 million tonnes a year in the next few
years, he said.  The two Lanzhou firms suffered combined
losses of 1.2 billion yuan last year, the worst in
PetroChina, according to the official.

The merger would help cut costs and increase efficiency by
using crude from the northwestern region of Xinjiang and
selling products in western China.  PetroChina had also
completed the merger of two petrochemical companies in
Daqing in Heilongjiang province, the sources said.

The companies processed crude from the nearby Daqing
oilfield, China's biggest, where output is declining after
40 years of production.  The merger of Linyuan
Petrochemical and Daqing Oilfield Petrochemical Plant would
produce the first of PetroChina's planned chemical groups.
With a crude processing capacity of eight million tonnes a
year, it would focus on the production of items such as

The three refinery-petrochemical groups would be formed in
Jinzhou, Dalian and Fushun, all in Liaoning province.
The other two chemical groups would be in Jilin city in
Jilin and in Liaoyang in Liaoning province.  The refineries
also to be run by the refinery-petrochemical department
were in Hohhot in Inner Mongolia, the Dagang field near
Tianjin, and the Huabei field in Hebei province, the
sources said. (South China Morning Post  28-Oct-2000)

SHUN CHI GROUP LIMITED: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance
has scheduled a hearing on December 6 on the petition of
Bank of China for the winding up of Shun Chi Group Limited.
A notice of legal appearance must be filed on or before
December 5.

SINOCAN HOLDINGS: Posts another annual loss for 1999
Sinocan Holdings, maker of three-piece cans for use in food
and beverage industries, recorded a HK$36.61 million net
loss for the year ended December 1999. That was down from
the HK$910.84 million loss posted a year earlier.

Loss per share for 1999 also narrowed to 4 HK cents from
107 HK cents the prior year. Revenue, meantime, jumped 46
percent to HK$258.91 million, but no dividend was proposed.

W.HO CIVIL ENG.& CONSTR.CO.: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance
has scheduled a hearing on January 3, 2001 on the petition
of Uni-Bright Engineering Limited for the winding up of
W.Ho Civil Engineering & Construction Co. Limited. A notice
of legal appearance must be filed on or before January 2.


BANK SUMMA: Soeryadjaya seeks personal guarantee annulment
PT Astra International founder William Soeryadjaya has
filed a document with the Central Jakarta District Court
asking it to annul a personal guarantee he signed in late
1992 covering all financial obligations arising from the
now closed Bank Summa.

According to the document, Soeryadjaya said the personal
guarantee was made merely to restore public confidence in
the bank at a time when it was suffering from a run on
deposits.  He further asserted that the guarantee should be
revoked immediately and all Bank Summa's outstanding
financial obligations to any third parties not be held as
his responsibility.

Bank Summa currently in the process of liquidation under
the management of Bank Indonesia. It was closed by the
government due to large-scale bad loans, mainly in the
property sector.

PT CHANDRA ASRI: IBRA reschedules debt repayments
PT DIPASENA: IBRA reschedules debt repayments
TEXMACO: IBRA reschedules debt repayments
The Indonesian Bank Restructuring Agency (IBRA) has agreed
to reschedule the debt repayments of three tycoons by
delaying the legal process against them, according to
Attorney General Marzuki Darusman.

IBRA has allowed some debtors -- including tycoons Marimutu
Sinivasan of Texmaco Group, Sjamsul Nur Salim of Dipasena,
and Prajogo Pangestu of Chandra Asri -- to spread their
debt repayments over the next eight years, Darusman
confirmed after a cabinet session.

Early last week, the president mentioned the government's
delay of the legal process against the three tycoons due to
their key role in increasing the country's exports.
Darusman said the agreement between IBRA and the debtors
has been reported to the House of Representatives. Based on
that agreement, if the debtors fail to pay back their loans
after eight years, then the government will sue them in


JAPAN SECURITIES JOURNAL: Files for court protection
The Japan Securities Journal filed for court protection
from creditors Friday, listing some 900 million yen in

According to private credit research company Teikoku
Databank, the Journal, publisher of a stock investing
daily, took the action with the Tokyo District Court. The
protection was recently approved as part of fast-track
legislation aimed at rehabilitating troubled firms.

Established in 1947, Japan Securities Journal had been
struggling in a tough business environment in the Japanese
post-"bubble economy" period.  In March 1999, it came under
the control of Claremont Capital Holding Inc., a
Tokyo-based financial company.

It had been experiencing fund-raising difficulties since
August when Claremont president Yoshihiko Kokura was
arrested on suspicion of fraud in connection with the
collapse of Taisho Life Insurance Co.

MITSUBISHI MATERIALS CORP: Sells plant site to reduce debt
Mitsubishi Materials Corp. expects to net about 4.5 billion
yen in the next fiscal year (ending March 2002) from the
sale of its Tokyo plant site to Sumitomo Realty &
Development Co. The intends to use the sale proceeds to
reduce its interest-bearing debt as part of larger efforts
to strengthen its financial standing.

SEGA ENTERPRISES: To post 20B yen group net loss for year
Sega Enterprises Ltd., the money-losing video-game console
maker, expects to post a group net loss of 20 billion yen
for the year ending March 2001.

The loss would be due to a cut in price of its Dreamcast
game console in the U.S., according to a report in the
Nihon Keizai newspaper.  For the six-month period ended
Sept. 30, the company expects to post a group net loss of
30 billion yen on sales of 110 billion yen.  The company
previously had forecast a group-level net profit of 1.5
billion yen for the year, and hoped to return to profit for
the fist time after three straight years of losses.

Dreamcast is Sega's hope to achieve that forecast. Sega cut
the U.S. retail price of the 64-megabit game machine to
$150 from $200 in late August. Dreamcast sales more than
double in the U.S. from Aug. 27 to Sept. 30 from the
previous five-week period, market researcher PC Data said.
(Bloomberg 27-Oct-2000)

SOGO CO: Seeks 95% debt forgiveness
Sogo Co. has submitted a rehabilitation plan to the Tokyo
District Court that proposes to reduce the number of stores
in Japan from 22 to 13 and raise the debt-reduction rate to
95 percent.

While, reflecting Sogo's strong determination to put
priority on corporate restructuring, the retailer will be
challenged by having to boost the competitiveness of its
surviving stores, improve its product line and accumulate
capital -- domestic and foreign -- to strengthen its
capital base.

Customarily, companies that file for restructuring under
the Bankruptcy Reform Law set their debt-reduction rates at
between 60 percent and 70 percent. Sogo's request for a 95
percent debt-reduction rate indicates that its financial
condition and sales are in even worse shape than originally

Sogo's closure of some its outlets likely will cut its
total sales by half. Notwithstanding that , however, sales
are projected to be between 470 billion and 480 billion
yen. That would position Sogo as the nation's third-largest
department store operator, with some 70 billion yen more in
sales than Daimaru.

Sogo's plan also may increase further the burden on
taxpayers, as the government-affiliated Deposit Insurance
Corporation of Japan is a creditor of the department store
operator. According to Sogo, the loan that had been passed
to the Deposit Insurance Corporation from Shinsei Bank
(formerly Long-Term Credit Bank of Japan) totals about 98
billion yen, out of which 31 billion yen is expected to be
repaid. The remaining 67 billion yen is expected to become

However, the corporation already has secured 99.9 billion
yen from reserves of public funds to cover the loss.
Therefore, for the time being, Sogo technically would not
create any additional burden on taxpayers. But the Deposit
Insurance Corporation also holds about 100 billion yen in
credit in Sogo's nine domestic stores slated for closure
and overseas outlets. If these stores fail to find buyers
and are forced to liquidate, the majority of the loan would
become unrecoverable. If the loss exceeds the amount of
reserves the Deposit Insurance Corporation has set aside,
the government would have to rely on additional taxpayer

SONY CORP: Slumps into red
Sony Corp fell into the red for the six-month period ended
September 30 as accounting changes affecting its US movie
business and a weak euro cut into earnings.

The electronics and entertainment giant also suffered from
a poor performance by its games division, as the impending
launch in North America and Europe of the PlayStation2
console depressed demand for its predecessor.  Sony posted
an interim net loss of 68.5 billion yen (about HK$4.94
billion), compared with a profit of 64.9 billion yen a year

"The net loss was basically caused by the change in
financial accounting for the picture business," Sony
spokesman Yusho Shichijo said.

Sony's pre-tax profit slipped 11.7 per cent to 117.2
billion yen, but sales inched up 4.6 per cent to 3,257
billion yen.  Net earnings went into the red after the
change mandated in June by the American Institute of
Certified Public Accountants.

Sony Pictures Entertainment is now accounting for film
advertising costs as a stand-alone item, rather than
incorporating them into a film's overall costs.
"Before we could divide such costs up over several years,"
Mr Shichijo said.

The film business was also hit by the poor reception
outside the United States for The Patriot, which starred
Mel Gibson as an American farmer turned revolutionary
against British colonialists.  "In overall operations,
electronics was basically healthy, especially on a local
currency basis, but the games business was weaker," Mr
Shichigo said.

Sony's global sales "were negatively impacted by the yen's
strength against the dollar and particularly [against] the
euro", the company said.  Heavy launch costs for
PlayStation2, released in Japan in March, contributed to a
12.3 per cent slump in revenue at Sony's games division.
Demand in North America and Europe, in particular for the
original PlayStation and PS One, a small portable version,
was weak. Major parts shortages which affected console
shipments added to Sony's woes.

"PlayStation2 is becoming Sony's main games terminal, and
there have been heavy start-up costs for advertising, etc.
for the games business," Mr Shichigo said.

The North American launch of PlayStation2 was this week,
but its European release has been put back to November 24
because of supply shortages. And North America is receiving
only 500,000 units of PlayStation2, half the number Sony
planned to release.  The shortages, notably of the powerful
computer chip that drives PlayStation2, have delighted
Sony's rival Sega Enterprises, which brings out its
Dreamcast console in the US this week.

The video game market accounts for about US$20 billion in
annual sales worldwide - more than the global cinema market
- and is showing annual growth averaging 30 per cent.
Looking ahead, Sony said it would continue its drive into
Internet-related products. Last month it brought out in
Japan a personal digital assistant with e-mail capability.

Next month Sony launches a new notebook version of its Vaio
personal computer in Japan, called the Vaio GT, which it
said would have "a full-spec video camera and such new
functions as providing moving images on Web sites".
Sony predicted it would return to the black in the full
financial year ending March 31. It is targeting a net
profit of 10 billion yen, a pre-tax profit of 255 billion
yen and 7,200 billion yen in sales. (South China Morning
Post  27-Oct-2000)

SUMITOMO TRUST & BANKING: Y28.3B exposure from Inter-Lease
Sumitomo Trust & Banking Co. fears a total of 28.26 billion
yen in loans extended to Inter-Lease Corp. could be
unrecoverable or take an extended time to recover.
Nonetheless, the firm said it won't have any impact on the
bank's earnings outlook. Inter-Lease decided earlier this
week to file for special liquidation.

TOMEN CORP: May sell steel business as part of rehab
Toyota Tsusho Corp., trading arm of Japan's top carmaker
Toyota Motor Corp., confirms it is in the final stages of
talks to buy the steel business of Japanese trading house
Tomen Corp.

Business daily Nihon Keizai Shimbun reported Thursday that
Tomen had agreed to sell its steel business to Toyota
Tsusho for several billion yen to help its restructuring
efforts. If so, it would be the first sale of a business by
the financially troubled trading firm since it launched a
restructuring plan.

In March, Toyota Tsusho said it would buy a quarter of 30
billion yen ($277.2 million) in new shares issued by Tomen.
Tomen has been downsizing its operations by pulling out of
the unprofitable primary aluminium business and reducing
its work force, to focus more on the areas of chemicals,
foods, textiles, energy and information technology.
Toyota Tsusho's shares finished Thursday morning trade at
360 yen, down 0.83 percent, while Tomen's shares were at
112 yen, down 1.75 percent. (Reuters  27-Oct-2000)


DAEWOO MOTOR: To submit self-rescue plan Oct. 31
Ailing Daewoo Motor plans to submit a sweeping self-rescue
plan to its creditor banks on Oct. 31, proposing a
reduction of 15 percent with total wages to be slashed by
up to 30 percent.

Daewoo said yesterday that the new management will disclose
its self-rescue plan on the morning of Oct. 31, which
includes steps to be taken both on a short- and long-term
basis in order to boost Daewoo Motor's decreasing corporate
value.  "The thrusts of the plan have been established but
details are still being filled in," a senior Daewoo
official said.

The creditor banks are demanding a self-rescue plan that
could substantially increase the carmaker's corporate value
in return for the resumption of funding.  The creditors
have stopped funding Daewoo Motor, which needs 100 billion
won every month to keep going, leaving 17,000 Daewoo
workers unpaid for two months. The creditors view that
Daewoo Motor can't be sustained as it is and fear that any
further funding will likely end up irretrievable. Daewoo
Motor currently has 12 trillion won in debts.

Daewoo officials said that the self-rescue plan will
contain steps particularly addressing manpower reduction
and wage cuts, therefore likely to spark opposition from
the firm's labor unions which are demanding the prompt
payment of back wages and the normalization of production

Sources said that a proposal to reduce total wage
expenditures by 30 percent and cut the existing workforce
by 15 percent is being reviewed. "The figures are being
talked about between management and the creditors," one
source said.

Also to be in the self-rescue plan are the lowering of
commissions being paid to Daewoo Motor Sales for the sale
of Daewoo cars by 3 percent to 15 percent; reorganization
of suppliers; shutdown of some domestic production lines
and other business plans, Daewoo officials said. Up for
closure according to the plan is the Pupyong plant, the
oldest production facility among Daewoo factories, industry
watchers said.

The Daewoo Motor management has made a counterproposal to
hold an emergency meeting with the unions on Oct. 31. The
unions had asked for the meeting today.  The previous
management has made a written promise to guarantee security
for five years, which will certainly be made null and void,
industry watchers said.

Some say that the overhaul is indispensable to making
Daewoo Motor more attractive to General Motors, the only
bidder for the ailing Korean car maker.  Meanwhile, Daewoo
yesterday said that it will reduce the number executives in
its sale arm Daewoo Motor Sales from 24 to 17 as part of
its rationalization plan.  (Korea Times  27-Oct-2000)

DAEWOO MOTOR: Volkswagen interested in Polish plant
Daewoo Motor has confirmed that Volkswagen has expressed
interest in acquiring Daewoo's commercial vehicle plant in
Poland. Daewoo Motor PR executive Kim Jong-do said the
German carmaker had contacted his firm through a Volkswagen
affiliate in Poland and that a high-ranking executive of
Daewoo Motor Poland has been talking with the people at
Volkswagen. Daewoo Motor's commercial vehicle production
facilities in Poland have an annual production capacity of
32,000 units. (Digital Chosun  27-Oct-2000)

DONG-AH CONSTRUCTION INDUS.: To layoff 1,500 workers
Dong-Ah Construction Industries has reached an agreement
with the labor union of its workers that 1,500 out of 3,900
total staff will be laid off. The move is part of a larger
attempt to rescue the troubled company through massive
restructuring. Dong-Ah agreed to pay an additional 5
months' in salaries on top of regular severance payments to
those being laid off. (Digital Chosun  29-Oct-2000)

SAMSUNG MOTOR: Debts continue to snowball
The government and Samsung Group are having a hard time
deciding the future of the group's commercial vehicle unit
with snowballing debts.

The commercial vehicle company incurred 206.6 billion won
(US$ 181 million) in losses last year alone due to
sluggishness in commercial car markets worldwide and the
domestic construction market. The company first started
operations in 1996 with plants in the Sungseo industrial
complex in Taegu.

The company's accumulated losses already amount to 289.2
billion won, and 66 percent of its 440 billion won in
capital has been eaten away.  Operational losses totaled
106.7 billion won last year, almost identical
with its sales revenue amounting to 107.5 billion won.
Total debts amount to 731.7 billion won with a debt ratio
of 491 percent, and the payment on interest alone came to
121.7 billion won last year.

The Samsung affiliate's operations grew worse this year
with the debt ratio rising to 1,400 percent. Cash
injections from Samsung's financial affiliates kept it
afloat this year.  Samsung Life provided a total of 59
billion won in the form of loans and the extension of
outstanding loans.

In order to save the commercial car unit from sinking,
Samsung affiliates would have to provide new capital to the
company. These affiliates provided 340 billion won to the
company last August, and they are reluctant to provide
additional funds, concerned that the commercial car unit
may not be able to sustain itself any longer.

A Samsung official said the company should be closed down
based on government guidelines for closing down non-viable
companies. Providing additional funding is impossible since
there are no buyers on the horizon.  Samsung is in a
difficult position to push for the closure of the company
because it set up the commercial vehicle unit in Taegu to
win public support for its entry into the passenger car

Samsung's pledges to invest 1.5 trillion won in the new
venture and turn out 100,000 pick-up trucks, 8,000 large
trucks and 100,000 sport-utility vehicles a year raised
public expectations and support.  But Samsung's investment
came to only 600 billion won, and the company can produce
only 25,000 pick-up trucks and 6,000 large trucks a year.
An assembly line for SUVs has yet to be installed.

For Samsung, it would be best if the government decides to
go ahead and put its commercial vehicle unit on the list of
insolvent firms, which will lead to liquidation of the
debt-ridden company. industry source said.  The government
previously left the decision for naming insolvent firms to
each business groups in the case of the four largest
conglomerates, but things have been changed now with the
government deciding to name them directly across the board
based on its standard guidelines. What the creditors would
do in this regard is the center of attention.

A Samsung official said the group is hoping that the
government and creditors will decide the matters for it by
putting it on the insolvent list.  The employees of the
commercial vehicle unit and the regional business community
in Taegu have been getting restless. The employees have
recently set up a committee to cope with the measure and
may go as far as setting up a labor union.

The Korea Chamber of Commerce and Industry KCCI Taegu
branch petitioned the presidential office Chongwadae and
the government Tuesday not to close down the commercial
vehicle unit. It also told Samsung to keep its commitment
to the local community. (Asia Pulse  27-Oct-2000)


RENONG BHD: Gov't plan would bail out, light rails too
Malaysia plans to spend as much as 5 billion ringgit ($1.3
billion) to bail out Kuala Lumpur's light rail, run by
Renong Bhd. and other firms, in the nation's biggest such
rescue, bankers involved in the transaction said.

The government wants to swap debt at the rail project for
bonds, details of which are being negotiated with a
creditors' committee headed by Bayerische Landesbank,
Commerce International Merchant Bankers Bhd., Employees
Provident Fund, PhileoAllied Bank Bhd., state asset
management company Pengurusan Danaharta Nasional Bhd., RHB
Bank Bhd.

The bonds will have tenures of between five and 15 years,
with yields of between 5.5 percent and 7 percent, the
bankers said. Any shortfall in the redemption of the bonds
will be supported by the government. "Talks are still
preliminary," said C. Rajandram, chairman of the
government's Corporate Debt Restructuring Committee, who
declined to confirm the details.  "We want to resolve this
as soon as possible."

The rescue comes after one of the two groups managing the
longest driverless rapid transit rail in the world
defaulted on a debt payment last year. The light rail
service, which runs between Kuala Lumpur and its suburbs,
is managed by Putra -- led by Renong -- and STAR -- headed
by the U.K.'s Taylor Woodrow Plc.

The move is another setback for Malaysian Prime Minister
Mahathir Mohamad's efforts to let private companies manage
key projects, a policy he crafted to help promote ethnic
Malay businesses. It also shows the government's tendency
to help out politically well-connected groups, a practice
that has made some investors wary of putting their money in

Renong, the largest industrial group in Malaysia, with
interests in construction, banking, oil and gas, hotels and
property, is controlled by Halim Saad, a protege of Daim
Zainuddin, Malaysia's finance minister. Renong's businesses
were formerly owned by dominant political party United
Malays National Organization, or UMNO.

In March, the government took over an unprofitable national
sewerage treatment project from Prime Utilities Bhd.,
paying the company 192.5 million ringgit after the company
failed to collect enough revenue to pay its bills.

"They've had to eat humble pie," said Muzni Mohamed, a
strategist and research manager at Pelaburan Johor Bhd.,
adding that public transport systems are very difficult to
Rail Woes

Under a plan being worked out for the light rail companies,
the government will set up a special purpose vehicle to
issue a series of bonds to creditors such as Bayerische
Landesbank, Danaharta, EPF, Standard Chartered Bank, ABN
Amro Bank, RHB, PhileoAllied Bank and Commerce

As part of the plan, the government will own the light rail
project, which will be leased back to an operating company,
bankers said.  Troubles at the rail projects emerged after
Putra, or Projek Usahasama Transit Automatik Sdn. defaulted
in 1999 on interest payments totaling 44.6 million ringgit
on a 2 billion ringgit loan, after revenues couldn't cover
its expenses.

Star, or Sistem Transit Aliran Ringan Sdn. Bhd., counts the
Employees Provident Fund and other state-run pension funds
as shareholders.  Malaysia is struggling to reorganize the
city's transport industry to help ease over-capacity. Other
companies in the industry that need help include KTM Bhd.,
the national railway being run by a group of investors led
by Renong, bus companies Park May Bhd. and Intrakota
Consolidated Bhd., and a 1.17 billion ringgit KL monorail

Government rescue of poorly managed companies that are
considered a national asset is not new in Malaysia.
It has bailed out Bank Bumiputra Bhd. three times in the
past 12 years. The bank, now merged with Bank of Commerce,
a unit of Commerce Asset-Holding Bhd., failed after its
loan to Carrian group in Hong Kong soured after the
property market went bust in the early 1980s.

State oil company Petroliam Nasional Bhd. was called in to
inject capital into the bank to keep it going. Khazanah
Nasional Bhd., a state investment arm, added another 1.1
billion ringgit to its investments in the bank in 1998 to
boost the bank's capital.  Malaysia has also bailed out
failed steelmaker Perwaja Terengganu Sdn.

The latest rescue will help remove a large chunk of debt
from Renong, which has 20 billion ringgit of loans. Last
year, its cash- rich toll-road unit PLUS sold 8.4 billion
ringgit in bonds to help repay some of its loans.
Malaysia's recession in 1998 made it difficult for the
group to pay its bills. (Bloomberg  27-Oct-2000)


BANK OF THE PHIL.ISLANDS: Ratings outlook lowered
DEVELOPMENT BANK OF THE PHILS.: Ratings outlook lowered
EQUITABLE PCI BANK: Ratings outlook lowered
LAND BANK OF THE PHILIPPINES: Ratings outlook lowered
Moody's has revised the ratings outlook for Bank of the
Philippine Islands, Development Bank of the Philippines,
Equitable PCI Bank, and Land Bank of the Philippines from
Stable to Negative.

The ratings downgraded, specifically, were:

-- Bank of the Philippine Islands: ratings for its long-
term deposits of Ba2, the short-term deposit rating of Not
Prime and the bank's financial strength rating of C;

-- Development Bank of the Philippines: ratings of the bank
for its long-term deposits and debt of Ba2 and Ba1
respectively, the short-term deposit rating of Not Prime
and the bank's financial strength rating of D;

-- Equitable PCI Bank: ratings for its long-term deposits
of Ba2, the short-term deposit rating of Not Prime and the
bank's financial strength rating of D;

-- Land Bank of the Philippines: ratings for its long-term
deposits of Ba2, the short-term deposit rating of Not Prime
and the bank's financial strength rating of E+.

The action follows a change in the outlook for Moody's
sovereign ceiling ratings for the Philippines for long-term
debt and deposits.  Moody's also noted that the financial
fundamentals of the Philippine banks are increasingly being
tested in the current, difficult operating environment.

To date, deterioration of the banks' financial conditions
has been mitigated by their generally ample capital and
profitability. But Moody's cautioned that if current
weakness persists, this could lead to future rating


BRIERLEY INVESTMENTS: Files suit against ex-director
Mainboard-listed Brierley Investments said yesterday that
it had filed a legal suit against its former executive
director, Mr Rodney Francis Price, seeking a total sum of
about $620,000.

The sum was directors' fees and expenses which Brierley
alleges Mr Price was not entitled to receive.  In a
statement to the Singapore Exchange, Brierley company
secretary M B Horton said that Brierley, together with two
related companies, had filed legal proceedings against Mr
Price in the High Court of New Zealand.

Three separate sums of ú125,982 (S$321,128), A$261,968
(S$243,237) and US$32,195 (S$56,518) are being claimed.
These were ""payments made to cover expenses, or directors'
fees which the companies allege Mr Price has failed to
adequately substantiate as being reimbursable expenses
under the terms of his engagement or as being payments
which he is entitled to retain," Mr Horton said.

Mr Price was executive director of New Zealand investment
company Brierley Investments until mid-1998 when he and
other members of Brierley's top management quit the company
amid criticism over the group's lacklustre performance.
During the year leading up to the resignations, Brierley
stock returned a negative 22.5 per cent, including gross

By comparison, the New Zealand Top 40 share index returned
negative 8.6 per cent.  Chief executive Paul Collins quit
in April 1998 and three executive directors, including Mr
Price, quit soon after. At the time of his departure, Mr
Price was chairman of the British chain of Thistle Hotels,
which is 46 per cent owned by Brierley Investments.

He was also deputy chairman of Australian newspaper
publisher John Fairfax Holdings, in which Brierley owns a
19.9 per cent stake.  Brierley, which is also listed in New
Zealand, Australia and London, made its debut on the
Singapore bourse in March this year.  The counter shed 0.5
cent yesterday to close at 24 cents.  (Straits Times  28-

CHEW EU HOCK HOLDINGS: Posts $7.9M annual loss
Construction firm Chew Eu Hock Holdings has fallen into the
red with a full-year net loss of $7.9 million, attributing
it to recessionary conditions in the construction sector as
well as cost overruns.

For the full-year ended July 31, CEH saw its turnover drop
by 20.8 per cent to $111.7 million.  Operating losses came
to $5.9 million, compared with a profit of $2.3 million in
the previous year.  The net loss came to $7.9 million, a
marked reversal from profits of $1.3 million previously.
Losses per share stood at 5.82 cents, down from earnings
per share of 0.97 cents in FY99.

In FY2000, CEH saw its net tangible assets per share dive
six cents, or 25.5 per cent, to 17.5 cents. No dividend was
declared.  The group blamed lower turnover, reduced profit
margins on projects and provisions for "foreseeable losses
made on cost overruns on some projects" for its net loss in
CEH also gave a sober forecast for its current year
prospects, noting that operating conditions in the
construction sector had yet to improve.

"The current recessionary conditions in the construction
industry will continue to exert downward pressure on
turnover and profit margins," the company said. "Industry
conditions are, however, expected to improve with the
recent announcement of more infrastructure projects by the
government. In addition, the cost overruns experienced in
FY2000 are not expected to recur given more concerted
efforts to control costs and manage ongoing projects."

CEH added that it expected two factors -- its strengthened
management team and steps to "leverage on the group's core
competencies to diversify into other construction
activities" -- to help it report "an improvement" in its
performance in FY2001. (Business Times  29-Oct-2000)


ITALIAN-THAI DEVELOP.: Seeking partners to reduce debt
Italian-Thai Development Plc is looking for new strategic
partners to help restructure its debts, which total 11
billion baht.

Managing director Premchai Karnasutra said the company was
planning to raise capital by issuing new shares to new
strategic partners. The main goal is for the new partners
to help the company enhance its liquidity so that it could
proceed with its business. In particular, the new partners
would be expected to help the company restructure its

The company's earlier negotiations on recapitalisation with
prospective partners almost reached a conclusion late last
year, but because of prevailing economic conditions, the
investors backed off and the recapitalisation plan had to
be put on hold. Mr Premchai conceded that in view of the
current economic situation, very few investors would be
interested in making investments in ITD.

The company's total debts now amount to 11 billion baht, of
which offshore loans are worth the equivalent of seven
billion baht. Of the four billion baht in domestic debt,
3.5 billion baht are in the form of debentures.
The company says its tight liquidity situation has made it
unable to repay its loans on schedule.

It currently has debts of 821 million baht coming due, but
it has only about 404 million baht available. As a result,
the company has said that it needs to negotiate new
repayment schedules. Mr Premchai attributed the company's
liquidity problem to the fact that the economic recovery
has been much slower than expected. As a result, the
country's construction activities have been adversely
affected with many projects put off.

The company's revenue in the first half of this year was
5.8 billion baht, only 20% of its 2000 target of 28.8
billion. As a result, its revenue target was changed to 15
billion baht, while the expected gross margin was reduced
to 10.2% from 17.5%.

Mr Premchai said the combined value of the projects awarded
to ITD was about 60 billion baht, 45 billion baht of which
came from existing projects. It has 5.8 billion baht in new
contracts with the State Railway of Thailand, and another
contract worth 10 billion baht for the Mae Moh mining
project. Revenues from the new projects would be fully
booked in 2002.

Mr Premchai said that while the company's inability to
repay its debts on time had somewhat tarnished its image,
all creditors would be treated fairly. There would be no
debt write-downs, just payment rescheduling, he said.
Italian-Thai shares closed unchanged yesterday on the Stock
Exchange of Thailand at 12.25 baht on turnover worth 2.69
million baht. (Bangkok Post  28-Oct-2000)

LOXLEY PCL: Bondholders approve $276M debt-equity swap
Loxley Pcl's bondholders have approved a plan expected to
pave the way for reorganization of $276 million of the
telecommunications systems distributor's debt.

Holders of Loxley's convertible bonds due in 2001 approved
a plan Oct. 26 for a debt-for-equity swap and a
rescheduling of repayments. The plan was backed previously
by holders of Loxley's convertibles due 2005.

Holders of the two issues of bonds - totaling a combined
$265 million -- will swap half their bonds for a 43 percent
stake in the company and accept as much as an eight-year
delay on payment of the remaining debt. The approvals were
made on condition of two non-Thai banks forgiving Loxley
half its $11 million debt to them.

Filing for for bankruptcy protection in April, Loxley was
one of many Thai firms hurt by the devaluation of the Thai
baht in 1997. The drop in the value of the currency raised
the cost of servicing the company's foreign currency debt.
Among its investments were stakes in a mobile phone project
in North Korea and a dam in Laos.

To strengthen its finances, Loxley this month said it plans
to raise $15 million by selling shares to existing and new
shareholders. Among the biggest shareholders are the Lamsam
family, which founded Thai Farmers Bank Pcl, now the
nation's third-largest lender. (Bloomberg  27-Oct-2000)

NATURAL PARK: Creditors to consider rehab plan Nov. 22
Natural Park Public Limited Company, through its
rehabilitation planner, submitted its plan for
rehabilitation to the court October 19 and set Nov. 22 as
the date for a meeting of creditors to consider the
rehabilitation plan. The meeting will be held at 9.00 a.m.
in the Conference Room of Y.M.C.A., 10th floor, 27 S.
Sathorn Road, Bangkok.

THAI PETROCHEM.INDUSTRY: Creditors to reject plan changes
Major creditors of Thai Petrochemical Industry say they
will reject all proposed amendments to the company's
restructuring plan when they vote on Monday.

Creditors as well as TPI had submitted nine proposed
amendments to the plan, which is being overseen by
Effective Planners. Anthony Norman, managing director for
Effective Planners, said at a pre-vote briefing yesterday
that some of the proposed amendments were "totally
unacceptable, unfair and unrealistic."

Among the most contentious proposals was TPI's petition for
changes in the buyback of shares from creditors by the
company itself, as well as changes in the proposed schedule
for the sale of non-core assets.  Under the restructuring
plan, some debt will be converted into new equity. Mr
Norman said TPI wanted creditors to allow the firm to buy
back converted shares at 5.45 baht each, plus 1.5 times the
prevailing interest rate.

But major creditors insist the buyback price should be
based on future market prices. Mr Norman said the buyback
scheme had originally been proposed by Prachai
Leophairatana, the TPI chief executive, not Effective

"I have never said that we agree with the buyback scheme,
only that it would be put up for consideration by the
creditors," Mr Norman said.

TPI also wanted creditors to delay the sale of non-core
assets, such as shareholdings in TPI subsidiaries, until
2004. The current plan calls for sales to begin in 2001,
depending on market conditions.

"I'm confident that majority creditors will vote in favour
of the existing plan, with no further delays," Mr Norman
said. "TPI's nine major creditors who sit on the steering
commitee represent 65% of total debt and have unanimously
accepted the plan."

At Monday's vote, approval from creditors holding 51% of
the debt is required to pass the plan, which would then be
submitted to receivership officials of the Central
Bankruptcy Court. TPI's major creditors include Bangkok
Bank, holding 30% of the total debt, the World Bank's
International Finance Corporation with 17%, and the German
development bank KfW with 6%.

Other creditors on the steering committee are Krung Thai
Bank, Citibank, Bank of America, Standard Chartered Bank,
Sanwa Bank, and the US Export-Import Bank. Regardless, Mr
Norman said all nine amendment applications would be
considered by creditors on Monday.

About 142 financial institution creditors, holding 99% of
total debts, are expected to attend Monday's vote.
Of the other proposed amendments, two applications by
Effective Planner dealt with minor technical and
administrative changes. Other proposals include a request
by Bank of Ayudhya for a guarantee on its loans, a
requested change by Siam Commercial Bank Asset Management
Corporation on interest and equity conversion, and
questions from National Finance on the equity trust

Tisco Finance has challenged its accepted claims on debt
owed. Thai Caprolactam, a TPI subsidiary, has requested an
amendment to shorten the period of debt repayments, and LG
Engineering has sought priority over other creditors.
Standard Chartered Bank has proposed modified treatment as
a guarantor.

Mr Norman said TPI expected 2000 operating profit of $250
million, up from $206 million last year. Operating profits
were expected to reach $350-400 million next year, due to
an upturn in the industry cycle and growing demand.
For the third quarter, Mr Norman said TPI expected a
significant improvement in operating profit due to higher
global plastic prices. (Bangkok Post  28-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

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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