/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/001110.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 Friday, November 10, 2000, Vol. 3, No. 220 Headlines * A U S T R A L I A * HOLDEN: Faces big impact if Daewoo goes bankrupt NEWS CORP: Posts loss for first quarter * C H I N A & H O N G K O N G * GUANGZHOU INT'L TRUST: Pact with overseas creditors SYSCAN TECHNOLOGY HOLDINGS: Posts 9-mo. loss TOM.COM: Promotion costs lift losses to $163M * I N D O N E S I A * BIMANTARA GROUP: Some subsidiaries not working with IBRA PLN: Expects to post Rp11 trillion in losses this year PT INDOFOOD: Billions of Rupiah lost, audit reveals PT PELINDO II: Billions of Rupiah lost, audit reveals PT PELINDO III: Billions of Rupiah lost, audit reveals PT SEMEN GRESIK: Billions of Rupiah lost, audit reveals PT TELKOM: Billions of Rupiah lost, audit reveals * J A P A N * SOGO CO.: 5-Yr. extension sought for reconstruction plan * K O R E A * CHOLLIAN: Workers strike, services feared at risk DACOM: Workers strike, services feared at risk DAEWOO MOTOR: Suspends ops at Pupyung plant DONG AH CONSTRUCTION: Court decides to preserve its assets HYUNDAI ENGIN.& CONST: Law bans sister co. from helping it POHANG IRON & STEEL CO.: To lose W42M on Daewoo bankruptcy * M A L A Y S I A * CRENDON HOLDINGS: Pursuing voluntary liquidation IJM INVESTMENT PRIVATE LTD.: Pursuing voluntary liquidation MAY PLASTICS INDUSTRIES: Defaults on RM24M debt payment MEAGA CORPORATION: Pursuing voluntary liquidation * P H I L I P P I N E S * NATIONAL STEEL CORP.: New liquidator named PHILIPPINE NAT.BANK: Seeks more time to repay emergency aid URBAN BANK: BSP chief, 5 others facing graft charges * T H A I L A N D * ANGEL AIR: Restructures debt; attempting expansion EKKAPAT FINANCE & SECURS.: FRA to pay more on debt KRUNG THAI FINANCE & SECURS.: FRA to pay more on debt MUANG THONG TRUST: FRA to pay more on debt PACIFIC FINANCE & SECURS.: FRA to pay more on debt ROYAL CERAMICS INDUS.: Plan garners creditor support ROYAL INT'L FINANCE: FRA to pay more on debt THAI PLASTIC & CHEMICALS: To get noncollateralized loans THANASAP FINANCE & SECURS.: FRA to pay more on debt THANASIN FINANCE: FRA to pay more on debt ================= A U S T R A L I A ================= HOLDEN: Faces big impact if Daewoo goes bankrupt ------------------------------------------------ Car and engine maker Holden could face the loss of almost 200,000 engine sales a year following the decision to declare debt-ridden Korean vehicle producer Daewoo Motor Co bankrupt. The bankruptcy move came after unions rejected a restructuring plan that called for layoffs, prompting the company's main creditor, Korean Development Bank to take action. It also followed a speech in the National Assembly by President Kim Dae-Jung who said Korea had to eliminate debt-ridden companies to boost investor confidence in the economy. The next step for Daewoo was expected to put the company under court receivership, a process that would install new management and freeze debts. Holden officials were examining the implications of Daewoo's troubles today. They made no immediate comment other than to say that meetings to discuss the situation were under way. But should Daewoo go under altogether or be significantly scaled back, it would be a blow to the company that had built a successful export business from its Melbourne engine plant in recent years. Last year Holden sold just under 192,000 engines to Daewoo worth an estimated $A350 million ($US183.58 million), more than a third of the company's exports of $A955 million ($US500.9 million). At the start of this year the company forecast an increase for 2000 but that was ruled out recently when Daewoo slashed orders. Should the Daewoo sales be cut further or dry up completely, Holden faces the prospect of job cuts. The saving grace for Holden could be if parent company General Motors proceeds with talks to buy Daewoo after Ford walked away from similar talks earlier this year. GM and Daewoo have been negotiationg the purchase since September with the US giant reportedly offering between $A7.6 billion ($US3.99 billion) and $A9.5 billion ($US4.98 billion). However, that offer might now be reduced. The problems for Daewoo in Korea might also affect sales of Daewoo cars in Australia with the firm operating as a joint venture between the parent group and Indonesian company Starsurya International. A Daewoo spokesman in Australia said the move into receivership for Daewoo in Korea offered a form of protectiowoo Australia said in a statement. "Receivership has become necessary in the prolonged transition period between the re-structuring of the Korean conglomerate and the sale of its most valuable assets being undertaken to repay creditor banks. We are informed from Seoul that most of the further cost cutting and re- structuring is expected to affect the least profitable while preparing the Company for sale." (Asia Pulse 09-Nov- 2000) NEWS CORP: Posts loss for first quarter --------------------------------------- Media giant News Corp revealed a first quarter loss of $439 million, but nonetheless predicted a full-year operating profit. The company's net figure for the three months to September 30 was dragged into the red by a $698 million abnormal loss. In the previous corresponding period News Corp had made a $251 million profit. At lunchtime, News shares had dropped almost 6.5 per cent to $19.89 from the day's opening level. The company said the abnormal loss primarily reflected the company's early adoption of a newly issued accounting standard. It forecast a full-year operating profit of between $US1.75 billion and $US1.85 billion. As the figures were released, chief executive Rupert Murdoch said he expects the initial public offer for the company's satellite group Sky Global Networks to go ahead in early 2001. "We would expect to complete the various conversations we are having with various people in the near future and be able to go forward some time in the first quarter of the next calendar year," he said. News Corp's filmed entertainment sector showed strength in the first quarter with operating income of $175 million, compared with $71 million in the corrresponding period last year. The television division had a drop in operating income to $138 million) from $229 million. The company said this was primarily due to significant declines at the Fox Broadcasting Company (FBC). "At FBC, higher programming costs, caused by a higher ratio of traditional programming versus reality specials and weaker primetime ratings, reflecting competition from the Summer Olympics, resulted in a loss for the quarter," News Corp said. The company said it was still early in the season, but the network's ratings were up sharply with ratings among adults aged 18 to 49 improving 13 per over last year. News Corp's magazines and inserts business reported a first quarter operating profit of $78 million, down from $86 million a year ago. "These lower operating profits were primarily a result of lower revenues from instant coupon machines and lower client participation in in-store sampling and merchandising events," News Corp said. In the newspaper division, the first quarter operating income of $170 million was broadly in line with the same period last year despite the effect of unfavourable currency exchange fluctuations in both the United Kingdom and Australian markets. "In Australian dollars first quarter operating income was up 12 per cent versus a year ago," News Corp said. "In Australia, revenue gains from strong national display advertising in July and August were more than offset by retail advertising declines and higher editorial and promotional expenses during the Olympics in September." The introduction of the GST also had a negative impact on operating results, the company said. Foxtel's loss before taxes for the quarter was $20 million, slightly better than its $23 million loss at the same time last year. Subscriber numbers increased to 673,000 from 534,000. News Corp's 25 per cent share of that loss was $3 million, compared to $4 million for the 1999 first quarter. (The Advertiser 09- Nov-2000) ============================== C H I N A & H O N G K O N G ============================== GUANGZHOU INT'L TRUST: Pact with overseas creditors --------------------------------------------------- A financial adviser at Guangzhou International Trust and Investment Corp. (GZITIC) has confirmed that the firm has reached an agreement with overseas creditors on the company's repayment of US$1 billion in debts. GZITIC will either pay off the principal within 10 years or pay 50 percent of its total debts in cash within six months, according to a Nov. 4 Hong Kong Ming Pao report. Under the agreement, GZITIC must repay 100 percent of its debts in arrears, excluding interest accrued, within 10 years. The effective date of this plan will not be later than nine months from the signing date, the story said. Seventy percent of the principal will be paid in cash installments each year, funded by the sale of GZITIC's assets and financial aid from the Guangzhou municipal government. GZITIC then will pay out the remaining principal at the end of 10 years. In addition, GZITIC will pay 1 percent annual interest. The agreement is still pending for approval by the People's Bank of China and the State Administration of Foreign Exchange, the story added. (China Online 07-Nov-2000) SYSCAN TECHNOLOGY HOLDINGS: Posts 9-mo. loss -------------------------------------------- Growth Enterprise Market-listed Syscan Technology Holdings' recorded a net loss of HK$16.07 million for the nine months ended Sept. 30, down from a loss of HK$23.45 million for the same period a year earlier. The optical image designer's turnover in the period amounted to HK$24.37 million, up from HK$4.92 million a year earlier. Losses per share fell to 1.97 HK cents from 4.66 HK cents a year ago. The company did not recommend an interim dividend payment for the period. The company attribed much of the loss to high research and development expenses, which totaled HK$14.11 million during the period, as well as a 63 percent increase in general administrative expenses, which accounted for HK$13.71 million of the company's operating costs. (South China Morning Post 09-Nov-2000) TOM.COM: Promotion costs lift losses to $163M --------------------------------------------- Tom.com's losses in the three months to September 30 blew out to HK$163.85 million after sizeable spending on advertising and Web-site development. In the second quarter, the company reported a loss of HK$148.5 million. The Internet vehicle of Hutchison Whampoa and Cheung Kong (Holdings) said the result was also affected by a one-off provision of HK$31.43 million for the costs of the realignment of resources for its Hong Kong portal operations. In the nine months to September 30, the company, formed late last year, suffered a total loss of HK$357.74 million. Tom.com, the hottest stock-market listing this year, sacked more than a quarter of its Hong Kong workforce in July, while its subsidiary iTravel cut back 83 per cent of its total staff at the SAR office in September. Chairman Frank Sixt said he expected a "significantly improved result" in the fourth quarter, based on further reductions in operating costs and higher revenues from organic growth of Tom.com's existing business and recent acquisitions. During the third quarter, the company said, its operating loss before depreciation, amortisation and reorganisation dropped 17 per cent quarter-on-quarter, but still came in at HK$112.3 million. Chief executive officer Wang Sing said the group expected its monthly burn rate would be reduced by 30 per cent by the end of the year. He said the operational costs of the company's Hong Kong portal were targeted for cuts to HK$6.3 million, from HK$15.3 million in the second quarter. "We do not rule out the possibilities of further lay-offs of staff," he said. But he said staff cutbacks could only be a part of the programme to streamline operations and reduce expenses. Turnover amounted to HK$13.22 million, compared with HK$5.27 million in the second quarter. Mr Wang said more revenue would flow from contributions by recently acquired units such as 163.net, Shawei.com and YC Press. Tom.com caused a buying frenzy when it listed on March 1. The counter's share price closed at HK$7.75 on its first day of trading, up from its HK$1.78 issue price. Yesterday, it rose to HK$3.55, up five HK cents. (South China Morning Post 09-Nov-2000) ================= I N D O N E S I A ================= BIMANTARA GROUP: Some subsidiaries not working with IBRA -------------------------------------------------------- Of Bimantara Group's 17 subsidiaries, only three -- PT Citra Mobil Nasional, PT Satelindo and PT Tricitra Karya -- have paid down debts to IBRA, the trio paying some Rp539.18 billion. Deputy Head of Asset Management Credit (AMC) of IBRA Irwan Siregar described Bimantara Group's owner, Bambang Trihatmodjo, as a cooperative debtor. Bimantara Group also has signed a Memorandum of Understanding (MoU) with IBRA for restructuring seven other companies's debts, which total Rp1.17 trillion. Those subsidiaries are PT Datakom Asia, PT Elektrindo Nusantara, PT Elok Abadi, PT Karyagraha Elektrindo, PT Komunikasi Selular Indonesia (Komselindo), PT Kondowana Safari and PT Kwee Cahyadi. Meanwhile, four other affiliates -- PT Bimantara Citra, PT Bukit Sentul, PT Citra International Finance & Investment Corp and PT Usaha Gedung Bimantara -- are now under debt restructuring proposal implementation. Their debts total Rp643.62 billion. Two other subsidiaries, PT Padang Golf Bukit Sentul and PT Media Telekomunikasi, are going through the process of signing a MoU. The duo's debts total another Rp72.65 billion. Another subsidiary, however, PT Bukit Jonggol Asri, is the subject of litigation with unpaid debts totaling Rp627.58 billion. Bimantara Group is included in IBRA's 21 top debtors with debts totaling at Rp2.29 trillion, including all of its subsdiaries. PLN: Expects to post Rp11 trillion in losses this year ------------------------------------------------------ State-owned electricity company (PLN) is predicted to suffer Rp10-Rp11 trillion in losses this fiscal year 2000. PLN's President Director Kuntoro Mangkusubroto revealed that in the first semester of 2000, the company suffered Rp9tr loss. "The loss should range from Rp10 to 11tr, not too far from last year," Kuntoro said to the press in Jakarta, today. The losses were caused by several factors, namely, the burdens arisen from power purchase agreements with independent power producers, PLN's debts to the third party and high price of gas. The increase in the price of gas would result in significant surge in PLN's production cost. Gas is the largest component in the production cost of the electricity company. "If the price was reduced to $1.5 per million british thermal (mmbtu), the production cost should become lower," he added. The production cost of PLN this year is projected to reach Rp28 trillion while the sales revenue is estimated to reach only Rp22 trillion. Hence, PLN is hoping that the government will soon restructure the company. "The restructuring will be very helpful," he said. The company's liabilities were totaling at Rp43tr. According to the plan, 50% of them will be converted into government shares through debt to equity swap. Kuntoro also said that the high amount of financial burdens was also caused by the large exposure in foreign currencies. "PLN still has to bear debts that have expanded by 70% due to rupiah depreciation against the dollar." Touching on the agreement to purchase electricity generted by private power generators, Kuntoro said that the negotiations with private power generators had shown a positive progress so that it would slightly reduce the company's financial burdens. Previously, the purchase of electricity from private power generators was estimated to cost Rp9 trillion. However, with the new agreement, the amount was reduced to Rp2.4 trillion. "We have signed the interim agreement with a private electricity company that resulted in lower tariff," he said. When asked about PLN bonds to be maturing in April 2001, Kuntoro felt certain that it would not be a problem. "PLN will pay the debts on time. But we are facing serious trouble if we have to pay the debts to the government," he said. (Indoexchange News 09-Nov-2000) PT INDOFOOD: Billions of Rupiah lost, audit reveals PT PELINDO II: Billions of Rupiah lost, audit reveals PT PELINDO III: Billions of Rupiah lost, audit reveals PT SEMEN GRESIK: Billions of Rupiah lost, audit reveals PT TELKOM: Billions of Rupiah lost, audit reveals ------------------------------------------------------- After audits were performed on PT Pelindo II, PT Pelindo III, PT Telkom, PT Semen Gresik and PT Indofood, it was determined that the state-owned company privatization program (BUMN), initiated by former President Habibie and continued by President abdurrahman Wahid, has cost the state billions of rupiah in losses. The Development Finance Controller (BPKP) estimated state losses at Rp 127.8 billion (US$ 44.06 million). The total includes losses caused by lavish spending, opportunity loss, income deposits, and potential losses reaching US$ 37 million. Arie Soelendro, the BKPK Chairman, made these comments at a consultation meeting with the House Commission IX presided by Abdullah Zaini at the Legislature Complex today. Arie blamed the losses on weak planning and privatization control systems. This includes the lack of cost and maintenance analytical studies, technical direction, professional support, financial standards, and terms of reference in privatization. Moreover, the program had no guidance in privatization as ordered by the Minister of Finance in decree No. 41/1998. ========= J A P A N ========= SOGO CO.: 5-Yr. extension sought for reconstruction plan -------------------------------------------------------- Japan's Deposit Insurance Corp. (DIC) is seeking a five- year extension of a 10-year reconstruction program for failed Sogo Co. The financially upside down department store operator filed for court protection from creditors under a July corporate rehabilitation law last July. DIC intends to purchase 198.6 billion yen of loans to Sogo from Shinsei Bank, successor to the nationalized Long-Term Credit Bank of Japan. Since the reconstruction program worked out under the new law provides for creditors to give up an average 95 percent of unsecured loans to Sogo, the program could result in several tens of billion yen of additional taxpayers' money being needed. DIC's extension plan intends to reduce the public's added exposure by extending the program's duration so that Sogo can raise its profitability to increase its loan repayment amount, according to informed sources. ========= K O R E A ========= CHOLLIAN: Workers strike, services feared at risk DACOM: Workers strike, services feared at risk ------------------------------------------------- Labor unions at Dacom, Korea's leading operator of international and domestic calls, and its subsidiary Internet-service provider, Chollian, called a strike Wednesday, causing fears that services will be affected. Union representatives said about 1,800 out of about 1,900 union members joined the strike the same day after negotiations with management on wage hikes broke down. The union also blames LG Group's reneging on an earlier commitment to make an equity investment into Dacom for contributing to the deterioration of operations at the firm and is demanding that Dacom cancel any remaining agreements with LG. (The Digital Chosun 08-Nov-2000) DAEWOO MOTOR: Suspends ops at Pupyung plant ------------------------------------------- Daewoo Motor Co said its Pupyung plant suspended operations today due to a parts shortage, after the company was declared insolvent yesterday. "Some parts and components suppliers have suddenly discontinued their supplies, asking for cash payments, after the insolvency announcement, and the consequent run- out of some inventories has forced us to close the plant for a day," a spokesman for Daewoo Motor said. "The shutdown may be longer than one day if the partner companies refuse to supply goods... our company has been doing its best to persuade the partners (to continue supplies)." Other plants in Kunsan, Changwon, Pyongtaek and Pusan are continuing normal operations but they may also face parts shortages soon if their suppliers take similar action, he added. The Pupyung plant, which produces 500,000 passenger cars a year, has 185 primary partners and 3,750 secondary suppliers, he said. The five plants, with a combined annual production capacity of 1.3 million vehicles, have a total of 504 primary partners and 9,360 secondary suppliers, he added. (AFX News Limited 09-Nov-2000) DONG AH CONSTRUCTION: Court decides to preserve its assets ---------------------------------------------------------- The Seoul district court has decided to put Dong Ah Construction under court protection from debtors. Under court receivership, the disposal of any of the company's properties -- worth more than 10 million won -- would be subject to court approval. The district court asked Dong Ah to pay 200 million won for an accounting firm's appraisal of the construction company's assets. The company will draw up its liquidation plan for creditors as soon as the court officially decides to break-up the company. Dong Ah applied for court protection last Saturday and its president Choi Dong-sup appeared before the court for questioning Monday. (Korea Herald 09-Nov- 2000) HYUNDAI ENGIN.& CONST: Law bans sister co. from helping it ---------------------------------------------------------- Hyundai Engineering and Construction's (HEC) self-rescue efforts are likely to suffer further setbacks, as key financial assistance expected from one of its sister firms is outlawed, industry observers said yesterday. The observers said that the Hyundai Group's attempt to have Hyundai Merchant Marine (HMM) sell off its shareholdings in Hyundai Heavy Industries (HHI) as a way to rescue HEC from its bankruptcy crisis runs directly counter to the current stock transaction law. After wrestling with Hyundai Group's actual owner, Chung Mong-hun, over the issue HMM said Tuesday that it would not consider selling its 12.46 percent stake in HHI to facilitate cash infusions into Chung-controlled HEC. Despite this initial resistance however, HMM, of which Chung owns 4.9 percent, was expected to back down in the face of rising pressure from the Chung camp. But the looming stock transactions between HMM and HHI were later found to be illegal, according to observers and stock experts. "Under the current law, Hyundai Merchant, as the single largest shareholder in Hyundai Heavy, is banned from selling its stakes in the heavy industries unit until April 23, 2001, because of Hyundai Heavy's recent purchases of its own stock from HEC," said MoneyToday analyst Lee Ki- hyung. Without further cash support form Hyundai Merchant, HEC will have serious difficulties staving off an insolvency crisis by year's end, he forecast. The current stock transaction law contains a clause stipulating that if a listed firm forms an internal fund to buy back its own shares, its largest shareholder is prohibited from selling its shareholdings for a period of six months. The clause is meant to prevent the largest shareholder's irregular profit-taking through short-term stock deals. On Oct. 20, Hyundai Heavy bought 4.64 percent of its own shares from HEC for 75 billion won ($67 million) through the internal fund, in a bid to strengthen the firm's managerial independence from the rest of the group. As a result of the deal, Hyundai Merchant is barred from disposing of its Hyundai Heavy shares until April 23, next year. The Chung camp is demanding that Hyundai Merchant also sell its 9.25 percent stake in Hyundai Electronics, along with Hyundai Heavy shares, to buy HEC-issued bonds. Excluding financial support from Hyundai Merchant, HEC will be left with about 4 trillion won in debts by the end of this year, meaning that the ailing contractor may face a shortfall of 300 billion to 400 billion won in covering its maturing commercial paper this year, said the observers. Earlier on Tuesday, a local brokerage warned that the Hyundai Group's maximum possible asset and equity sales, including support from Hyundai Merchant, will fall short of defusing the HEC's debt crisis. Even if self-rescue efforts are completed, HEC will still face debt repayment obligations, worth 654 billion won, in the first half of 2001, said the brokerage. (Korea Herald 09-Nov-2000) POHANG IRON & STEEL CO.: To lose W42M on Daewoo bankruptcy ---------------------------------------------------------- Pohang Iron & Steel Co. (POSCO) and its distributors will suffer a loss of 43.2 billion won (US$ 40 million) on a credit sale as ailing Daewoo Motor finally went bust Wednesday, a POSCO spokesman said Wednesday. After providing Daewoo with steel sheets for carmaking, POSCO hasn't received 15 billion won, and its outlets need to be paid 31.2 billion won. POSCO supplied 90 percent of the carmaker's steel, while Dongkuk Steel and Union Steel Manufacturing Co. provided the remaining 10 percent steel. =============== M A L A Y S I A =============== CRENDON HOLDINGS: Pursuing voluntary liquidation IJM INVESTMENT PRIVATE LTD.: Pursuing voluntary liquidation MEAGA CORPORATION: Pursuing voluntary liquidation ----------------------------------------------------------- Three affiliate companies of IJM Overseas Ventures Sdn Bhd, a wholly owned subsidiary of IJM Corporation Bhd., are in the process of undertaking voluntary liquidations. The companies are Crendon Holdings Limited, a 25% associate incorporated in the United Kingdom; Meaga Corporation Sdn Bhd, a 25% dormant associate company; and IJM Investments Private Limited, a 100% dormant subsidiary incorporated in the Union of Myanmar. According to the parent company, the liquidations of the others are not expected to have any significant impact on its earnings, tangible assets for the financial year ending 31 December 2000. MAY PLASTICS INDUSTRIES: Defaults on RM24M debt payment ------------------------------------------------------- May Plastics Industries Bhd. has defaulted on the repayment of loans from 9 banks totaling RM24 million that came due on October 31. The banks and their loan portions were Danaharta Unrus Sdn. Bhd., RM 5.7 million; Overseas Union Bank, RM6 million; Oriental Bank Bhd., RM7.3 million; Hong Kong Bank Malaysia, RM0.9 million; United Overseas Bank Bhd., RM173,000; Malaysian Banking Bhd., RM420,000; Arab Malaysian Bank Bhd., RM760,000; Malaysian International Merchant Bhd., RM180,000; Malaysian Industrial Development Finance Bhd., RM190,000. May Plastics Industries Bhd. is a public listed company with 20 years in the plastic manufacturing industry in Malaysia. The company specializes in fashioning precision plastic parts and components, including the design and development of moulds, tools and dies for the injection- moulding industry. May Plastics Group's subsidiaries are involved in off-set printing and the manufacture of corrugated, multicoloured display boxes, Polyethylene terephathalate (PET Polyester) film sheets and mixed plastic, heavy-duty industry pallets. ===================== P H I L I P P I N E S ===================== NATIONAL STEEL CORP.: New liquidator named ------------------------------------------ THE Securities and Exchange Commission has appointed former associate commissioner Danilo Concepcion as liquidator of the defunct National Steel Corp., replacing former Petron Corp. chair Monico Jacob, who had served more than nine months as head of the interim receivership committee tasked to revive the ailing steel firm. The appointment of Concepcion was made after the National Steel Labor Union questioned the credibility of Jacob in handling the NSC case on account of his being a director of Philsteel and Steel Corp. In an order issued recently, the SEC said it is left with no other choice but to appoint a new liquidator since Jacob has also expressed his willingness to relinquish the position. "The NSC labor union brought to the attention of the commission the alleged conflict of interest obtaining the appointment of Atty. Jacob...On the basis of foregoing, Atty. Jacob reiterated his earlier desire to be relieved of his responsibilities as NSC liquidator. He manifested that his effectiveness as such may be hampered by the said allegation. Consequently, the hearing panel is left with no other recourse but to accept the resignation of Atty. Jacob," the SEC said. An SEC official said the move would allow Jacob to concentrate on more pressing matters. Jacob also sits in the receivership committee overseeing the operations of discount retail chain Uniwide Holdings Inc. and Philippine Airlines. He is also doing consultancy services for ASB Holdings Inc. of property developer Luke Roxas. (Manila Times 09-Nov-2000) PHILIPPINE NAT.BANK: Seeks more time to repay emergency aid ----------------------------------------------------------- Philippine National Bank (PNB) has asked the government for eight years to repay 25 billion pesos (about HK$3.9 billion) of emergency funds it obtained last month to survive a wave of deposit withdrawals. Philippine Deposit Insurance Corp president Norberto Nazareno said the government was studying the proposal by PNB, the country's No 5 bank. "The initial proposal submitted by PNB is to convert it into a long-term loan for eight years at market rates," Mr Nazareno said. "They would like it converted into a long-term maturity to finance the bank's rehabilitation." The Philippine central bank and the deposit corporation extended the loans to help the bank survive deposit runs triggered by PNB chairman Lucio Tan's withdrawal from a plan to buy 30 per cent of the lender. Mr Nazareno said the emergency funds had a 90-day tenure and were renewable for another 90 days. The loans, backed by collateral including real estate and government securities, carry an interest rate of one percentage point more than the yield of the 91-day Treasury bill. The emergency funds account for about 18 per cent of PNB's total deposits of 140 billion pesos, well within the 50 per cent limit the government can extend. "PNB is too big too fail," Mr Nazareno said. "It must be supported at all costs." (South China Morning Post 09-Nov- 2000) URBAN BANK: BSP chief, 5 others facing graft charges ---------------------------------------------------- Bangko Sentral ng Pilipinas Governor Rafael Buenaventura and five BSP officials were charged with graft by a former official of the ill-fated Urban Bank Inc. before the Office of the Ombudsman yesterday. Former UBI president and chief executive officer Teodoro Borlongan said that Buenaventura, Deputy Governor Alberto Reyes, managing director Ma. Dolores Yuviengco, director Candon Guerrero Jr., general counsel Juan de Zu�iga and officer-in-charge Tomas Aure Jr. should be held liable for the unlawful and hasty closure of the bank. Describing it as a "draconian measure," the former Urban Bank chief executive officer said it was "highly doubtful, if not physically impossible" for these monetary officials to have finished the required Supervision and Examination Sector report and declare UBI under the receivership on April 26, a day after the bank holiday. "The truth of the matter is that, there could have been no such statement of account as of April 25 available or ready for and used by the SES in the morning of April 26, at or about the same time the SES report was being prepared," he stated in his 27-page complaint. Borlongan reiterated this statement only became available two days after the voluntary bank holiday, which only makes the report "more suspicious," not to mention the failure of BSP personnel to furnish his lawyer Sigfrid Fortun a copy of such document. He added monetary authorities merely "gave lame excuses" for not having produced one and theorized the SES report, which gives a factual finding of an ailing bank's financial condition, "could have been manufactured and back-dated," thus making them liable for falsification of documents. As it turned out, the former UBI official said he found out that the document showed "a wealth of errors and incorrect premises" which only makes these BSP officials criminally liable for "negligence and acts of malfeasance and misfeasance." Borlongan claimed these six monetary officials should be brought to court for violating the Anti-Graft Law (RA 3019), the Central Bank Act (RA 7653) and the Code of Conduct of Public Officials (RA 6713). "By preparing, submitting and using reports with their attachments which contain errors of fact, incorrect premises and inappropriate conjectures, respondents (Buenaventura et al.) acted in a manner violative of their duties and responsibilities," the complaint read. Borlongan added: "What the respondents (Buenaventura et al.) did was violate not only this constitutional provision but the aforecited laws as well, by acting in concert with one another in falsifying official documents and causing damage, injury and prejudice to UBI." (Philippine Star 09-Nov-2000) =============== T H A I L A N D =============== ANGEL AIR: Restructures debt; attempting expansion -------------------------------------------------- Most of airline Angel Air's major creditors have agreed to restructure their debts by extending the settlement period, according to Somchai Bencharongkul, president of Angel Air. "Some of them give me up to 16 months credit. The only one which does not understand us is PB Air. I can't negotiate with them now since the matter is before the court," he said. Earlier this year, Angel Air briefly suspended its service because of financial troubles before re-entering the market in July by launching a daily Bangkok-Hong Kong service on a 299-seat Lockheed Tristar leased from Kampuchea Airline. "I'll keep fighting to keep the business alive as long as I can see some light at the end of the tunnel," Mr Somchai said. Angel Air has total debts of between 200 million and 300 million baht to Thai Airways International Plc, the Aeronautical Radio of Thailand, the Airport Authority of Thailand, the Petroleum Authority of Thailand and PB Air for various services and products. He stressed that he would definitely pay all the debt as long as the creditors gave him an opportunity to run the business in the future. After struggling for two years with limited success in building business, Angel Air is adding more flights and introducing new regional routes from Nov 29. The second national carrier will lease three 274-seat Airbus 300-600Rs from China Northern Airline. Somchai said the lease included pilots, engineers and some cabin crew. He declined to provide more details. The first aircraft is due to arrive in Bangkok on Nov 27 and two days later will serve the new routes that include five flights a week from Bangkok to Hong Kong and then on to Taipei; one flight a week from Bangkok to Hong Kong; and one flight from Bangkok to Chengdu, China. Angel Air would quote fares 5% below its competitors, Mr Somchai said. The other two aircraft will be used for other planned additional flights and new routes in the future. The airline might start a Bangkok-Dubai service by year- end. Angel Air and China Northern Airline have also agreed to share passengers on connecting flights. "As China is a very large market, if we could capture 1% of their traffic we would be able to stay in business," Mr Somchai said. Angel Air has three billion baht in registered capital. So far, it has spent at least one billion baht in the past two years and has an accumulated loss of nearly 500 million baht. "We haven't been successful in the past because I entered the business when the baht was 50 to the US dollar. Moreover, some of our former employees were not careful in spending my money. So from now on, I will personally look into each baht the firm spends to make sure it is well spent because this is my own money." (Bangkok Post 09-Nov- 2000) EKKAPAT FINANCE & SECURS.: FRA to pay more on debt KRUNG THAI FINANCE & SECURS.: FRA to pay more on debt MUANG THONG TRUST: FRA to pay more on debt PACIFIC FINANCE & SECURS.: FRA to pay more on debt ROYAL INT'L FINANCE: FRA to pay more on debt THANASAP FINANCE & SECURS.: FRA to pay more on debt THANASIN FINANCE: FRA to pay more on debt ----------------------------------------------------- The Financial Sector Restructuring Authority (FRA) will repay 8.6 billion baht to the creditors of seven defunct finance companies, beginning Nov 16. The seven companies are among 56 ordered to be liquidated by the FRA in 1997 and are Royal International Finance, Muang Thong Trust, Ekkapat Finance and Securities, Krung Thai Finance and Securities, Thanasin Finance, Thanasap Finance and Securities and Pacific Finance and Securities. The largest creditor of the companies is the central bank's Financial Institutions Development Fund, which holds 94.53 percent of the total claims. ROYAL CERAMICS INDUS.: Plan garners creditor support ---------------------------------------------------- Almost all creditors of Royal Ceramic Industry Plc voted in favor of its business rehabilitation plan, which calls for most loan repayments to be made over the next 14 years. The creditors accounted for 93.44 percent of the debts. Anek Vasanasompong, the company's senior vice-president, said that of debts totalling 1.6 billion baht, principal of almost 1.3 billion baht would be repaid in two stages. About 800 million baht would be repaid over 14 years while the remaining debt of 500 million baht would be put on hold, at no interest charge, for three years. If the company finds a partner during the three years, the capital to be injected by the investor would be used to repay this portion of the debt. "So far, we have not yet negotiated with any party as the market price of our shares is too low," said Mr Anek. "In the meantime, we will focus on improving our performance so that we can more easily negotiate with our potential partners and get a higher return for our company. The company's major shareholders, holding more than 50%, are prepared to become minor shareholders if a partner is found." The loan repayment schedules were based on conservative estimates of the company's annual sales revenue of about 800 million baht, he said. While the company would not post any profit this year, it would start making some profit next year. Mr Anek said that another portion of debt, totalling 275 million baht, which represented interest charges, would be partly resolved by converting 47 million baht into equity, resulting in creditors holding a 30% stake in the company. The remaining 228 million baht would be repaid only after all the principal was repaid. He said that after the approval of the plan, the company would adopt a more aggressive strategy, particularly in marketing its products and seeking ISO 9001 certification. However, it still had no plan to expand its production capacity as demand accounted for 50% of its current potential. However, the ceramic industry was improving, partly because of the disposal of property through auctions by the Financial Sector Restructuring Authority, he said. Many property projects had been restarted, improving the prospects for related businesses such as ceramic makers, he added. (Bangkok Post 09-Nov-2000) THAI PLASTIC & CHEMICALS: To get noncollateralized loans -------------------------------------------------------- Local and foreign creditors of Thai Plastic and Chemicals Plc have agreed to provide the company with new loans without collateral, the Bangkok Post reported. They have also released fixed assets used as collateral for existing debts, moves which endorse the company's strong financial and management performance, the report said, citing a Thai Plastic spokesman. Thai Plastic is the largest manufacturer of polyvinyl chloride in Southeast Asia with two local factories, one each in Samut Prakan and Rayong, and six joint ventures in the region. The company has borrowed a total of US$25 million at low rates from HSBC and European-based Fortis Bank without using fixed assets as collateral, he said. Thai Plastic has also reached an agreement with syndicated banks to release all fixed assets on existing loans totalling 45.5 mln usd, the spokesman added. Bank of America took the initiative as lead arranger for the syndicated loan. Other participants include Citicorp Securities Asia Pacific, Industrial Bank of Japan, International Bank of China, Bank of Nova Scotia and Tokai Bank. Industrial Finance Corporation of Thailand will also release security collateral on an existing loan of 1.4 bln yen. Thai Plastic plants in Thailand produce a total of 440,000 tons of PVC resin per year while its regional plants produce a total of 200,000 tons of resin per year. The company annually produces 78,000 tons of PVC compound, 22,500 tons of PVC paste resin and 7,200 tons of stabiliser chemical in both local and overseas plants. (AFX News 07- Nov-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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