TCRAP_Public/001114.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

           Tuesday, November 14, 2000, Vol. 3, No. 222


* A U S T R A L I A *

KEYCORP LTD: Forecasts US$5.89M net loss in 2001

* C H I N A  &  H O N G  K O N G *

BENEFUN INT'L HLDGS.: Posts HK$19.1M net loss
COMPUTECH HOLDINGS: Posts Q3 Loss of HK$514,000
HUTCHISON GLOBAL CROSSING: Posts US$10.4M Q3 operating loss
MAGICIAN INDUSTRIES: Signs debt restructuring agreement

* I N D O N E S I A *

BANK NEGARA: Posts 9-month loss
BOB HASAN: Given new deadline to pay up
PT DAYA GUDA SAMUDRA: Moody's downgrades notes
SALIM GROUP: Given new deadline to pay up
SJAMSUL NURSALIM: Given new deadline to pay up

* J A P A N *

TOYOTA MOTOR: UK manufacturing arm warns of mounting losses

* K O R E A *

DAEWOO MOTOR: To unveil more stringent self-rescue plan
DONG-AH CONSTRUCTION: Court orders creditor protection
HYUNDAI ENGIN.& CONSTR.: Critical week for debt repayment
LG GROUP: Seen heading toward crisis as stock prices plunge

* M A L A Y S I A *

TECHNOLOGY RESOURCES INDUS.: Stake sale may bring cash

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

ASB GROUP: Receiver steps up review of finances

* T H A I L A N D *

LANNA LIGNITE: Posts Q3 loss
MODERN HOME DEVELOPMENT: Submits rehab plan to Court
ROYAL CERAMIC INDUSTRY: Details of business rehab plan
THAI PETROCHEM.INDUS.: Auditors uncover `inappropriate` fee


KEYCORP LTD: Forecasts US$5.89M net loss in 2001
As Smart-card developer Keycorp Ltd proceeds with a revised
alliance with Telstra Corp Ltd, it has forecast a net loss
of $A11.389 million ($US5.89 million) for the year ending
December 31, 2001. Keycorp forecast $A90.342 million
($US46.72 million) EBITDA for the same period in a
statement to shareholders.

C H I N A  &  H O N G  K O N G

BENEFUN INT'L HLDGS.: Posts HK$19.1M net loss
Garment-maker Benefun International Holdings Ltd. recorded
a net loss of HK$19.1 million for the year ended June 30,
down from a HK$29.9 million net loss a year earlier. Loss
per share was 3.6 HK cents, likewise down from 6.5 HK cents
the year before. Revenue also fell 15.5 percent to HK$95.7
million. No final dividend was proposed.

COMPUTECH HOLDINGS: Posts Q3 Loss of HK$514,000
Banking software product developer Computech Holdings Ltd.
recorded a loss of HK$514,000 for the three months ended
Sept. 30. That compares with a HK$2 million loss for the
same period a year earlier. Loss per share for the quarter
was 0.26 HK cents, down from 1.44 HK cent a year
before. Revenue plunged 60 percent to HK$4.2 million. No
dividend was proposed.

For the nine-month period ended Sept. 30, however, the
company posted a HK$134,000 net profit, a turnaround from a
HK$2.37 million net loss the year before. Loss per share
was 0.08 HK cent over the period compared with loss
per share of 1.69 HK cent a year before. Revenue fell 43
percent to HK$24.4 million.

HUTCHISON GLOBAL CROSSING: Posts US$10.4M Q3 operating loss
Hutchison Global Crossing, an equal joint venture
partnership formed by the subsidiary of Asia Global
Crossing and Hutchison Telecom (HK), recorded an operating
loss of US10.4 million for the third quarter of this
financial year, up 28 percent for the same period the
previous year. The company had revenue of US$32.2 million
(HK$251.16 million) for the third quarter, up 12.4 percent
for the same period last year. Net loss was 8 percent to
US$10.69 million and due mainly to keen competition from
local international voice services.

Intcera High-Tech, maker of ceramic components for optical
fiber communications networks, recorded a HK$3.17 million
loss for the three months through Sept. 30. That compares
to a loss of HK$3.69 million for the same period a year
ago.  Loss per share for the quarter was 0.80 HK cents,
down from 1.15 HK cents for the prior year's same period.

For the first nine months of this year, the company's loss
widened to HK$24.37 million, up from HK$8.83 million the
previous year. Loss per share was 7.05 HK cents, likewise
up from 2.75 HK cents for the same period the year before.
No third-quarter dividend was declared, unchanged from a
year earlier.

MAGICIAN INDUSTRIES: Signs debt restructuring agreement
Magician Industries (Holdings) Ltd said it has entered into
a debt restructuring agreement with its subsidiaries and

In a statement, the company said all major terms of the
heads of agreement announced on Sept 30 remain unchanged
and have been included in the agreement. The company said
one of the changes involve the value of the land pledged to
the secured creditor.

The land has been valued at HK$11.1 million, which exceeds
the estimated outstanding balance of the debt of about
HK$7.8 million as of Dec 15 2000. The secured creditor
therefore has agreed to the creation of a second mortgage
over the land in favour of the residual creditors, it said.

Magician Industries has also agreed to pay up to HK$10.8
million instead of HK$10 million for full and final
settlement of debts compromised by creditors under its debt
compromise.  In addition the aggregate principal amount of
the zero coupon secured convertible bonds has been reduced
from HK$134 million to HK$116.873 million.

The aggregate principal amount of the zero coupon secured
convertible bonds has been increased from HK$40 million to
HK$57.126 million and the requirement for a lock-up period
of one year for the exercise of the conversion rights has
been removed, the company said. In addition, the maximum
number of conversion shares to be made available for
acquisition by qualifying shareholders has been cut from
520 million shares to 434.366 million shares.

Under the debt restructuring agreement, the company's
residual indebtedness will be reduced from about HK$337.6
million to about HK$110.1 million, with about
HK$116.9 million of debts deferred for five years on an
interest free basis under the zero coupon secured bond and
another HK$57.1 million debt deferred for 5 years at a
coupon rate of 4.0 percent per annum.

"The reduction in residual indebtedness will result in a
significant decrease in the group's interest cost, which
will in turn have a positive effect on the group's earnings
and net asset value," the statement said. (AsiaGateway 13-


BANK NEGARA: Posts 9-month loss
Bank Negara Indonesia (P.BNI) posted a consolidated net
loss of IDR1.02 trillion for the first nine months of the
year. That was down substantially from IDR4.62 trillion a
year ago, due to declining interest expenses. The state-
owned bank said interest expenses fell to IDR6.85 trillion
from IDR11.76 trillion.  Interest income rose to IDR6.63
trillion from IDR5.86 trillion. This left a net interest
loss of IDR223.42 billion this year compared with IDR5.91
trillion last year.

BOB HASAN: Given new deadline to pay up
SALIM GROUP: Given new deadline to pay up
SJAMSUL NURSALIM: Given new deadline to pay up
Indonesia has given some of the country's best known
businessmen until Nov. 15 to hand over more assets to cover
massive debts to the government or face legal action.

In a statement last Saturday, chief economics minister
Rizal Ramli focused his irritation on the Salim Group, once
Indonesia's biggest conglomerate and headed by a close
associate of disgraced former president Suharto.

"The government has been fair and patient with all debtors
but the time for patience is past," he said, following a
meeting of the powerful Financial Sector Policy Committee,
which he chairs.

The government has had little success in its politically-
charged attempts to get the owners of failed banks to come
up with more assets to cover billions of dollars in debts
to the state, run up during the country's economic crisis
which erupted in 1997. It is the latest deadline by Mr
Rizal, who in early October gave the debtors two weeks to
pledge more assets and personal guarantees.

The last straw appears to have been the recent purchase by
the Salim Group of assets before it had paid back its
debts. Early last week, the group purchased a 24.2 per
cent stake in Singapore-based food maker QAF Ltd. The
sellers were the government's Indonesian Bank Restructuring
Agency (Ibra) and Holdiko Perkasa, which was set up to
manage assets already pledged by Salim to the agency.

"The committee was particularly critical of the recent
actions of the Salim Group, which purchased a previously
pledged stake in a former Group holding company. This Group
has shown that they have additional capital at their
disposal at the same time that they are not meeting their
commitment under the terms of the MSAA to repay their debts
to the government," Mr Rizal said.

The MSAA, or Master Settlement and Acquisition Agreement,
is at the heart of the controversy and was a deal made
during the brief rule of former president BJ Habibie, who
succeeded his mentor Suharto in 1998. However, the value of
the assets pledged has since fallen sharply, leaving
an already impoverished government saddled with the

Mr Rizal said that Ibra, the agency set up to resurrect the
broken banking industry, had been instructed to revise the
rules regarding asset sales to ensure the government can
repossess assets repurchased by debtors who are
later found not to have honoured the MSAA terms.

The deal was with the Salim Group, Bob Hasan -- a close
friend of Suharto -- and Sjamsul Nursalim, who headed the
Gajah Tunggal conglomerate. All owned banks which had to be
taken over by the government. Hasan and Nursalim were last
month named suspects in probes over the collapse of their
banks. Mr Rizal gave them until 7pm on Wednesday to cover
that shortfall and put up personal guarantees to cover any
future ones.

The amounts involved are substantial. During the crisis,
the government extended 193.3 trillion rupiah (S$36.3
billion) to prop up troubled banks but a recent audit
suggested that more than two-thirds of the amount had
been mismanaged. If they miss the deadline, their cases
will be handed over to the Attorney-General, Mr Rizal said.

"Our priority is to gain maximum return on the outstanding
debts for the government of Indonesia and we will pursue
legal action against any and all debtors if that is
required to achieve that objective."  (Business Times 13-

PT DAYA GUDA SAMUDRA: Moody's downgrades notes
Moody's Investors' Service on Friday downgraded 225 million
dollars of guaranteed notes issued by Indonesian fishing
giant PT Daya Guda Samudra (DGS), citing crippling
disruptions to its operations from the religious conflict
in the Maluku islands.

Moody's said the downgrade of the notes due this year from
Caa1 to Ca, was accompanied by the withdrawal of its
rating.  "The rating agency believes that it will be able
to obtain sufficient information from the issuer to
properly and timely monitor the rating in the future,"
Moody's said in a statement received here.

The downgrade, it said, reflected "the prolonged damage to
DGS' operations caused by the ongoing ethnic and religious
conflict close to its main fishing base in Eastern
Indonesia," Moody's said in a statement received here.
"Further, DGS has stated that it is unable to generate
sufficient cash flow to fund its current level of
operations and its debt repayment obligations."

The agency said it was uncertain whether the company's
efforts to raise cash by selling off fishing boats would
result in its being able to meet the December coupon
payment of the guaranteed notes. "The downgrade also
reflects the apparent uncertainty in resolving creditors'
claims under Indonesian law should DGS default," it added.

DGS, it said, had at the latest report in June 2000, been
able to operate only 30 percent of its fleet, mainly
because of the lack of experienced crews willing to operate
in the area, where Christian-Muslim violence has raged for
almost two years. DGS, now delisted from the Jakarta Stock
Exchange, was also in preliminary discussions with the
Indonesian Bank Restructuring Agency over default on a
short-term bank loan "which resulted in significant bad
debt provisions, accounting for over 40 percent of its 1999
sales, Moody's said. (Agence France Presse 10-Nov-2000)


TOYOTA MOTOR: UK manufacturing arm warns of mounting losses
Toyota Motor, the world's third largest carmaker, is
warning of mounting losses on its UK manufacturing
operations because of the strength of sterling and slowing
demand for some models.

The Japanese manufacturer, one of Britain's largest inward
investors, has also indicated it is unlikely to authorise
additional significant investment in the country in the
absence of currency stability.  Toyota's warning follows
similar concerns raised by other carmakers, notably Nissan
Motor and Honda, which are also incurring sizeable losses
from manufacturing in Britain.

According to figures obtained by the Financial Times,
Toyota Motor Manufacturing (UK) - the group's main British
arm - made pre-tax losses of 52m last year, compared with
a 19.1m profit in 1998.  Sales fell from 1.36bn to
1.31bn. Officials blamed the disappointing figures on
"exchange rate imbalance" and warned of much larger losses
this year.

Output at its main car plant at Burnaston, near Derbyshire,
is expected to be flat this year at about 179,000 vehicles
- almost 20 per cent below capacity.  "The problems with
currency have persisted this year and the situation is
worsening," said a spokesman.

Toyota has also been hit by mixed demand for its Avensis
model, built in the Midlands.  The carmaker has already
decided to ask some suppliers to switch contracts from
sterling to euros to help minimise its currency exposure.
(Financial Times  13-Nov-2000)


DAEWOO MOTOR: To unveil more stringent self-rescue plan
Daewoo Motor plans to come up with extremely painful
restructuring measures, centering on massive layoffs, in
two weeks, to stem the rapid disintegration of business
foundations at home and abroad, company officials said

"In anticipation of court receivership, the company is now
working out new and much tougher self-rescue steps in
conjunction with U.S. consulting agency Arthur Anderson,"
said a top company executive.

The upcoming self-rehabilitation measures will be much more
painful than its previous one, announced Oct. 31, that
called for cutting annual costs by 900 billion won ($796
million), including layoffs of 3,500 workers, he said,
hinting that the number of job cuts will sharply be

He noted that the new restructuring blueprint will take
into consideration a sharp fall in sales and production.
In a related move, Daewoo Motor said that it will give
thousands of employees a leave of absence to reduce costs,
starting today. All of Daewoo's 6,000 white-collar workers
will be given a weeklong leave of absence, during which
they will be paid 70 percent of their normal wage, over the
next two months, company spokesmen said, adding that the
work hours of the carmaker's 13,000 factory workers have
already been halved. The company is expected to save 24
billion won from the program.

Meanwhile, an average of 10 employees are leaving Deawoo
Motor since its initial bankruptcy Nov. 6, they said,
adding that over 100 have already quit this month alone. In
contrast, the number of resignations reached just 48
persons in entire August at the height of sales talks with
Ford Motor.

"The accumulating unpaid wages, estimated at about 120
billion won so far, and the increasingly unpredictable
future of the company are prompting a growing number of
workers to mull over moving to other employers," said a
company spokesman.

Daewoo's main passenger car plant in Pupyong, west of
Seoul, remained idel yesterday for the third consecutive
day, as subcontractors suspended parts supplies, demanding
cash payments. Daewoo's other plants in Korea are also
facing a similar fae, while its overseas plants in Poland,
Uzbekistan and Ukraine, among others, are suffering severe
setbacks from the parent firm's bankruptcy.

Daewoo Motor applied for court receivership Friday, two
days after creditors declared the carmaker bankrupt. The
court is expected to freeze all debts and assets and
install new management within a week while it deliberates
its decision. Daewoo's car exports, crucial to the nation's
effort to expand current account surplus, has also been
completely halted. (Korea Herald  13-Nov-2000)

DONG-AH CONSTRUCTION: Court orders creditor protection
The Seoul district court has announced its decision to put
Dong-Ah Construction under court protection from its

Under court receivership, the disposal of any of the
company's properties worth more than 10 million won (US$
8,833) will be subject to court approval. The district
court also asked Dong-Ah to pay 200 million won for an
accounting firm's appraisal of the construction company's

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 Nov. 4.

HYUNDAI ENGIN.& CONSTR.: Critical week for debt repayment
One of South Korea's ailing construction companies, Hyundai
Engineering and Construction, faces some 115 million
dollars of maturing debt in the coming week.

The debt includes 80 million dollars of bonds with warrant
(BWs) held by foreign lenders and another 35 million
dollars of promissory notes issued domestically. The BWs
matured Monday and the promissory notes have to be
settled over the coming week.

The company has enough liquidity to meet the payment of 115
million dollars this week, according to Hyundai Engineering
spokesman Park Jong-Kil. He added that he company had
enough cash from overseas engineering and construction
projects, incuding a massive project to build gas treatment
facilities in Iran.

However, the Yonhap News Agency quoted an unidentified
senior official of Hyundai Engineering as saying that the
company had asked foreign lenders to allow it to repay the
80 million dollars in installments. Yonhap further said the
cash-stricken company had an outstanding debt repayment
guarantee worth three trillion won (2.6 billion dollars) in
addition to its own debt of 5.2 trillion won including
foreign borrowings. The Hyundai Engineering spokesman said
he had no information on the debt repayment guarantee made
by the company.

LG GROUP: Seen heading toward crisis as stock prices plunge
Amid the deepening woes at major conglomerates Hyundai and
Daewoo, LG appears to be gradually sinking into troubles.
LG watchers at home and abroad started to warn about steep
crashes in share prices of almost all LG companies, citing
their falling profits, lack of transparency and worsening
governance structures.

The expert warnings are already coming close to reality for
three flagship firms - LG Electronics, LG Chemical and LG
Telecom, with LG Electronics shares diving 26 percent in
the first six days of this month.  On Friday, LG
Electronics reported a third quarter net profit of 27.1
billion won ($23.9 million), down by an astounding 88.9
percent from a net profit of 245.8 billion won recorded for
the previous quarter.

The firm's debts also snowballed from 3.2 trillion won at
the end of June to 5.7 trillion won, larger than the near
bankrupt Hyundai Engineering and Construction's 5.2
trillion won.  MoneyToday analyst Lee Jong-hwan,
forecasting a continuing slide in LG Electronics stock
price from its yearly high of 58,900 won, warned that it
may crash below 10,000 won sooner or later. Friday's
closing price was 14,200 won, down 1,100 from the previous

As for LG Chemical, the German investment bank Dresdner
Kleinwort Benson (DKB) said in a report last week that the
company's third-quarter net profit would fall 41 percent
from the previous quarter, due primarily to low margins
from its polyvinyl chloride (PVC) business. It then issued
a sell recommendation for LG Chemical, reasoning that the
firm's planned split into three independent units and
governance problems associated with the founding Koo
family, on top of the deteriorating profits, will seriously
harm non-LG shareholders. LG Chemical shares fell to 13,050
won from its 52 week high of 45,800 won.

Stocks of LG Construction, LG International Corporation, LG
Industrial Systems, LG Cable & Machinery, LG Telecom and
other group affiliates, except for second-tier units LG
Home Shopping and LG Capital, have also taken sharp drops
so far this year. The nation's third largest chaebol in
terms of assets has been generally regarded as safe from a
liquidity crisis afflicting Hyundai, Daewoo and other

"A growing number of fund managers and market analysts are
already raising concerns that LG Group could be on course
to the Hyundai Group-like crisis during next year, unless
the current problems are fixed," said Lee. "The picture of
LG sinking into Hyundai-like troubles is extremely
worrying," he said, calling on group owners and managers to
pay greater attention to the shareholder interests,
managerial transparency and restructuring of groupwide

Recently, the DKB and other domestic and foreign brokerages
have issued sell recommendations for LG Electronics, LG
Chemical and other group firms, painting a dismal picture
of their stock price outlook.  UBS Warburg lowered its
forecast for LG Electronics' net profits for this and next
year by 40 percent and 53 percent, respectively, to 539
billion won and 375 billion won, estimating its stock price
value at 9,500 won.

Indosuez WI Carr and SG Securities also recommended sell
for LG Electronics, pulling down its stock value to 11,000
won and 14,500 won each, while Merrill Lynch slashed net
profit estimates for 2000 and 2001 by 40 percent and 53
percent. Among local brokerages, Samsung Securities and
Hyundai Securities also sharply downgraded LG Electronics
shares, pointing to its deteriorating profitability and
snowballing debts.

"It is very rare that local and foreign analysts
simultaneously downgrade a specific stock or issue a sell
opinion," said Lee, predicting that the LG company will be
plagued by intensive foreign selling for the time being.
SK Securities analyst Chon Woo-jong said that unlike
Samsung Electronics, LG Electronics' cell-phone business is
heavily dependent on the local market, making it vulnerable
to Seoul's ongoing crackdown on "subsidized cell-phone"

In the latest illustration of the company's opaque
management, LG Electronics came under fire for its alleged
attempt to cover up its sharp profit fall for the third
quarter. On Friday morning, LG released its quarterly
business results to securities firms, but somehow failed to
give notice to news organizations.

It belatedly issued a press release later in the day, only
after the Yonhap News Agency obtained the relevant data.
"The lack of disclosure transparency, as vividly seen in
the LG incident, is the biggest factor scaring away
potential foreign investors," said an analyst.

In a separate incident, the family of LG Group Chairman Koo
Bon-moo were accused of taking irregular stock-transaction
profits by letting LG companies buy their LG shares above
the market prices. "Apart from the alleged irregularities
by the Koo family, foreign analysts raised fears that LG
Chemical would be forced to take the bulk of the financial
burdens for the group's bid to obtain the third generation
wireless service, dubbed IMT-2000," said Lee. (Korea Herald


TECHNOLOGY RESOURCES INDUS.: Stake sale may bring cash
Attempts by businessman Tajudin Ramli to sell his key stake
in the country's flagship airline may help breathe life
back into his indebted telecom group Technology Resources
Industries (TRI).

Mr Tajudin is expected to raise between M$1.34 billion
(about HK$2.74 billion) and M$1.79 billion from the sale of
his 29.09 per cent of Malaysian Airline System (MAS), held
by his 47 per cent-owned Naluri.

"It should be around the cost price. After all, Mr Tajudin
was asked to rescue MAS and even though he failed, few
other privatisation projects have been runaway successes,"
said Pong Teng Siew, head of research at Jupiter

In 1994, the 54-year-old tycoon bought the MAS stake for
M$1.79 billion, or M$8 per share, from the government,
which hoped he could reverse the fortunes of the loss-
making carrier.  The government, now considering whether to
allow a foreign airline to take an equity stake in MAS, is
in talks to buy out Mr Tajudin.

TRI is struggling to restructure a US$375 million eurobond
one year after it defaulted.  Analysts said TRI, laden with
debts of M$3.2 billion, needs to call a rights issue to
refinance the bond.

They speculated the company had been slow in doing so
because Mr Tajudin, with a personal 25 per cent stake in
TRI, might not be in a position to respond to the cash
call.  But, if the MAS sale goes through, Mr Tajudin could
get Naluri to buy his stake in TRI, thereby freeing it to
make the cash call.

Depending on the price tag for MAS shares, Naluri stands to
stash away between M$300 million and M$800 million after
repaying its M$1 billion debts.  Analysts expect Mr Tajudin
to sell his 25 per cent stake in TRI, worth about M$620
million based on prevailing market prices, to Naluri.

"This would be a neat maneuver. It gives Naluri a new core
business to replace MAS and also de-gears him in TRI,
paving the way for TRI to make a rights issue to refinance
the eurobond," said Yee Yang Chien, head of research at HLG

Mr Tajudin would still control TRI through Naluri. "It is
complicated but basically, Mr Tajudin would be giving up
aviation to focus on telecommunications," said Dennis Lee,
an analyst with T A Securities.  "As he controlled MAS
through Naluri, he could also control TRI through Naluri."

Mr Tajudin has also said he may consider floating TRI's
wholly owned Celcom (Malaysia), the country's largest
mobile-phone service operator, to raise cash. However, some
analysts doubted this would happen as investors were
unlikely to take kindly to the move that would reduce TRI
to a holding company.

"It would help to address TRI's debt woes but is an
unlikely alternative for the moment," said an analyst who
tracks the telecommunications sector.  "Maybe as a last
resort, but not now as the risk of adverse market reaction
is strong." (South China Morning Post  13-Nov-2000)


ASB GROUP: Receiver steps up review of finances
The receivership committee overseeing the operations of the
ASB Group of Companies has directed the distressed firms
owned by real estate developer Luke Roxas to submit their
financial statements and refrain from withdrawing
funds in excess of P5 million per transaction without prior

It also directed the ASB Group to submit bank reconcilia-
tion statements as of Oct. 31, the list of all bank
signatories, details of advances to stockholders with
complete breakdown of companies from where money was
withdrawn, complete list of existing personnel and list of
specific sources of revenues identifying name and addresses
of customers.

The receivership committee has given the ASB Group 10 days
from receipt of notice to submit the required data. Non-
compliance is a ground to cite the ASB in contempt of the
order, said Fortunato Cruz, head of the ASB receivership
committee. The SEC had extended for another 60 days or
until Dec. 30 its order suspending all claims lodged
against the ASB Group to give the companies enough time to
reply to the creditors' comments on the proposed rehabili-
tation plan.

In its order, the SEC said it found the request for
extension of the debt moratorium reasonable. The extension
was also meant to allow the SEC to decide on the ASB
Group's proposed recovery program, which called for the
dacion en pago of its properties to pay off debts. Without
an extension, creditors can start initiating foreclosure
proceedings against the ailing group's assets. The
suspension order expired on Oct. 31.

The SEC has also ordered ASB's interim receiver to take
custody and control of the ailing firms' assets to provide
ample protection to investors and ensure the conservation
of the group's assets. The ASB Group filed a loan
suspension payment petition with the SEC in July owing to
severe cashflow problems resulting from the sudden
pretermination of investments of its clients.

Creditor-banks of the ASB Group, however, questioned the
feasibility of the corporations' proposed rehabilitation
plan, saying it failed to ensure the long-term viability of
the distressed companies. These banks include the
Philippine National Bank, United Coconut Planters Bank, Far
East Bank and Trust Co., and the Development Bank of

In a separate filing with the SEC, UCPB said the plan is
not comprehensive as it failed to address material and
relevant matters pertaining to the financial statements of
petitioners. It said the plan includes adjustments to the
financial statements which are not acceptable under
generally accepted accounting principles and are "not
realistic but are manipulations intended to conceal the
financial condition of petitioners."

UCPB said the ASB Group should in fact be liquidated since
it is already insolvent. It claimed that the ASB Group has
a negative net asset of P3 billion. DBS, for its part, said
the plan failed to provide a material financial commitment
for the payment of secured creditors. Under the plan, the
payment of secured creditors is totally dependent on the
success of the asset pool which is highly questionable.

"There is no reasonable certainty that the finished
projects that are to be contributed to the pool will be
completed or that the new projects to be constructed will
materialize. The plan does not provide alternatives in the
event that the asset pool does not generate the projected
revenue or otherwise fails," DBS said. "It is doubtful
whether the terms of the plan would be sufficient to bring
about the rehabilitation of the ASB Group because it does
not provide for the institution of changes in the ASB
Group's management, organization, policies, operations or
finances for the purpose of rescuing or reviving the
petitioning corporations."

PNB said the plan is unrealistic and too prejudicial to the
mortgage banks. It said the proposal of waiver of interest
and charges is too onerous and burdensome considering that
waiver of interest and penalties will only commence upon
the actual turnover of the titles to be dacioned in favor
of the bank. Individual creditors of the ASB Group, on the
other hand, said they would not oppose the rehabilitation
plan for the ailing group unless it would result in the
complete and total satisfaction of all obligations.

In a motion filed with the SEC, the individual-creditors
said the rehabilitation plan should make provisions of a
repayment scheme, particularizing those for interest as
distinguished from payments on the principal and allocate a
specific portion of the amounts realized from ASB's
projects to service its debts to creditors.

The plan, according to individual-creditors, lacks a
material financial commitment for the repayment of debts
and liabilities to the creditors-depositors. Individual-
creditors also said the properties that will go into the
asset pool component of the plan should be valuated by an
independent and professional appraiser to ensure realistic

They, however, objected to ASB's proposal to offset the
outstanding receivables from Roxas, owner of the ASB Group,
saying it violates generally accepted accounting
principles, which dictates that revenues from asset
disposition be recognized only when realized. Individual-
creditors said the P5.23 billion in receivables by ASB from
Roxas should remain as a material asset account in the
books and must be pursued for collection from him in order
to strengthen the financial condition of ASB and prevent
its collapse against the pile of debts owed to secured
creditors.  (Manila Times  13-Nov-2000)


Bangkok Union Insurance recorded an 8 million baht loss for
the third quarter ended Sept. 30. That was down from a loss
of 51 million baht for the same period the previous year.
For the first nine months of the year it showed a profit 12
million baht, compared with a loss of 11.4 million baht for
the same nine-month period last year.

Kulthorn Kirby recorded a loss of 19.1 million baht for
third quarter ended Sept. 30, down over tenfold from a
235.1 million  baht loss for the same period last year. For
the nine-month period ended Sept. 30, however, it posted a
profit of 7.2 million baht, compared with a 371.5 million
baht loss for the same nine-month period the previous year.

LANNA LIGNITE: Posts Q3 loss
Lanna Lignite recorded a 38.6 million baht loss for third
quarter ended Sept. 30. That was down from a loss of 105
million baht for the same period last year. For the first
nine months of the year, however, it posted a profit of 2.5
million baht, compared with a profit of 15.2 million baht
for the same nine-month period last year.

MODERN HOME DEVELOPMENT: Submits rehab plan to Court
Modern Home Development has filed a business rehabilitation
plan with the Central Bankruptcy Court. It now is in the
process of determining its debts. It also is seeking to
extend the date for submitting third quarter financial
results to Dec 14.

Om-Sin Amnuay Sub Fund recorded a loss of 194.4 million
baht for the third quarter ended Sept. 25. That was up over
900 percent from a loss of 21.8 million baht for the same
period the previous year. For the nine-month period ended
Sept. 25, the company posted a loss of 939.4 million baht,
compared with a loss of 235.6 million baht for the same
nine-month period the prior year.

ROYAL CERAMIC INDUSTRY: Details of business rehab plan
Royal Ceramic Industry has reported after a meeting of
shareholders that the company has developed a business
rehabilitation plan that seeks to treat all of its
creditors fairly. For example, it will repay new debts,
such as working capital finance from Thai Farmers Bank, in
full in their normal term.

Its existing principal loan amounts totaling 1.4 billion
baht, however, would be paid in two segments. The first
portion -- 840 million baht - it proposes to repay over 14
years; the second portion -- 525 million baht -- to be
suspended, then paid with proceeds from a capital increase
by a new strategic partner within three years.

Repayment of accrued interest totaling 275.4 million baht
would also be split in two segments, the first of 47
million baht to be converted into equity (30 percent stake)
and the second portion of 228 million baht to be suspended
and repaid between the 14th and 16th years.

Thai Packaging & Printing recorded a loss of 99,000 baht
for the third quarter ended Sept. 30, down substantially
from a loss of 9.4 million baht for the same period the
prior year. For the first nine months of the year, the
company posted a loss of 2.2 million baht, likewise down
from a 20.9 milion baht loss for the same period the
previous year.

THAI PETROCHEM.INDUS.: Auditors uncover `inappropriate` fee
Court-appointed managers Effective Planner may provide
details of an Bt82-million fee that former Thai
Petrochemical Industry (TPI) boss Prachai Leophairatana
charged the company to guarantee a Bt2.7-billion loan from
Bangkok Bank a few years ago, a source said.

TPI chief executive Prachai, who ran the company prior to
Effective Planner, allegedly charged 3 per cent for the
loan guarantee, according to a source working for Effective
Planner, who described the move as inappropriate. In
addition, there were inappropriate loan extensions among
companies under the TPI umbrella, the source said.

Effective Planner has scheduled a press conference for
Monday. However, Prachai told The Nation via telephone that
the Bt82 million was a guarantee fee paid by TPI to family
company Leophairatana Co, as TPI had used the family's
shares as collateral to back the loan from Bangkok Bank.
Everything was on the level, as the fee was paid to the
family's company, he said. He said he did not charge any
fee for personally guaranteeing other loans amounting to
billions of baht.

TPI is the country's largest corporate debtor with an
outstanding US$3.7 billion (Bt160.87 billion). Prachai had
earlier lobbied for creditors to remove his personal
guarantee obligations. Prior to the 1997 crisis, personal
guarantees were common practice. Regarding the inter-
company loans, Prachai said it was an old issue. And
since both sides had settled the issue, Effective Planner
should not raise it again, he said.

Yesterday was the deadline for the company and its
creditors to amend the debt-restructuring plan. Twelve
amendments proposed by eight parties were tabled. Effective
Planner sought to amend three points, while TPI sought to
amend one point. Thai Military Bank raised 6 points,
Bangkok Metropolitan Bank one point and four trade
creditors raised one point.

TPI sought a debt reduction of $700 million, which it said
was unpaid interest due over the past 3 years ending March
31, and proposed a minimum capital increase of $500
million. It proposed a new-share price of Bt17.7
per share, which is the book value.

Attorney Chavalit Uttasart said the proposals would make
the restructuring more practical, as the company would
still have to increase its capital at the end of 2003 to
refinance an estimated $1.8 billion in debt. The proposal
was not aimed at delaying Thursday's vote on the
restructuring plan, he said. The vote has already been
postponed once, on October 30. (The Nation  11-Nov-2000)

The Aromatics (Thailand) recorded a loss of 1.4 billion
baht for the third quarter ended Sept. 30. That was down by
nearly 33 percent from a loss of 2.2 billion baht for the
same period the previous year. For the first nine months of
the year the company recorded a loss of 2.9 bilion baht,
likewise down from a 3.3 billion baht loss for the first
nine months of last year.

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
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Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
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Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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