TCRAP_Public/001208.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, December 8, 2000, Vol. 3, No. 239


* A U S T R A L I A *

ARTHUR YATES & CO.: Bailed out by Norgard Clohessy
BENETTON (SYDNEY): Fashion failure, 7 franchises to close
LIBERTY ONE: Rescuer pulls out, administrator called in
PRESLITE AUSTRALIA: Goes into receivership

* C H I N A  &  H O N G  K O N G *

FORLUXE SECURITIES: Liquidators in plea for guidance
GUANGDONG ENTERPRISE: Creditors back US$5.95B rehab
GUANGNAN HOLDINGS: Trio of ex-execs jailed
TRUE NEWS LTD: Facing winding up petition
21 CYBERNET CORP.: Posts $9.88M half-year loss

* I N D O N E S I A *

PT DHARMALA INTILAND: Signs MOU on rehab plan with IBRA
PT PERTAMINA: Debt-laden oil firm to slash workforce 40%
SALIM GROUP: Delay in exercise of put option sought

* J A P A N *

SHIGERU TANAKA: Mayor's debts a staggering 7 billion

* K O R E A *

AHN KWON & CO.: To face charges for passing false statement
CHEJU BANK: Cash infusion or merger planned for it
DAEWOO MOTOR: Halts operations at two plants
HANVIT BANK: Cash infusion or merger planned for it
KOREA LIFE INSURANCE: Leads insurance co. losers in 1H
KWANGJU BANK: Cash infusion or merger planned for it
KYOBO LIFE INSURANCE: Leads insurance co. losers 1H
KYONGNAM BANK: Cash infusion or merger planned for it
PEACE BANK: Cash infusion or merger planned for it
SEOULBANK: Cash infusion or merger planned for it

* M A L A Y S I A *

PSC INDUSTRIES BHD: Revises debt restructuring plan
RASHID HUSSAIN BHD: Revises financing plan for group revamp
REPCO BHD: Still treading financial waters

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

MONDRAGON LEISURE AND RESORT: Clark Devel. to oversee rehab

* T H A I L A N D *

SIAM STEEL INT'L: Bt65M forex losses found
SUPALAI: Restructures Bt94M loan


ARTHUR YATES & CO.: Bailed out by Norgard Clohessy
Arthur Yates & Co. Ltd. is being bailed out by agribusiness
funds manager Norgard Clohessy Equity Ltd. The Perth-based
investment company will acquire the inancially embattled
gardening group Yates for less than its current market
value. It will give the garden products wholesaler a much-
needed equity injection.

BENETTON (SYDNEY): Fashion failure, 7 franchises to close
Woonona businessman Rob Champion won't lose his Soul
Pattinson pharmacy at Woonona despite being forced to close
his string of seven Benetton franchises in Sydney and
Melbourne. Acting on advice from insolvency adviser John
Star, of Sydney firm Star Dean and Wilcox, Mr Champion has
closed the doors to the seven franchises of the Italian
fashion chain and is negotiating with creditors to repay
some of his $3.6 million debt.

Mr Champion refused to comment on the matter yesterday.
However his wife Deirdre said her husband's Soul Pattinson
Pharmacy in Woonona would not be a victim of the failure of
his Benetton chain. "It has nothing to do with the pharmacy
... fortunately," she said.

Mr Champion established his first Benetton store in
Chatswood in 1989, then came others throughout the city
including a high-profile outlet in Sydney's Queen Victoria
Building. However, Mrs Champion confirmed the decision to
open a store in Melbourne's Collins St two years ago
signalled the beginning of the end for the fledgling
fashion empire. She said they regretted opening the Collins
St store.

Insolvency adviser John Star said delays in opening
followed by lackluster sales placed a severe strain on the
rest of the stores. Mrs Champion said her husband, who
suffered a heart attack earlier in the year, had the
ability to bounce back and start again, but he may
not want to.

"He's not really sure at the moment," she said. "We're just
coping with this situation."

Fellow pharmacist and colleague Colin Craig praised Mr
Champion yesterday, saying he was well regarded in
Wollongong and a good businessman. "Credit-wise there's
never been a problem with Rob Champion," he said. "I'm very
surprised that he would go that way. It would have to be
terrible bad luck. He's been in business for a long time
and is one of the better Soul Pattinson agents in the
Wollongong area." (Illawarra Mercury  04-Dec-2000)

LIBERTY ONE: Rescuer pulls out, administrator called in
Australia's first listed Internet company, LibertyOne, last
night moved to appoint an administrator after Hong Kong
investment group iReality decided against proceeding with a
rescue bid for the financially stricken company.

iReality had taken over management control of LibertyOne on
October 18, injecting $2.3 million and outlining publicly a
$6 million recapitalisation plan.  However, LibertyOne's
board was informed the deal was off at a meeting yesterday,
prompting its two independent directors, Mr Nicholas
Whitlam and Ms Kerri-Anne Kennerley, to place the company
into voluntary administration.

LibertyOne chief executive Ms Marcelle Anderson said the
company's biggest liabilities were wages for 250 Zivo
staff, plus commitments to joint ventures Monet Asia
Pacific and Satellite Music Australia.  At its peak
LibertyOne had a market capitalisation close to $1 billion
and ambitions to join the Net stars listed on the Nasdaq.

The company had been founded by New Zealand entrepreneur Mr
Graham Bristow as an "e-creator", holding licences for
major Web brands Excite, uBid and celebrity sports Web
sites.  Even before the Nasdaq bubble burst in April,
LibertyOne had struck problems. Its shares had run hot and
cold on a series of rumours about takeovers and the much
vaunted Nasdaq listing.

Two chief executives walked in the first year, followed by
a string of directors. Zivo, the Web design business that
generated most of the revenue, also lost key management who
later took legal action.

"The company has been in a difficult financial situation
for some time. The board, prior to the iReality proposal,
had acted with extreme caution before entering new
liabilities," said Ms Anderson.

Mr Whitlam had planned to step down as chairman later this
month. (Sydney Morning Herald 07-Dec-2000

PRESLITE AUSTRALIA: Goes into receivership
Jobs throughout Australia's vehicle industry are being
threatened after a Melbourne parts manufacturer was put
into the hands of receivers.

Preslite Australia, in Melbourne's northern suburbs,
appointed a voluntary administrator earlier this week.
The Manufacturing Workers Union claims the company is yet
to guarantee whether its 90 employees will receive the $4
million worth of entitlements they are owed. Work bans have
been placed on the company and union spokesman Craig
Johnston says the move could threaten jobs throughout the
industry as they are the only supplier of windscreen wiper
engines in Australia.

"The car companies are saying that they need the parts
within three to five days or there could be stand-downs,"
he said.

The union plans to meet with the administrators this
morning in an effort to resolve the dispute. (ABC News
Online 07-Dec-2000)

C H I N A  &  H O N G  K O N G

FORLUXE SECURITIES: Liquidators in plea for guidance
The liquidators of Forluxe Securities have been forced back
into court to ask a judge how to divide shares held by the
collapsed brokerage amid a HK$48 million shortfall.

The judge must decide how to allocate HK$16-million worth
of shares to more than 500 clients who claimed securities
to the value of HK$64 million.  The court hearings have
been held behind closed doors.

Clients of the brokerage and its finance arm were invited
to attend the proceedings but only one person turned up.
Many of the disgruntled clients - an estimated 60 per cent
- have already received compensation from the Securities
and Futures Commission.  The legal issue of how to
distribute shares to the clients has lasted more than two
years, and in part has hinged on the outcome of the CA
Pacific case.

In that, there was a shortfall of HK$500 million when CA
Pacific Securities and its margin finance arm, CA Pacific
Finance, collapsed in January 1998.  Clients were owed
HK$1.4 billion in shares, but it had only HK$900 million in
shares on hand. In December that year a judge ordered that
the shares be returned to the clients.

At the same time, she admitted this would be a costly,
time-consuming and ultimately a potentially "unjust"
result.  Madam Justice Maria Yuen Ka-ning had rejected
claims that the securities held by CA Pacific were held as
part of its general assets.

"It follows that when such securities were acquired, the
law would regard the client as having the beneficial
interest in them," Justice Yuen Ka-ning said.

The judge has reserved judgment on how to allocate the
shares in the CA Pacific case.  The same judge has also
reserved judgment in the Forluxe case.  In particular, she
must decide whether the shares held by the Forluxe
companies are owned by the clients or by the Forluxe

If the shares are held on trust for the clients, she must
specify the mechanism for their distribution.  Both cases
will set a legal precedent. "The only comfort that can be
drawn is that by the time we are finished, how liquidators
go about winding-up a brokerage should be much clearer,"
Forluxe liquidator Nick Hill of Nelson Wheeler Corporate
Advisory Services said.

"The tragedy is that the liquidators face a significant
number of major legal obstacles in unravelling the affairs
of what is essentially a small company," Hill said. "The
legal concepts involved are extremely complex and, because
there are no legal precedents to follow for many aspects,
they are expensive to resolve."

The absence of clients of the collapsed brokerage was a
distinct change from the early court days where extra seats
had to be put outside the courtroom to accommodate the
disgruntled investors.  The brokerage's collapse was a
dramatic affair, at one point involving a global manhunt
for Forluxe Securities' chairman James Mui Kwong-nok and
his brother Gordon Mui Kwong-yin.

The pair were arrested by commercial crime police at Chek
Lap Kok in July 1998 amid accusations of fraud. No charges
have been laid.  Liquidators in the meantime pursued the
pair via the civil courts, securing a judgment of more than
HK$39 million. (South China Morning Post 07-Dec-2000)

GUANGDONG ENTERPRISE: Creditors back US$5.95B rehab
Debt-ridden Guangdong Enterprise (Holdings) (GDE) can
finally seal its US$5.95 billion debt-restructuring plan,
as nearly all creditors have approved it.

As of yesterday, the deadline for banks to sign off on the
plan, 146 creditors holding about 97 per cent of GDE's debt
had given their approval, according to Standard Chartered
Bank, the liaison member of the creditors' steering

"We are extremely pleased with the overwhelming favourable
response," said Standard Chartered's E. M. Williams,
chairman of the steering committee.

The Guangdong provincial government had stipulated a
minimum 95 per cent acceptance rate by creditors before any
debt restructuring could go ahead.  The debt restructuring
of GDE, the insolvent investment arm of the Guangdong
government, could be completed without the approval of the
remaining creditors, Standard Chartered said.

However, the bank said creditors that failed to sign on to
the restructuring plan would be excluded from it.
Mr Williams urged the remaining banks to approve the plan
to avoid losing "the substantial value to be provided by
the Guangdong provincial government under the restructuring

GDE's restructuring plan, which was initiated two years
ago, is the largest to be undertaken in Asia.  From the
onset, Beijing was determined to make GDE's debt
restructuring a success to restore the confidence of
bankers and foreign investors in mainland companies.
The success of GDE's debt restructuring would also be a
model for other government-backed insolvent enterprises.

Under the debt-restructuring plan, announced by the
Guangdong provincial government last December, creditors
and bond holders will receive a package of cash-equity
assets for every US$100 GDE owes them.  The package has a
bond certificate for the Dongjiang water project with a
face value of US$45. In addition there would be a GDE
security with a face value of between US$10 and US$12, and
US$10 cash.

GDE became insolvent after Beijing shut down Guangdong
International Trust and Investment Corp (Gitic) - one of
Guangdong's premier fund-raising arms.  The 1998 closure
caused an uproar among international banks, which in turn
tightened their lending to a significant number of mainland
companies, including GDE, leaving these firms with a
mountain of debt. (South China Morning Post 07-Dec-2000)

GUANGNAN HOLDINGS: Trio of ex-execs jailed
A court yesterday handed down some of the most severe
penalties for a mainland-related company in Hong Kong,
sending three former executives of scandal-plagued Guangnan
Holdings to jail.

The trio were sentenced to between two years and six years
for fraudulent accounting, conspiracy to defraud and
misappropriation of funds from Guangnan and its
subsidiaries.  Mr Justice Gareth Lugar-Mawson said the
scandal could jeopardise Hong Kong's reputation as an
international business centre.

Guangnan, the listed food arm of Guangdong Enterprises
(Holdings), is undergoing a comprehensive financial,
corporate and management restructuring to resolve debts of
US$5.95 billion. Its problems emerged after the spectacular
collapse of Guangdong International Trust and Investment
Corp in 1998.  The judge said the three -- who had
embezzled funds of Guangnan subsidiary Chaozhou Industries
(Holdings) and had "gambled" them on the stock market --
"ignored company law as if it was "a children's game."

"These are serious offences, particularly in Hong Kong,
which enjoys an excellent international reputation as a
place for honest business," he said.

The judge said the share prices of listed companies should
reflect their genuine status, but the deception scheme
embarked on by the management of Guangnan had "defeated
that purpose." The company's auditors, the Securities and
Futures Commission and the stock exchange were successfully
deceived from the fact that the food company had
exaggerated its annual profit for three financial years
from 1996 to 1998.

Guangnan, burdened by US$488 million in debts, reported a
net loss of HK$3.47 billion for last year and a negative
shareholders' equity of HK$1.18 billion as of December.
Huang Xiao-jiang, 35, formerly an executive director of
Guangnan, was jailed for six years on five counts of
conspiracy to defraud and one of conspiracy to commit false

Former deputy financial controller Xie Ping, 35, was jailed
for four years on two counts of conspiracy to defraud, two
of conspiracy to commit false accounting and one of false
accounting.  The judge accepted he was not an active player
and in the middle-management level. Chen Li-bin, 38,
previously a director of Chaozhou but with no part in
Guangnan, was jailed for two years on one count of
conspiracy to commit false accounting. The judge believed
he was pressured to take part in the scam as he was a
junior in the hierarchy.

The judge also accepted none of the three were the
ringleader and were not personally enriched in the "rotten,
corrupted and dishonest" scam.  Former chairman Sun Guan,
52, believed to be the mastermind of the fraud, remains at

Huang and Xie admitted more than doubling Guangnan's profit
through fraudulent accounting and fabricating business
transactions.  They and Chen further admitted embezzling
more than HK$46 million from Chaozhou for share
speculation.  They committed the offences on instructions
from top management, the Court of First Instance heard.

They were among nine Guangnan executives arrested by the
Independent Commission Against Corruption, sending shock
waves through the stock market worried about the quality of
management of locally listed mainland companies. (South
China Morning Post 07-Dec-2000)

TRUE NEWS LTD: Facing winding up petition
The High Court of Hong Kong SAR, Court of First Instance,
has scheduled a hearing on January 10, 2001, on the
petition of Lau Kam Hung for the winding up of True News
Limited. A notice of legal appearance must be filed on or
before January 9.

21 CYBERNET CORP.: Posts $9.88M half-year loss
21 Cybernet Corporation Ltd recorded a $9.886 million loss
for the six-month period ended Sept. 30. Turnover was $6.49
million and loss per share was at 0.41 cent. No dividend
was declared.


PT DHARMALA INTILAND: Signs MOU on rehab plan with IBRA
The Indonesian Bank Restructuring Agency has signed a
memorandum of understanding on a debt restructuring
exercise with PT Dharmala Intiland and its six operating
companies. The restructuring will cover outstanding debts
of some 520 billion rupiah and US$2.862 million. The exact
amounts must still be verified according to IBRA. The
repayments will be made over terms of 1-5 years.

PT PERTAMINA: Debt-laden oil firm to slash workforce 40%
In an attempt to transform itself into a world-class energy
company, debt-ridden state-owned oil firm Pertamina has
announced plans to lay off almost half of its workforce.

"There will be a reduction between 30 percent and 40
percent in structural positions. Pertamina is focusing on
how . . . to become more efficient and competitive," said
Pertamina's general manager Baihaki Hakim, according to The
Jakarta Post .

Years of mismanagement and corruption have left Pertamina
with more than US$10 billion worth of debt.  The giant
conglomerate was an integral part of a web of state
subsidies, monopolies and cartels that allowed former
dictator Suharto, his cronies and children to amass huge
fortunes and finance a system of patronage that kept his
authoritarian regime in power for 32 years.

Critics have called for the company, which employs 26,000
people, to initiate a wide-ranging investigation of graft
and other corrupt practices.

"The main thing they should do is to fire corrupt
officials," said Bachrowi Sanusi, an analyst in the oil and
natural gas sector. "It's no use restructuring if they
don't solve this problem."

Indonesia's attorney general has already opened an
investigation into corruption at Pertamina.  Mr Hakim
denied accusations that the reduction of the workforce and
restructuring was due to financial difficulties. He said it
was an effort to catch up with foreign companies such as
its Malaysian counterpart Petronas, which are important
players on international energy markets.

A spokesman for Pertamina said the reductions were not
expected to cause undue problems. He said about 1,000
workers retire annually and the rest would be encouraged to
relocate to subsidiaries.  Pertamina is expected lose its
long-time market monopoly in fuel distribution in Indonesia
next year after regulators agreed to open up the sector to
foreign competition. (South China Morning Post, Jakarta
Post 07-Dec-2000)

The Jakarta Commercial Court upheld its previous ruling
rejecting the Indonesian Bank Restructuring Agency (IBRA)'s
1.0 trillion rupiah claim in the PT Tirtamas Comexindo
bankruptcy case.

According to Judge Mahdi Soroinda Nasution, "IBRA cannot be
considered as Comexindo's creditor."

In the Comexindo case, IBRA represented the claims by a
number of commercial banks taken over by the agency.
Nasution added the legal owners of the claims are still
those commercial banks, not IBRA.

SALIM GROUP: Delay in exercise of put option sought
The Salim Group plans to ask Polymax bondholders to
postpone exercising their put option in February 2001 in
order to prevent the dilution of Salim's stake in PT
Indocement Tunggal Prakarsa Tbk of 39 percent.

Phiong Phillipus, Corporate Finance Division Manager ITP,
said the Salim Group will immediately negotiate with
bondholders regarding the matter. "So they will not
exercise the put option in February 2001," he told Bisnis

The Salim Group has issued a Polymax exchangeable bond
worth US$200 million, which was issued by Polymax
International Ltd -Salim Group's vehicle - in 1996, with
guarantee of Salim's ITP stake. The bond is due on 27
February 2006 with put option on 27 February 2001.

Earlier it was reported that Salim's stake in ITP might be
diluted significantly due to the put option if ITP fails to
execute the extraordinary shareholders meeting by the end
of this December only because the government the government
has not given approval on Heidelberger's acquisition plan
through a rights issue. It is also feared that Heidelberger
will cancel its plan, which will result in the damage of
the government's stake.

Salim currently controls 43.7 percent stake in ITP, which
consists of PT Kaolin Indah Utama (KIU) 39.28 percent and
PT Mekar Perkasa (MP) 4.42 percent. Meanwhile the
government controls 45 percent, in which IBRA holds 20
percent and the Finance Ministry 25 percent.

According to Phiong, during the put option, the Salim Group
will face two probabilities. First, if the bondholders
convert their bonds to ITP shares, Salim's shares will be
diluted by 3 percent.

According to the statement issued by ITP management
recently, based on the exchange price of US$1.66 per share,
the bond can only be swapped with ITP's old shares that
belong to KIU, which amounts to 95.9 million shares or
3.97 percent. Second, if the bondholders demand payment and
the Salim Group cannot fulfill it, Salim might lose a
maximum of 39 percent of its ITP stake.

"Because the shares will be sold immediately to securities
agents," Phiong said. "Meanwhile the shares guaranteed is
only 39 percent, and only 5 percent were guaranteed to
Marubeni and Sumitomo."

Phiong, however, was optimistic the bondholders would delay
exercising their put option rights. That's because the
Salim Group has received a principle agreement from
Heidelberger to finance Salim's bond payment. "We're just
waiting for the agreement to be signed," Phiong said.
(Bisnis Indonesia 7-December-2000)


SHIGERU TANAKA: Mayor's debts a staggering 7 billion
According to an article in the Dec. 6 Asahi Shimbun, a
mayor who jumped on Japan's so-called "bubble economy"
bandwagon and failed now has debts exceeding 7 billion yen.

The article credits knowledgable sources with the story
that 74-year-old Shigeru Tanaka -- mayor of Wako city in
Saitama Prefecture -- now has no way of paying the interest
on his debts, let alone the principal. Tanaka first got
into trouble due to a failed building project in central
Tokyo's Akasaka district.

At the height of the asset-inflated economy in 1989, Tanaka
borrowed heavily for construction of an eight-story
building to be called the Akasaka Tanaka Building.
According to a report on his assets that he submitted to
Wako city, Tanaka's debts totaled 7.1 billion yen as of
April 1998 and 70.6 billion yen two years later.

Creditor banks that loaned money to Tanaka already have
written off about 4 billion yen in bad loans and sold the
credit to Corporative Credit Purchasing Co., a private
organization funded by banks and financial institutions.
Even if Tanaka were to sell off all his assets now, he
would have a major shortfall in covering the debt.

According to a former account clerk for the mayor, Tanaka
owes 3.245 billion yen to Tokai Bank and 240 million yen to
the Bank of Tokyo-Mitsubishi. He also borrowed 2.8 billion
yen from credit-guarantee companies.

Tanaka had planned to receive high rents from the Akasaka
Tanaka Building, which also had rental accommodations below
ground. He established a real estate management company to
receive down payments and rent from tenants. He initially
planned to repay all the loans in 15 years.

The building failed to attract enough tenants, and the
collapse of the over-extended Japanese economy in the early
1990s quashed Tanaka's plans of meeting his debt and making
great wealth. Meanwhile, Tanaka has assured voters he has
committed no wrongdoing, and he expects to run for a fourth
term as mayor.


AHN KWON & CO.: To face charges for passing false statement
Cho Hung Bank yesterday accused a domestic accounting firm
of glossing over financial statements fabricated by Haitai
Confectionary Co.  According to the bank, Haitai reduced
its bad debts by 463.2 billion won, but the accounting
firm, Ahn Kwon & Co., failed to correct the manipulation
while auditing the bankrupt confectionary company.

Cho Hung is also planning to press charges against Park
Gun-bae, former chairman of Haitai Confectionary, and other
concerned employees.  "We have discovered that Haitai
Confectionary illegally reduced the bad debts by 463.2
billion won," said a Cho Hung official, adding that the
bank would charge complaints against Ahn Kwon & Co. for its
neglect of duty, if over 75 percent of Haitai's creditors
pass the resolution.

Cho Hung Bank suspects that Haitai Confectionary presented
the falsely adjusted financial statements in an attempt to
receive approval from the creditors on the firm's
normalization plans concerning a composition contract with
Cho Hung.  Haitai Confectionary had gone bankrupt in
November 1997, shortly following the insolvency of its
parent Haitai Group, but was chosen for composition in
August the following year.

Haitai Confectionary was designated for a sell-off by the
creditor banks last month and is currently searching for a
buyer with universal banking group ABN AMRO acting as the
lead manager of the sale. (Korea Herald 07-Dec-2000)

CHEJU BANK: Cash infusion or merger planned for it
HANVIT BANK: Cash infusion or merger planned for it
KWANGJU BANK: Cash infusion or merger planned for it
KYONGNAM BANK: Cash infusion or merger planned for it
PEACE BANK: Cash infusion or merger planned for it
SEOULBANK: Cash infusion or merger planned for it
The South Korean government will inject 7 trillion won
(HK$42 billion) into six debt-weakened banks and next year
create two mega-banks. The latest cash lifeline will come
on top of about US$100 billion (HK$780 billion) of state
money already put into the financial system since the 1997
financial crisis.

After the latest injection, a financial holding company
will be set up in February to run Hanvit bank, Kwangju
bank, Peace bank, Cheju bank and Kyongnam bank, the
Financial Supervisory Commission (FSC) said. The sixth,
Seoulbank, will be auctioned off to foreign investors or
taken over by the holding company by mid-2001.

"The government expects to lay down the framework of
banking sector restructuring by the end of this year so
that domestic banks will have the foundation to enhance
competitiveness," the FSC said in a press release. "For
this purpuse, the government will push hard with the second
phase banking sector restructuring through the establish-
ment of a financial holding company and the merger of other
strong banks."

It said the public funds would enable the weak banks to
lower the ratio of bad loans against all loans to 6 per
cent and achieve a 10 per cent capital adequacy ratio, an
indicator of a bank's capital against liabilities.

"About 7 trillion won of public funds is expected to be
required for the six banks," the FSC said. Because of low
profitability and huge bad loans, South Korean banks cannot
compete with foreign institutions.

"It is necessary [for the government] to lead even strong
banks to combine their operations and to step up banking
sector reform," the FSC said.

It noted that Hana Bank and KorAm Bank are in merger talks
to create the country's second largest bank with total
assets of 82.7 trillion won. Kookmin is the largest bank.
Starting next October, the government will reorganise the
banks into separate wholesale, retail and investment
operations, officials said. A senior FSC official said two
"super banks" would be created, one by merging healthy
banks and the other led by Hanvit Bank.

President Kim Dae Jung has vowed to have financial sector
reforms ready by the end of the year and in the labour
sector by next February. But the International Monetary
Fund (IMF), whose US$58 billion bailout funds saved South
Korea from a financial meltdown in late 1997, has cast
doubt on the government's plan to tie up non-viable banks
under a holding company.

"The use of financial holding companies as a vehicle to
solve weak banks is questionable," David Coe, the IMF's
senior representative in Seoul, told journalists this week.

He noted that corporate leverage levels are still too high
and banks are still lending to non-viable companies.
"Failure to correct such lingering problems could result in
yet another banking crisis," he said. (Hong Kong iMail 07-

DAEWOO MOTOR: Halts operations at two plants
Daewoo Motor halted operations at its two biggest plants
Thursday because of problems in parts supplies from Korea
Delphi, its largest parts supplier.

"Korea Delphi stopped supplying parts and asked to
negotiate payment methods for supplies," said Kim Jong-do,
a spokesman from South Korea's third largest automaker,
which is in court receivership.

Creditors and Korea Delphi would start talks and operations
would be resumed soon, he said.  It was the second time for
both plants to stop operating since Daewoo Motor went
bankrupt.  The Pupyong plant, the firm's largest plant
which had been idled for three weeks, resumed operations on
Monday, after creditors agreed to provide fresh loans. The
other plant is located at Kunsan.

Daewoo Motor's debt was estimated at $7.45 billion as of
June 30. Banks agreed to provide 727.9 billion won ($607.6
million) in fresh funding after the company's union agreed
to job cuts. (Reuters 07-Dec-2000)

KOREA LIFE INSURANCE: Leads insurance co. losers in 1H
KYOBO LIFE INSURANCE: Leads insurance co. losers 1H
Samsung Life Insurance is the only life insurer to register
a profits (29.2 billion won) in the first half of the year,
while Kyobo Life Insurance and Korea Life Insurance
suffered losses of 285.1 billion won and 232.5 billion won,

Overall, the nation's 23 life insurance companies suffered
combined losses of 785 billion won during the first half of
fiscal year 2000 (April-September) due mainly to massive
stock appraisal losses, although they enjoyed a combined
pre-dividend profit of 1.19 trillion won during the same
period last year, according to the Financial Supervisory
Service (FSS).

Life insurers as a whole marked an average 7.3 percent
growth in asset operation profits, lower than the planned
average interest rate of 7.8 percent to be paid on
customers' insurance premiums, an FSS official said.
The three leading players - Samsung, Kyobo and Korea - were
also in the same boat, although they registered respective
profits of 862.7 billion won, 399.3 billion won and 73.3
billion won in the first half of fiscal year 1999, thanks
to massive share appraisal profits. In other words, they
could not bear the interest costs on premiums with the

In a report on performance of life insurance firms, the FSS
said yesterday that the 13 life insurance companies lost a
combined total of 785.2 billion won due to stock price fall
in the first half _ 280.2 billion won in the first quarter
and 505 billion won in the second quarter.  Despite the
losses in stock investment, the life insurers garnered 3.22
trillion won in profits from insurance business and another
2.32 trillion won in profits from other investments this
year, according to the report.

But they had to register the huge amount of losses since
they have to keep as much as 5,729 billion won in their
mandatory reserves, the official said. The figure is up
about 4,585 billion won from the 1,144.2 billion won a year
earlier.  The mandatory reserve refers to the money that
insurance firms have to deposit among the premiums
collected in order to pay their customers when they are
matured or requested.

In the first half of this year, the combined assets of the
insurance firms rose 16 percent from the previous year to
114.49 trillion won.  But amid the widening gap in
insurance policy sales between big and small companies, the
big three _ Samsung, Kyobo and Korea _ occupied 83.2
percent of the total assets, an increase of nearly 10
percentage points from the 74.3 percent last year.

In insurance business, Samsung gained 2.98 trillion won in
profits, Korea 883.8 billion won and Kyobo with 173 billion
won, while minor firms such as Hyundai and Samshin recorded
deficits of 258.5 billion won and 182.5 billion won,
respectively.  (Korea Times 06-Dec-2000)


PSC INDUSTRIES BHD: Revises debt restructuring plan
PSC Industries Bhd (PSCI) has revised its proposed debt
restructuring exercise, resulting in the increase of the
total debt to be restructured from RM554.01 million to
RM581.42 million.

In a statement to the Kuala Lumpur Stock Exchange today,
the company said the debt to be restructured were those
owing to OCBC Bank (Malaysia) Bhd, Bank Islam Malaysia Bhd,
secured bank creditors and unsecured bank creditors. It
said the secured debts of RM73.72 million owing to OCBC
Bank (Malaysia) Bhd would be settled by cash.

On the RM34.69 million owed to Bank Islam Malaysia Bhd, the
company has proposed to convert the debts into 4.08 million
new PSCI shares at an indicative price of RM8.50 per share.
PSCI said it proposed to convert the RM426.66 million bank
borrowings, including interest capitalised, owing to
secured creditors into 50.19 million new redeemable
convertible loan stocks A (RCLS 'A') at an indicative price
of RM8.50 debt to RM1 nominal value of RCLS.

In its proposal to restructure the RM46.33 million
borrowings to unsecured bank creditors, the company will
convert the debt into 5.45 million RCLS 'B' at an
indicative price of RM8.50 per new ordinary shares of RM1
each in PSCI. (The Edge Daily 06-Dec-2000)

RASHID HUSSAIN BHD: Revises financing plan for group revamp
RHB Bhd has unveiled a revised group restructuring and
financing scheme which, in essence, calls for a RM650mil
bond issue in place of the originally proposed rights
issue, convertible bond issue and private share placement
to raise a similar amount of funds.

However, even with the revision, substantial shareholder
Malaysian Resources Corp Bhd (MRCB), which has a 22.7%
stake in RHB, remains opposed to the scheme.  Under the
revised scheme, RHB shareholders would no longer be
required to raise cash to fund the restructuring exercise
as the proposed bond issue to be made via a special purpose
vehicle wholly-owned by subsidiary RHB Capital Bhd would be
fully underwritten by HSBC Bank Malaysia Bhd.

The RM650mil 10-year serial bonds would be issued in 10
tranches with maturities ranging from one to 10 years and a
fixed rate coupon for each bond tenure payable semi-
annually in arrears. They would have an average indicative
yield of 7.6% per annum.

Adding to RHB's confidence in the success of the proposed
bond issue was the upgrading of RHB Bank Bhd's rating from
AA3 to AA2 by Rating Agency Malaysia Bhd (RAM), said RHB
group executive chairman Tan Sri Abdul Rashid Hussain at a
press conference in Kuala Lumpur yesterday.  The revised
plan, which would assure the group of the requisite
financing for its restructuring scheme, meant that "we are
on track and ready to meet the banking and universal broker
status deadlines by year-end," he said.

Rashid said although the decision to revise the scheme was
partly due to MRCB's objection to the original plan, the
main reason was the weak sentiment in the equities market
which made equity financing difficult.  He said the new
scheme had received Bank Negara's approval as well as the
"unanimous'' approval of the RHB board of directors except
MRCB's two representatives on the board.

RHB had announced in September a comprehensive plan to
streamline its businesses by de-linking its banking and
insurance operations from its stockbroking activities.
Under the revised scheme, at RHB level, its proposed 1-for-
10 rights issue at RM2 per share has been scrapped.

At the RHB Capital level, the swap ratio for the proposed
acquisition of the remaining 49% stake in RHB Securities by
way of a scheme of arrangement has been varied.  Minority
shareholders in RHB Securities would now receive 11 RHB
Capital shares for every 10 RHB Securities shares held.
Previously, they would have been entitled to five RHB
Capital shares and five RHB Capital warrants for every six
RHB Securities shares.

The disposal of the stock-brokering business of RHB Capital
to RHB Securities for RM1.66bil is now to be satisfied via
a combination of RM1.15bil cash (previously RM1.02bil), a
novation of a loan of RM180mil and the issue of new RHB
Securities shares at RM3.65 each (previously RM3.80).

RHB is also proposing that prior to the demerger of RHB
Securities from RHB Capital, the stockbroking entities
would declare and distribute their surplus distributable
reserves totalling RM250mil as dividends for the financial
year ending June 30, 2001, to RHB Securities which, in turn
would declare and distribute the same to RHB Capital.

Substantial shareholders would maintain their equity
holdings upon completion of the scheme. However, RHB's
equity interest in RHB Capital and RHB Securities would
rise slightly to 50.6% compared with 50.2% under the
original proposal. (Star Online 07-Dec-2000)

REPCO BHD: Still treading financial waters
Financially troubled Repco Bhd is showing small signs of
stabilizing despite current problems that include losses
swelling to more than RM35.6mil this year from RM9.8mil in

Kenneth Teh and Gong Wee Ning of PricewaterhouseCoopers
were appointed special administrators to the company on
April 8 last year.  Teh said the Repco management was
initiating all efforts to address the company's problems,
including its borrowings which had ballooned from
RM378.8mil last year to more than RM419.3mil this year due
to interest charges.

Its revenue had also declined from RM270mil in 1999 to
RM236.8mil this year.  Gaming activities, through its
subsidiary Everise Ventures Sdn Bhd, continued to be the
main income earner for Repco, contributing more than
RM219.5mil to the group this year compared to RM255mil in

Sales of autoparts products through Repco (M) Sdn Bhd and
Repco Industries Sdn Bhd amounted to RM9.4mil to the group
this year while timber activities through Repco Timber Sdn
Bhd and Hajat Samarak (M) Sdn Bhd contributed RM7.8mil.
Trading of Repco shares was suspended on April 8 last year.

"In terms of performance, the company is stabilising," said
Teh after the company's AGM in Kota Kinabalu yesterday.
(Star Online 07-Dec-2000)


MONDRAGON LEISURE AND RESORT: Clark Devel. to oversee rehab
State-run Clark Development Corp. (CDC) is taking charge of
rehabilitating debt-laden Mondragon Leisure and Resort
Corp. (MLRC) after its financial adviser backed out due to
controversies involving the Mimosa Leisure Estate in the
former US airbase in Pampanga, north of Metro Manila.

In an exclusive interview with BusinessWorld yesterday, CDC
president Rogelio L. Singson said the state-owned firm will
not allow Mondragon chairman Jose Antonio U. Gonzalez to
run the company. He said CDC will be looking at all
possible options to resume casino operations in Mimosa
which will include the entry of new investors and public

Mr. Singson added that CDC will resume talks with
Mondragon's creditor banks on debt restructuring which has
been halted after investment firm Penta Capital Investment
Corp. terminated its financial advisory agreement with
the casino operator.

"We're looking at how to proceed from here on after
PentaCapital backed out. I'm looking now at the legal
aspect and cleaning it up and talking to the creditors if
they're ready to come in and operate it. We're looking at
all options including going to public bidding," he said.

PentaCapital terminated the agreement with Mondragon
chairman Jose Antonio U. Gonzalez after the latter made
allegations two weeks ago that the investment company is
involved with associates of embattled President Joseph
Estrada. PentaCapital agreed in July to negotiate with
Mondragon's creditors, CDC, the Philippine Amusement and
Gaming Corp. (Pagcor) and the Bureau of Internal Revenue
(BIR) in behalf of the debt-laden firm for the settlement
of its debts and the resumption of the casino operations.

The financial adviser has also deferred the 650-million
Philippine peso ($13.04 million at PhP49.832=$1) bridge
financing it has committed to infuse into Mondragon. With
the termination of its financial advisory services,
PentaCapital has also withdrawn all proposals submitted to
the government agencies and the creditor banks.

The CDC official said putting Mimosa on the auction block
will avoid further controversies since the bidding will be
transparent. "It's too controversial if we get investors,
I'd rather go into open bidding and it's up to them who
will submit the most attractive bid," he said.

Meanwhile, Mr. Singson said CDC will be prioritizing the
five creditor banks which have leasehold assignments. These
include Metropolitan Bank and Trust Co., Far East Bank and
Trust Co., Asian Banking Corp., United Coconut Planters
Bank and Land Bank of the Philippines.

PentaCapital earlier said almost all of Mondragon's 25
creditor banks have given their nod on the proposed terms
of the restructuring to pay off its PhP6-billion ($120.40
million) debt. It has asked creditors for a moratorium
on debt payment until the company starts generating
profits. PentaCapital has also asked the creditor banks to
give the casino firm between eight- and ten-year period to
pay its debts with interest of about 8%.

The investment firm has also negotiated for an equity
conversion as well as partial asset for share swap
arrangement involving some of the Mondragon group's assets
together with properties personally owned by Mr. Gonzales.
In the meantime, Mr. Singson said all the other facilities
in Mimosa will continue to operate aside from the casino.

"We have assured the members that they can continue to use
the facilities, we continue to operate the golf course, the
hotel under an arrangement. It's only the casino that
didn't cooperate, because that's Pagcor's license. But
otherwise all the facilities are functioning," he said.
(Business World  07-Dec-2000)


SIAM STEEL INT'L: Bt65M forex losses found
Siam Steel International's total unrealized foreign
exchange losses on its consolidated balance sheet as of
September 3 were Bt65 million, according to an auditor's
filing to the stock exchange.

Somckid Tiatragul, the certified auditor of the company,
said that Siam reaped a consolidated gain of Bt1.9 million
from loan repayments, but its unrealized loss from
outstanding loans totalled Bt67 million.  The report shows
that as of September 30, accumulated unrealised exchange
losses stood at Bt917 million, of which Bt572.9 million was
unrealized exchange losses on outstanding loans.

The auditor noted that as of June 30 SIAM and its
subsidiaries' outstanding foreign loans came to approxi-
mately $37.09 million. Under the rehabilitation plan, which
was approved by the Central Bankruptcy Court on May 11, the
foreign currency loans were split into three parts - $13.96
million and $8.64 million and $14.49 million, respectively.

The third part was converted to approximately Bt1.269
billion and is in the process of being converted to equity.
During the three-month period ended September 30, Siam had
paid approximately $220,000 in foreign loans on the first
part. As a result, outstanding foreign currency loans at
the end of the third quarter stood at approximately $36.87
million, the auditor noted. (The Nation  08-Dec-2000)

SUPALAI: Restructures Bt94M loan
Bank of Asia has agreed to restructure a Bt94 million loan
to troubled property developer Supalai using a debt-to-
equity conversion formula. Achara Tangmatitham, vice
executive chairman of Supalai, informed the Stock
Exchange of Thailand that the deal was signed yesterday.

Supalai owes Bt94 million to the bank in the form of
unsecured convertible debentures. But under the plan BOA
agreed to inject a total of Bt181.5 million into the
company, giving Supalai a gain of Bt87.40 million. The bank
also holds unsecured debentures and convertible debentures
issued by the property company.

The 70,547 units of unsecured debentures, due 2007, were
sold to the bank at Bt841.2652 apiece. The debentures offer
an annual coupon rate of 2.5 per cent. The net proceeds
from the debentures totalled Bt59.3 million.

Supalai also issued the bank 34,751 convertible debentures
at Bt1,000 apiece. Supalai informed the stock exchange that
BOA exercised its right to convert the debentures to 1.66
million shares at a price of Bt20.95 apiece. (The Nation

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

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