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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Wednesday, December 27, 2000, Vol. 3, No. 251
Headlines
* C H I N A & H O N G K O N G *
GUANDONG ENTERPRISES: Creditors Approve Debt Restructuring plan
* J A P A N *
MYCAL CORP.: Closes 45 Stores & Retires 1,500 Employees
SOGO CORP.: Developer Offers $3.5b For Causeway Bay Premises
* K O R E A *
DAEWOO MOTORS: Banks Refuses To Honor Checks To Contractors
HYUNDAI INVESTMENT: Unlikely To Meet Recapitalization Deadline
KOOKMIN BANK: Strike Paralyses Bank Operation
REGENT MERCHANT: Declares Bankruptcy
* M A L A Y S I A *
ACTACORP HOLDINGS: Targets To Finish Debt Revamp By June
FCW HOLDINGS: Imposes Stringent Cost Cutting Measures
* P H I L I P P I N E S *
ASB GROUP: Hongkong Firm Studies Possible Investment
UNIWIDE: Creditor Banks Approve Rehabilitation Plan
VICTORIAS MILLING: Urges SEC To Stop Alternative Rehabilitation Plan
* T H A I L A N D *
BANK of AYUDHYA: Will Trim Non-Performing Loans by 20% next year
THAIOIL POWER: Asks Creditors for Repayment Extension To Attract Investors
THAI TELEPHONE: Creditors Approve Bt40B Debt Restructuring Plan
================================
C H I N A & H O N G K O N G
================================
GUANDONG ENTERPRISES: Creditors Approve Debt Restructuring plan
---------------------------------------------------------------
After two year negotiating with creditors, Guandong Enterprises Holdings
(GDE) completed a landmark US$ 5.59 billion debt restructuring plan which
will serve as model for government-backed insolvent companies.
Under the plan the provincial government will inject its 81 per cent
holdings in Dongshen Water Supply into Guandong Investment, 40 per cent
owned by GDE. While two GDE companies were reorganized to improve
management and capital structures.
Wu Jiesi, chairman of Guandong Investment (GDI)told the SOUTH CHINA MORNING
POST, the agreements and practices achieved through commercial and
consensual negaotiations were consistent with international practices.
Goldman Sachs, GDE's adviser, said the successful restructuring will send
an approval for China's commitment to the international lending community,
international capital markets and the reform of state-owned enterprises".
The restructuring started on December 1998 and the injection of the
Dongshen Water project was put on hold twice because its future supply
contract with SAR Government was uncertain. The proposal pushed true when
99.99 per cent GDI shareholders approved the deal.
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J A P A N
=========
MYCAL CORP.: Closes 45 Stores & Retires 1,500 Employees
-------------------------------------------------------
Mycal Corp., a major retailer, will implement a restructuring plan to
reduce a 1.16 trillion yen total debt as of August 31 by shutting down 45
stores and asking some 1,500 employees to apply for early retirement.
The company already disposed its fitness club unit People Co. now will sell
shares in Mycal Card Inc., a credit card company; and Mycak Finance in
Japan
Maintenance Co., a group firm specializing in maintenance of building
facilities, a JAPAN TIME report said.
Mycal posted a group net loss of 5.9 billion yen on revenues of 1.856
trillion yen in the business year that ended in February.
January next year, another 22,000 employees from 71 group firms will be the
next to have an earlt retirement to cut further payroll costs.
SOGO CORP.: Developer Offers $3.5b For Causeway Bay Premises
------------------------------------------------------------
CHINESE Estates' (0127) major shareholder Joseph Lau Luen-hung is
rumored to be offering $3.5 billion to buy the premises of Sogo
department store in Causeway Bay.
Market sources said Mr Lau had recently stepped up his efforts to bid
for thepremises by raising the offer price. Situated in a prime
location of the busy district, the building has a total floor area of
about 450,000 square feet and hosts both the department store and office
space.
The office space is used by Sogo to run the local operation. The offer
price stands at an average of $7,777.80 per square foot. Market sources
said Osaka-based Sogo planned to sell the premises for almost $4 billion
to raise money to repay its debts after it had sought court bankruptcy
protection in early April this year.
Hang Lung Development (0010) chairman Ronnie Chan Chi-chung last month
said Sogo had earlier approached his group regarding a possible sale.
Other potential buyers include Sun Hung Kai Properties (0016) and Wharf
(Holdings) (0004). (Hong Kong iMail 22-December-2000)
=========
K O R E A
=========
DAEWOO MOTORS: Banks Refuses To Honor Checks To Contractors
------------------------------------------------------------
Creditor banks failed to honor checks issued by Dawoo Motors to 15
contractors and is negotiating to pay only 40% of the W 1.4216 trillion in
bills.
Daewoo Motor primary contractors' have some W 277.5 billion debt that
will be due at the end of the month and may go insolvent if they will not
be able to honor these debt payments, a report from the DIGITAL CHOSUN
said.
HYUNDAI INVESTMENT: Unlikely To Meet Recapitalization Deadline
--------------------------------------------------------------
Hyundai Investment Trust and Securities (HITS) will rely mostly from the
asset swapping from other Hyundai affiliates and the AIG investment of
U.S. for equity investment to meet the re-capitalization deadline at the
end of the year.
Hyundai Electronis Industries (HEI) has a standing offer from its
affiliates to have its stock holdings as collateral to the creditors and
will be converted to equity capital if there will be a shortfall.
Minority shareholders in HEI opposed the conversion of its share holdings-
9.62 million shares in Hyundai Information Technololgy, 317,000 shares in
Hyundai Logistics, 7.74 million shares in Hyundai Autonet - into HITS
equity, a KOREA HERALD report said.
KOOKMIN BANK: Strike Paralyses Bank Operation
---------------------------------------------
Kookmin Bank and Housing & Commercial Bank (HCB) is posed to incur losses
if the strike will prolong and management and union feud intensifies
because to the merger negotiations.
The presidents of the two banks gave the strikers until the start of
business hour of December 26,2000 to return to work and will not be
subjected to disciplinary actions, the DIGITAL CHOSUN report said.
Some team and deputy general managers of the banks' operational branches
started to denounce the merger and eventually joined the strike on
Saturday. They also announced they were not recognizing President Kim
Sang-hoon (who handled the merger negotiations). Every employee of Kookmin
Bank, except the management, and will likely to continue until December
28.
Union members opposed the mergers because of the job cuts that is
inevitable. At the moment, 60% of Kookmin and H&CB branches reportedly
overlap within a 500 meters range. But President Kim Sang-Joon promised
affected employees will be given large settlement if discharged.
If the strike will continue to prolong, a series of default will occur
from small and medium companies. An estimated loss of W300 billion per
day was projected for as long as there will be no note settlement.
REGENT MERCHANT: Declares Bankruptcy
------------------------------------
Regent Merchant Bank was declared bankrupt because of the illegal loan
scandal involving MCI Korea chair Jin Seung-hyun causing massive
withdrawals depleting W540 billion in deposits. The Financial Supervisory
Commission immediately gave the bank a three month operation suspension
order.
===============
M A L A Y S I A
===============
ACTACORP HOLDINGS: Targets To Finish Debt Revamp By June
--------------------------------------------------------
Actacorp Holdings Bhd is targeting to complete its debt restructuring
scheme by next June, said group executive director Syed Adeli Syed
Amir.
"The company has already held discussions with its creditors to gauge
its position on various aspects of the scheme," Adeli told reporters
after the company's AGM in Subang yesterday.
He said the company was undertaking the restructuring under the
direction of the Corporate Debt Restructuring Committee (CDRC), which
had made a few proposals regarding an asset injection.
However, Adeli declined to elaborate, saying the details had yet to be
finalised.
He said that on completion of the restructuring the company's core
business might be changed, depending on the type of new assets to be
injected into it.
"The company's future core business could be construction, property
development or a totally new business," he said.
Adeli said the company might see the emergence of a new substantial
shareholder after the restructuring.
Currently, the company, via its subsidiary, has managed to secure a
major contract worth RM80mil from Jabatan Perumahan Negara to construct
six blocks of low-cost apartments in Kuala Lumpur.
Actacorp's total liabilities amount to RM221mil, of which 80% is owed
to bank creditors and the rest to trade creditors.
For its financial year ended June 30, 2000, the group recorded a 60%
increase in turnover from RM18mil to RM28mil. However, it remained in
the red with a pre-tax loss of RM35mil, although this was much less than
the loss of RM214mil it posted the year before. (The Star 22-December-
2000)
FCW HOLDINGS: Imposes Stringent Cost Cutting Measures
-----------------------------------------------------
FCW Holdings Bhd. will institute stringent cost-control to reduce losses
for this year and prevent its stock from becoming obsolete.
Richard Voon, Group financial controller told the STAR, these measures
will help the company become " lean and mean" in the face of rapid changes
in technology and intense competition in the sector.
FCW's pre-tax losses doubled to RM46.2 million from RM24.1 million as of
June 30 because of debt provisions and stock obsolescence.
The company gets 70% of its revenue from cellular phones and telecoms
business while the remaining 30% from projects of the defence ministry
involving installation of radio system, Voon said.
In view of the tough times, FCW executive director said it is planning to
diversify into other growth areas but telecommunications will still be a
part but not the core.
The company had a restricted issue for new FCW shares to animal feed
producer Sin Heng Chan on July this year.
=====================
P H I L I P P I N E S
=====================
ASB GROUP: Hongkong Firm Studies Possible Investment
----------------------------------------------------
A Hongkong-based company is seriously studying the possibility to takeover
ASB Group or one of its companies while the Securities and Exchange
Commission (SEC) granted a 60 day debt moratorium to protect the company
from its creditors.
ASB interim receiver Monico V. Jacob, the BUSINESS WORLD learned, the
investor wanted to takeover the real estate business. The receivership
committee is negotiating with secured and unsecured creditors to hasten
the debt due diligence by the potential white knight and possible infusion
of fresh capital.
UNIWIDE: Creditor Banks Approve Rehabilitation Plan
---------------------------------------------------
Philippine National Bank and Allied Banking Corp. approved Uniwide's
rehabilitaion plan but the investment agreement with French retailing
giant Casino Guichard Perrachon will be finalized February next year.
Uniwide has debts with PNB P832.96 million while Allied Bank P 358
million. Under the rehabilitation plan, the two banks will be
reasonable compensated". PNB will receive P 250 million in cash and the
balance of the debt converted into 50% of the new shares of stock.
The other creditors include Land Bank of the Philippines, Bank of the
Philippine Islands, East West Bank, East Asia Capital, Equitable PCI Bank,
ING Bank, International Exchange Bank, Metropolitan Bank & Trust Co.,
Philippine Bank of Communications, Rizal Commercial Banking Corp. and
United Coconut Planters Bank.
Approval for the rehabilitation plan is essential to finalize Casino's
investment in Uniwide.
Uniwide interim receiver chairman Monico V. Jacob told the BUSINESS WORLD
they are working with Casino for an extension and so far the response was
positive.
VICTORIAS MILLING: Urges SEC To Stop Alternative Rehabilitation Plan
--------------------------------------------------------------------
Victorias Milling Corporation (VMC) management filed a restraining order
before the Securities & Exchange Commission against the implementation of a
new alternative rehabilitation plan (ARP) because it might suffer some
irreparable damages, a BUSINESS WORLD report said.
Sugar planters may refuse to mill with VMC because they wanted a status
quo in place while still coming up with a final solution, a VMC
management said.
SEC has yet to hear the Bank of Philippine Islands' oppositon approving
the management committee ( Mancom) rehabilitation plan.
VMC president Manuel B. Ma¤alac said the Mancom has no authority to
deliberate BPI's opposition. In opposing the ARP, the VMC claimed it
lacks certain provisions in the proposed rehabilitation plan.
In defending the ARP, Mancom feels that their plan is more " realistic"
because it guarantees the cooperation of the creditors and stockholders
without ignoring their rights.
In the ARP, creditors will be required to convert over PhP1.1 billion and
PhP2.4 billion worth of claims into equity and convertible notes,
respectively. Capital infusion of P 300 million will also be required in
the form of equity or loans and reduce the present manpower.
Mancom appointed chief operating officer, Arthur N. Aguilar was opposed by
VMC management.
===============
T H A I L A N D
===============
BANK of AYUDHYA: Will Trim Non-Performing Loans by 20% next year
----------------------------------------------------------------
Bank of Ayudhya will restructure Bt 16 billion debt reducing the non
performing loans ( NPL) to 20 per cent next year.
Chumlong Atikul, Bank of Ayudhya president, said this is small compared
to the Bt45billion it restructured this year.
The loan-loss of the remaining bad debts will allow the bank to increase
its profits next year because it surpass Bank of Thailand's 135 per cent
requirements, a BUSINESS DAY report said.
Bad loans will shrink to 10 per cent at the end of 2003 because the
remaining debtors can no longer service their respective loan payments.
This year the borrowers outpaced new lending resulting to an outstanding
loan of Bt325 billion. Next year it will focus on export sector projecting
an increase of 4 per cent.
THAIOIL POWER: Asks Creditors for Repayment Extension To Attract Investors
--------------------------------------------------------------------------
Thai Oil Power Co. (TOP) will asked its creditor to revise its debt
repayment schedule from five to 10 years to allow it to use the money for
the purchase of a power generating plant and attract investors by paying
dividends. Its debts are in two currencies: 1.5 billion baht loaned by
Bangkok Bank(BBL) and US$37 million .
Chainoi Puankosoom,TOP Deputy Managing Director, told the BUSINESS DAY
that the firm will be listed on the domestic exchange late next year. The
company will be investing in a 117-megawatt power plant under the Small
Power Producer (SPP) project and a 700-megawatt power plant under the
Independent Power Producer project. TOP plans to offer 25 per cent to the
public while holding 74 per cent. The total registered capital will be
Bt1.8 billion.
In the Independent Power Producer project, TOP will have B-Grim of Germany
and the Electricity Investment Corporation of Switzerland as joint venture
partners.
THAI TELEPHONE: Creditors Approve Bt40B Debt Restructuring Plan
---------------------------------------------------------------
Most of the creditors of Thai Telephone & Telecommunications approved the
Bt40.608 billion debt restructuring plan which was divided into three lots.
But Alcatel opposed the plan claiming they will be paid only after all the
debts from creditors will be settled.
Witit Sajjapong, vice-president of the provincial fixed-line telephone
company, told the BANGKOK POST that Bt25.164 billion was owed to financial
creditors; Bt 8.05 billion to major trade creditors; Bt232 million to small
suppliers of equipment and services; another Bt 7.163 billion to related
trade creditors. The plan was divided into three. First lot, equivalent
to 33.213 billion baht, would be restructured to the equivalent of 20.623
billion baht. There would be a repayment term of 11.5 years including a
1.5-year grace period. Interest would be paid monthly. Creditors in the
first group can elect to convert up to one billion baht, or a portion of
their loans, directly into ordinary shares.
A second lot equivalent to 6.030 billion baht would have a repayment
term of 13 years including a grace period of 11.5 years. Interest is to
be paid monthly, but can be capitalised in an amount equivalent to 18
months of interest without triggering a default.
The third lot, equivalent to 6.56 billion baht, would have a term of
16.5 years with a 13-year grace period. Interest will be paid only after
the loans are paid up. The company has the option of buying back the third
lot of loans with the proceeds from capital increases.
The major creditors who supported 90.49 % of the debt restructuring plan
are Sumitomo Bank, Krung Thai Bank, BangThai, Credit Lyonnais and Bank of
Sweden.
He said, aside from Alcatel, there are two other suppliers namely Sumitomo
and Ericsson who agreed to back the plan. TT&T owes Alcatel Bt3billion.
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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Copyright 2000. All rights reserved. ISSN: 1520-9482.
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