TCRAP_Public/010208.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

               Thursday, February 8, 2001, Vol. 4, No. 28



DOWNER GROUP:  Takes Control on Evans Industries

C H I N A  &  H O N G  K O N G

CATIC INTERNATIONAL:  Cash Injection Slowed Losses
NEW WORLD:  Sells Regent Hotel
TOM.COM:  Closes E-Commerce Dept.


SINAR MAS:  Sells Stake in APP
ASIA PULP:  US Securities Face Delisting


MAZDA MOTOR:  Imposes 10 Percent Pay Cut on Directors
JUSCO:  Dissolves Dutch Subsidiary


DAEWOO MOTOR:  Transformed Into People's Company
DAEWOO SHIPBUILDING:  Australian Investor Bids
KOREA TELECOM:  Sells 14.7 Percent Stake


MALAYSIA AIRLINES:  Offers Top Post to Motor Racer
MALAYSIA ELECTRIC: Needs RM 150M Capital Injection
RHB BANK:  Tycoon Buys Back Stake


NATIONAL STEEL:  Creditors Wants Liquidator Replaced
PETRON CORP.: Posts P1.1B Net Loss


THAI PETROCHEMICAL:  Court Approves Rehab Plan


DOWNER GROUP:  Takes Control on Evans Industries
Downer group, a building contractor, moved to take full control
of Evans Deakin Industries yesterday through achieving the target
of 50.1 percent of EDI shares, according to the Wednesday edition
of The Australian.

Stephen Gillies, Downer Group managing director, said he
anticipated obtaining 90 percent acceptance during the next two

"We've had a very good response among the smaller shareholders
and those that haven't taken up the offer so far are mainly the
bigger shareholders or institutions," said Gillies. "But
generally, they wait until the last week and we don't anticipate
any problems in getting to that 90 percent level and then moving
to compulsory acquisition."

One of the advantages for Downer Group in taking over EDI is the
expansion of its shareholder base, as EDI has about 13,000
shareholders. The Downer Group has about 500.

Downer would also be looking at disposing of some of EDI's
interests outside the core business of infrastructure
maintenance, such as B&D Roller Doors.

C H I N A  &  H O N G  K O N G

CATIC INTERNATIONAL:  Cash Injection Slowed Losses
Catic International Holdings "turned around" last year with the
help of a HK$10 million cash injection by parent China National
Aero-Technology Import and Export Corp (Catic), the South China
Morning Post reported on Wednesday.

In another sale, the profit from a stake in a Hangzhou thermal
power plant operator also helped offset the loss for the year.

It will announce last year's results in April.

Catic International has been trying to narrow its loss, which
amounted to about HK$145.34 million in 1998. The company trimmed
the loss to about HK$39.77 million in 1999.

Catic International, formerly Far East Aluminum Holdings, is an
SAR-based backdoor listing vehicle of Catic. The company said the
investment in the thermal power operator could serve to offset
part of the operating loss of its curtain wall and aluminum works
contracting business.

Yang Chunshu, chairman Catic International, said the aluminium
price should "stabilize" this year after a rise last year.

"The US economic slow-down this year should exert downward
pressure on the price of the commodity . . . and this could lower
our production cost," Mr Yang said. He said the company had
HK$500 million worth of orders and contracts on hand for the

NEW WORLD:  Sells Regent Hotel
New World Development wants to complete its debt reduction plan
with the sale of the Regent Hotel and the merger of its telecom
assets scheduled for completion by April, according to the
Wednesday issue of HongKong iMail.

Rachel Tong, analyst with Salomon Smith Barney, estimates the
sale price of the entire Regent Hotel at about $2.7 billion to
$2.8 billion, implying a valuation of $4.5 billion to $4.6

Henry Cheng Kar-shun, managing director of New World Development
said the group was looking to raise $3 billion from the sale of
its telecom assets, and $1 billion to $3 billion through the sale
of the Regent Hotel. The group aimed to lower its net debt to $22
billion by June from the existing $28 billion. If the sale of the
Regent Hotel proceeded smoothly, New World would move a step
closer to its debt reduction program.

Apart from the sale of hotel and telecommunications assets, New
World would be able to book a $400 million profit from the sale
of the Grand Millennium Tower, another $300 million from the Choi
Hung Road Private Sector Participation Scheme project and some
$34 million from the sale of Dragon Pride in Tin Hau this year.

TOM.COM:  Closes E-Commerce Dept.
---------------------------------, the Internet vehicle of Hutchison Whampoa and Cheung
Kong (Holdings), will close down its e-commerce department
because of huge losses. During the second quarter of last year,
the company reported a loss of HK$148.5 million. The result was
also affected by a one-off provision of HK$31.43 million for the
costs of the realignment of resources for its Hong Kong portal

In the nine months to September 30, the company, formed late last
year, suffered a total loss of HK$357.74 million, according to
the Wednesday's Star On Line.

In December of last year, laid off 30 employees in the
process out of a total 60 staffers in its Hong Kong office. From
this total 10 will be released while 20 will be transferred to
Hutchinson Whampoa Ltd.

The e-commerce department was headed by former Hong Kong Tourist
Association veteran Stanley Yip, who resigned last month.


SINAR MAS:  Sells Stake in APP
Sinar Mas Group will pledge its stake in troubled Asia Pulp &
Paper Co Ltd (APP) to the government to help cover its US$1.3
billion (S$2.2 billion) debt as part of a debt deal with Bank
Internasional Indonesia (BII).

Sinar Mas, the founder of both APP and BII, owns 18 percent of
the bank, while the government holds 57 percent, the Business
Times reported on Wednesday.

APP, a holding firm for mainly Indonesian pulp and paper
producers, has outstanding debts estimated at nearly US$11
billion with about US$2 billion coming due this year.

Prijadi Praptosuhardjo, Finance Minister, said since the
government still has an interest in APP as shareholder it must
protect its equity by trying to get an additional domestic pledge
from Sinar Mas.

Although Sinar Mas has already pledged assets as part of a debt
deal with BII, its value remains uncertain because of the doubt
surrounding APP, whose share price plunged to 94 cents last year.

ASIA PULP:  US Securities Face Delisting
ASIA Pulp & Paper Co Ltd its US-traded securities may be delisted
from the New York Stock Exchange (NYSE) because their value has
fallen below the exchange's minimum requirement. The Singapore-
based company's American Depository Receipts, or ADRs, have not
closed above US$1 each for the last 30 days, which fails to meet
the exchange's continued listing criteria.

The NYSE can delist the shares if they do not trade over US$1 in
the next six months, the Business Times reported on Wednesday.

Chief Financial Officer Hendrik Tee said, "If we are delisted,
this could result in a default of some of our obligations."

APP also said its Tjiwi Kimia unit had made an interest payment
on some 1997 bonds that were due Feb 1. It owed interest payments
totaling about US$43.3 million (S$75.3 million) last week, and
paid US$30 million yesterday. The remaining US$13.3 million,
which are for 1994 bonds, must be paid by the beginning of March.


MAZDA MOTOR:  Imposes 10 Percent Pay Cut on Directors
Mazda Motor Corp. has implemented a uniform 10 percent pay cut
for all its 25 directors on the board for one year from March.

Mazda President Mark Fields told employees at the company's
facility in Yokohama that the management must share the pain of
the firm's financial problems, according to the Wednesday issue
of the Japan Times On Lines.

Under its restructuring plan, Mazda aims to cut 1,800 jobs. It
will start an early-retirement program in the middle of this
month. With the planned pay cut, the troubled carmaker intends to
make clear the top management's responsibility for its
deteriorating business performance, Fields said.

Mazda, which is 33.4 percent owned by Ford Motor Co. of the
United States, has already decided to implement a 15 percent pay
cut for some directors, in addition to the 10 percent cut.

JUSCO:  Dissolves Dutch Subsidiary
Jusco Co., a major Japanese supermarket chain operator, will
dissolve its Netherlands-based subsidiary because it is no longer
needed as a fundraising channel, according to the Wednesday issue
of the Japan Times On Line.

Set up in 1988, Jusco (Europe) B.V. took charge of raising funds
for Jusco's acquisition of U.S. specialty women's clothing
stores, among other activities, Jusco said.

The parent company had already set up a fund to cover the
estimated loss from the liquidation of the wholly owned
subsidiary, so the measure will not affect earnings for the
current business year that ends this month, the company said.


DAEWOO MOTOR:  Transformed Into People's Company
Former government officials, academic leaders and religious
leaders numbering 300 vowed to transform Daewoo Motor into a
"people's company" run by private citizens. Choi Gak-kyu, former
vice prime minister, said the group would stage rallies from
March 2 to the end of July aiming to raise one trillion won
(about HK$6.17 billion) in public donations.

The money would be used to buy Daewoo Motor shares, he said,
expressing doubts about a government bid to sell the company to
United States car giant General Motors (GM) and its Italian
partner Fiat, according to the Wednesday edition of the South
China Morning Post. After Ford Motor pulled out of a US$6.9
billion takeover bid last September, GM investigated Daewoo
Motor's finances and is still interested.

Daewoo officials said the closure was aimed at reducing costs and
inventories. Sales in January fell 51.9 percent from a year
earlier to 38,710 units, with inventory levels amounting to one
month's orders.

Daewoo Motor was declared bankrupt three months ago. It plans to
lay off 1,918 production workers from February 16 as part of its
efforts to slash 6,884 jobs, or a third of its workforce.

Its annual production capacity includes 1.06 million vehicles in
South Korea and 875,000 in overseas plants in Poland, Romania,
the Czech Republic, Uzbekistan, Ukraine, India, Iran, Libya,
Vietnam, China and Egypt.

DAEWOO SHIPBUILDING:  Australian Investor Bids
Newcastle Heavy Industries (NHI), an Australian shipbuilder, is
interested in a stake in Daewoo Shipbuilding, one of the world's
largest shipbuilders.

Korea Development Bank (KDB) has said it is presently assessing
the NHI proposal to buy a stake in Daewoo Shipbuilding, spun out
this month from the collapsed Daewoo Heavy Industries and
controlled by KDB after agreeing to debt-for-equity swaps,
according to the Wednesday issue of the Sydney Morning Herald.

Newcastle has engaged the services of PricewaterhouseCoopers as
financial advisor to assist in the delicate negotiations with
Daewoo Shipbuilding and KDB.

Daewoo Shipbuilding was reported to have held separate talks with
Newcastle Heavy Industries to provide technology and consulting
services to a new Australian shipyard to be set up by Newcastle.

KOREA TELECOM:  Sells 14.7 Percent Stake
The government yesterday placed 14.7 percent of its shares in
state-run Korea Telecom up for public sale in the first step
towards fully privatizing the telephone giant.

In the two-day auction, the government will sell 50.97 million
shares, the South China Post reported on Wednesday.

Samsung Electronics, Pohang Iron and Steel, as well as other
major companies and institutional and retail investors were
invited to participate in the auction.

The maximum bid will be a 5 percent stake with the minimum
running from 1,000 and 17.34 million shares.

A Korea Telecom official said the company has held talks with
several foreign investors. Microsoft was said to be interested in
5 percent and Singapore Telecommunications in the whole 15
percent block. Other interested foreign companies include AT&T.


MALAYSIA AIRLINES:  Offers Top Post to Motor Racer
Nikki Lauda, an Austrian motor racing legend, was offered the top
post at Malaysia Airlines. Mr Lauda, the three-times Formula One
world champion, who started his own airline in 1979 but lost
control of it last November, was quoted in Vienna media reports
as saying he may decide this week whether to return to motor
racing or take the airline post, according to the Wednesday issue
of the Business Times.

Malaysia's finance ministry is now completing a controversial
buyback of a 29 percent stake in the national carrier following
its failed privatization and has not ruled out a foreign
executive chairman.

Finance Minister Daim Zainuddin said last month that foreign
parties were interested in buying a stake but no offers would be
considered until a reorganization is completed in two or three

Australia's Qantas and Swissair said last month they were still
interested in principle in taking an equity stake.

MALAYSIA ELECTRIC: Needs RM 150M Capital Injection
Malaysia Electric Corporation Bhd (MEC), a leading local consumer
electrical and electronics manufacturer, will need an injection
of RM50 million to make it a viable concern, according to the
Wednesday issue of the Edge Daily.

Sunrise Stream Sdn Bhd, the new owner, is expected to invest
working capital to revive the company. MEC manufactures and
distributes electrical and electronic appliances. Fiamma Holdings
Bhd holds a 50.1 percent stake in Sunrise Stream while Kelana
Sinar Sdn Bhd owns the balance of 49 percent.

A subsidiary of MEC, Sunrise Stream will assume control of MEC.
Certain manufacturing assets and liabilities of the MEC group
will be transferred to Sunrise Stream after the completion of the
entire deal.

As for Fiamma, it is involved in the distribution and assembly of
electrical home appliances, sanitary ware and bathroom
accessories. Products marketed by the group include Elba, Faber,
Ariston, General Electric and Rowenta.

The Securities Commission has approved Fiamma's acquisition of
the 50.1 per cent stake in Sunrise Stream and the completion of
the acquisition is pending shareholders' approval.

The MEC City project was touted to be the 'Electrical Appliances
Capital of Malaysia', covering 1,210 hectares. It was proposed to
be the premier integrated city for electrical and electronic
goods, which would also enable research and development to be
integrated with training centers, where vendors and suppliers
would be linked directly to their customers.

Besides the plants in Pahang, MEC also has a factory in Balakong,
Selangor producing electric kettles on a small scale.

RHB BANK:  Tycoon Buys Back Stake
Entertaiment tycoon Rashid Hussain is attempting to buy his
shares of RHB Bank from the government to maintain his presence
in the bank, the Business Times reported on Wednesday.

RHB Capital's bid to redeem RM1 billion (S$458 million) worth of
preference shares in 70 percent subsidiary RHB Bank from
Danamodal Nasional for RM1.38 billion. Danamodal, which had
recapitalised RHB Bank and other weak financial institutions
during the economic crisis, now has the option of converting the
preference shares or selling it to another party.

If converted, the new owner could own up to 15 percent of the
enlarged share capital of RHB Bank. Otherwise, conversion will
boost the government's stake in RHB Bank as government investment
arm Khazanah Nasional already owns 30 percent of the third
largest bank in the country.

The Finance Ministry has opposed the tycoon's return because of
his failed attempt to restructure RHB in September of last year
and raise over RM1.3 billion.


NATIONAL STEEL:  Creditors Wants Liquidator Replaced
Creditor banks of National Steel Corp. (NSC) are asking the
Securities and Exchange Commission (SEC) to immediately replace
former SEC associate commissioner Danilo Concepcion as liquidator
of the ailing steel company.

Global Business Bank and Philippine National Bank led the
creditors in asking the SEC to order Concepcion to stop entering
into any lease agreement and negotiating with any prospective
lessee without consulting them, according to the Wednesday issue
of the Philippine Star.

They said that the liquidator and the creditor-banks should work
hand-in-hand. However, they claimed that based on information
they received, the liquidator has allegedly taken or initiated
actions without consulting them. This, they said, could be
prejudicial to the interest of the creditors and other
stakeholders of NSC.

In an order dated December 18, the SEC panel hearing the NSC case
granted Concepcion's request to negotiate for the lease of NSC's
Iligan steel plant subject to the liquidator's consultations with
creditor banks on the choice of lessee and the terms and
conditions of the lease agreement.

The creditor banks told the SEC that Concepcion should be
required to explain his acts in soliciting lease proposals for
the Iligan plant without prior consultation with the creditor-
banks and in clear violation of the December order of the SEC.

The banks also asked the SEC to hold in abeyance any invitation
or talks for the lease of the plant pending ongoing negotiations
with Swiss firm Glencore International A.G. or to restrain lease
negotiations until consultations with creditor-banks were made.

The groups that have submitted proposed lease agreements include
Allengoal Steel Trading and Fabrication and Cathay Pacific Steel

PETRON CORP.: Posts P1.1B Net Loss
Petron Corp. has reported a net loss of P1.1 billion for 2000,
lower than the projected P2-billion loss for the period, but
marked a complete turnaround from the P2.4-billion net income
registered in 1999, according to the Wednesday issue of the
Philippine Star.

This was a record loss for the company, and marked only the
second time in its history that it turned in a negative
performance. The first was in 1997 when the company ended up in
the red by P500 million due to foreign exchange losses following
the Asian financial crisis at that time.

The company blamed the peso depreciation and volatility of crude
oil prices in the world market for its huge losses last year.
Petron said its financial performance started to deteriorate in
1999 when its net income dropped by 35 percent to P2.4 billion
from P3.7 billion in 1998, as domestic prices of refined products
failed to catch up with higher crude oil prices.

It said the company continued to sustain significant cost under-
recoveries through most of 2000. Specifically, it incurred under-
recoveries based on benchmark Dubai Crude Oil of P0.38, P1.10,
and P1 for the months of October, November and December 2000,

Aside from these, the company also incurred other under-
recoveries of P0.17 per liter in operating cost; P0.18 per liter
in interest expense; and P0.56 per liter in foreign exchange
losses last year.

Jose Syjuco Jr., Petron chairman, said, "We have always perceived
that out financial difficulties were temporary. We trust that the
economic situation will allow us to turn in a more favorable
performance for 2001."

The Philippine National Bank incurred losses of about P1 billion
last year, although this was much lower than the previous year's
P9.87 billion, unaudited financial reports showed, the Philippine
Star reported on Wednesday. The loss came despite a P10-billion
capital infusion from beer and cigarette tycoon Lucio Tan in
September of last year.

Feliciano Miranda Jr., PNB president, said final financial
results of the country's fifth largest lender would be out by the
end of the week. Miranda said the bank had asked the Bangko
Sentral ng Pilipinas to accept a dacion en pago or payment-in-
kind arrangement for P10 billion of its P15-billion emergency
loan obtained last Oct. 6. The loan is due in April.

PNB borrowed a total of P25 billion from the government, with P10
billion coming from state-owned Philippine Deposit Insurance

PNB had requested the BSP that the remaining P5 billion be paid
over eight years in installment at prevailing market rates at the
time of payment. Miranda said these were the terms they had asked
from the BSP in relation to the rehabilitation of the bank.

He said the P10-billion payment-in-kind arrangement would be
comprised mainly of PNB's Financial Center complex valued at P8
billion plus other pieces of real estate.

The PNB official said it was the prerogative of the government to
review the rehabilitation program that had been approved in
principle by the central bank.

"We can't do anything if they want to review it. That is their
option," Miranda said.


Bangkok Metropolitan Bank (BMB) will need Bt25 billion in new
capital to allow the bank to meet regulatory minimums.

With current plans limiting new capital to Bt10 billion, the bank
estimates it would have to sell Bt40 billion in bad loans to meet
capital adequacy minimums, according to the Wednesday issue of
the Bangkok Post.

Manit Wityatem, BMB's executive chairman, said needs the new
funds to continue operations and avoid closure.

But the Financial Institutions Development Fund (FIDF), which
owns the bank, said that it would hold talks with the Government
Pension Fund to lead a coalition to inject around Bt10 billion in
new capital into BMB and take a 51 percent stake.

Mr Manit said the bank had drafted a plan to sell 40 percent of
its current non-performing loans, or about Bt40 billion, to an
asset management firm, either a national AMC or other state

Most of the loans to be sold are backed by collateral. BMB
estimates that it can fetch around 80 percent of book value for
the asset sale.

The sale of the NPLs will allow us to raise capital to targets
without additional aid from the development fund. At the end of
2000, BMB had Bt39.2 billion in paid-up capital, with
shareholders equity of negative Bt9.29 billion, assets of Bt164.8
billion and deposits of Bt167.4 billion.

THAI PETROCHEMICAL:  Court Approves Rehab Plan
The Central Bankruptcy Court has approved the Thai Petrochemical
Industry (TPI) rehabilitation plan submitted on December 15 of
last year.

In a report to the Stock Exchange of Thailand, Peter Vassiliou,
an attorney for Effective Planners Limited, said the creditors
had also given their consent.

The rehabilitation plan calls for TPI to issue capital shares to
raise $500 million in 2002 to pay back debt.

The interest rate was set at MLR minus 3 percent for the first
year of a 5-year plan, MLR minus 1 percent for the second year,
and MLR plus 1 percent for the third year. In the fourth and
fifth years, the rate would be MLR plus 2 percent.

In addition, TPI is to sell non-core assets to pay back debts in
the second year of the 5-year plan. In addition, TPI is to sell
non-core assets to pay back debts in the second year of the 5-
year plan.

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

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Trenton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Lexy Mueller, Managing Editor, James Philip P.
Jover and Maria Vyrna Nineza, Editors.

Copyright 2000.  All rights reserved.  ISSN: 1520-9482.

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