TCRAP_Public/010212.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

                 Monday, February 12, 2001, Vol. 4, No. 30



NEWS CORP:  Murdoch Plays Down Effect of Fourth Quarter Losses
RUSHTV:  Employees Will Be Paid
SATELLITE:  Former Chief Lied
SELECT-TEL:  Seeks to Defend Cash Position
WOLLONGONG:  Goes to Receivership

C H I N A  &  H O N G  K O N G

PALIBURG HOLDINGS:  Defaults on HK$1.25B Debt Repayment
SOHU:  Cuts Staff to Ease Losses


PT TJIMA KIMIA: S&P Raises Ratings
TEXMACO GROUP:  Merges Two Affiliates


SEGA ENTERPRISES:  Halts Dreamcast Game Production


DONG-AH:  Government Seeks Suspension of Liquidation
HANBO GROUP:  Court Fines Hanbo Chief


MALAYSIA AIRLINES:  No Independent Valuation Made
RENONG:  Tycoon Misses Buy-Back Payment
RHB CAPITAL:  Blocks Reorganization Plan


NATIONAL STEEL:  Accuses Liquidator of Railroading
PHIL. NATIONAL BANK:  Government Studies Plan
URBAN BANK:  Bank of Commerce Withdraws


TANAYONG Plc.:  Files for Bankruptcy


NEWS CORP:  Murdoch Plays Down Effect of Fourth Quarter Losses
Rupert Murdoch, News Corp. chairman, has denied News Corp. is in
the red for December but instead is busy closing a deal that will
create the world's dominant satellite television operation,
according to the Friday's South China Morning Post.

Despite recording a A$36 million (about HK$153.3 million) net
loss for the three months to December 31, Murdoch indicated that
he is still pursuing the US$70 billion deal to add United States
satellite television operator DirecTV to his portfolio.

He said talks with General Motors and its Hughes Electronics
unit, which owns the satellite broadcaster, were "progressing."

The anticipated merger of News Corp's Sky Global Networks
satellite division and DirecTV fueled a 91 percent rise in News
Corp. to A$18.15 in local trading.

The market overlooked abnormal losses of US$290 million stemming
from the company's new media forays.

"We are very pleased with our results for the quarter, achieved
as they were in a challenging economic climate, and encouraged by
the turnaround we enjoyed at several of our key businesses,"
Murdoch said.

RUSHTV:  Employees Will Be Paid
Redundant employees of RushTv with contracts worth $300,000 will
be paid, according to the Wednesday issue of the Australian
Financial Review.

In a meeting with Arthur Andersen, Telstra and Ambience (Web
service) with the new RushTv majority stockholder, i7, they
assured the employees that they would be paid.

Steve Wise, I7 chairman, is not commenting on this assertion. He
says only that it is disappointing the Australian online business
has gone under.

SATELLITE:  Former Chief Lied
Former Satellite Group executive Jonathon Owen Broster, has been
charged with making a false or misleading statement in order to
obtain a financial advantage, the Age reported on Wednesday.

Broster is alleged to have made the statement in relation to the
transfer of $A250,000 from Satellite to his private company for
an investment in Sydney Skytour.

Broster's former colleague at the bankrupt Australian media and
property company, Gregory Joseph Fisher, faces three charges
relating to the same transaction, which took place in March 2000.

Two other business associates, Ian Widdup and Jim Byrnes, bought
$A200,000 shares in a bid to make the property management and
development group profitable again.

Under the restructuring plan, some $350 million worth of new
assets will be transferred with a capitalization of about $A100

SELECT-TEL:  Seeks to Defend Cash Position
Select-Tel Ltd, a billing solution firm, was forced to defend
their cash positions today after queries from the Australian
Stock Exchange (ASX). The ASX has asked the company to explain
how they would continue to operate given their lack of revenues,
high costs and ailing cash reserves, AAP News reported on Monday.

Select-Tel said it had reported receipts for the quarter of
$73,000 with net negative operating cashflow for the quarter of
$802,000. Cash at the end of the quarter stood at just over $1.18

The ASX has asked the billing solutions company if it was going
to run out of money within four months and what steps it had
taken to ensure that it had sufficient funds in order to continue
its operations.

The company report said, "We have reduced our expenditure to take
account of this, in particular, reducing overheads where market
penetration his been below anticipated levels."

WOLLONGONG:  Goes to Receivership
Car dealer Wollongong Prestige Cars has gone into receivership,
reportedly owing creditors more than $1.5 million, according to
the Tuesday issue of the Australian.

Wollongong Prestige Cars at North Wollongong ceased trading last
Friday with Volvos and other luxury vehicles subsequently removed
from the site.

Esanda Finance Corporation on February 2 appointed Sims Lockwood
senior partner Tony Sims and Nicholas Seaton as joint
administrators of Benwest Pty Ltd.which formerly traded as
Wollongong Prestige Cars.

Sims said Volvo had exercised a bailment agreement, which gave it
the right to remove its vehicles from sale and from the site.

He said the administrators had taken possession of the company's
books and records and were now investigating the firm's financial
position. Sims said the debt might reach $1.5 million.

C H I N A  &  H O N G  K O N G

PALIBURG HOLDINGS:  Defaults on HK$1.25B Debt Repayment
Paliburg Holdings, once one of Hong Kong's high-flying
developers, said it faces liquidation unless it can persuade
bondholders to give it more time to make a US$161.5 million
(HK$1.25 billion) debt payment that it missed on Tuesday. The
company's total debt is estimated to be in excess of HK$6
billion, Hong Kong Imail reported on Friday.

Paliburg is 60.4 percent owned by Lo Yuk-sui's flagship Century
City International Holdings (0355), in which he holds a 58
percent stake.

The bonds, issued in 1996, were previously exchangeable for Regal
Hotels International shares.

The missed payment also triggers a default on US$210 million in
so-called zero-coupon bonds, which pay no interest until
maturity, originally due in 2002. Bondholders can now demand
immediate payment of US$285 million.

That default probably lets Paliburg's bank and financial
creditors recall their loans.

Lo Yuk-sui, Paliburg chairman, said although Paliburg raised
HK$230 million by selling control of Chi Cheung Investment, it
still has HK$6.2 billion of debt -- more than it owed two years

Paliburg and its affiliated companies "made heavy leveraged bets
on property before the 1997 crash", said David Webb, publisher of
financial Internet site

SOHU:  Cuts Staff to Ease Losses
--------------------------------, a Beijing-based portal operator, plans to cut its
staffing level by 10 percent this year in a bid to ease losses,
which nearly doubled in the quarter to December 31 from the
previous three months to US$8.26 million.

The quarter rose 36 percent from the previous quarter to US$2.17
million, but it cost the company US$2.07 million to generate the
revenue, the South China Morning Post reported on Friday.

David Cui, Merril Lynch (Asia Pacific), said that the China-based
portal spent 94.6 US cents for every dollar of revenue it
generated, much more than the 20 US cents leading United States
counterparts generally spend. Its operating costs more than
doubled to US$9.53 million.

Online advertising accounted for 95 percent of net revenue in the
last quarter of last year.

An advertising-based revenue model is considered unsustainable in
the long term by analysts, as total online advertising spending
on the mainland is insufficient to support the entire industry's
existing scale of operation.

Charles Zhang Chaoyang, chief executive, said that in an effort
to widen its revenue base, the company has expanded into Web site
development, Internet consulting and short-messaging services.

He hopes these non-advertising revenue sources will account for
20 percent of total revenue by the end of this year.


PT TJIMA KIMIA: S&P Raises Ratings
Standard & Poor's raised its credit rating on one of the bonds
issued by PT Pabrik Kertas Tjiwi Kimia, a major subsidiary of
Asia Pulp & Paper Co., following news that Tjiwi Kimia had paid
the coupon on one of its bonds and avoided a default, Asian Wall
Street Journal reported on Thursday.

When Tjiwi Kimia missed coupon payments for two of its bonds on
Feb. 1, it had to downgrade the credit ratings for APP and its
various operating units, which sent prices for the various
companies' bonds and shares down.

Tjiwi Kimia made a US$30 million coupon payment due for the $600
million senior unsecured notes due August 2004 that were issued
by Tjiwi Kimia Finance Mauritius Ltd., a unit of Tjiwi Kimia.
That prompted S&P to raise its rating on the bond to double-C
from D. It also revised its corporate-credit ratings on Tjiwi
Kimia to SD, or selective default, from D.

The international credit-rating agency said it hasn't changed its
rating on APP and its other operating subsidiaries, which include
PT Indah Kiat Pulp & Paper Corp., PT Pindo Deli Pulp & Paper
Mills, PT Lontar Papyrus Pulp & Paper Industry, and APP China
Group Ltd.

The rating for those companies and their guaranteed subsidiaries
remains at triple-C-minus and they are on CreditWatch with
negative implications, S&P said.

TEXMACO GROUP:  Merges Two Affiliates
The Indonesian government has approved a plan to merge two
companies affiliated with the Texmaco Group, the country's
largest debtor, in a plan to reschedule their debts, Business
Times reported on Friday.

The Financial Sector Policy Committee (FSPC), a government-
appointed body that is overseeing Indonesia's debt restructuring
efforts, has endorsed the plan to merge PT Polysindo Eka Perkasa
Tbk and PT Texmaco Jaya Tbk.

"Their combined debts will be restructured as secured convertible
bonds and debt-to-equity swaps," said an FSPC statement.

Texmaco Group, which comprises more than 20 companies, has debts
of US$2.7 billion (S$4.7 billion). The announcement follows an
agreement among Polysindo's creditors on December 29 to renew
US$632 million of secured debt into a new facility owed by a
reorganised Polysindo and backed by the company's assets.


SEGA ENTERPRISES:  Halts Dreamcast Game Production
Sega Enterprises, a major developer of TV game machines and
software, is stopping production of its Dreamcast game consoles,
which once sold in the millions, by the end of March, Yomiuri
Shimbun reported on Friday.

Dreamcast, known for the clear graphics of its high-tech console
and the rapid response of its controller, saw competitively
priced rival products gradually encroach on its share of the game
console market since its launch in 1998.

Even though the company is still calculating its after-tax
consolidated losses for the four consecutive fiscal years ending
in March 2001, it still expects to continue developing game
software, including for its competitors.

Tetsu Kayama, special advisor to Sega, said that CSK founder and
Sega Chairman and President Isao Okawa "has generously bestowed
on us some of his financial assets, including corporate stocks of
listed companies. This has not only enabled us to pull ourselves
away from the danger of bankruptcy but also has provided us with
the knowledge that banks can now invest safely in us with the
stocks as collateral."

He said that with the enormous investment in the Dreamcast
development project now out of the way, the company expects to
see higher profits over coming years. That ultimately rules out
any incentive that CSK Corp., the parent company, may have had in
the past to sell Sega.


DONG-AH:  Government Seeks Suspension of Liquidation
The Korean government has asked a Seoul court to suspend the
liquidation of Dong-Ah Construction Industrial Co. until the
insolvent contractor completes a second phase of a Libyan water
pipe project, Bloomberg reported on Friday.

The Ministry of Construction and Transportation said the request
reflects concerns over Korea's diplomatic ties with Libya should
Dong-Ah fail to complete the project.

The Korean government also needs to persuade Libya to allow Dong-
Ah to finish the second round of the project, which is 95 percent
completed, Lee was cited as saying.

Dong-Ah went insolvent in November after defaulting on 3.7
trillion won of debt.

HANBO GROUP:  Court Fines Hanbo Chief
The Seoul District Civil Court has fined former Chairman Chung
Tae-soo of Hanbo Business Group, according to the Friday issue of
World News Connection. Chung has been ordered to pay 38.7 billion
won (US$30.9 million) to Saenuri Mutual Savings Fund in
compensation for an illegal loan Chung arranged from the Hanbo
Mutual Savings Fund, which merged with Saenuri.

Presiding Judge Ha Kwang-ho of the Seoul District Civil Court
convicted Chung of illegally withdrawing 42.6 billion won (US$34
million) from the Hanbo Mutual Savings Fund in 1996. The law bans
mutual savings funds from offering loans to their shareholders
and Chung is the largest shareholder of Hanbo Mutual Savings.

The fund could not retrieve the loans made to Hanbo Steel Co.,
which Chung owned, because the firm went bankrupt in 1997


MALAYSIA AIRLINES:  No Independent Valuation Made
There was no independent valuation was done when the government
agreed to pay a hefty premium for former chairman Tajudin Ramli's
substantial block of shares in Malaysian Airline System (MAS)
last month.

Tajudin owns owns 47 percent of Naluri Bhd. Naluri in turn owned
29.09 percent of the national carrier, according to the Thursday
issue of Business Times.

However, minority shareholders of Naluri are not likely to
complain although the company will incur a loss of RM4.8 million
(S$2.2 million) from the disposal of the MAS stake for RM1.79
billion in cash.

The proceeds will come in handy for debt-laden Naluri. Tajudin
said RM927.4 million would be used to retire Naluri's debts,
while the balance of RM864.5 million will be for new business

In the meantime, Naluri will place the remaining proceeds in
banks and earn RM24.2 million a year -- more than the loss of
RM4.8 million from the disposal.

RENONG:  Tycoon Misses Buy-Back Payment
Malaysian tycoon Halim Saad missed a payment of RM100 million
(S$46 million) to United Engineering (Malaysia) Bhd. (UEM) as
part of a promised share buy-back on Renong Bhd.

United Engineers (Malaysia) Bhd had eased payment terms for a
RM3.2 billion buy-back of UEM's 32.3 percent stake in
conglomerate Renong Bhd, according to Friday's Business Times.

Renong, Mr Halim's flagship group, owns 38 percent of UEM. The
deal harks back to Mr Halim's efforts to juggle his finances as
the Asian crisis rocked Malaysia back in 1997, when parties
linked to him sold some RM2.3 billion of Renong shares to UEM in
an off-market transaction.

Mr Halim sought to mollify angry investors by granting a put
option to UEM, allowing it to sell back the Renong shares and
recoup the cost of holding the stake, a concession committing him
to a RM3.2 billion payment by February 14, 2001.

Under the new terms, Mr Halim agreed to pay UEM only 9 percent,
or RM300 million, of the total by the end of 2001, due in three
equal installments starting on Feb 14. The remaining RM2.9
billion would be due on May 14, 2002, with no conditions set on
the form the payments would take.

RHB CAPITAL:  Blocks Reorganization Plan
Malaysian Resources Corp. (MRCB), a newspaper publishing and
power generation group, said it supports a government decision to
block a key part of RHB Capital Bhd.'s reorganization plan
because it would raise the level of borrowings, Bloomberg
reported on Friday.

Malaysian Resources, or MRCB, which owns 23 percent of Rashid
Hussain Bhd., parent of RHB Capital, "considers the government's
stand as a positive development in view of MRCB's concerns over
RHB group's high gearing level," it said in a statement.

Last week, Finance Minister Daim Zainuddin rejected a plan by RHB
Capital to buy back 1 billion ringgit ($263 million) of
preference shares in its 70 percent-owned RHB Bank unit at a
premium from Danamodal Nasional Bhd., a state-owned bank
recapitalization agency.

MRCB's statement comes a month after it said it was disappointed
that a group reorganization at Rashid Hussain -- which includes
splitting its banking business from its brokerage division --
didn't include a reduction of debt at parent Rashid Hussain.


NATIONAL STEEL:  Accuses Liquidator of Railroading
National Steel Corp. (NSC) has accused government-appointed
liquidator, Danilo L. Concepcion, of railroading the firm's
dissolution and liquidation, according to Business World on
Friday. Management wants to remove and disqualify the firm's

"The acts of Mr. Concepcion in railroading dissolution and
liquidation while the question of jurisdiction of the SEC to do
so is still pending, and while the company is considering the
feasibility of bringing the proceeding back to rehabilitation...
is detrimental to the over-all interest of the company," NSC

The firm's management accused Mr. Concepcion of acting
prematurely towards liquidation and, in effect, undermining the
prospects of getting new joint-venture partners or investors
critical to the rehabilitation.

Meanwhile, the firm's creditors have also sought the removal of
Mr. Concepcion as liquidator for allegedly violating SEC orders
when he issued invitations to lease out the firm's Iligan plant.

PHIL. NATIONAL BANK:  Government Studies Plan
The government is studying a plan to recover its equity holdings
in Philippine National Bank through a debt-to-equity arrangement
involving the bank's P25-billion obligation to the government,
the Philippine Daily Inquirer reported on Friday.

Alberto Romulo, finance secretary, said the plan could restore
the government's holdings in the bank to 30.4 percent or possibly
even above 50 percent.

Romulo said the proposal, which is now being studied by the
Department of Finance, came from former Central Bank Governor
Jose Cuisia.

Rafael Buenaventura, Bangko Sentral ng Pilipinas Governor, said
it was up to the national government if it wanted to convert
PNB's P25-billion loan into equity.

He said, "We will give DOF a chance to review the entire rehab
plan to make it consistent with rules of the government. My main
concern is how to make PNB viable again."

BSP and PDIC strictly could not convert the loans and take equity
position in the bank. However, they could pass on the obligations
to the national government, which, in turn, can regain control of

The entire rehabilitation plan that had been approved in
principle by BSP is also being reviewed by the national

URBAN BANK:  Bank of Commerce Withdraws
Bank of Commerce (Bancommerce) is backing out from its earlier
plan to takeover the closed Urban Bank because of the ongoing
controversies surrounding the bank's closure in April 2000,
Business World reported on Friday.

The Cojuangco-run commercial bank also announced it has shelved
the rehabilitation of Urban Bank pending the resolution of all
legal issues involving the closed bank.

Raul B. de Mesa, Bancommerce president, said Bancommerce remains
committed to the rehabilitation plan. Mr. de Mesa said the
rehabilitation plan has already been approved by over 94 percent
of Urban Bank's depositors and creditors, as well as by the
state-owned Social Security System which has pledged a 600-
million Philippine peso ($12.43 million at PhP48.284=$1)
investment in the form of convertible bonds.

Urban Bank's large depositors -- such as San Miguel Corp., Manila
Electric Co. and Petron Corp. -- have also given their nod to the
plan. The three have agreed to convert their combined PhP750-
million deposit in the bank into equity.


TANAYONG Plc.:  Files for Bankruptcy
Sadan International (Thailand) Co, the local arm of a Hong Kong-
based construction firm, filed a bankruptcy suit against
development giant Tanayong Plc. for debt of Bt19 million before
the Central Bankruptcy Court on January 24.

In April 1997, the civil court ruled in favour of Sadan for
repayment of principal debt of Bt14 million and interest charged
of 7.5 percent, according to Tuesday's Bangkok Post.

In Sadan's filing with the bankruptcy court, the company charged
that Tanayong failed to make the payment and filed an appeal to
the civil court to delay settlement.

After investigating assets of Tanayong, the creditor said that
most of the debtor's assets were pledged against loans extended
by many creditors and Tanayong's performance suffered losses
totalling Bt3.5 billion with liabilities exceeding assets.

Keeree Kanjanapas, Tanayong's chief executive, said that he was
not worried about the bankruptcy suit.

Mr Keeree said that the conflict with Sadan stemmed from
differences over construction costs. While Sadan estimated the
costs at 14 million baht, Tanayong's figure was seven million.
Tanayong claimed that the quality of construction carried out by
Sadan had sparked refund claims from Tanayong's customers,
forcing Tanayong to make claims against Sadan in turn.

As Sadan could not accept these claims, it had sued Tanayong in
the civil court, Tanayong claimed.

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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