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/raid1/www/Hosts/bankrupt/TCRAP_Public/010302.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, March 2, 2001, Vol. 4, No. 43 Headlines A U S T R A L I A HIH INSURANCE: ASIC Investigates Disclosure Practices HUTCHISON TELECOMMUNICATIONS: Losses May Widen ONE.TEL: Reports A$132.3M Net Loss C H I N A & H O N G K O N G ZHUHAI GIANT: Ex-President Wants Control Back I N D O N E S I A PT DHARMALA INTILAND: Reports Poor Performance REGENT HOTEL: RP970B Debt Restructuring Plan Finalized J A P A N MITSUBISHI: Will Cut 9,500 Jobs to Regain Momentum SEGA: 300 Employees to Leave Jobs Following Dreamcast Withdrawal UBE INDUSTRIES: Fails to Recover 500M Yen K O R E A HYUNDAI ENGINEERING: Five Banks Extend 90B Won Loan SSANGYONG CEMENT: New Owners Asks Banks to Lower Rates M A L A Y S I A MALAYSIAN RESOURCES: Reorganizes Business WCT ENGINEERING: Reprimanded for Breaching Regulations P H I L I P P I N E S CYBER BAY: Negotiating to Restructure P1.34B Loan NATIONAL STEEL: Plan Includes Tax Exemption T H A I L A N D ASIAN HARINE: Posts Bt174M Net Loss BANK OF ASIA: Posts Bt4.12B Net Loss THAI GERMAN CERAMICS: Records Bt430.9M Net Loss ================= A U S T R A L I A ================= HIH INSURANCE: ASIC Investigates Disclosure Practices ------------------------------------------------------ The Australian Securities and Investments Commission (ASIC) will investigate HIH Insurance's disclosure practices as its stock's trading was halted on February 26, according to the Tuesday issue of the Sydney Morning Herald. A HIH spokesman said, "we are having continuing discussions with the ASX and ASIC is also inquiring into issues relating to disclosure. This does not relate to solvency but simply providing the point of time at which the company will be able to provide further clarity on the scale of its interim loss." Standard & Poor's downgraded HIH's ratings from BBB+ to BBB-; it remains on "credit watch negative." HUTCHISON TELECOMMUNICATIONS: Losses May Widen ----------------------------------------------- Hutchison Telecommunications (Australia), a mobile telephone company, posted a net loss of A$92.5 million last year that might grow because of incremental subscriber acquisition costs, according to the Tuesday issue of the South China Morning Post. Barry Roberts Thomson, Hutchison Telecommunications (Australia) managing director, said the Orange One subscriber base is still being built and may contribute further losses to the firm. Hutchison Australia, which is 58 percent owned by Hong Kong's Hutchison Whampoa, aims to have 400,000 Orange One subscribers by the end of 2002, compared to 74,703 at the end of last year. Roberts-Thomson also said the company would place longer-term funding in 2001 to cover the costs of its planned A$1 billion third generation mobile and data network using its 1800 MHz spectrum and further development of business operations. Hutchison Australia said its A$420 million replacement bank facility established in December would be used to pay the balance due this year on the Samsung Electronics contract for the building of the Orange One network. ONE.TEL: Reports A$132.3M Net Loss ------------------------------------ One.Tel, a telecommunications company, has reported a net loss of A$132.3 million for the half year ending December 31, 2000, according to the Tuesday issue of AAP. The Australian telecommunications firm will attempt to return to profitability by next year, releasing audited statements showing an interim net loss of A$132 million compared to a loss of A$19.2 million previously. The comparative figures had not been restated for changes in accounting policies with respect to certain customer acquisition costs and business establishment costs. Sales revenue according to yesterday's audited figures was A$570.6 million, compared to an unrestated A$246.1 million in the previous first half. Expenses from ordinary activities were A$704.4 million compared to A$265.3 million, while borrowing costs rose to A$6.9 million from A$3.2 million. ============================== C H I N A & H O N G K O N G ============================== ZHUHAI GIANT: Ex-President Wants Control Back ---------------------------------------------- Shi Yuzhu, president of the Zhuhai Giant Group, wants to pay back debts owed to private buyers so it can regain control, according to the Monday issue of the China Daily. Shi had set up the Giant company in Zhuhai in South China's Guangdong Province in 1991. The company grew with astonishing speed and became China's second largest non-state high-tech enterprise in 1993. But Shi's ambitious plan to build the 70-storey Giant Tower, predicted to be the highest building in China at the time, eventually pushed the company to the edge of bankruptcy. The project was stopped because of the Giant Group's fiscal crisis in 1995, leaving hundreds of buyers in Guangdong and Hong Kong failing to recoup their money. ================= I N D O N E S I A ================= PT DHARMALA INTILAND: Reports Poor Performance ---------------------------------------------- PT Dharmala Intiland (DILD), a property company under Dharmala Group, reported a poor financial performance during the first nine months of 2000, Indoexchange News reported on Wednesday. Even though the company only managed to book Rp4.03bn in operating profits during the period of January-September 2000, it suffered a Rp136.28bn net losses due to large non-operating expenses. Despite booking Rp1.17bn interest incomes, Dharmala Intiland still managed to have a positive progress considering that the company had to bear Rp8.53bn in interest during January-September 1999. However, it was not sufficient to cover non-operating expenses. Indonesian Bank Restructuring Agency (IBRA) has approved debt- restructuring scheme for PT Dharmala Intiland. The Rp570bn debt restructuring scheme is applied to the entire debt of Dharmala Intiland including its six subsidiaries: PT Dharmala Land, PT Taman Harapan Indah, PT Dharmasejahtera Sakti, PT Grand Family View, PT Sinar Puspapersada and PT Grand Interwisata. The restructuring scheme was classified into three phases: 1. Short-term loan for Dharmalasejahtera Sakti and Grand Interwisata, starting from December 2000. 2. Secured medium-term bond for Taman Harapan Indah maturing in 2009, followed by Dharmala Land bond maturing in 2009, Dharmala Intiland in 2007, Sinar Puspapersada in 2007 and Grand Family View due in 2001. 3. Debt transfer from Grand Interwisata to Taman Harapan Indah. Theresia Rustandi, Dharmala Intiland Corporate Secretary, said the company has submitted the collateral required by IBRA for the restructuring scheme. REGENT HOTEL: RP970B Debt Restructuring Plan Finalized ------------------------------------------------------- Regent Hotel will be able to pay the Indonesian Bank Restructuring agency (IBRA) only Rp202.5 billion of its Rp970 billion (US$101.04 million) debt after it finalizes its debt- restructuring plan, Asia Pulse reported on Friday. Bambang L.M. Soedibyo, an IBRA executive, said some Rp963 billion of debt is in foreign currencies run by PT Permadani Khatulistiwa Nusantara (PKN). PKN, which is now under control of IBRA, is 12 percent owned by Said Umar Husin, 12 percent by Fahmi Idris, 12 percent by Soegoeng Sarjadi, 12 percent by Maher Algadrie, 20 percent by a foundation and 32 percent by a bank syndicate. IBRA listed six debtors among the member companies of the Kodel Group. The other five are PT Dharma Muda, a trading and service company; PT Grahamas Intitirta, a beverage processing company; PT Bintara Tani Nusantara, an oil palm plantation company; PT Tamarindo Nusa Hotel, a hotel operator and Golden Spike Energy Ind. Ltd., a trading and services company. Restructuring of the debts of the five other companies is expected to be completed in six months. ========= J A P A N ========= MITSUBISHI: Will Cut 9,500 Jobs to Regain Momentum --------------------------------------------------- Mitsubishi Motors Corp. (MMC) will close a key plant in Nagoya and cut 9,500 jobs (14 percent) of its workforce by 2003 as part of its restructuring plan. Takashi Sonobe, MMC president, said the move aims to regain the trust of customers and achieve a sustainable growth, according to Monday's Japan Times On Line. Under the plan, production will be reduced by 20 percent with the closing of the Oe plant in Nagoya, one of its four passenger car plants. Production facilities in Mizushima plant in Okayama will also be consolidated. MMC's annual production will be reduced to 1 million vehicles from the current 1.3 million. A common supplier system will be implemented in MMC to cut parts- procurement cost by 15 percent. The company will also cut the number of different car chassis from 12 to six and halt the production of two loss-making luxury cars -- the Proudia and the Dignity, the officials said. MMC said it would announce a new organizational structure by April 1. SEGA: 300 Employees to Leave Jobs Following Dreamcast Withdrawal ----------------------------------------------------------------- Sega Corp. will solicit applications from 300 employees wanting to leave their respective jobs after the production of Dreamcast game console was stopped. Some 1,600 employees will be transferred to new subsidiaries after Sega completes spinning off its in-house software development and game arcade management sections this year, according to the Monday issue of the Japan Times On Line. The firm expects to save 1.9 billion yen in labor costs through these programs. As a result, the workforce at the parent company will shrink to about 700, Sega said. Sega expects a group net loss of 58.3 billion yen this year because of the Dreamcast-related losses. UBE INDUSTRIES: Fails to Recover 500M Yen ------------------------------------------ Ube Industries Ltd., chemical maker, may fail to recover 500 million yen in claims to the failed Fuji Car Mfg. Co., Jiji Press English News Service reported on Tuesday. Ube will disclose the amount of potential losses anew after confirming the impact that Fuji Car's failure may have on its earnings for the current year ending March 31. The chemical maker filed for court protection on February 23 because of the impact that Fuji Car's failure may have on its Fuji Car, a major maker of multistory parking systems. ========= K O R E A ========= HYUNDAI ENGINEERING: Five Banks Extend 90B Won Loan ---------------------------------------------------- Five creditor bans will likely extend 90 billion won in fresh loans to Hyundai Engineering and Construction using its future proceeds from sales of apartments. Cho Hung, Kookmin, Hana, Shinhan and KorAm are discussing the positive and negative implications in lending against the proceeds from the apartment sales, Korea Herald reported on Monday. SSANGYONG CEMENT: New Owners Asks Banks to Lower Rates ------------------------------------------------------- Taiheiyo (Pacific) Cement Co. has asked banks to lower interest on outstanding loans in newly acquired Ssangyong Cement as it prepares to inject additional funds in the ailing cement firm, the Korea Herald reported on Monday. An official of Cho Hung Bank, Ssangyong's main creditor, said the lowering of interest rates would normalize Ssangyong's operations. Taiheiyo Cement made a US$350 million investment in the ailing cement company last Oct. 31 to acquire a 29.4 percent stake and agreed to purchase 300 billion won worth convertible bonds from the company. =============== M A L A Y S I A =============== MALAYSIAN RESOURCES: Reorganizes Business ------------------------------------------ Malaysian Resources Corp. (MRCB) will reorganize its property, power, banking and media businesses to address its mounting debt of 1.5 billion ringgit and to boost earnings. MRCB had planned to sell some of its assets to Chase Perdana Bhd. and Sitt Tatt Bhd., Bloomberg reported on Monday. The firm has been losing money for the past two years, with its biggest loss in 1998 amounting to 1.4 billion ringgit. MRCB plans to sell all or part of its 43 percent stake in Sistem Televisyen Malaysia Bhd., or TV3, which operates the country's first commercial television station. WCT ENGINEERING: Reprimanded for Breaching Regulations ------------------------------------------------------- The Kuala Lumpur Stock Exchange (KLSE) has reprimanded WCT Engineering Bhd. for breaching listing regulations. In a statement on February 24, the KLSE said it is punishing WCT Engineering for failing to disclose a transaction where any percentage ratio is equal or exceeds 5 percent in violation of Section 114 of the Main Board Listing Requirements. Asia Pulse reported on Monday that WCT failed to disclose the acquisition and disposal by its wholly owned subsidiary Bulatan Gemilang Sdn Bhd of 1.3 million shares in MTD Capital Bhd. The announcements were only made to the exchange for public release of the acquisition and disposal on June 29 and July 20 last year, a delay of about two and a half years and one year, respectively. ===================== P H I L I P P I N E S ===================== CYBER BAY: Negotiating to Restructure P1.34B Loan -------------------------------------------------- Cyber Bay Corp., developer of the multibillion-peso Coastal Bay project along Manila Bay, is considering the option of debt-to- equity with respect to its P1.34 billion loan that has been in default since 1998, BusinessWorld reported on Monday. The loan was obtained by Cyber Bay's wholly owned subsidiary Amari Coastal Bay Development Corp. from Bangkok Bank Public Ltd. (BBPCL) to finance the initial phase of the Coastal Bay project. The interest for the loan is plus 2.5 percent over prevailing Singapore Interbank rates and has a penalty of 3 percent per annum. Cyber Bay also has a P145.25-million loan to Philippine National Bank (PNB). Aside from the bank loans, Cyber also has unrealized foreign exchange losses amounting to P92 million as of June last year. In December 1999, the company restructured a portion of the PNB loan through dacion en pago involving some of the company's real- estate properties. The dacion en pago provided that within two years the company has the right to match the offer of a third party should the bank decide to sell the said properties. NATIONAL STEEL: Plan Includes Tax Exemption -------------------------------------------- The Department of Finance (DoF) will exempt National Steel Corp. (NSC) from paying P1 billion worth of tax liabilities as part of its liquidation plan. Finance Undersecretary Cornelio C. Gison said the Bureau of Internal Revenue (BIR) waived the income and documentary stamp taxes for the transfer of NSC land assets to a special purpose vehicle, BusinessWorld reported on Monday. Gison met with representatives of NSC's creditor banks last Friday to discuss the firm's liquidation plan. The banks are Philippine National Bank, Indosuez Bank, Landbank of the Philippines, China Bank, Rizal Commercial Banking Corp., Asian Bank, Equitable-PCI Bank, United Coconut Planters Bank, Urban Bank, Wise CITCO, Traders Royal Bank, United Overseas Bank, Bank of Commerce, and Allied Bank. The 14 banks have asked the DoF for a tax exemption to facilitate the liquidation of NSC. Aside from discussing the liquidation plan the creditors also want the government to intervene in resolving the Hottick problem The NSC majority owner is Malaysian-owned Hottick Investments. Hottick wants the liquidation order lifted, believing that they can rehabilitate the ailing steel firm. The delay in the approval of the liquidation plan is mainly caused by Hottick's insistent opposition. But the DoF said it would not interfere with the approval of the liquidation plan. "The SEC is an independent body. We will respect that. But we will see what we can do to help the creditors," Gison said. =============== T H A I L A N D =============== ASIAN HARINE: Posts Bt174M Net Loss ------------------------------------ Asian Marine Service's net loss last year widened to Bt173.86 million from Bt85.22 million in the previous year. BANK OF ASIA: Posts Bt4.12B Net Loss ------------------------------------- Bank of Asia posted a net loss of Bt4.12 billion in its audited financial results for 2000 compared to a loss of Bt11.22 billion in 1999. THAI GERMAN CERAMICS: Records Bt430.9M Net Loss ------------------------------------------------ Thai-German Ceramic Industry reported a lower net loss of Bt430.92 million last year against Bt522.81 million in 1999. 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. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR -- Asia Pacific subscription rate is $575 for 6 months delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. *** End of Transmission ***