/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/010305.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, March 5, 2001, Vol. 4, No. 44 Headlines A U S T R A L I A BRADMILL UNDARE: Winding Up to Go Smoothly CENTAUR MINING: Moody's Downgrades Rating to Ca CENTRAL NORTH: Seeks Receiver Appointment MAXIS CORP.: May Wind Up Operation C H I N A & H O N G K O N G GILBERT HOLDINGS: Delisting Extended to May 31 ILINK.NET: May Continue to Post Losses MONKEY KING: Enters Bankruptcy Proceedings NETEASE.COM: Expects to Posts Losses I N D O N E S I A PT DANAMON SENTRA: IBRA Approves Restructuring Plan PT PANCA OVERSEAS: SC Dismisses IFC Claim PT SEMEN GRESIK: Issues Rp1.2 Tri Bonds J A P A N DIA KENSETSU: Agrees to a 16-Year Repayment Deal IKEGAI CORP.: Files Court Protection MITSUI LINES: Consolidates Subsidiaries NEC HOME: To Be Dissolved K O R E A DAEWOO CORP.: American Creditors Prepare $400 Million Lawsuit DONG-AH: Court Orders Books Examined HYUNDAI ENGINEERING: Revises Restructuring Plan LG TELECOM: Net Loss Doubled M A L A Y S I A MOL.COM: Incurs RM18M Net Loss NEW STRAITS TIMES: Restructures Assets RESORTS WORLD: Announces RM876M Net Loss TECHNO ASIA: Stock Exchange Gives Reprimand TIME ENGINEERING: Posts a RM136M Net Loss P H I L I P P I N E S ASB: Seeks 60-day Extension from SEC UNIWIDE: UCPB Accepts Payment-In-Kind URBAN CORP.: SEC Set to Order Liquidation on March 8 S I N G A P O R E ASIA PULP: Will Close its Overseas Branches T H A I L A N D EMC: Submits Rehabilitation Plan INTER FAR EAST: Creditors Did Not Accept Rehab Plan SINO RESOURCES: Submits Rehabilitation Plan ================= A U S T R A L I A ================= BRADMILL UNDARE: Winding Up to Go Smoothly ------------------------------------------- The Ministry of Industry expects the winding up of Bradmill Undare Group, a textile manufacturer, will be orderly and that workers' benefits will be paid in full, according to the Wednesday issue of M2 Presswire. Senator Minchin said the textile manufacturer would have to go into administration to adjust to the trading environment. The government has poured A$750 million in textiles, clothing and footwear (TCF) Strategic Investment Program (SIP); the tariffs were held until 2005. It also provided A$1 million start-up funding towards implementation of the TCFL Action Agenda, which aims to encourage the sectors' international competitiveness. Bradmill was recognized as one of Australia's largest and most diverse specialty textile manufacturers. CENTAUR MINING: Moody's Downgrades Rating to Ca ------------------------------------------------ Moody's has downgraded the loan term rating of Centaur Mining & Exploration Ltd. (Centaur) from Ca from Caa1 on February 27. Moody's says Centaur has been unable to replenish its Debt Service Reserve (DSR) on February 28, according to the Wednesday issue of the. Centaur originally failed to replenish the DSR for the June 2001 interest payment within 30 days of making the December 2000 interest payment. Failing to replenish the DSR constitutes a technical default under the bond indenture. The outlook remains negative. Centaur continues to face liquidity problems due to significant exposures arising from adverse positions on exchange rate and commodity hedging, including overhedging of gold. Production delays related to the new underground gold mine and the weak nickel price environment have also contributed to the company's liquidity problems. As at January 31, Centaur had available funds of A$16.1 million, including A$10.0 million committed to the DSR. This compares to US$12.375 million (A$1=US$0.52) that is required to replenish the DSR. Centaur Mining & Exploration Limited is a mining company that operates the Mt. Pleasant gold mine and the Cawse nickel project. Both are located in Western Australia. CENTRAL NORTH: Seeks Receiver Appointment ------------------------------------------ Creditors of Central North Island Forestry Partnership, a forest plantation, are seeking the appointment of a receiver before it is to be sold, M2 Presswire reported on Wednesday. Central North Island Forestry Partnership is a joint venture between Fletcher Forests and Chinese Government-owned Citic. The forest plantation has a US$1.48 billion debt with a syndicate of 12 banks including the Bank of New Zealand. Michael Stiassny and Grant Graham, Ferrier Hodgson receivers, said the sale of 190,000 hectares of trees will be completed in six to nine months. The receivership follows acrimony between the partners, with Citic initiating legal proceedings claiming Fletcher Forests supplied logs too cheaply to Fletcher Challenge Paper mills. Fletcher Paper has since been sold as part of a plan for the Fletcher Group to disaggregate. Terry McFadgen, Fletcher Challenge chief executive, said low log prices were to blame for losses. Citic New Zealand is carrying the legal claims of more than A$155 million if Central North is placed into receivership. MAXIS CORP.: May Wind Up Operation ----------------------------------- Maxis Corp., a satellite broadbander, may file a winding up petition in court to protect assets it has given to Australian Securities and Investments Commission (ASIC), according to the Wednesday issue of the Sydney Morning Herald. Sepan Stepanian, some remaining Maxis director, said they may have a receiver to restrict dealings in corporate assets, prevent the spending of corporate funds except in the ordinary course of business, report weekly to ASIC setting out the basis for all payments and ceasing to raise funds from the public as long as the shares are suspended by the Australian Stock Exchange. Trading of Maxis shares were suspended recently. They last traded at 4.5c, down from a high of 48c. Investors must notify ASIC if funds are provided to insure the solvency and proper governance of the firm. There will be a winding up hearing on March 5 at the NSW Supreme Court. ============================== C H I N A & H O N G K O N G ============================== GILBERT HOLDINGS: Delisting Extended to May 31 ----------------------------------------------- The delisting of Gilbert Holdings Ltd. will be moved for three months from February 28 to May 31, according to the February 28 issue of the AFX. The Stock Exchange of Hong Kong granted the extension after the company's liquidator received a resumption proposal but will still determine if it is valid or not. The company's shares remain suspended until further notice. ILINK.NET: May Continue to Post Losses --------------------------------------- Data centre operator iLink.net, which is controlled by Pacific Century CyberWorks, has warned that it will likely continue to make losses in the near future as its expansion plans demand significant capital expenditure, according to its newly issued prospectus obtained yesterday. ILink.net is in the midst of a fund-raising exercise aimed at raising about $140.8M to build data centers in China and other parts of Asia. It will issue 110M shares at $1.28 a share to institutional investors. The shares will begin trading on Hong Kong's Growth Enterprises Market on March 9. iLink reported a $28.6M net loss for the 10 months to October 31. In its prospectus, iLink.net warned that its history of losses would likely continue, "due to the high level of planned operating and capital expenditure, increased sales and marketing costs, hiring of additional personnel and a greater level of product development". The company will use $43M to fund its operations this year and about $12M for marketing and promotional activities. MONKEY KING: Enters Bankruptcy Proceedings ------------------------------------------- Shenzhen-listed Monkey King appears to be the latest company to face the threat of failure as a key shareholder and major debtor have entered bankruptcy proceedings. The Monkey King Group, which owes the listed firm more than one billion yuan and is its second largest shareholder, was formally brought into bankruptcy hearings in a court in Yichang in Hubei province, according to a report in the Shenzhen Securities Times. The listed company, based in Yichang, makes welding materials for use in the construction industry. It is also a contractor on the nearby Three Gorges Dam, a major project aimed at providing flood control and power generation along the Yangtze River. The group, which has a range of investments including property, was deeply in debt because of losses from investments in the stock market as well as the non-repayment of loans extended to other companies, the newspaper reported. "The draining of cash by the main shareholder of the listed Monkey King has been frenzied," the report said. It put the group's assets at 370M yuan with debts of 2.4B yuan. The listed company had net assets of 330M yuan as of June 30 last year. NETEASE.COM: Expects to Posts Losses ------------------------------------- Netease.com, a Chinese web portal, is expected to post a net loss of US$4.3 to US$5.8 million for the fourth quarter despite a forecast of 34 percent increase in revenues. The Chinese Web portal has commissioned Goldman Sachs to help find a buyer, the South China Morning Post reported on Thursday. The company has cash on hand of US$90 million despite suffering a monthly burn rate of US$2.23 million in the third quarter. David Cui, an analyst at Merrill Lynch, said online advertisement is on the decline, forcing Internet portal firms to diversify its base. Antonio Tambunan, Internet analyst at Deutsche Bank, said Netease is not pressured to look for buyers because it has a cash shortage but it just wanted to beat its competitors to be sold at the right price. ================= I N D O N E S I A ================= PT DANAMON SENTRA: IBRA Approves Restructuring Plan ---------------------------------------------------- The Indonesian Bank Restructure Agency (IBRA) has approved the restructuring agreement of Danamon Sentra Pembiayaan (DSP) and two subsidiaries of Danamong Group, PT Danamon Finance and PT Danamon Usaha Pembiayaan (DUP), AFX reported on Wednesday. Usman Admadjaja acted a co-borrower but has yet to sign a memorandum of understanding. Total obligations of the three companies consist of loan principal of Rp558.639 billion rupiah with interest of Rp439.203 billion, plus loan principal of US$15 million with interest of US$10.5 million. IBRA received Rp billion cash payments last December 12 and 13 last year. IBRA added that it received on December 12 and 13, 2000 -- before the MoU signing -- cash payments worth Rp30 billion. PT PANCA OVERSEAS: SC Dismisses IFC Claim ------------------------------------------ The Indonesian Supreme Court has denied the World Bank's International Finance Corp. (IFC) petition to disqualify fake creditors of PT Panca Overseas Finance Ltd., a finance company. Some 14 creditors last month voted in favor of the restructuring plan of PT Panca, according to the Thursday issue of the Asian Wall Street Journal. IFC has US$13 million debt to PT Panca and questioned the claims of some creditors to let the firm pay only 17 cents on the dollar and oppose the firm's bankruptcy. According to Lahut Pangaribuan, an IFC lawyer, they are still for the Supreme Court's decision on the petition against the procedure of the case. The company's debt stood at A$68 million in mid 2000, but that total jumped to about A$230 million after it purportedly received a A$160 million syndicated loan arranged by a Hong Kong- registered company called Harvest Hero International Ltd. late last year without security. Harvest Hero and its syndicate of 13 creditors, all of which are based in Western Samoa or the Bahamas, voted in favor of Panca's restructuring plan in January, and their voting strength outweighed that of all of the creditors to Panca that existed before the Harvest Hero loan emerged, including U.S., European and Asian banks, as well as the IFC. Panca has insisted that the loan from Harvest Hero is legitimate and said its restructuring plan is fair for all 31 creditors. Harvest Hero's legitimacy was questioned because it does not have a telephone listing or have license to lend money in Hongkong. Its corporate registration documents show it has paid-up share capital of just HK$2 (26 U.S. cents). The papers also give an address for its director, Oen Robin Ilmuwan, which turns out to be a restaurant selling chicken noodles and porridge in north Jakarta. The restaurant's proprietor has said he has never heard of Mr. Ilmuwan or Harvest Hero and knows nothing about how anyone from that address could have lent A$160 million to Panca. PT SEMEN GRESIK: Issues Rp1.2 Tri Bonds --------------------------------------- Cement producer PT Semen Gresik has issued Rp1.2 trillion in domestic bonds during the first semester of this year to repay its debts, the Jakarta Post reported on Saturday. Urip Timuryono, Semen Gresik president, said the funds would be used to repay its medium-term notes I and II at US$162.21 million and Rp214 billion. Payment for note I falls due in January next year, while note II will mature in April of the same year, he said. He is confident that the company can meet its obligations to creditors. Semen Gresik issued medium-term notes I and II in 1997 to help finance the construction of its Tuban II cement plant. The underwriters include PT Danareksa Securities, PT Bahana Securities and PT Citicorp Securities Indonesia. The planned spin off of PT Semen Padang and PT Semen Tonasa will have no effect on the bond issue. The government owns a 51 percent stake in Semen Gresik and Cemex has a 25.53 percent stake. The remaining 23.46 percent is publicly owned. ========= J A P A N ========= DIA KENSETSU: Agrees to a 16-Year Repayment Deal ------------------------------------------------- Struggling condominium builder Dia Kensetsu Co. has agreed to a 16-year debt repayment deal with Resolution and Collection Corp. (RCC), Japan's bad loan collector. The deal will involve 152.1 billion yen in loans to Dia that RCC took over from then-Nippon Credit Bank in November 1999, following the ailing bank's nationalization the previous year, Jiji Press English News Service reported on Wednesday. This is the first approval of a long-term repayment plan by RCC, which is seeking to recover purchased loans as soon as possible. An RCC official said the deal was an exceptional case. Since the collapse of NCB, its main creditor bank, Dia has been proceeding with a reconstruction program with the help of Asahi Bank and continues negotiations with RCC on repayment terms. IKEGAI CORP.: Files Court Protection ------------------------------------- Ikegai Corp., a machine tool maker, is seeking court protection on February 28 from creditors for leaving 27.1 billion yen in debt. The machine tool maker posted a parent-only operating loss of about 400 million yen for the half year ended September, according to Thursday's Asia Pulse. Ikegai will consolidate production of machine tools and industrial machinery at its plant in Ibaraki Prefecture and will sell its headquarters in Kawasaki near Tokyo. MITSUI LINES: Consolidates Subsidiaries ---------------------------------------- Mitsui O.S.K. Lines Ltd. will consolidate after liquidating two subsidiaries, Jiji Press English News Service reported on Monday. The major Japanese shipping firm will also terminate the operations of two subsidiaries, Blue Highway Line Corp. and Blue Highway Line Nishinihon Corp., on May 31, aiming to complete liquidation procedures by March 2002. The new unit, tentatively called Shosen Mitsui Ferry Co., will be capitalized at 1.2 billion yen and service routes from the area around Tokyo to Hokkaido, the northernmost Japan prefecture, and to the Kyushu region, southern Japan. With this consolidation in place, Mitsui O.S.K. hopes to generate a recurring profit of some 600 million yen from four consolidated ferry units in fiscal 2001 through March 2002 and lift the figure to 1.6 billion yen in the following year. NEC HOME: To Be Dissolved -------------------------- NEC Corp. plans to dissolve and liquidate its wholly owned subsidiary NEC Home Electronics Ltd., Jiji Press English News Service reported on Wednesday. The liquidation will leave the electronics giant with a special loss of 35.1 billion yen on a parent basis for the year ending March 31. But the special loss will not affect NEC's earnings for the year because it was factored into revised earnings forecasts released on Feb. 20, the company said. NEC Home Electronics has been providing only customer and maintenance services since April last year, when it handed over most of its operations to other firms, including NEC Lighting Ltd. and NEC Viewtechnology Ltd. ========= K O R E A ========= DAEWOO CORP.: American Creditors Prepare $400 Million Lawsuit ------------------------------------------------------------- John H. Bae, Esq., Mitchell I. Sonkin, Esq., at Cadwalader, Wickersham & Taft in New York are ready to file a lawsuit on behalf of the Official Committee of Unsecured Creditors appointed in the Daewoo International (America) Corp., chapter 11 case. The Committee's Proposed Lawsuit seeks to recover more than $400,000,000 from Hanvit Bank, Korea First Bank, Resolution and Finance Corp., Chohung Bank, Koram Bank, Seoul Bank, Industrial Bank of Korea, Shinhan Bank and Korea Exchange Bank, Daewoo Corporation, Daewoo International Corporation, Daewoo Engineering & Construction Co., Ltd., Daewoo U.K. Ltd., and Korea Asset Management Corporation, on behalf of the American Debtor's estate. Earlier this year, with Judge Lifland's blessing, the Creditors' Committee launched an investigation into potential claims that Daewoo America's estate may have against the Korean financial institutions that at one time served on the Creditors' Committee. Subject to Bankruptcy Court permission, the Committee is prepared to assert Daewoo America's claims now. The Committee is convinced that a $400 million receivable owed by Daewoo Corp. resulted from an international conspiracy between Daewoo Corp. and Daewoo U.K. to siphon money out of the Debtor's estate to fund the British Finance Centre in London that, according to an investigation launched by the Korean government, served as an illegal slush fund for Daewoo Corp. and its executives. The estate's claims against KAMCO and the Korean Banks arise from the intentional actions undertaken by these defendants to spin-off Daewoo Corp.'s significant assets to Daewoo Int'l. and Daewoo E&C as part of the Daewoo Corp. restructuring in Korea, while completely disregarding the estate's objection to such spin-off. These actions have impaired the estate's ability to pursue and recover on the approximately $400 million in damages Daewoo Corp. caused the estate. The Committee tells Judge Lifland that Daewoo America has significant claims, including a claim for civil conspiracy, based on the agreement between KAMCO and the Korean Banks to ignore the objection and authorize the restructuring to proceed in violation of Korean and U.S. law. The Committee's Draft Complaint is intended to redress the estate for damages caused by the wrongful actions of these defendants. The Committee's Draft Complaint also seeks to equitably subordinate the claims of these defendants to the claims of unsecured creditors that did not engage in such misconduct. The Committee believes the estate has meritorious claims against these defendants and the claims should be pursued. The Committee has requested that the Debtor consent to the relief sought herein. However, Daewoo America has declined to give the Committee its consent. The Committee urges Judge Lifland to grant leave to the Committee to assert these significant claims because, as evidenced by its refusal to consent to the relief sought herein, the Debtor is hopelessly conflicted from properly prosecuting these claims. The Claims Against Daewoo Corp. According to Daewoo America's Schedules of Assets and Liabilities, Statement of Financial Affairs and Monthly Operating Reports filed with the Bankruptcy Court, Daewoo America holds a $5,432,915 receivable owed by Daewoo Corp. on account of ship-building commissions. Fom November 1998 through July 1999, Daewoo America made 43 separate wire transfers totaling $398,897,842 to accounts in London payable to "Daewoo London". The Debtor booked these wire transfers as debt owed to the Debtor by Daewoo U.K. Ltd., which has the identical address as Daewoo London. These wire transfers were made by the Debtor based on direction received from Daewoo Corp. The Committee understands that all directions to wire transfer funds to Daewoo London were made to the Debtor's Finance Manager, Mr. In Duk Yoo. While the Debtor booked these transfers as loans made to Daewoo U.K., at the time Daewoo Corp. directed the Debtor to make these wire transfers, the Debtor was not given any explanation as to the purpose of the wire transfers, or how the U.K. Receivable was to be repaid to the Debtor. Moreover, no loan agreements were executed between the Debtor and Daewoo U.K. or Daewoo Corp. in connection with these transfers, nor was any promise made by Daewoo Corp. or Daewoo U.K. as to how or when the U.K. Receivable would be repaid. At the time the Debtor made the wire transfers, none of the Debtor's lenders was advised of the transfers. In fact, the Committee believes that these wire transfers were not loans to Daewoo U.K., but rather, were part of an international conspiracy between Daewoo Corp., Daewoo U.K. and Mr. In Duk Yoo (the Debtor's former Finance Manager) to inject cash into a slush fund in London known as the British Finance Centre, which is the subject of an investigation launched by the Korean government. According to press reports, the British Finance Centre was an informal bank account that managed approximately $20 billion unlawfully transferred from other affiliates of Daewoo Corp. throughout the world, much like the wire transfers that took place involving the Debtor. Daewoo U.K. was responsible for overseeing and/or managing the funds that the Debtor wire transferred to Daewoo London, which has the exact same address as Daewoo U.K. Daewoo Corp. has admitted that the Debtor's wire transfers were made to accounts owned by Daewoo Corp. The Korean Restructuring Beginning in mid-1999, Daewoo Corp. and its affiliates became subject to an out of court restructuring of their debt in Korea. As part of the Korean Restructuring, a creditors' committee was formed made up of Daewoo Corp.'s largest Korean creditors to oversee Daewoo Corp.'s restructuring and operations. Each of the Korean Banks became a member of this Korean Committee. In addition, Hanvit Bank is the lead creditor bank in charge of overseeing the Daewoo Corp. restructuring. KAMCO, the largest creditor of Daewoo Corp., holds approximately 41% of Daewoo Corp.'s debt. It is believed that KAMCO plays a significant role in Daewoo Corp.'s restructuring. Under the Korean Restructuring, each of the Korean creditors of Daewoo Corp. is to participate in a debt-for-equity swap, pursuant to which the creditors would become the eventual equity holders of Daewoo Corp. Upon information and belief, important decisions involving Daewoo Corp.'s operations and restructuring are made by Daewoo Corp.'s Korean Committee and KAMCO. By notice to Creditors of Daewoo Corp. dated July 24, 2000, Daewoo Corp. notified its foreign creditors that Daewoo Corp. would spin-off its trading division and construction division into new companies as a part of the Daewoo Corp. restructuring. The Committee was advised that a significant portion of Daewoo Corp.'s assets would be transferred to the new companies as part of the spin-off. The remaining Daewoo Corp. would retain Daewoo Corp.'s non-operating businesses as well as significant liabilities. The Notice stated that creditors of Daewoo Corp. may register their objection to the spin-off by delivering a written objection to Daewoo Corp. by August 24, 2000. The Committee was advised that failure to file an objection to the spin-off would cause the creditor's claim to remain only against the remaining Daewoo Corp., which would have no assets with which to satisfy the claim, and that the creditor could not seek to satisfy its claim against the two new companies. In order to preserve the estate's claims against Daewoo Corp., the Debtor, at the urging of the Committee, timely filed an objection to the proposed spin-off. On or about December 21, 2000, the Debtor's counsel and Daewoo Corp.'s U.S. counsel sought the Committee's consent to have the Debtor withdraw the objection because Daewoo Corp. had to effectuate the spin-off prior to the end of 2000 in order to receive significant tax benefits under Korean law in the range of hundreds of millions of U.S. dollars. They sought to obtain the withdrawal of the objection because the spin-off was not possible under Korean law unless the Debtor's objection was resolved. The Debtor, Daewoo Corp. and the Committee entered into a compromise whereby $25 million would be set aside to secure the claims of the Trade Creditors in the event a plan of reorganization were not to otherwise yield a payment to satisfy in full the claims of the Trade Creditors. In an effort to obtain Court approval of the proposal, the Debtor's counsel requested an emergency hearing with the Court, which the Court granted to be heard on December 26, 2000. Notwithstanding the compromise reached by the Debtor, Daewoo Corp. and the Committee that would have allowed the Trade Creditors to be paid in return for the Committee's consent to the withdrawal of the objection, the Korean creditors, including KAMCO and the Korean Banks, rejected the proposal. The Committee has learned that, in late-December 2000, KAMCO and the Korean Banks entered into an agreement to participate in a vote to determine whether they should spin-off Daewoo Corp. as planned under the Korean Restructuring, without satisfying the Debtor's objection as required under Korean law. Upon information and belief, the defendants agreed that the spin-off would be effectuated and all Korean creditors would be bound to such decision, notwithstanding the objection, if the Korean creditors approved the spin-off. Then, pursuant to the vote of the Korean creditors, Daewoo Corp.'s trading division was spun off to Daewoo International Corporation and Daewoo Corp.'s construction division was spun off to Daewoo Engineering & Construction Co., Ltd. The spin-off of Daewoo Corp. in the face of the Debtor's Objection, the Committee charges, was a violation of, among other things, Articles 530-9 paragraph 4, 527-5 and 232 of the Korean Commercial Code. The Claims Against Daewoo Corp. and Daewoo U.K. The Committee's Proposed Lawsuit asserts significant claims against Daewoo Corp. and/or Daewoo U.K. for (A) Civil Conspiracy. Each time Daewoo Corp. directed the Debtor to wire funds to Daewoo London, Daewoo Corp. and Daewoo U.K. entered into a conspiracy to unlawfully transfer funds out of the estate to be used to fund the British Finance Centre. These agreements caused damages to the estate in an amount not less than $398,897,915, plus interest and costs. (B) Money Had and Received. Defendant Daewoo Corp., having full control over the Debtor, caused the Debtor to transfer $398,897,915 to accounts controlled by Daewoo Corp. Thus, Daewoo Corp. owes to the estate the sum of $398,897,84, plus interest and costs. (C) Conversion. Daewoo Corp. unlawfully exercised dominion and control over the $398,897,842 that belong to the estate, and has caused damages to the estate in an amount not less than $398,897,842, plus interest and costs. (D) Breach of Contract. Daewoo Corp. owes the estate a sum of $5,432,915 for shipbuilding services the Debtor provided pursuant to an agreement with Daewoo Corp. This amount remains due and owing, and the estate is entitled to collect this amount, plus interest and costs. (E) Fraudulent Transfer (three counts). The transfers to Daewoo U.K. at the direction of Daewoo Corp. were made with the intent to hinder, delay and defraud the Debtor's creditors, and prevented the Debtor from being able to satisfy its debts as they came due. The Claims Against KAMCO and the Korean Banks The Committee's Proposed Lawsuit asserts separate claims against KAMCO and the Korean Banks as a result of the Korean Restructuring and their conduct in these proceedings for: (A) Civil Conspiracy. By agreeing to be bound by a vote to spin-off Daewoo Corp.'s trading and construction divisions over the objection of the Debtor, KAMCO and the Korean Banks entered into a conspiracy to commit a crime and/or a tort under Korean and U.S. law. KAMCO and the Korean Banks, as the eventual equity holders of Daewoo Int'1. and Daewoo E&C, had a financial incentive to enter into the conspiracy to effectuate the spin-off over the Debtor's objection to prevent the estate from recovering on the U.K. Receivable and the Corp. Receivable. KAMCO and the Korean Banks took overt step's in furtherance of the conspiracy by in fact taking the vote and causing Daewoo Corp. to spin-off its trading and construction divisions to Daewoo Int'l. and Daewoo E&C, respectively. As a result of this conspiracy, the Debtor's estate's ability to recover on the U.K. Receivable and the Corp. Receivable from Daewoo Corp. has been severely impaired, and has caused damages to the Debtor's estate in an amount not less than $404,330,757, plus interest and costs. (B) Fraudulent Transfer (two counts). Daewoo Corp., with the intent to hinder, delay and defraud its creditors, undertook to effectuate the Korean Restructuring. Daewoo Corp. organized defendants Daewoo Int'l. and Daewoo E&C as corporations and transferred and conveyed substantially all of its assets to those defendants. KAMCO and the Korean Banks aided and abetted the fraudulent transfer by authorizing the spin-off over the Objection of the Debtor. KAMCO and the Korean Banks, as the eventual equity holders of Daewoo Int'1. and Daewoo E&C, had a financial motive in fraudulently transferring Daewoo Corp.'s assets to Daewoo Int'1. and Daewoo E&C. (C) Breach of Fiduciary Duty Against Hanvit Bank, Seoul Bank, Chohun Bank, Industrial Bank of Korea Shinhan Bank and Resolution and Finance Com. Hanvit Bank, Seoul Bank, Chohung Bank, Industrial Bank of Korea, Shinhan Bank and Resolution and Finance Corp., as members of the Official Committee of Unsecured Creditors, owed a fiduciary duty to all unsecured creditors of this estate. By participating in the conspiracy to spin-off Daewoo Corp.'s business and aiding and abetting the fraudulent transfer of Daewoo Corp.'s assets for their own benefit as the eventual equity holders of Daewoo Int'1. and Daewoo E&C, they breached their fiduciary duty to other unsecured creditors. As a consequence of this breach, the estate has damages claims against these defendants in an amount not less than $404,330,757, plus interest and costs. (D) Equitable Subordination. The claims held by KAMCO and the Korean Banks against the Debtor's estate should be equitably subordinated to the claims of general unsecured creditors. By conspiring with each other to cause the spin-off of Daewoo Corp.'s trading and construction divisions in violation of Korean and U.S. law, KAMCO and the Korean Banks engaged in inequitable conduct. By aiding and abetting the fraudulent transfer of Daewoo Corp.'s assets to Daewoo Int'1. and Daewoo E&C, KAMCO and the Korean Banks also engaged in inequitable conduct. By their control and dominion over Daewoo Corp., which in turn controlled the Debtor, KAMCO and the Korean Banks are insiders or controlling persons of the Debtor. By taking the above actions to impair the Debtor's estate's ability to recover on the U.K. Receivable and the Corp. Receivable from Daewoo Corp., KAMCO and the Korean Banks benefited themselves as the ultimate shareholders of Daewoo Int'1. and Daewoo E&C, to the detriment of all other unsecured creditors of the Debtor. Therefore, subordination of the claims of KAMCO and the Korean Banks to the claims of the Trade Creditors would be wholly consistent with the provisions of the Bankruptcy Code. Essentially, the Committee explains, the conduct of KAMCO and the Korean Banks has left Daewoo America and its creditors with valueless claims against Daewoo Corp. because Daewoo Corp., by its own admission, has been left with only "insolvent assets" as a result of the Korean Restructuring. These claims are the Daewoo's single largest assets and the Committee asks Judge Lifland for permission to pursue these claims on behalf of the estate. DONG-AH: Court Orders Books Examined ------------------------------------- The Seoul District Court has ordered Dong Ah Construction's accounting books examined because of allegations that it fabricated records from 1988 to 1997. The court will make a final decision after the accounting firm completes its investigation on March 2, according to the Tuesday issue of the Korea Herald. Dong Ah's value was allegedly inflated since the accounting firm's previous report reportedly showed that the company's liquidation value was greater than its value. The court had ordered the firm's liquidation on February 8. Sales figures were overvalued by 700 billion won during the 10- year period from 1988 to 1997; the company's value after a due diligence check was conducted was 200 billion won. Meanwhile, the Construction-Transportation Ministry has asked the court to allow Dong Ah to finish its Libyan project under court protection. The Libyan government has filed a suit against the Dong Ah Construction consortium, seeking compensation for $3.6 billion in damages it says the Korean builder has caused during its work on the Great Waterway project there. HYUNDAI ENGINEERING: Revises Restructuring Plan ------------------------------------------------ Hyundai Engineering & Construction Co. is revising its restructuring plan, which includes debt-reduction, according to the Thursday issue of the Asian Wall Street Journal. Under the new plan, Korea Exchange Bank will guarantee US$400 million in Hyundai Engineering foreign debts through the arrangement of 340 billion won in short-term loans. Fresh financial assistance will also be injected if it sticks with its debt-reduction plan. Creditors want a new audit of Hyundai Engineering's books before new loans are granted. But if Hyundai Engineering continues with its cash shortage because of poor debt restructuring performance, its debt will be converted to equity, Korea Exchange Bank said. Hyundai Engineering's debt currently stands at 4.5 trillion won, which is down from over five trillion won a year ago. The debt- restructuring plan calls for the company to reduce its debt to 3.8 trillion won by year's end. LG TELECOM: Net Loss Doubled ---------------------------- LG Telecom, the mobile phone unit of South Korea's LG Group, said recently that its net loss more than doubled in 2000 due to heavy expenditures for handset subsidies to attract new subscribers. LG said its net loss in 2000 reached 442.4 billion won compared to 161.6 billion won in 1999. Sales in 2000 were 1.85 trillion won against 1.44 trillion won the previous year. =============== M A L A Y S I A =============== MOL.COM: Incurs RM18M Net Loss ------------------------------- Mol.com, an information technology firm, incurred a net loss of RM18million for the six months ended December 31, 2000, compared with a profit of RM189,000 previously, despite recording a higher turnover of RM70.5million, according to the Thursday issue of the Star On Line. The operating loss was at RM13.33 million compared with an operating profit RM6.19mil in the previous corresponding period. Loss per share stood at 24.03 sen against 2.7 sen earnings per share previously. The company's net tangible assets per share fell to 44 sen from RM1.06 a year ago. Its pre-tax loss of RM16.5million, and electrical equipment and apparatus division RM1.97million. The loss was because of the cost of financing and operating expenditure in the acquisition of Internet-related businesses. NEW STRAITS TIMES: Restructures Assets --------------------------------------- The New Straits Times Press (Malaysia) Bhd (NSTP) is restructuring its short-term loans and divesting non-core assets under its rationalising program, according to the Monday issue of the Edge. Datuk Seri Abdul Rahman Maidin, executive vice-chairman of New Straits Times Press (Malaysia) Bhd., said these assets are not in line with its core of competencies. The restructuring should provide NTSP enough funds to weather its present financial problems. NSTP recorded a net loss of RM19.75 million for the first quarter ended Nov 30, 2000. It had short-term borrowings of RM1.12 billion and long-term borrowings of RM336.84 million. RESORTS WORLD: Announces RM876M Net Loss ----------------------------------------- Resorts World Bhd announced a net loss of RM876 .57 million for the financial year ended December 31, 2000, because of a goodwill write-off resulting from the sale of Star Cruise Ltd and NCL Holdings ASA. The net profit in the previous year was RM645.91 million due to an exceptional loss of RM1.26 billion, the Edge Daily reported on Wednesday. Turnover, however, increased marginally to RM2.34 billion from RM2.18 billion in 1999. Resorts World recommended a final dividend of eight sen less tax, which brought the total amount to 16 sen following an earlier interim dividend of eight sen. TECHNO ASIA: Stock Exchange Gives Reprimand -------------------------------------------- The Kuala Lumpur Stock Exchange, in consultation with the Securities Commission, has publicly reprimanded Techno Asia Holdings Berhad (TECASIA), formerly known as Westmont Land (Asia) Berhad, for breach of Section 34 and Section 341 of the Main Board Listing Requirements (MBLR). Section 34 of the MBLR stipulates that a listed company is to make an immediate announcement upon the appointment of receiver or liquidator of the company or any of its subsidiaries. TECASIA had breached Section 34 of the MBLR for failing to make an immediate announcement to the Exchange for public release on the appointment of receiver and manager on Westmont Mount Austin Sdn Bhd ("WMA"), a wholly owned subsidiary of the Company on 13 December 1999. The announcement was made on 5 January 2000, after a delay of 17 market days. Section 341 of the MBLR states that the content of a press or other public announcement is as important as its timing. Each announcement should be balanced and fair. The Company breached Section 341 of the MBLR in respect of the announcement made on the appointment of receiver and manager on WMA dated 5 January 2000 as the contents of the said announcement contradicted with its subsequent announcement dated 12 January 2000. The public reprimand was imposed pursuant to Section 392 of the MBLR after taking into consideration various factors, including that the Company is a repeat offender of the Exchange's Listing Requirements and after consultation with the Securities Commission. TECASIA was previously publicly reprimanded by the Exchange on 21 May 1998 for failing to comply with Section 57 of the MBLR which requires the Company to furnish to the Exchange a preliminary financial statement (on a consolidated basis) immediately upon the figures being available and in any event not later than three (3) months after the end of the financial year giving all the information prescribed by the form set out in Appendix IV of the MBLR and stating whether such results are audited or subject to audit. TECASIA was also publicly reprimanded by the Exchange on 16 October 1998 for failing to comply with Section 60 of the MBLR which requires the Company to issue printed annual report to the Company's shareholder and the Exchange within a period not exceeding six (6) months from the close of the financial year of the Company. The Exchange views the above contravention seriously and hereby cautions the Company and its Board of Directors of its responsibility to maintain appropriate standards of corporate responsibility and accountability in order to achieve greater disclosure and transparency to its shareholders and the investing public. TIME ENGINEERING: Posts a RM136M Net Loss ------------------------------------------ Time Engineering Bhd. posted a bigger net loss of RM136.36 million for the financial year ended December 31, 2000, compared with RM124.76 million in the previous year. Turnover was RM1.03 billion with a pre-tax loss of RM94.43 million, according to the Wednesday issue of the Edge Daily. Announcing the results on Wednesday, Time said the telecommunications division recorded a pre-tax profit of RM31.59 million, power division (RM39.02 million) and engineering and manufacturing (RM17.34 million). The corporate segment suffered a RM166.12 million pre-tax loss while its information technology and media divisions reported a pre-tax loss of RM25.04 million and RM3.25 million respectively. ===================== P H I L I P P I N E S ===================== ASB: Seeks 60-day Extension from SEC ------------------------------------- ASB Group, a real estate group, has asked the Securities and Exchange Commission (SEC) to postpone for 60 days of its authority to suspend payments for its P12 billion debt since it has not acted on its rehabilitation plan submitted last year. ASB's debt payments suspension authority expires on February 28, according to the Friday issue of the Manila Standard. The real estate firm needs time because it is negotiating with Chevalier, a foreign investor. The firm has urged the SEC for approval of its rehabilitation plan because its has been approved in principle by two unidentified banks. But some ASB creditor banks have repeatedly opposed the rehabilitation plan on the ground that certain provisions in the plan encroach on their rights over mortgaged properties. These banks are Rizal Commercial Banking Corp., Philippine National Bank, Prudential Bank, Union Bank of the Phils., United Coconut Planters Bank and Equitable PCI Bank. A provision in the plan calls for the release of the mortgaged property to form part of the asset pool to be managed by a trustee bank. The banks see this as usurpation of their rights, violating the Mortgage Trust Indenture. UNIWIDE: UCPB Accepts Payment-In-Kind -------------------------------------- The Uniwide group of companies has told the Securities and Exchange Commission that it has accepted an offer of payment in kind from United Coconut Planters Bank (UCPB). The payment in kind involves a debt-for-asset swap of nonoperating assets owned by Uniwide, according to Wednesday issue of the Business World. A memorandum of agreement (MOA) on the payment in kind with UCPB will greatly reduce Uniwide's P1.04 billion debt. A special corporation will be set up where Uniwide assets and lands will be transferred as payment for subscription to shares. Uniwide properties in Naic, Cavite, and Caloocan will be assigned to UCPB. The reduction of Uniwide's debt exposure will make the company more attractive to investors and subsequently support the firm's return to and concentration in the retail business. URBAN CORP.: SEC Set to Order Liquidation on March 8 ----------------------------------------------------- The Securities and Exchange Commission (SEC) is set to order the liquidation of Urbancorp Investments Inc. (UII), a subsidiary of the failed Urban Bank Inc., on March 8 if there no feasible alternative rehabilitation plan is submitted. SEC Chair Lilia Bautista made the announcement after Bank of Commerce (Bancommerce) signified they will no longer pursue the rehabilitation of UII and Urban Bank, Philippine Daily Inquirer reported on Monday. Bancommerce withdrew interest in the merger because of the current unresolved legal issue Urban Bank and UII are involved. Norberto Nazareno, Philippine Deposit Insurance Corp. president, said several banks and some corporate depositors are interested in the status of the bank and can submit a bid. Petron Corp. and San Miguel Corp. have P1 billion each in deposits in Urban Bank while Manila Electric Co. has P500 million. UII last June asked for and was granted relief on its P5.83 billion in liabilities. The state-owned Philippine Deposit Insurance Corp., the receiver of Urban Bank, has claims amounting to P4.6 billion from UII on behalf of the bank. Nazareno said the liquidation option is unpopular and will take time. ================= S I N G A P O R E ================= ASIA PULP: Will Close its Overseas Branches -------------------------------------------- Asia Pulp & Paper Co. will close its overseas branches and reduce its Singapore operations to raise cash to pay suppliers. In a meeting with suppliers last week, insurance firms that back the supply of raw material are now demanding cash before they will be able to repaying suppliers again, according to the Wednesday issue of the Asian Wall Street Journal. Sales fell to US$90 million in November, compared with an average monthly figure of $280 million, but should recover to about US$180 million this month. APP has a total debt of US$12 billion. The firm has US$1.5 billion of bond payments due this year. The firm owes US$450 million to foreign and local suppliers. Credit Suisse First Boston and J.P. Morgan are interested to be APP's financial advisor. APP desperately needs supplies of raw materials in order to produce pulp and paper at its mills. Stocks of chemicals are low at about 10 to 14 days, while pulp inventory is at about two months. As a compromise, the ailing pulp firm offered to pay cash of 1.1 times the value of each future order. APP plans to sell its Indian unit for US$100 million to raise cash and its stake in Sinar Mas Pulp & Paper (India) Ltd., the Indian unit of Sinar Mas Group. =============== T H A I L A N D =============== EMC: Submits Rehabilitation Plan --------------------------------- EMC submitted its rehabilitation plan to the Bankruptcy Court in a letter to the Thailand Stock Exchange (SET) on February 21. Komol Wongpornpenpap, EMC chairman, wrote they are waiting for a scheduled creditors' meeting to consider their plans. INTER FAR EAST: Creditors Did Not Accept Rehab Plan ---------------------------------------------------- Creditors have not accepted the rehabilitation plan submitted by Inter Far East Engineering Pcl., an office equipment distributor. Watana Limnararat, representing Arthur Andersen Business Advisory Ltd. (appointed planner), informed the Stock Exchange of Thailand on March 1 that they attended the meeting of creditors on February 23 to present the Inter Far East rehabilitation plan. SINO RESOURCES: Submits Rehabilitation Plan -------------------------------------------- Sino-Thai Resources Development Public Co., Ltd. through Yuanta Securities (Thailand) Co., Ltd., Financial Advisor, has reported a projection on the firm's rehabilitation plan to the Stock Exchange of Thailand on February 28. For the year ended 30 December 2000, the company recorded total revenue of Bt128.97 million, relatively lower than the projection by Bt22.86 million or 15.05 percent. The variance was attributable to lower income from Tin Mining and Industrial Stone. While total actual cost and expenses of Bt128.65 million were also lower than the projection by Bt20.97 million or 14.02 percent in accordance with the contraction of actual revenue. In 2000 the company recorded a net profit of Bt 2.56 million, relatively higher than the projection by Bt 0.36 million or 16.36 percent. But the company recorded Bt2.24 million from a depreciation of excess revaluation assets by the TAS No.32 announced on December 26, 2000. Finally the Company recorded a net profit of Bt 0.32 million, relatively lower than the projection by Bt 1.88 million or 85.51 percent. EXPLANATION ON THE SIGNIFICANT VARIANCE OF THE ACTUAL PERFORMANCE AND PROJECTION Revenue from tin ore of Bt 99.88 million was materially lower than expected by Bt 24.54 million, or 19.72 percent, from the temporary ceased operation for maintenance of the Company's dredgers (Aokam Thai 2 and Aokam Thai 3) and the supporting vessel. Revenue from industrial stones of Bt 20.59 million was lower than the projection by Bt 1.91 million or 8.49 percent. The company can sell 296,771 tons of construction stone, which is slightly less than the target 300,000 tons. Other income of Bt4.30 million was higher than expected by Bt 3.59 million on recovery of bad debt expenses, gains from debt restructuring and sales of other equipment. Cost of tin ore production of Bt 93.53 million was lower than the projection by Bt19.78 million or 19.78 percent. Cost of industrial stone production of Bt 21.14 million was lower than the projection by Bt 1.76 million, or 7.68 percent, mainly resulting from the volume of Tin Ore and Quarry for Construction were less than the sale projection. Selling and administrative expenses were slightly higher than the projection by Bt 0.56 million or 4.53 percent. 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. 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