/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/010313.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 Tuesday, March 13, 2001, Vol. 50, No. 50 Headlines A U S T R A L I A STEEL TANK: Plans Auction, Cutting Work Force COMPLETE BODY: Faces Liquidation of Assets BRADMILL UNDARE: Workers Demand Gov't To Act On Pledge C H I N A & H O N G K O N G FUJIAN GROUP: Hands Over Assets To HSBC, Sin Hua Bank GRAND FORTUNE: Petition For Winding Up PANDA-RECRUIT: Costs For Portal Slides Into The Red In 2000 I N D O N E S I A NEWMONT MINAHASA: Minahasa Gold Mine Nears Closure in 2003 J A P A N KUMAGAI GUMI: To Issue Y20b Worth Of New Equity DAIHYAKU MUTUAL: Fitch Affirms Manulife Rating With Daihyaku Buy MITSUBISHI MOTORS: Denies Report Of Break-up With Volvo K O R E A DAEWOO MOTOR: Activists Stage Demos vs. Layoffs HYUNDAI SEMICONDUCTOR: S&P Lowers Hyundai Semi. America To B- M A L A Y S I A CELCOM TIMUR: Rating Agency Lowers Company's RM100M RUF IDRIS HYDRAULIC: TAE Owns Wisma Idris, Prime Utilities Shares TIME DOTCOM: Posts Pre-Tax Loss Of RM2.5 M For FY 2000 P H I L I P P I N E S EXPRESS TELECOMMUNICATIONS: Creditors Want Debt Guarantee PILIPINO TELEPHONE: To Face SEC Sanction For Refusal To Open Book S I N G A P O R E PANPAC MEDIA: Clarifies A Report On Retrenchment T H A I L A N D KOOKMIN BANK: To Ink Merger Deal With H&CB NAKORNTHAI STRIP: Court Appoints New Planner On Case - - - - - - - - - - ================= A U S T R A L I A ================= STEEL TANK: Plans Auction, Cutting Work Force -------------------------------------------------- Steel Tank and Pipe (STP) has laid plans for a six day series of auctions if the group of companies continues to fail to find buyers, the Newcastle Herald reported. The auctions would take place next month at STP sites in Melbourne, Sydney, and Newcastle. Glenn Thompson of the Australian Manufacturing Workers Union says ongoing concerns of selling troubled STP companies means poor prospects for workers' continued employment. The company has been concerned with the sale of the group since its collapse in November last year, resulting in the placement of the companies under receivership. STP has laid off about two-thirds of its workforce across its sites, retaining 9 workers at the Newcastle plant at Carrington, and about the same number in Melbourne. An estimated total of $870,000 in outstanding settlements has been given to STP employees. But STP still owes a total of about $4.2 million. If STP proceeds with the auctions, the Herald noted, there are chances of short-selling its equipment, eventually splitting the group's assets. Properties in Sydney, Melbourne and Newcastle are scheduled for sale on March 21 and 22. PWC receiver Greg Hall expects the administrator would be able to generate a surplus from the sale of assets, enough to be distributed among the unsecured creditors. Mr. Hall represents National Australia Bank, a secured creditor owed more than $10 million. COMPLETE BODY: Faces Liquidation of Assets ------------------------------------------ Complete Body Corporate, the largest body corporate management group in Queensland, faced liquidation of its assets on Tuesday last week, according to Australasian Business Intelligence. Michael McCann, company administrator, says assets of Accountable Property Management and Springwood Strata Title Management would be included along with those of Complete Body. With the loss of records and the necessary papers, there are no figures yet as to the total losses of about 7,000 property owners that have accounts with the group. BRADMILL UNDARE: Workers Demand Gov't To Act On Pledge ------------------------------------------------------ Bradmill Undare Group's 900 workers demanded the State and the national Australian governments to take steps toward upholding the promise to save their jobs in the failed textile company. The request was made during the workers' meetings on March 2001, the Australasian Business Intelligence said. Bradmill's 9 business are all under receivership, and currently need an estimated A$19 million to fulfill their obligations under the worker redundancy payments. ================================ C H I N A & H O N G K O N G ================================ FUJIAN GROUP: Hands Over Assets To HSBC, Sin Hua Bank ----------------------------------------------------- Having failed to repay its debts, the Fujian Group Ltd surrendered its assets to HSBC and Sin Hua Bank, to whom the company owed HK$144 million and HK$179 million, respectively, said a report of the AFX. Fujian also owed Standard Chartered Bank HK$40.5 million. The notes were due at the end of January. The group is in negotiations with the creditor banks to look into prospects for refinancing. GRAND FORTUNE: Petition For Winding Up -------------------------------------- A petition to wind up Grand Fortune International Limited was filed in the High Court of Hong Kong on January 30, 2001. The petition filed by Hua Chiao Commercial Bank Limited of 92 Des Voeux Road Central, Hong Kong, is scheduled for hearing before the Court on April 11, 2001 at 9:30 AM. PANDA-RECRUIT: Costs For Portal Slides Into The Red In 2000 ----------------------------------------------------------- The development and promotion costs for portal PandaPlanet.com saw Growth Enterprise Market-listed Panda-Recruit falling HK$21 million into the red last year. The loss came despite a strong rise in recruitment advertising for the company, which had a HK$4.5 million profit in 1999. Company losses widened in the fourth quarter, after a HK$13.3 million loss in the first three quarters. Management said the losses stemmed from increased promotional costs for its Panda- planet.com and setting up operations in Guangzhou. The PandaPlanet.com portal, launched in February last year, had revenue of HK$8.8 million with an average of 1.1 million weekly page-views maintained during the fourth quarter. At the end of December, the number of registered members stood at 137,946. Turnover for Panda-Recruit increased by 82 percent to HK$129.1 million due to increased advertising in Recruit magazine. Advertisement pages posted in the magazine throughout the year rose by 89.1 percent to 13,142 of ad pages. Recruit, distributed free within MTR Corporation stations, made HK$5.3 million on a turnover of HK$117 million. The loss was 2.58 HK cents per share. No dividend was declared. ================= I N D O N E S I A ================= NEWMONT MINAHASA: Minahasa Gold Mine Nears Closure in 2003 ---------------------------------------------------------- PT Newmont Minahasa Raya (NMR), a subsidiary of Colorado-based Newmont Corporation, is set to shut down its depleted gold mine in Ratatotok, Minahasa regency, North Sulawesi, by 2003, Jakarta Post reported, citing a source from the company. The company is licensed to operate the mine until 2016. 375 workers are expected to lose jobs, as a result of the planned closure. But the displaced workers are scheduled to receive their compensations, totaling US$4.45 million, starting the end of 2001, the Post said. By 2003 another NMR gold mine in Lobongan, located near the Ratatotok mine, might be due for closure, despite its large gold deposits. Problems, like illegal mining by locals, continue to hound the project and have been affecting operations. From the mine's operations alone, the company has yet to break even. There are hopes, the report continued, that the company will be able to generate a profit of $413 million this year. NMR spent $234 million on the construction of necessary infrastructures at the Minahasa gold mine. The Minahasa site started operations in 1996. Other than the Minahasa site, Newmont also operates, in partnership with Sumitomo Corporation and an Indonesian business ally, a copper and gold mine in Batu Hijau, Sumbawa, West Nusa Tenggara. The mine began production in late 1999. ========= J A P A N ========= KUMAGAI GUMI: To Issue Y20b Worth Of New Equity ----------------------------------------------- According to a report in Japan Times Online, ailing construction firm, Kumagai Gumi Company, plans to issue new shares totalling 20 billion yen to 13 financial institutions and an affiliate. The finance institutions Sumitomo Bank, Sumitomo Trust & Banking Co., Tokai Bank, Chuo Mitsui Trust & Banking Co. and regional banks Gunma Bank, Hokuriku Bank, Fukui Bank and Hokkoku Bank are expected to subscribe to the new issues. Each will own 4.5 percent of the construction firm. Expecting to raise 20 billion yen through the offering, the company will use the funds to funnel 16.4 billion yen into capital accounts that have been at the disposal of non-performing assets. Proceeds will also be used to help meet outstanding loans with the creditor banks. A company source that, with the infusion of fresh capital, the shareholders' equity will reach 33.4 billion yen. Beleaguered by bad assets and huge interest-bearing liabilities, the firm decided on March 1 to reduce its capital by 65 billion yen to 17 billion yen, as part of its restructuring plan, in agreement with its 15 creditor banks. In so doing, the banks have agreed to forgive 430 billion yen worth of company loans. DAIHYAKU MUTUAL: Fitch Affirms Manulife Rating With Daihyaku Buy ---------------------------------------------------------------- Fitch has affirmed Manulife Financial Corporation's ratings after additional review of its Japanese subsidiary's (Manulife Century) agreement to acquire the in-force business of Daihyaku Mutual Life Insurance Company of Japan. Fitch believes the transaction more closely resembles reinsurance of a runoff block. Much of the risk on the liability side has been extracted through the restructuring of policy cash values and lower guaranteed crediting rates. The `riskier' asset classes have not been acquired, leaving primarily cash and Japanese governments to meet liability needs. The transaction provides opportunity for ongoing Japanese operations, supplementing Manulife Century's current distribution, scale and expense infrastructure. Still, the uncertain Japanese market will represent an increased, though still modest, proportion of Manulife's premiums and deposits and net income. In addition regulatory risk-based capital ratio (MCCSR) will decline as a result of the transaction. Fitch will continue to monitor operating and asset performance against management's projections for the transaction. MITSUBISHI MOTORS: Denies Report Of Break-up With Volvo ------------------------------------------------------- Carmaker Mitsubishi Motors Corporations (MMC) still maintains its union with Swedish truck maker AB Volvo. MMC confirmed its position, in an article in Japan Times Online, denying a report by Asahi Shibum that the two parties are considering a termination regarding their truck business by the month's end. Mitsubishi said that "the basic policy agreed to in July 2000 between Mitsubishi Motors and Volvo is unchanged and we have received no notice from Volvo to change the policy." ========= K O R E A ========= DAEWOO MOTOR: Activists Stage Demos vs. Layoffs ----------------------------------------------- Labor and university student activists, laid-off workers and their sympathizers held demonstrations, in separate venues, in protest against the layoffs of 1,751 workers by debt-burdened Daewoo Motor Company in the wake of the reopening of its main plant. As reported by Associated Press (AP), the protests were marred by violence as protesters clashed with riot police in separate incidents. A smaller protest at the Bupyong plant tried to stop dozens of buses transporting workers to the plant. Police detained 200 protesters for blocking the Daewoo buses. About 1,500 laid-off workers, together with their sympathizers, staged a much bigger rally at one university. In that same incident, hundreds of rallyists were caught in a violent encounter with about 1,000 riot police trying to disperse the crowd. Four student protesters and two policemen were injured in the clash. The protests failed to stop Daewoo from reopening its Bupyong plant, which is reportedly capable of producing half a million cars. Daewoo laid off the workers in February, when it padlocked its Bupyong plant as a come-on move to General Motors Corp, which the South Korean carmaker has been eyeing as a likely acquirer. The ailing carmaker, which is third largest in the country, has been under court receivership since November of last year when it filed for bankruptcy. However, its two other plants, whose combined capacity is estimated at 500,000 cars, are both operating normally. Daewoo has been facing troubles with its estimated debt burden of $10 billion. The company blames a 12% drop in sales from 945,000 in 1999 to 830,000 vehicles in 2000. January sales were only 38,700 vehicles, about 52% of sales in the same month last year. Laying-off workers is part fulfillment of its pledge to creditor banks in return for emergency loans extended to the company. About 5,500 workers have already been fired, 34% of the total 16,000 workforce. HYUNDAI SEMICONDUCTOR: S&P Lowers Hyundai Semi. America To B- ------------------------------------------------------------- Standard & Poor's lowered its long-term rating on Hyundai Semiconductor America Inc., a U.S. subsidiary of Hyundai Electronics Industries Co. Ltd., to single-'B'-minus from single- 'B' on Thursday, March 8. At the same time, Standard & Poor's, a United States credit rating agency, placed the rating on CreditWatch with negative implications. The rating action reflects Hyundai Semiconductor America's failure to make a payment on part of its debt. Parent company Hyundai Electronics is reportedly considering various plans, possibly involving the Korean government, to provide support to Hyundai Semiconductor America. The rating on Hyundai Semiconductor America has not been revised to 'SD' (Selective Default) at this stage, because Standard & Poor's believes that the payment default will be remedied before the expiration of the grace period. However, the company's failure to make the payment is symptomatic of serious liquidity shortages. Upon gathering all necessary information, Standard & Poor's is likely to downgrade the company to the triple-'C' category or lower. A U.S. subsidiary of Hyundai Electronics Industries, Hyundai Semiconductor America recently defaulted on a loan repayment of US$57 million. =============== M A L A Y S I A =============== CELCOM TIMUR: Rating Agency Lowers Company's RM100M RUF ------------------------------------------------------------ The Rating Agency Malaysia Berhad (RAM) has lowered the short- term rating of Celcom Timur Sdn Bhd (CTS) in regard to the company's RM100 million revolving underwritten facility (RUF). In the rating watch, Celcom's RUF rating slid to NP from P3. The non-investment rating reflects the credit risk of its largest customer, Celcom, which contributes over 95% of CTS' revenue stream. Celcom is also CTS' major shareholder with a 60% stake in the company. The rating downgrade on CTS further reflects the slow receivable collection from Celcom, which has put a strain on CTS' liquidity position. Additionally, RAM holds the view that financial support from its 40% shareholder, Sarawak Electricity Supply Corporation will, at best, be limited to its minority interest in CTS. CTS' RM100 million RUF was earlier placed on RAM's Rating Watch concurrent with the Rating Watch on Celcom's debt facilities pending the completion of CELCOM's debt restructuring scheme. Celcom recently concluded the debt restructuring exercise and the ratings of Celcom's restructured tranche 1, 2 and 5 of the multi- structure facility were removed from Rating Watch and accorded enhanced long-term and short-term ratings of BBB3 and P3 respectively. The enhancements to the ratings of Celcom's MSF takes into account the imposition of certain structural covenant protections in the MSF. As an unsecured creditor of Celcom, CTS ranks below the MSF lenders. IDRIS HYDRAULIC: TAE Owns Wisma Idris, Prime Utilities Shares ------------------------------------------------------------- TA Enterprise Bhd (TAE) remains the owner of six million Prime Utilities Bhd shares and Wisma Idris, which are collateral for a RM225.08 million loan granted to Idris Hydraulic (Malaysia) Bhd. The deal was reached after the board of directors of TAE announced on March 8, 2001, in a letter to Idris, that TA First Credit Sdn Bhd (TAFC) would not proceed with the supplemental agreement. Idris and the proposed new company (Newco) have offered the supplemental agreement to all creditors to extend the expiration date of a debt-restructuring agreement (DRA) with the lenders from Feb 16 to Sept 30. TAFC conveyed to the lawyers of Idris that a standstill condition on the sale of shares of Prime Utilities Berhad contained in the supplemental agreement must be removed. However, to date, Idris has not agreed to the demand. As such, with the lapsing of the DRA, TAFC's position will be back to status quo prior to the signing of the DRA. TAFC will continue to hold on to the collateral for the loan of Idris including, without limitation, Wisma Idris and shares of PUB. TAFC has received attractive offers for the purchase of its PUB shares and is considering selling the shares to recover part of its loan to Idris. By signing the supplemental agreement, TAFC will not have the flexibility to sell the PUB shares as it deems fit. This may affect TAFC's ability to recover its loan. The financial benefits from the proposed settlement to TAFC under the DRA are dependent on the future workable value of the various securities receivable by TAFC and are therefore uncertain to TAFC now. By not continuing with the DRA and proposed restructuring of Idris, TAFC is of the opinion that it will not have a material financial effect on TAFC as it continues to hold on to its collateral which has its own financial worth. TIME DOTCOM: Posts Pre-Tax Loss Of RM2.5 M For FY 2000 ------------------------------------------------------ On its way listing on the main board of the Kuala Lumpur Stock Exchange on Monday, March 12, 2001, TIME dotCom Bhd posted a pre- tax loss of RM 2.6 million for the financial year ending December 31, 2000, Bernama reported. Releasing its maiden audited financial report on Friday, TIME dotCom said they were reviewing sales for the year registering RM 1.418 million. The Internet company is a member of TIME Engineering Bhd which includes TT dotCom Sdn Bhd, TIME Wireless Sdn Bhd, TIME Reach Sdn Bhd, TIME Sat Sdn Bhd and TIME dotNet Bhd. ===================== P H I L I P P I N E S ===================== EXPRESS TELECOMMUNICATIONS: Creditors Want Debt Guarantee --------------------------------------------------------- Creditor banks of Express Telecommunications Co., Inc. (Extelcom) are asking the telecom company's foreign shareholder Millicom International Cellular to guarantee half of its P1.2 billion debt. A report in Business World (BW) revealed, before they will approve the company's request for longer repayment term, the banks want greater collateral. A source close to the negotiation says the repayment terms are currently underway, waiting for approval. Millicom currently owns a 40% stake in the troubled Extelcom. Creditor banks of Extelcom include British bank HSBC, the state- owned Land Bank of the Philippines (LBP), and United Coconut Planters Bank (UCPB). The proposed plan will place the loan on repayment schedule of 8 years, with a 3-year grace period on the principal. Under the same schedule, the interest will be paid on a quarterly basis, at a yield of the benchmark 91-day Treasury-bill plus a spread of 3%. Extelcom will use the revenues from its operations in the analog cellular phone business to pay for the loan. However, the source, referring to the company's repayment plans, said "We're banking on the company's cash flows from the analog business... Extelcom offers the cheapest cellular service. But of course its market is not the gentxt crowd... Extelcom should upgrade to digital in three to four years." Bayan Telecommunications, Inc. (BayanTel), owns 46% of Extelcom through Marifil Holdings. Mayon Holdings, Inc. owns about 12%. To upgrade its analog network, and eventually venture into the text-capable cellular business, the company would need an estimated P5 billion to P10 billion. PILIPINO TELEPHONE: To Face SEC Sanction For Refusal To Open Book ----------------------------------------------------------------- Pilipino Telephone Corporation (PilTel) may face sanction if it fails to cooperate in the investigation conducted by the SEC for possible violation of full disclosure rules and alleged window- dressing of financial statements submitted through 1998, to mislead investors, Manila Times reported. The SEC claims that Piltel failed to promptly disclose its suspension of debt payment in 1999. Piltel denies such allegations, citing that such a move would have negative impact on the investing public and cause panic in the already shaky market. In line with its ongoing investigation, the SEC asked the affiliate of telecom giant Philippine Long Distance Telephone Company to open its books to SEC auditors on Monday, March 12, 2001, the report said. But according to an SEC executive, if the telecom company refuses to do so, the SEC will recommend drastic measures to be imposed on the company, including trading suspension of its shares on the local stock exchange. Last week, Piltel failed to show its books to SEC auditors, claiming that some records were unavailable. ================= S I N G A P O R E ================= PANPAC MEDIA: Clarifies A Report On Retrenchment ------------------------------------------------ PANPAC Media.com clarified on Thursday, March 8, 2001, a Business Times report that came out on the same day, saying "Panpac axes two-thirds of Asiastockwatch.com staff." Panpac's lawyers, said Business Times in its report the following day, said that BT's report was "factually erroneous", adding that 5 staff members of the financial portal have been let go. Another 7 were released from the Asian Entrepreneur magazine. It was reported in BT that the retrenchment was aimed to streamline its operations. Panpac Media has been incurring losses for the last two years, blaming its investments in online ASW and ZingAsia.com, a travel and lifestyle portal, both eating up its revenues at a rate of almost $1 million a month. Net loss reached $8.39 million for the six months ending September 2000. Asiastockwatch (ASW) currently employs 35 staff members, 14 of whom are based in Malaysia. Workers in Panpac's magazines, Smart Investor and Asian Entrepreneur, are employed under Panpac Business Communications Pte Ltd., a Panpac Media subsidiary. =============== T H A I L A N D =============== KOOKMIN BANK: To Ink Merger Deal With H&CB ------------------------------------------ Kookmin Bank will formally sign its merger agreement with the Housing and Commercial Bank (H&CB) later this month, said H&CB Vice-president Kim Young-il in a report by the Korea Herald. Completion of their respective due diligence audits are due March 18. The contract is in fulfillment of an announcement back in December of a merger between the country's two strongest commercial banks. The merged bank will start operating in July 2001. Kim also said that a "merger ratio and the name of a merged entity", among other issues, will also be determined in the agreement. However, the potential value of Kookmin Card Company may not be taken into account in the merger ratio since it's already included in the Kookmin Bank's price stock. A task force has been assigned to disclose the position of both banks on the issue of listing the merged bank on the New York Stock Exchange today. H&CB, Kim added, is currently setting negotiations with the ING Group if a certain stake in the proposed merged bank would be guaranteed to the global financial services group, in which ING owns a 10 percent interest. NAKORNTHAI STRIP: Court Appoints New Planner On Case ---------------------------------------------------- Maharaj Planner Company Limited will be the new planner for Nakornthai Strip Mill Public Company, by court order released on March 2, 2001, which was also approved by the creditors. The new director is Mr. Sawasdi Horrungruang. 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. Lyndsey Resnick, Ronald Villavelez, 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 ***