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        T R O U B L E D   C O M P A N Y   R E P O R T E R

                     A S I A   P A C I F I C

           Thursday, March 15, 2001, Vol. 50, No. 52



                           Headlines


A U S T R A L I A

IOCOM LIMITED: Restructure Builds Potential For Profit


I N D O N E S I A

ASEAN ACEH: At Risk Due To Gas Field Closures


J A P A N

MITSUBISHI MOTORS: Execs Face Charges For Cover-up
TOKYO MUTUAL: Moody's Lowers Company To Caa1


K O R E A

HYUNDAI ELECTRONICS: To Dispose Of Non-Core Businesses
HYUNDAI MOTOR: DaimlerChrysler To Cancel Deal With Hyundai Motor


M A L A Y S I A

SOUTHERN PLASTIC: Advisor Formally Withdraws
MALAYSIA AIRLINES: Government To Cut Airline Workforce


P H I L I P P I N E S

EAST ASIA:  Rehab Plan and Investor Capital Imminent


S I N G A P O R E

ASIA PULP: Gets Low `CC' Ratings From S&P


T H A I L A N D

CENTRAL PAPER: Enters REHABCO Category
THAI WAH: Creditors, Bankruptcy Court Approve Rehab Plan


     -  -  -  -  -  -  -  -  - -

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A U S T R A L I A
=================


IOCOM LIMITED: Restructure Builds Potential For Profit
------------------------------------------------------
Iocom Limited announced on Tuesday to the Australian Stock
Exchange that the company has restructured, returning focus to
the core business while still maintaining the value of strategic
investments and significant profit potential of its divisions
such as Internet Business Solutions and the CTI business.

Iocom management has worked diligently to achieve this
restructure in order to ensure an outcome that should provide
maximum benefit for its shareholders.

Iocom Limited is forecasting a strong finish to the current
financial year with all business units cash flow positive.

The total consolidated revenue for the group is in the vicinity
of A$5,500,000 with an operating loss of A$4,400,000.

Abnormal writedowns to the book value of investments and the
value of intellectual property of the UBSP/Atura/fullCRM software
division are in the vicinity of A$3,100,000. These writedowns are
mostly due to a prudent approach to inherent values of
intellectual property and the goodwill of non-performing business
units in the current economic climate.

Iocom is currently raising up to A$500,000 through a placement
that will cushion the effects and costs of the restructure while
the company returns to a cash flow positive status.

The proposed sale of equity in the CTI division is also expected
to contribute cash to Iocom.

Most of the business divisions of the MUA Group acquisition have
been integrated into Iocom Solutions or have been disbanded. MUA
Distribution, which has been cash flow negative, is being wound
down and will finalize trading before the end of March.

Expenses for the UBSP/Atura/FullCRM group have been halted. Most
of the staff in this division has been dismissed. Iocom is
seeking to sell the intellectual property.

The emphasis of the restructuring has been to allow Iocom to
concentrate on the successful core business, Iocom Solutions,  
SME outsourcing and systems integration. The unique services
product that Iocom has designed (Productivity Services Agreement
- PSA) has proven to be strategically sound. The PSA provides a
tailored level of service for all SME or Satellite-Corporate that
is a simple and cost effective method of maintaining their IT
infrastructure.

PSA includes a set contract term, usually about 24 months, and
provides a stable and reliable source of ongoing revenue.
Further, as the product allows a fixed-cost and potentially
reduced price for a client's IT expenditure, it may prove to be
attractive in a period of recession. Technology Consulting and
Systems integration continues to be profitable.

Iocom Solutions will continue to grow and is firmly focused on
profitability. Iocom Solutions has carried many administrative
costs for other divisions, and has been cash flow negative during
the last quarter. It is forecast that this division will be cash
flow positive before the end of the financial year.

IBS (Internet Business Solutions), a company acquired early this
financial year, is now operating with a positive cash flow and
sales budgets are being achieved.

The IBS business acquisition came with the intellectual property
for a firewall in addition to significant technical expertise in
networks, network security, the internet, and secure internet-
based site-to-site offices connectivity. Additional investment
has been made into this business, and in particular the continued
development of the firewall into a marketable product. Most IBS
personnel are now being integrated into Iocom Solutions, with a
small contingent attending to the ongoing profitable firewall
development.

The Fortress Firewall range (Fortress Lite, Fortress, and
Fortress Enterprise) negates the requirement for a router in most
instances, and also acts as a secure encrypted Virtual Private
Network (VPN) gateway and a remote-access gateway. Iocom
forecasts tremendous potential for this product range, which will
be officially launched on Monday, March 19, 2001. The Fortress
product has already been shipping in pre-release and has been
successfully installed. Outside of organic growth and sales,
Iocom is in the process of expanding the sales channel to
Australian and potentially global distribution, as well as
investigating global licensing opportunities.

The CTI business, in cooperation with Dell and Microsoft,
successfully launched Alexis (an interactive PABX and
communications product which consolidates telephone and network
services) on February 21st (Sydney) and February 23rd
(Melbourne). The CTI division does require additional capital
investment over the next 24 months and Iocom is in discussions
that involve a joint venture with parties to provide the capital
investment requirements.


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I N D O N E S I A
=================

ASEAN ACEH: At Risk Due To Gas Field Closures
-----------------------------------------------
PT Asean Aceh Fertilizer (AAF) is one of two Aceh-based
fertilizer companies that are predicted to suffer from monthly
losses reaching Rp85 billion, Jakarta Post reported, resulting
from the shut down of United States-based ExxonMobil's gas field
in the province. The other company is PT Pupuk Iskandar Muda
(PIM).

The closure of the gas fields would cause the two companies'
combined production loss estimated at 120,000 tons every month,
which could have a detrimental effect on domestic fertilizer
prices.

Last Friday, the American oil-and-gas company closed five gas
fields in Lhokseumawe, Aceh, blaming security problems in the
province.

The two Aceh fertilizer companies, including pulp firm PT Kertas
Kraft Aceh, get their gas supply from ExxonMobil's natural gas
production.

The president of Pupuk, Mr. Omay K. Wiraatmaja, said in the Post
report, that the gas field closure will greatly affect AAF's
production and operations, since majority of AAF's fertilizer is
exported. AAF produced 587,055 tons of fertilizer last year,
exporting 99 percent of production, or 567,027 tons.


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J A P A N
=========

MITSUBISHI MOTORS: Execs Face Charges For Cover-up
---------------------------------------------------
Eleven former executives of Mitsubishi Motors Corporation (MMC)
are facing a suit filed with the Tokyo District Court. A
company's shareholder is seeking to force the former executives
to pay a sum of Y1.18 billion in compensation for losses incurred
by the company and attributed to the cover-up of auto defects and
customer complaints, Japan Times Online reported.

In October and November of last year, MMC suffered a 30 percent
drop in new vehicle sales due to the scandal. It also lost Y11.5
billion for free auto inspections conducted to restore buyer
trust. For the illicit cover-up, MMC was fined Y4 million by the
district court.

The plaintiff is a 63-year-old MMC shareholder from Toyohashi,
Aichi Prefecture. One of the 11 respondents is former MMC
President Katsuhiko Kawasoe, who quit his post last October, to
take responsibility for the scam.  

An MMC spokesman refused to comment on the matter since the case
did not involve the company.

The police stated MMC executives reported only claims that would
steer the Transport Ministry away from recalls when it conducted
an inspection of the company in March and November of last year.


TOKYO MUTUAL: Moody's Lowers Company To Caa1
--------------------------------------------
Moody's Investors Service has downgraded the insurance financial
strength rating of Tokyo Mutual Life Insurance Company (Tokyo
Life) to Caa1 from B3. The rating outlook is developing. This
concludes a rating review initiated on November 24, 2000.

The rating adjustment reflects Moody's view that the company is
under severe stress resulting from both its own financial
weakness and a negative business environment.

Tokyo Life had unrealized losses of Y94.0 billion in its
investment portfolio of marketable securities in general account
as of September 30, 2000.

Further declines in the Japanese stock market have negatively
affected the company's investment portfolio. Additionally, Tokyo
Life has suffered from a decline of new contracts and policies in
force.

Without a change in these trends, Tokyo Life will lose its
business base and source of profitability. Part of the decline in
policies in force stems from the increased level of awareness of
Japanese policy holders regarding the credit strength of life
insurance companies.

The developing outlook reflects Moody's views on Tokyo Life's
ongoing restructuring. Tokyo Life has announced its plan of
raising Foundation Funds in the amount of Yen 30.0 billion from
Daiwa Bank and other companies. Additionally, the company has
sold its headquarters building.

Foundation Funds are a debt-natured capital. The use of these
funds could raise Tokyo Life's regulatory solvency margin ratio.
However, in Moody's view, Tokyo Life is required to immediately
present and implement its restructuring plan in order to build up
real capital to absorb the risk and to build up its business
franchise for the future.

Tokyo Mutual Life Insurance Company, headquartered in Tokyo, is a
Japanese life insurance company. Tokyo Life had total assets of
Y1.0 trillion at the end of September 2000. (Moody's Investors
Service)


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K O R E A
=========

HYUNDAI ELECTRONICS: To Dispose Of Non-Core Businesses
------------------------------------------------------
Hyundai Electronics, the ailing Hyundai unit, is undergoing talks
with foreign companies to liquidate its non-core non-
semiconductor units before the end of the year, the Digital
Chosun reported.

Korea's Deputy Prime Minister at the Ministry of Finance and
Economy, Jin Nyun, told reporters last Monday that this is one of
the company's last-ditch efforts to resolve its liquidity crisis.  
Jin said that there are no clear chances for the company to
survive since its fate rests on plunging chip prices in the world
market.

According to Jin, the electronics unit needs to disengage itself
from the Hyundai business group before the start of the second
half this year. The only way to achieve that is by cutting the
stake owned in Hyundai by its sister companies from the current
19 percent down to 3 percent.

HYUNDAI MOTOR: DaimlerChrysler To Cancel Deal With Hyundai Motor
-----------------------------------------------------------------
DaimlerChrysler (DC) may ditch its plans to joint venture with
Hyundai Motor. DC would prefer to create a partnership with
Japan's Mitsubishi Motor, the Korea Herald reported as told by
Sejong Securities.

DC and Japanese automaker Mitsubishi Motor plan to form a joint
venture on a commercial vehicle unit, as the former is finalizing
an agreement to buy out Volvo's 3 percent stake in the latter.  
"[This is] heightening the chances that the German-U.S. car maker
would withdraw from talks to establish a 50-50 truck-bus
manufacturer in Korea with Hyundai Motor," said the brokerage in
a report.

"DaimlerChrysler is likely to scale down its original joint
venture plans with Hyundai. At worst, the possibility of the
Hyundai-DaimlerChrysler commercial deal being scrapped could not
be ruled out," said the Sejong report. "The Daimler-Volvo deal
could have an adverse impact on Hyundai Motor's short-term stock
prices."


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M A L A Y S I A
===============

SOUTHERN PLASTIC: Adviser Formally Withdraws
--------------------------------------------
Southern Plastics Holdings Bhd announced to the Kuala Lumpur
Stock Exchange on Monday that Utama Merchant Bank Berhad has
withdrawn as adviser for the company's proposed restructuring
plan, effective February 23, 2001.
Utama Merchant has also notified the Securities Commission,
Foreign Investment Committee, and Ministry of International Trade
and Industry of their intention to retract all documents in
relation to the proposals that had earlier been submitted them.
The former restructuring plan encompasses proposals on rights
issue with warrants, employees' share option plan and the
increase in authorized capital.

Southern Plastic also announced that the appointment of
Aseambankers Malaysia Berhad and Arthur Andersen & Co have as the
Merchant Bank and Financial Consultant, respectively, to
formulate a new restructuring plan for the company.

According to the Southern Plastic release, "Details of the new
plan will be announced in due course upon finalization of the
plan."  


MALAYSIA AIRLINES: Government To Cut Airline Workforce
------------------------------------------------------
Ailing Malaysia Airlines (MAS) will have a trimmer workforce
starting next month, when the government will start firing
airline workers, the Business Times reported on Tuesday. This
government move would help encourage more airlines to fly to
Kuala Lumpur. MAS will voluntarily comply with this plan to cut
its workforce to 21,000.

Analysts say this move is casting bright hopes on this company
beleaguered by high fuel costs, keener competition and a debt
burden of almost RM10 billion.

The government, which owns nearly half of the airline company, is
planning to sell part of its stake in MAS to a foreign carrier.


=====================
P H I L I P P I N E S
=====================

EAST ASIA:  Rehab Plan and Investor Capital Imminent
----------------------------------------------------
East Asia Capital Corporation (AEA) is in negotiations with a
Taiwanese and Singaporean conglomerate. The prospective investor,
is expected to bring an infusion of capital amounting to P200
million, Business World reported. The conglomerate has already
prepared a rehabilitation plan to be presented to the company's
stockholders' assembly in two weeks' time.

Securities and Exchange Commission (SEC) chairperson Lilia R.
Bautista, was quoted by World saying that "the proposed entry of
the [investor] has to be approved by the creditors since there
will be a dilution of their interests."

According to Bautista, the Bangko Sentral ng Pilipinas (BSP) is
currently studying the rehabilitation proposal and will decide on
it first before the plan can be implemented. And with fresh
capital trickling in AEA will be able to renew its investment
house license.

The SEC had earlier issued a cease-and-desist order (CDO) against
AEA for failing to comply with the SEC's minimum paid-up capital
requirement of P300 million, the World reported. AEA posted
estimated capital accounts amounting to P99 million, as of
December 19, 2000, showing a cash deficiency of over P200
million. However, the SEC lifted the CDO ruling on the company
just so negotiations with new investors will be facilitated.


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S I N G A P O R E
=================

ASIA PULP: Gets Low `CC' Ratings From S&P
-----------------------------------------
Standard and Poor's on Tuesday lowered the long-term local and
foreign currency corporate credit and senior debt ratings on Asia
Pulp & Paper Co. Ltd. (APP) and its operating subsidiaries,
namely, PT Indah Kiat Pulp & Paper Corp Tbk, PT Pabrik Kertas
Tjiwi Kimia Tbk, PT Pindo Deli Pulp & Paper Mills, PT Lontar
Papyrus Pulp & Paper Industry, and APP China Group Ltd. The
rating dropped to double-'C' from triple-'C'-minus. At the same
time, Standard & Poor's lowered its ratings on all but one of the
guaranteed subsidiaries to double-'C' from triple-'C'-minus. The
ratings remain on CreditWatch with negative implications.

The downgrade reflects Standard & Poor's belief that default is
imminent as a result of Asia Pulp's announcement that it will
stop all group payments of interest and principal on outstanding
debt. The rating on Asia Pulp & Paper Finance Mauritius Ltd.
(APPIIM) has already been lowered to 'D' following it's
nonpayment of a $11.25 million quarterly dividend due February
15, 2001, on a $375 million unsecured, cumulative, redeemable
preference share issue.

Standard & Poor's regards as a default any interruptions to
scheduled payments of financial obligations, be they interest or
principal, and will lower the various issue ratings to 'D' when
the next respective dates for interest or principal payments are
passed and payments are not made. At the same time, the corporate
credit ratings on each entity will be lowered to 'SD' (selective
default) or 'D', depending on whether an entity is, at that point
in time, current on any other debt. Although a financial advisor
has been appointed to address APP's debt maturity and capital
structure concerns, Standard & Poor's does not expect a
resolution in the near term due to the group's extensive debts,
complex debt structure, and the existence of numerous creditor
groups.


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T H A I L A N D
===============

CENTRAL PAPER: Enters REHABCO Category
----------------------------------------
The Stock Exchange of Thailand (SET) announced over the weekend
that Central Paper Industry Public Company Limited (CPI) is one
of the seven listed companies subject to rehabilitation plan
preparation that have been transferred to the category named
Companies Under Rehabilitation (REHABCO). This was after SET  
established procedures and guidelines for categorizing companies,
especially under REHABCO.

The six other companies include: Thai Heat Exchange Public
Company Limited (Thai Heat), Sanyo Universal Electric Public
Company (Sanyo Uni), Preecha Group Public Company Limited
(Preecha), Thai Wah Public Company Limited (Thai Wah), Thai
Petrochemical Industry Public Company Limited (Thai Petro)and NEP
Realty and Industry Public Company Limited (NEP).

All seven are under rehabilitation plan preparation. Thai Wah and
Thai Petro have rehabilitation plans already approved by
creditors and the Bankruptcy Court. NEP's company auditor issued
a disclaimer opinion on financial statements for 3 consecutive
years, from 1998 to 2000.

Main consideration for the classification of these companies
under the REHAB category is the respective company's audited
annual financial statements ending December 31, 2000, filed in
SET.

Under the REHABCO category, SET explained, the listed company's
financial statements must show negative shareholders' equity on
its balance sheet, and that the auditor must have issued a
disclaimer or an adverse opinion on the company's financial
statements for three consecutive years.

Thus, the SET temporarily posted an SP sign on March 12, 2001 to
suspend further trading for 30 days from the date of announcement
to April 11, 2001. This is to give the CPI management time to
make prudent decisions that benefit all parties concerned. Under
these conditions, CPI, including the four others under rehab plan
preparations, must inform SET by April 11 whether they have
decided to prepare a rehabilitation plan to propose to the
company's shareholders, ask for voluntary delisting, or whether
they would like to try other options which will benefit all
company stakeholders involved. The company must also provide SET
with a time schedule to implement their decisions.

The SET, under its guidelines and procedures, would allow trading
the securities of the first four listed companies under the
REHABCO category from April 12 to May 11 after receipt of all
required information. This is to give all shareholders a chance
to trade the securities before further suspension or the company
has implemented the rehabilitation plan.

The SET will post an SP sign to prohibit the trading of the first
four listed companies from May 14 onward. However, these listed
companies may request the SET to allow continued trading under
the REHABCO category, if they have completed their debt
restructuring of more than 50 percent of their total liabilities,
and the rehabilitation plan has either been approved by the
shareholders or the Bankruptcy Court in accordance with the
conditions specified by the SET.


THAI WAH: Creditors, Bankruptcy Court Approve Rehab Plan
--------------------------------------------------------
Creditors and the Bankruptcy Court approved the rehabilitation
plans of Thai Wah Public Company Limited, a listed company which
has been transferred to the category named Companies under
Rehabilitation (REHABCO), the Stock Exchange of Thailand (SET)
announced over the weekend.

Also approved was the rehabilitation plan of Thai Petrochemical
Industry Public Company Limited (Thai Petro).

Under the REHABCO, the Thai Wah and Thai Petro submitted
financial statements that showed negative shareholders' equity on
their respective balance sheets. The two companies will be
allowed to trade their securities only under the REHABCO category
because their rehabilitation plans have been approved and the
companies have already fulfilled the major requirements of the
rehabilitation plans via the SET information system.

Thai Wah and Thai Petro will have to report to the SET
every three months on their actual implementation progress, as
compared to their rehabilitation plan, SET said.


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.

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