/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/010605.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, June 5, 2001, Vol. 4, No. 109 Headlines A U S T R A L I A ALPHA HEALTHCARE: Ramsay Increases Relevant Interest CHAMPION FORMS: Workers Protest Loss Of Entitlements FRANKLINS AUSTRALIA: Woolworths Buys 67 Stores HIH INSURANCE: ASIC Secures Adler's Agreement To Demands ONE.TEL LIMITED: Amcom Telecoms Not A Debtor ONE.TEL LIMITED: Lucent Consults Advisers ONE.TEL LIMITED: S-Holders Misled Re Financial State OVERFLOW: Goes Into Voluntary Administration PASMINCO LIMITED: Daniels Resigns From Board C H I N A & H O N G K O N G BRIGHT RIVER: Faces Winding Up Petition CIL HOLDINGS: Winding Up Petition Set For Hearing FAI FIRST: Hearing of Winding Up Petition Set FULLRANGE INDUSTRIAL: Winding Up Petition To Be Heard GENERAL FAIR: Winding Up Petition Slated For Hearing HAND SEAL: Petition To Wind Up HANG SHUN: Petition To Wind Up HINET HOLDINGS: Posts HK$433.4M Consolidated Net Loss HINET HOLDINGS: Posts Notice Re AGM PACIFIC CENTURY: Exchange Approves Concessions I N D O N E S I A GUNAWAN GROUP: IBRA Announces Status KALLA GROUP: Seven Debtors In Process, Says IBRA SURYA DUMAI: Two Debtors Enter Into MoU J A P A N KUMAGAI GUMI: Restructuring Plan Insufficient, S&P Says SEAGAIA: To Repay Only Y9.5-B To Main Creditors K O R E A DAEWOO MOTOR: To Post Higher Operating Profit In May HYUNDAI ENGINEERING: Some Creditors Reject Bailout KOREA HOUSING: Bags Bailout Package Worth W1.84-Trillion M A L A Y S I A ABRAR CORP: Proposals Under Review AUSTRAL AMALGAMATED: Reports Status Of Plan To SC CEMENT INDUSTRIES: Seeks Deadline Extension OMEGA HOLDINGS: Banks Talks Re Debt Workout Continue PANGLOBAL BERHAD: Notice Of Discontinuance Served REPCO HOLDINGS: Reports Status Re Debt Workout RNC CORP: Reports Status Of Debt & Corporate Workout SENG HUP: Provides Details Re Debt Settlement SENG HUP: Update On Default Payment P H I L I P P I N E S NATIONAL BANK: DOF To Close `Reverse Privatization' Deal NATIONAL POWER: ADB Offers Buyers Financial Backing S I N G A P O R E ASIA PULP: IBRA Won't Foreclose On Sinar Mas Assets DAIRY FARM: Managed Sell-Down Of Franklins Stores Begins OSPREY MARITIME: Plans To Dispose Of LNG Ops T H A I L A N D SUN TECH: Additional Info Re Warrants Issue - - - - - - - - ================= A U S T R A L I A ================= ALPHA HEALTHCARE: Ramsay Increases Relevant Interest ---------------------------------------------------- Ramsay Centauri Pty Ltd increased its relevant interest in Alpha Healthcare Limited on 01 June 2001, from 26,772,761 ordinary shares (59.35 percent) to 27,437,260 ordinary shares (60.8 percent). CHAMPION FORMS: Workers Protest Loss Of Entitlements ---------------------------------------------------- Former workers of printing firm Champion Forms, which is currently under voluntary receivership, stormed into the offices of the company's liquidator Sims Lockwood Wednesday, to protest against the imminent loss of their leave and superannuation entitlements totaling around A$1.5 million, Australasian Business Intelligence (ABI) reported last week. Director David Branagan said the workers might have to share around A$600,000, but only after banks and secured creditors have received payments on debts and obligations. FRANKLINS AUSTRALIA: Woolworths Buys 67 Stores ---------------------------------------------- Woolworths Limited announced yesterday that it had signed a binding agreement to purchase 67 of Franklins' 282 stores. These stores generate an annual turnover of around $1.25 billion. The Franklins stores will be transferred progressively to Woolworths over six months, starting June 2001. The total package for disposal of the Franklins' business has been agreed in principle with the Australian Competition and Consumer Commission (ACCC). This will include undertakings by Woolworths to divest some existing Woolworths stores to satisfy ACCC local competition issues. Woolworths CEO, Roger Corbett, said Woolworths was well placed to continue its growth strategy in the Group's core businesses. "We regard the present Franklins store acquisitions as providing impetus to this process. The ongoing benefits of the Project Refresh emphasis on cost reduction, productivity improvements and capital management will enable us to maintain our competitiveness, deliver a better offer to customers and increase shareholder value in an enhanced competitive environment. "Woolworths will invest approximately $350 million over the course of 2001/02, on both the acquisition and upgrading of the 67 Franklins stores. The net working capital cost (inventory less trade payables) is expected to be negligible," he said. "The acquisition of the Franklins stores will accelerate the need to expand dry goods warehouse facilities in Queensland and fresh food warehouse facilities in NSW. "As previously announced, Woolworths expects its net repayable debt to peak in 2001/2 at less than $1 billion. In the first financial year 2001/2, sales from the newly acquired Franklins stores are expected to be in the region of $950 million due to the phased handover and refurbishment. The incremental net profit contribution after funding costs in 2001/2 is expected to be minimal. Net profit contribution from these new stores in the first full year (2002/3) will be incremental to Total Earnings per Share." Woolworths is being advised on the purchase by UBS Warburg. HIH INSURANCE: ASIC Secures Adler's Agreement To Demands -------------------------------------------------------- Jillian Segal, Deputy Chair of the Australian Securities and Investments Commission (ASIC), announced Thursday that ASIC had obtained court undertakings from Rodney Stephen Adler. ASIC sought this protective order as an interim step in its broad investigation into the collapse of HIH Insurance Limited. Last week ASIC obtained undertakings from the former HIH CEO Ray Williams and former HIH CFO Dominic Fodera. Thursday's court undertakings provide security for any judgment in ASIC's civil penalty proceedings, which allege that the three former directors breached their duties as directors in relation to a payment of $10 million by an HIH subsidiary (HIH Casualty and General Insurance Ltd) to Pacific Eagle Equities Pty Ltd, a company of which Mr Adler was a director. ASIC also alleges a breach of director's duties in respect of Pacific Eagle Equities. Thursday's court undertakings, without admission, provide security in relation to any judgement up to the value of $7.7 million and include: * that Adler will pay ASIC $2 million by 12 noon on 5 June 2001, which will be held by ASIC as security for any judgment obtained by ASIC against Adler or Adler Corporation Pty Ltd; * that Lynda Sharon Adler will provide a third party mortgage on 12 Myoora Road, Toorak, Victoria; and * that Adler Corporation will provide ASIC with security over 14.2 million shares in Medicine Quantale Ltd and 8.3 million shares in Neighbourhood Cable Ltd. Further, Adler has undertaken to provide ASIC with $4.7 million in alternative security to the shares from Adler Corporation by 1 September 2001. Adler has also agreed to surrender all his passports to ASIC by 5 pm Thursday. If he wishes to travel outside Australia he must provide ASIC with a detailed written itinerary and a photocopy of a return ticket at least seven days prior to his intended departure. This matter is next listed before the court on 2 July 2001 and ASIC's broader investigations are otherwise continuing. ONE.TEL LIMITED: Amcom Telecoms Not A Debtor -------------------------------------------- In response to numerous queries, Amcom Telecommunications (ASX:AMM) wished to clarify, as a matter of record, that it has minimal exposure to One.Tel Limited. OneTel announced last week that it has been placed into voluntary administration. OneTel has an annual contract with Amcom of no more than approximately 1 percent of its total revenues, of which $67,000 is outstanding. Amcom is not a debtor of OneTel, says G Evans, Amcom Investor Relations Manager. ONE.TEL LIMITED: Lucent Consults Advisers ----------------------------------------- Lucent Technologies, American telecommunications infrastructure firm and a major creditor of collapsed One.Tel Limited, has called in its advisers to devise possible options and recourse to protect its interests, following the downfall of One.Tel Limited, The Courier Mail reported Friday. The report said Lucent has an outstanding contract with One.Tel, primarily to finance the latter communication firm's $1-billion GSM nationwide network. It wasn't disclosed, though, how much One.Tel owes Lucent, or how much of the whole project has been financed and completed. One.Tel called in administrators Wednesday last week. The company is laden with debts amounting to $180 million and forecast debts of over $300 million, the report said. ONE.TEL LIMITED: S-Holders Misled Re Financial State ---------------------------------------------------- One.Tel Limited's major shareholders Publishing & Broadcasting Limited (PBL), and The News Corporation Limited (News) claimed that insolvent One.Tel had "profoundly misled" its shareholders regarding the company's real financial status, The Courier Mail reported Friday. However, both shareholders promised to exhaust "all available remedies". According to the report, PBL Chairman James Packer, News Chairman Lachlan Murdoch, and the board of One.Tel appointed an administrator to the collapsed telecommunications firm Wednesday last week, forestalling a proposed rights issue pegged at $132 million. Following the company's placement under administration, it will be most probable that One.Tel's ongoing GSM network infrastructure construction, which is being financed by Lucent Technologies will be sold off in a firesale for a bargain price, the report said. OVERFLOW: Goes Into Voluntary Administration -------------------------------------------- Discount retail group, Overflow, Wednesday went into voluntary administration, calling in Ernst & Young Australia, Australasian Business Intelligence reported last week. The group, which operates 22 stores, cited sluggish retail sales, cashflow problems due to goods and services tax, and exorbitant fuel prices that dragged the group into its downfall. Overflow, before going into voluntary administration, enjoyed an estimated turnover of A$40 million, the report said. Although no estimate of the group's debts has been released yet, the company holds no plan of shutting down operations. PASMINCO LIMITED: Daniels Resigns From Board -------------------------------------------- Pasminco Limited yesterday announced the resignation from its Board of Tony Daniels. Ross Herron has accepted an invitation to join the Board as a non-executive director and fills the casual vacancy created by Daniels resignation. Herron is a senior partner of PricewaterhouseCoopers and the leader of its Mining and Energy practice. He has been the audit partner for a number of Australia's leading resources companies and brings to the Board considerable expertise in the areas of financial and capital management and a close knowledge of the mining and metals industry. Prior to the recent appointment of Tony Barnes as Chief Financial Officer of Pasminco, Herron acted in this role for four months in an interim part-time capacity under a consultancy agreement with PricewaterhouseCoopers, which also provides outsourced internal audit services to Pasminco. The Chairman of Pasminco, Mark Rayner, thanked Daniels for his contribution to the Board since he became a Director in January 1996 and welcomed Herron as a Director who brings outstanding expertise and industry experience to the Board. ================================ C H I N A & H O N G K O N G ================================ BRIGHT RIVER: Faces Winding Up Petition ---------------------------------------- The petition to wind up Bright River International Limited will be heard before the High Court of Hong Kong on June 6, 2001 at 9:30 am. The petition was filed with the court on March 2, 2001 by Armstrong World Industries (HK) Limited whose principal place of business in Hong Kong is situated at 19th Floor, Cindic Tower, 128 Gloucester Road, Hong Kong. CIL HOLDINGS: Winding Up Petition Set For Hearing ------------------------------------------------- The petition to wind up CIL Holdings Limited is set for hearing before the High Court of Hong Kong on July 4, 2001 at 9:30 am. The petition was filed with the court on May 11, 2001 by Sin Hua Bank Limited whose principal place of business in Hong Kong is situated at 2A Des Voeux Road, Central Hong Kong. FAI FIRST: Hearing of Winding Up Petition Set --------------------------------------------- The petition to wind up Fai First Pacific Insurance Company Limited is scheduled to be heard before the High Court of Hong Kong on June 6, 2001 at 10:00 am. The petition was filed with the court on April 9, 2001 by the company of 23rd Floor, Dah Sing Financial Centre, 108 Gloucester Road, Wanchai, Hong Kong. FULLRANGE INDUSTRIAL: Winding Up Petition To Be Heard ----------------------------------------------------- The petition to wind up Fullrange Industrial Limited is scheduled for hearing before the High Court of Hong Kong on the July 4, 2001 at 9:30 am. The petition was filed with the court on May 9, 2001 at by The National Commercial Bank of 1-3 Wyndham Street, Central, Hong Kong. GENERAL FAIR: Winding Up Petition Slated For Hearing ---------------------------------------------------- The petition to wind up General Fair Development Limited is scheduled to be heard before the High Court of Hong Kong on July 11, 2001 at 10:00 am. The petition was filed with the court on May 16, 2001 by Sin Hua Bank Limited whose principal place of business in Hong Kong is situated at 2A Des Voeux Road, Central Hong Kong. HAND SEAL: Petition To Wind Up ------------------------------ The petition to wind up Hand Seal Development Limited scheduled for hearing before the High Court of Hong Kong on June 20, 2001 at 9:30 am. The petition was filed with the court on April 24, 2001 by The National Commercial Bank Limited whose principal place of business in Hong Kong is situated at 1-3 Wyndham Street, Central, Hong Kong. HANG SHUN: Petition To Wind Up ------------------------------ The petition to wind up Hang Shun Hing Investment Company Limited is set for hearing before the High Court of Hong Kong on June 27, 2001 at 9:30 am. The petition was filed with the court on May 8, 2001 by Sin Hua Bank Limited whose principal place of business in Hong Kong is situated at 2A Des Voeux Road, Central Hong Kong. HINET HOLDINGS: Posts HK$433.4M Consolidated Net Loss ------------------------------------------------------ HiNet Holdings Limited announced the audited consolidated results of the Company and its subsidiaries for the year ended 31 March 2001 together with the comparative figures for the corresponding period in 2000: Year-end date: 31 March 2001 Currency: HK$ (Audited) (Audited) Last Current Corresponding Period Period from 1 April 2000 from 1 April 1999 to 31 March 2001 to 31 March 2000 (`000) (`000) Turnover : 25,070 38,507 Profit/(Loss) from Operations : (80,630) (30,481) Finance cost : (16,932) (3,659) Share of Profit/(Loss) of Associates : (1,355) 140,750 Share of Profit/(Loss) of Jointly Controlled Entities : - - Profit/(Loss) after Tax & MI : (433,402) 25,475 % Change over Last Period : N/A EPS/(LPS)-Basic : ($0.093) $0.012 -Diluted : N/A $0.011 Extraordinary (ETD) Gain/(Loss): Nil Nil Profit/(Loss) after ETD Items :(433,402) 25,475 Final Dividend per Share : Nil Nil (Specify if with other options): N/A N/A B/C Dates for Final Dividend : N/A Payable Date : N/A B/C Dates for (-) General Meeting: N/A Other Distribution for Current Period: N/A B/C Dates for Other Distribution: N/A (i) In order to rationalize its business structure and performance, the Group disposed of several subsidiaries, Maggert Management Limited, Win Link Limited, Pan Asia Telecom Limited, Pan Asia Taili Networking (Beijing) Company Limited, Harvest Year Investment & Development Limited, and Smart Engineering Company Limited to independent third parties. The Group recorded a loss of $13,640,000 on disposal of the subsidiaries. Aggregate turnover and loss from ordinary activities after taxation of the disposed subsidiaries for the period from 1 April 2000 to the dates of disposals amounted to $6,128,000 and $3,741,000 respectively. (ii) In March 2001, the Group carried out a review of the carrying value of the fiber-optic network. Due to operational deficiencies identified by in-house qualified engineers, the Directors determined that the recoverable value of certain fiber-optic cables has been impaired. The carrying value of such assets has therefore been written down to their estimated recoverable value determined after taking into account the expected future cashflows of such assets. (iii) During the year, the Group terminated the construction projects for certain new data centers. The costs incurred by the Group in respect of the relevant projects have therefore been written off. Finance costs 2001 2000 Interest on bank loans and overdrafts and other loans repayable within five years HK$14,646 million HK$3,642 million Loans arrangement fee HK$2,250 million - Finance charges on obligations under finance leases HK$36,000 HK$17,000 Total HK$16,932 million HK$3,659 million (7) (Loss)/earnings per share (a) Basic (loss)/earnings per share The calculation of the basic (loss)/earnings per ordinary share is based on the Group's loss for the year of $433,402,000 (2000: earnings of $25,475,000) and on the weighted average number of 4,664,156,319 (2000: 2,182,391,698) ordinary shares in issue during the year. (b) Diluted earnings per share Diluted loss per share for the year ended 31 March 2001 is not shown as the potential ordinary shares are anti-dilutive. The calculation of the diluted earnings per share for the year ended 31 March 2000 is based on the Group's adjusted profit for the year of HK$26,466,000 and the weighted average number of 2,469,797,839 shares after adjusting for the effects of all dilutive potential ordinary shares. (c) Reconciliation for 2000 diluted earnings per share Net profit for the year used in calculating basic earnings per share HK$25,475,000 Deemed increase in earnings as a result of the conversion of the dilutive potential ordinary shares HK$991,000 Net profit for the year used in calculating diluted earnings per share HK$26,466,000 2000 Number of shares Weighted average number of ordinary shares used in calculating basic earnings per share 2,182,391,698 Deemed issue of ordinary shares for no consideration 287,406,141 Weighted average number of ordinary shares used in calculating diluted earnings per share 2,469,797,839 Dividend The Directors have resolved not to recommend the payment of a dividend for the year (2000: $Nil). Business Review & Prospects 2001 is a challenging year for the Group with new business direction focusing on communications and technology-related businesses. Within one-year time, HiNet has successfully uplifted itself as a leading communications infrastructure group with established presence in the PRC. The Group's achievements and future prospects have been recognized with its inclusion in the New Mid Cap 50 Index since 1 June 2000 and the selection as a constituent stock of both the Hang Seng IT Index and the Hang Seng IT Portfolio Index from 1 March 2001 by HSI Services Limited. Subsequent to the acquisition of DigiNet Group Limited (DigiNet) in late March 2000, the Group underwent a re-engineering to merge the business and operation of DigiNet with the Group. Utilizing the expertise of the fiber-optic experts joining the Group through this acquisition, the Group took a significant step to expand the coverage of its fiber-optic network from Guangdong Province to other key areas in the PRC. The construction work of the nation-wide fiber-optic network has been substantially completed as of the financial year-end. This network currently covers 9 provinces and connects over 70 major and more prosperous cities in the PRC. In October 2000, the Group acquired 11.11 percent equity interest of iTec World Limited to strengthen its communications business. iTec World is principally engaged in the provision of telecommunication services in Hong Kong and the PRC, mainly with the provision of Voice over Internet Protocol (VoIP) services and the development of value-added applications based on the IP network. The Group strongly believes that with the well developed connections, experienced management team and expertise which iTec World possesses, synergies will be generated through co- operations between the Group and iTec World. The ultimate mission of the Group is to become the "gateway" between the PRC and other parts of the world. To achieve this unique market position, the Group will dedicate to enhance its communication infrastructure facilities and provide value-added services for the benefits of its customers. During the year, in order to concentrate the Group's resources to achieve the mission, the Group disposed of several subsidiaries whose operations were not consistent with the Group's development strategy. Viewing the huge potential in the international market, the Group will continue to explore the opportunities through actively seeking strategic alliances with potential partners. Leveraging their advanced technology and extensive experience, the Group is confident in further expanding its business and strengthening its market position. Looking ahead, we anticipate a booming IP century with strong market demand for bandwidth and telecommunication services. With a professional management team with profound expertise and experiences, we are confident in achieving robust developments in our business and bringing excellent contributions to our valued shareholders. Financial Review For the year ended 31 March 2001, the Group recorded a turnover of $25,070,000 (2000: $38,507,000). Loss attributable to shareholders was $433,402,000 (2000: profit of $25,475,000). For the year, the Group recorded a loss from operations of $80,630,000 (2000: $30,481,000) in the course of developing its operations. On the non-operating side, the Group recorded net non-operating expenses of $340,420,000 (2000: $34,493,000). During the year, the IT industry experienced fundamental changes in market conditions, which have particularly impacted telecommunications, Internet and technology companies. Therefore, the Directors conducted a thorough review of the Group's assets. As a result, the Group recorded non-operating charges of $232,051,000 and $76,050,000 respectively relating to write down of the carrying value of certain fixed assets and provision against certain investments. In addition, the Group recorded non-operating charges of $13,640,000 and $14,779,000 respectively on disposal of several subsidiaries operating in non-core businesses and on termination of the construction projects of certain new data centers with diminished prospects. The Directors believe that these crucial measures will help to set a smooth platform for the Group in the coming years. In order to finance development of its fiber-optic network, the Group has secured a revolving loan facility of $300 million from a financial institution. We believe this, together with those trade facilities already granted to the Group by existing bankers, will provide adequate funds to meet the ongoing operations of the Group. HINET HOLDINGS: Posts Notice Re AGM ----------------------------------- Notice is hereby given that the annual general meeting (AGM) of HiNet Holdings Limited will be held at The Coral Room 1, 3/F., Furama Hotel, One Connaught Road Central, Hong Kong on Tuesday, 11 September 2001 at 10:30 a.m. for the following purposes: 1. To receive and consider the audited accounts and the reports of the directors and auditors for the year ended 31 March 2001. 2. To re-elect directors. 3. To authorize the board of directors to fix the remuneration of directors. 4. To re-appoint auditors and authorize the board of directors to fix their remuneration. 5. As special business, to consider and, if thought fit, adopt with or without amendments, the following resolution as an ordinary resolution: "That: (1) subject to paragraphs (2) and (3) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to purchase securities of the Company on The Stock Exchange of Hong Kong Limited or on any other stock exchange on which the securities of the Company may be listed and is recognized by the Securities and Futures Commission and the Stock Exchange for this purpose, subject to and in accordance with all applicable laws and/or the requirements of the Rules Governing the Listing of Securities on the Stock Exchange or of any other stock exchange as amended from time to time, be and it is hereby generally and unconditionally approved; (2) the aggregate nominal amount of shares to be purchased by the Company pursuant to the approval in paragraph (1) above shall not exceed 10 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing this resolution, and the said approval shall be limited accordingly; (3) the aggregate amount of subscription rights attached to the warrants to be purchased by the Company pursuant to paragraph (1) above shall not exceed 10 per cent of the aggregate amount of subscription rights attached to such warrants outstanding at the date of passing this resolution, and the said approval shall be limited accordingly; and (4) for the purposes of this resolution: "Relevant Period" means the period from the passing of this resolution until whichever is the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the revocation or variation of the authority given under this resolution by ordinary resolution of the members of the Company in general meeting; and (iii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws or the Company's Bye-laws to be held." 6. As special business, to consider and, if thought fit, adopt with or without amendments, the following resolution as an ordinary resolution: "That: (1) subject to paragraph (3) below, the exercise by the directors of the Company during the Relevant Period (as hereinafter defined) of all the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company and to make or grant offers, agreements and options which might require the exercise of such power be hereby generally and unconditionally approved; (2) the approval in paragraph (1) above shall authorize the directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such power after the end of the Relevant Period; (3) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the directors of the Company pursuant to the approval in paragraph (1) above, otherwise than pursuant to (i) a Rights Issue (as hereinafter defined), (ii) the exercise of any option under any option scheme or similar arrangement for the time being adopted for the grant or issue to employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, (iii) the exercise of subscription rights attaching to the warrants issued by the Company and from time to time outstanding or (iv) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the By-laws of the Company, shall not exceed 20 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this resolution and the said approval shall be limited accordingly; and (4) for the purposes of this resolution: "Relevant Period" means the period from the passing of this resolution until whichever is the earliest of: (i) the conclusion of the next annual general meeting of the Company; (ii) the revocation or variation of the authority given under this resolution by ordinary resolution of the members of the Company in general meeting; and (iii) the expiration of the period within which the next annual general meeting of the Company is required by any applicable laws or the Company's Bye-laws to be held. "Rights Issue" means an offer of shares or other securities of the Company open for a period fixed by the directors to holders of shares of the Company or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusion or other arrangements as the directors may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognized regulatory body or any stock exchange in, any territory outside the Hong Kong Special Administrative Region of the People's Republic of China)." 7. As special business, to consider and, if thought fit, adopt with or without amendments, the following resolution as an ordinary resolution: "THAT conditional upon the passing of resolutions nos. 5 and 6 set out in the notice convening this meeting, the general mandate granted to the directors to exercise the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company and to make or grant offers, agreements and options be hereby extended by the addition thereto of an amount representing the aggregate nominal amount of the share capital of the Company repurchased by the Company under the authority granted pursuant to resolution no. 5 set out in the notice convening this meeting, provided that such amount shall not exceed 10 per cent of the aggregate nominal amount of the share capital of the Company in issue at the date of passing of this resolution." PACIFIC CENTURY: Exchange Approves Concessions ---------------------------------------------- The directors of Pacific Century CyberWorks Limited announce that on 1 June 2001 the Stock Exchange of Hong Kong Limited has approved the Company's application for the right to apply (i) the De-minimis Concession (as described in the Stock Exchange's announcement dated 3 May 2001) and (ii) the Modified Calculation Concession for purposes of determining the "assets test" and the "consideration test" under Rules 14.06, 14.09, 14.12 and 14.20 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited for classifying notifiable transactions (other than connected transactions). As the Group has a negative net tangible asset value, applying the Relevant Tests (which use the net tangible assets as the denominator) will create an impractical and unduly onerous disclosure obligation on the Company. In such circumstances, the Company made such application in accordance with the announcement. De-minimis Concession The De-minimis Concession is such that each transaction carried out in the ordinary course of business of the Group, which is entered into on normal commercial terms, and where the consideration or value of the transaction does not exceed HK$1,000,000 would be considered as de-minimis. The Relevant Tests will not apply. Modified Calculation Concession The Group has a negative net tangible asset value (not arising from operational losses) of approximately HK$9,864 million and the gross assets less intangibles and current liabilities amount to approximately HK$43,324 million based on the unaudited pro forma consolidated balance sheet as at 31 December 2000, as set out in this announcement. The monetary thresholds against which the "gross assets less intangibles and current liabilities of the asset to be acquired or realized" for the "assets test" and the "consideration for the asset to be acquired or realized" for the "consideration test" are to be determined for the purposes of the Modified Calculation Concession to ascertain the type of notifiable transaction for the purposes of the Listing Rules are as follows: (A) ratio of 5 percent or above but below 15 percent (approximately HK$2,166 million or above but below approximately HK$6,499 million) - the requirements for discloseable transactions will apply; (B) ratio of 15 percent or above but below 25 percent (approximately HK$6,499 million or above but below approximately HK$10,831 million) - the requirements for major transactions will apply; (C) ratio of 25 percent or above (approximately HK$10,831 million or above) - the requirements for very substantial acquisitions will apply; and (D) for acquisition of assets (including securities but excluding cash) by the Company or any of its subsidiaries for consideration that includes securities for which listing will be sought, the requirements for share transactions will apply if the ratio is less than 5 percent (HK$2,166 million). For the avoidance of doubt, the "profits test" and "equity test" will remain applicable to the Company. Period for which the Modified Tests Will Apply The Stock Exchange's approval for the use of the modified tests described above will remain in effect from 1 June 2001 until the publication or the due date of publication of the Company's next annual report, whichever is earlier. Basis for the Company's Application The Company's application for the De-minimis Concession and the Modified Calculation Concession as described above was based on the unaudited pro forma consolidated balance sheet set forth below: Unaudited Pro Forma Consolidated Balance Sheet The following is an unaudited pro forma consolidated balance sheet of the Group as of 31 December 2000 assuming, inter alia, that the following transactions (previously announced in the Company's announcements and/or circulars) had been completed on 31 December 2000. (i) the disposal of the 60% equity interest in its mobile telecommunications business to Telstra Corporation Limited ("Telstra"); (ii) the formation of Reach Ltd. ("Reach"), containing the IP backbone businesses of the Group and Telstra; (iii) the issue of a US$750 million convertible bond to Telstra; (iv) the drawdown of US$4.7 billion under a syndicated loan facility by a subsidiary of the Company; and (v) the repayment of the outstanding short term loan as of 31 December 2000 of approximately US$7.66 billion. The following unaudited pro forma consolidated balance sheet has been prepared in accordance with accounting principles generally accepted in Hong Kong and on a basis consistent with the accounting principles applied in the Group's consolidated balance sheet as of 31 December 2000. The effects of accounting principles required to be applied by the Group subsequent to 31 December 2000 have not been reflected in the following financial information, including the unaudited pro forma adjustments. 1. The Group disposed of a 60 percent equity interest in its mobile telecommunications business in the amount of approximately US$1.68 billion (equivalent to HK$13,104 million) to Telstra for cash consideration of approximately US$1.68 billion (equivalent to HK$13,104 million). 2. The Group contributed its IP backbone business to Reach in exchange for its 50 percent equity interest in Reach and cash from Reach of approximately US$1,125 million (equivalent to HK$8,775 million). The corresponding amounts reduced the Group's share of net assets of the IP backbone business by approximately HK$1,264 million together with a net reduction in goodwill in the amount of approximately HK$7,511 million. 3. The Company issued a convertible bond to Telstra in the amount of US$750 million (equivalent to HK$5,850 million). 4. The Group received US$4.7 billion (equivalent to HK$36,660 million) from the drawdown of a syndicated loan facility by a subsidiary of the Company. 5. The outstanding short term loan as of 31 December 2000 in the amount of approximately US$7.66 billion (equivalent to HK$59,750 million) was repaid out of the proceeds from the aforementioned transactions. 6. Investment in unconsolidated subsidiaries of approximately HK$5,065 million in the unaudited pro forma consolidated balance sheet includes unamortized balance of intangible assets in the amount of approximately HK$1,735 million. 7. For the purpose of this announcement, amounts quoted in US dollars have been translated into Hong Kong dollars at a rate of US$1 to HK$7.8. Such translation should not be construed as a representation that the US dollar amounts have been, could have, or could be, converted to Hong Kong dollars, as the case may be, at that or any other rate or at all. 8. As stated in the Company's Annual Report for the year ended 31 December 2000, a valuation of Reach is being undertaken by Reach in connection with its formation. The results of the valuation may require an adjustment to the carrying value of the Group's investment in Reach, which will be recorded in the financial statements for the year ending 31 December 2001. ================= I N D O N E S I A ================= GUNAWAN GROUP: IBRA Announces Status ------------------------------------ The Indonesian Bank Restructuring Agency (IBRA) announced Thursday the current status of one of the last three obligors of its Top 50, Gunawan Group. The following is a breakdown of the current status of the obligor: Step In Process 3 debtors Process to MoU - MoU - Loan Agreement - Fully Paid 1 debtor Legal Action to be Processed 1 debtor Legal Action - Disposal - Total Outstanding Gunawan Group: Rp458.678 billion & equal to Rp809.961 billion**) Note: **) loan in foreign currency as been converted to Rp Gunawan Group This group is comprised of five debtors where three debtors are in process, one debtor, PT Jayapari Steel Ltd. Corp, has made full payment to IBRA equal to Rp59.625 billion and one more debtor, Gunawan Iron Steel Sdn Bhd is in process towards legal action. This group runs its business in the steel industry. The shares of this group are owned directly or indirectly by Gwie Gunawan. By announcement of the current status of aforementioned obligors, the Top 50 has been completed, announcing restructuring progress which can be summarized as follows: In Process : 149 debtors (21,29 percent) Process to MoU : 82 debtors (11,71 percent) Signed MoU : 196 debtors (28 percent) Signed Loan Agreement : 55 debtors (7,86 percent) Fully Paid : 60 debtors (8,57 percent) Legal Action to be Processed: 55 debtors (7,86 percent) Legal Action : 52 debtors (7,43 percent) Disposal : 14 debtors (2 percent) Others *) : 37 debtors (5,29 percent) Note: *) majority handle by AMI division The total outstanding of Top 50 obligors, comprised of 700 debtors worth Rp61.653 trillion, equal to Rp73.398 trillion. IBRA expects this restructuring program of the Top 50 can be accomplished by the end of this year, and with minimum condition reach to 80 percent in the form of MoU. KALLA GROUP: Seven Debtors In Process, Says IBRA ------------------------------------------------ The Indonesian Bank Restructuring Agency (IBRA) announced Thursday the current status of one the last three obligors of its Top 50, Kalla Group. The following is a breakdown of the current status of the obligor: Step Kalla Group In Process 7 debtors Process to MoU - MoU - Loan Agreement - Fully Paid - Legal Action to be Processed 1 debtor Legal Action - Disposal - Total Outstanding Kalla Group: Rp1.482 trillion & equal to Rp155.755 billion**) Note: **) loan in foreign currency as been converted to Rp Kalla Group Comprises seven debtors in process, and one debtor is in process towards legal action namely PT Bukaka Tekhnik Utama. The operation of this group falls in chemical industry, construction, distributor/automotive dealer, electricity equipment and sea transportation. The shares of this group are owned directly or indirectly by Kalla family. SURYA DUMAI: Two Debtors Enter Into MoU --------------------------------------- The Indonesian Bank Restructuring Agency (IBRA) has announced current status of one the last three obligors of its Top 50, Surya Dumai Group. The following is a breakdown of the current status of the obligor: Step Surya Dumai Group In Process 4 debtors Process to MoU 3 debtors MoU 2 debtors Loan Agreement - Fully Paid - Legal Action to be Processed - Legal Action - Disposal 1 debtor*) Total Outstanding Surya Dumai: Rp739.153 billion & equal to Rp678.814 billion**) Note: *) total debt has been converted to rupiah. Surya Dumai Group Comprised of 10 debtors, four debtors are in the process, three debtors are in process towards MoU and two debtors have signed MoU, PT Ciliandra Perkasa and PT Muriniwood Indah industry. One debtor PT Arindo Tri Sejahtera has been disposed to Bank Mandiri worth Rp145.372 billion. This group runs its business in plantation cultivation, trading, forestry and its processing, real estate and a holding company. The shares of this group are owned directly or indirectly by Martias. ========= J A P A N ========= KUMAGAI GUMI: Restructuring Plan Insufficient, S&P Says ------------------------------------------------------- According to Standard and Poor's Corporation (S&P), the restructuring plan of Kumagai Gumi Company Limited is inadequate to revive its credit quality, which may result in the failure of the company's rescue efforts, AFX-Asia reported Friday. S&P explained that the plan does not take into account the toughening price competition in the market, or creditor banks' attempts to sell off bad assets. SEAGAIA: To Repay Only Y9.5-B To Main Creditors ----------------------------------------------- Seagaia resort group pledged in a court-supervised settlement to repay only Y9.5 billion to its 10 major creditors, mostly financial institutions, along with the right to foreclose on collateral assets, Dow Jones reported Sunday, citing a local news report. The figure, according to the report, was based on new collateral values. However, the amount of Seagaia's pledge is Y1 billion short of the estimated value of the group's total assets. The resort group owes a total of Y326.1 billion in debts, as of February this year. Meanwhile, the Miyazaki District Court was expected to kick off an inquiry yesterday into the values of the group's outstanding debts, before court-appointed trustee Yasumasa Sato starts final negotiations with the group's creditors regarding repayments, the report said. ========= K O R E A ========= DAEWOO MOTOR: To Post Higher Operating Profit In May ---------------------------------------------------- Troubled automaker Daewoo Motor expects to book in May an operating profit higher than the W6.7-billion operating profit posted in April, its first since June 1998, The Korea Herald reported yesterday. The automaker's domestic and offshore car sales experienced a 24.3 percent rise from April to 51,322 units, as exports climbed 36.1 percent from the preceding month to 34,710 units. Its rescue efforts are clearly paying off, the report said, as the company as it an achievement rate of 75.2 percent of its annual cost-cutting target of W999.2 billion as of April 30 this year. HYUNDAI ENGINEERING: Some Creditors Reject Bailout -------------------------------------------------- Certain creditor institutions of Hyundai Engineering and Construction Company (HDEC) are rejecting the proposed debt-for- equity swap as part of the bailout package for the ailing builder, The Korea Herald reported yesterday, citing creditor bank officials. Of the 160 minor creditors of HDEC, only half have expressed willingness to cooperate in the W2.9-trillion bailout program. However, only two of the 36 finance firms, namely Samsung Life Insurance Company and Tongyang Investment Bank, that signed a creditor agreement for HDEC, have refused to join in the conversion program, the report said. Meanwhile, last week, 16 asset management firms have agreed to purchase HDEC convertible bonds valued at over W600 billion, which was agreed to by the builder's major creditors, including Korea Exchange Bank, in April, the report said. KOREA HOUSING: Bags Bailout Package Worth W1.84-Trillion -------------------------------------------------------- Korea Housing Guarantee Corporation (KHGC) has won the approval of both the government and the creditor groups for a fund injection totaling W1.84 trillion into the near-insolvent housing guarantee firm, The Digital Chosun reported Friday. Citing an official at the Construction and Transportation Ministry, Chosun said in a plenary meeting creditors decided to convert W560.9 billion, or 35.7 percent of the loans totaling W1.57 trillion, into equity at KHGC. From its end, the National Housing Fund pledged to make new equity investment, which is expected to help shed bad debts worth W1.11 trillion. This whole bailout package, according to the official, will help raise the debt service costs of the Korea National Housing Guarantee by W130 billion per annum. In order to push ahead with the privatization of the firm, the government intends to pursue its plan to dispose of its equity in the guarantee fund. =============== M A L A Y S I A =============== ABRAR CORP: Proposals Under Review ---------------------------------- Abrar Corporation Berhad revealed the Special Administrators of the Company are currently reviewing the offers/proposals submitted to them on 27 April 2001 by interested parties to acquire the businesses and/or the assets of the Company. The Special Administrators will thereafter formulate a workout proposal for the Company. The submission of the offers/proposals by the interested parties was pursuant to a briefing held by the Special Administrators on 16 April 2001 at Pengurusan Danaharta Nasional Berhad's premises in Kuala Lumpur. In the meantime, the moratorium under Section 41 of the Pengurusan Danaharta Nasional Berhad Act, 1998 (the Danaharta Act), which took effect from 27 May 2000, i.e. the date of the appointment of Special Administrators to the Company, has been further extended to 26 May 2002. The extension of the moratorium was pursuant to Section 41(3) of the Danaharta Act. AUSTRAL AMALGAMATED: Reports Status Of Plan To SC ------------------------------------------------- Austral Amalgamated Berhad said there has been no change in the status of the Company's plan to regularize its financial condition since its last announcement on 2 May, 2001, in which the Securities Commission (SC) had, via their letter dated 16 April 2001, approved AAB's plan to regularize its financial position. The details of the SC's approval of the Proposals were announced 20 April 2001. CEMENT INDUSTRIES: Seeks Deadline Extension ------------------------------------------- In the Circular to shareholders of Cement Industries Of Malaysia Berhad (CIMA) dated 8 March 2001 on the proposed debt restructuring of Negeri Sembilan Cement Industries Sdn Bhd (NSCI), a wholly owned subsidiary of the company, it was stated that CIMA, NSCI and the Syndicated Lenders of NSCI were negotiating to extend the completion date for the debt restructuring agreement, which lapsed on 15 February 2001. The completion date had subsequently been extended to 31 May 2001. On behalf of CIMA, Commerce International Merchant Bankers Berhad wishes to announce that CIMA and NSCI are currently negotiating with the Syndicated Lenders to further extend the completion date as certain terms of the Redeemable Convertible Secured Loan Stocks that will be issued as an integral part of the Proposal are still being negotiated. OMEGA HOLDINGS: Banks Talks Re Debt Workout Continue ---------------------------------------------------- The Board of Directors of Omega Holdings Berhad (OHB) says the company is still in negotiation with its creditor banks on the company's proposed debt restructuring scheme. PANGLOBAL BERHAD: Notice Of Discontinuance Served ------------------------------------------------- PanGlobal Berhad was served 31 May 2001 with the Petitioner's Notice of Discontinuance dated 29 May 2001. Panglobal Berhad (PGB) had earlier obtained an extension of restraining order for a period of three months, effective 17 April 2001. The restraining order under Section 176 of the Companies Act, 1965 dated September 21, 1998 was granted to PGB and four of its subsidiaries, namely PanGlobal Properties Sdn Bhd, Limbang Trading (Limbang) Sdn Bhd, Global Minerals (Sarawak) Sdn Bhd and Menara PanGlobal Sdn Bhd. Background The Group's principal activities include general insurance business, extraction of logs, sawmilling and manufacturing of veneer, coal mining, property investment and development, rental of office and commercial premises and operation of hotel apartments. The Company was originally a housing developer. In 1966, the Company disposed of these activities and entered into the towel and yarn manufacturing business. Over the years, the Company diversified its activities into property development, computers and insurance. The Company maintains its insurance operations through PanGlobal Insurance Bhd, with head office in Kuala Lumpur and branches in 12 states. It transferred its towel manufacturing operations to one of its subsidiaries in 1987, thus becoming a purely investment holding company. Subsequently, the Company, in 1994, disposed of its property development division and computer division and, in 1995, its textile operations. To ensure continued growth, in early 1995 the Company underwent a restructuring as part of which it acquired Limbang Trading Sdn Bhd which is involved in timber extraction and related activities and Global Minerals (Sarawak) Sdn Bhd which operates a coal mine. Both companies operate in Sarawak. In addition, the Company acquired property development land in Johor Bahru. The Company has since obtained a restraining order under Section 176 of the Companies Act, 1965 granted to PanGlobal and four of its subsidiaries (PanGlobal Properties Sdn Bhd, Menara PanGlobal Sdn Bhd, Global Minerals (Sarawak) Sdn Bhd and Limbang Trading (Limbang) Sdn Bhd) which has been extended for a final period of six months from April 17,2000 for the purpose of implementing a plan of arrangement. The plan would involve the issuance of redeemable convertible secured and unsecured loan stock, disposal of assets and rights and special issue. On July 17, 1999, the Company had accepted a conditional offer by Road Builder (M) Holdings Bhd (RBH) to acquire its 26.67 percent equity interest in Econstates Bhd for RM80m cash and the proposed Econstates disposal was approved by the Company's shareholders on December 31, 1999. The proposed disposal is in line with the composite scheme to raise cash proceeds to repay certain Group borrowings. On February 2, 2000, the High Court granted a holding over injunction to a shareholder to preserve the status quo of the proposed Econstates disposal, the shares of which had been pledged to an offshore bank for a loan facility granted to the Company. On March 21, 2000, the offshore bank gave notice that it would force sell the shares following the expiry of the restraining order on March 20, 2000. On March 23, 2000, the Company was notified that the shares had been forced sold on March 22, 2000 at RM2.00 per share. Subsequently, on March 27, 2000, the Company was served a notice by a shareholder that an ex parte injunction had been obtained to restrain RBH and the offshore bank from completing the force sale. The injunction does not involve the Company as the Econstates shares were forced sold by the offshore bank. In view of the action taken by the offshore bank, the SPA dated September 23, 1999 between RBH and the Company was terminated. REPCO HOLDINGS: Reports Status Re Debt Workout ---------------------------------------------- Repco Holdings Berhad stated there has been no change in the status of the company's plan to regularize its financial condition since its last announcement on 2 May 2001. The Special Administrators are currently formulating the corporate and debt restructuring proposal. RNC CORP: Reports Status Of Debt & Corporate Workout ---------------------------------------------------- RNC Corporation Berhad reports the status of the proposed restructuring scheme (PRS) as of the date of this announcement as follows: (a) The PRS is still pending the approval of Kuala Lumpur Stock Exchange (KLSE) on the listing and quotation of the ordinary shares, Redeemable Convertible Secured Loan Stocks (RCSLS) and Redeemable Convertible Unsecured Loan Stocks (RCULS) pursuant to the PRS on the Main Board of KLSE; (b) On 18 May 2001, the Special Administrators obtained approval from The State Authority of Johor for the sale of shares in Equiventures Sdn Bhd (ESB); and (c) The Special Administrators and Affin Merchant Bank are in the midst of preparing an Information Circular detailing the approved PRS, which will be sent out to shareholders in due course after the receipt of clearance from the KLSE on the content of the circular. SENG HUP: Provides Details Re Debt Settlement --------------------------------------------- Seng Hup Corporation Berhad announced additional information regarding the debt settlement between Taiping Consolidated Berhad (TCB) involving the latter company's irredeemable convertible preference shares (ICPS), as follows: 1) Debts owing by a main contractor of TCB Group: Debtor Amount Owing ICPS Received (Units) Invescor Ventures Sdn Bhd RM737,138 724,920 The Scheme Creditors of TCB, admitted for proof pursuant to the Proposed Composite Scheme of Arrangement were fully settled by way of issuance of ICPS at its nominal value of RM1.00 on the basis of one ICPS for every RM1.00 of debt. 2) The net loss and net tangible liabilities of TCB group, based on the last audited accounts as at 30 April 2000 are as follows: Loss after taxation RM42,497,000 Net tangible liabilities RM281,669,000 3) Impact on Earnings Per Share and Net Tangible Assets per share: A full provision has been made on the debts owing above, in the financial year ended 31 March 1998. The net tangible assets of Seng Hup Corporation Berhad (Special Administrators Appointed) (SHCB) for the financial year ending 31 March 2002 will increase by RM217,476, based on the average ICPS pricing at RM0.30 as of 31 May 2001. It is expected that there will be an increase of approximately RM0.01 per share for both the net tangible assets per share and earnings per share of SHCB for the prevailing financial year. Recoverable amount = 724,920 units x RM0.30 = RM217,476 NTA per share and EPS will increase by = RM217,476 / 19,998,000 shares = RM0.01 4) The directors, substantial shareholders and persons connected with them have no interest, direct and indirect, in the Debt Settlement. 5) The Debt Settlement is part of the Proposed Composite Schemes of Arrangement of TCB, pursuant to Section 176 of the Companies Act, 1965. As SHCB is under Special Administration, the approval of the shareholders of SHCB is not required. Further, the Debt Settlement does not require the approval of government authorities. 6) The Proposed Debt Settlement had been formulated to avoid the inevitable liquidation of the TCB group, thus enabling the TCB group to continue as a going concern to consolidate itself for the future, on a stronger footing with a return to profitability. The Debt Settlement will also enable the creditors of the respective subsidiaries of TCB to directly participate in the revival of TCB and to benefit from such participation as the ICPS will be traded on the Kuala Lumpur Stock Exchange, and will thus allow the creditors the opportunity to potential capital gains. Premised on the rationale above, the Special Administrators, on behalf of SHCB, are in the opinion that it is in the best interest of SHCB to accept the Debt Settlement. SENG HUP: Update On Default Payment ----------------------------------- The default by Seng Hup Corporation Berhad (SHCB) as of 30 April 2001 amounted to RM54,742,901 made up of a principal sum, plus RM17,871,781 in interest for revolving credit facilities, trade financing and overdraft. P.T. Krisindo Mas, a subsidiary of SHCB had as of 30 April 2001, defaulted on US$2,280,000, made up of a principal sum plus US$782,966 in interest, in respect of its property loan. Dasar Jernih Sdn Bhd and Nazar Holdings Sdn Bhd both subsidiaries of SHCB have respectively defaulted in the principal repayment of their property loan amounting to RM5,728,000 and RM1,180,000 together with interest of RM1,311,045 and RM336,893 respectively as of 30 April 2001. There are no other new developments since the company's previous announcement with regard to this Practice Note. Background Seng Hup started its operations in 1960 with a single sales outlet in Jalan Tuanku Abdul Rahman, Kuala Lumpur. It was then involved only in the trading of basic light fittings with minimal decorative features. In the later part of 1978, under a new management team, Seng Hup adopted a more aggressive expansion program through the concept of retail chain stores. The Company has since built up an extensive retail network throughout Malaysia. Over the years, the Group has been principally involved in lighting equipment and related products and property investment. The Company has also diversified its product segment by venturing into the design, supply and installation of thematic lighting systems. Its maiden project in this field is a multi- million Ringgit contract for the supply and installation of laser equipment and a computerized audio-visual specialist lighting system for the Sunway Pyramid and Pyramid Ice projects. The Company has tendered for projects adopting latest developments in remote source lighting using fiber optics. In addition, it entered into a RM30m contract with a Singapore- based Grandlink Group Pte Ltd in 1988 to supply and install decorative lights and lighting equipment/system to its US$2.4 billion mixed development projects in Qingdao and Nanjing. Against the background of the economic downturn, Seng Hup's loans were acquired by Pengurusan Danaharta Nasional Bhd and Special Administrators, Messrs BDO Binder, were appointed to the Company on 9 September 1999, pursuant to Section 24 of the Pengurusan Danaharta Nasional Bhd Act 1998. The appointment was subsequently extended for another year to 8 September 2001. On 3 April 2000, the Special Administrators entered into a conditional MOU with the intention of setting up key areas of agreement pending the finalization and approval of a debt restructuring scheme. The scheme entails a capital reconstruction exercise; transfer of listing status to a new company; rights, ICULS and special issues; private placement; and the acquisition of 100 percent each in Brightway Holdings Sdn Bhd and Laglove (M) Sdn Bhd, which is engaged in the manufacture and export of medical gloves. ===================== P H I L I P P I N E S ===================== NATIONAL BANK: DOF To Close `Reverse Privatization' Deal -------------------------------------------------------- The Department of Finance (DOF) intends to close its `reverse privatization' deal this week with Philippine National Bank's (PNB) majority shareholder Lucio Tan, to acquire the latter's controlling stake in the bank, Business World reported yesterday. A Finance Department official told World as saying, "There are continuing negotiations for the reverse privatization. The details of the plan will be clear [this week]. We will sit down with the cabinet cluster [today] to present the plan." Issues regarding the plan that are expected to be tackled before the Cabinet today include: PNB shares conversion price, PNB equity volume to be bought by the state, and should the government takeover the control over PNB. NATIONAL POWER: ADB Offers Buyers Financial Backing --------------------------------------------------- The Asian Development Bank (ADB) has offered to give financial assistance to potential buyers of the beleaguered state-owned National Power Corporation (Napocor), to secure a successful privatization, following Congress' approval of the new power reform bill Friday, The Herald Tribune reported yesterday. ADB Country Director Gunther Hecker was quoted by Tribune as saying, "We consider the actual sales process as an essential part of the restructuring program of the government. The bank is interested in the success of this process and may provide funding assistance to potential investors if so justified." According to Tribune, large domestic and foreign conglomerates have already expressed interest to takeover Napocor's power- generation and sub-transmission assets and contracts with independent power producers (IPPs), from whose sale the government expects to fetch a total of P390 billion at the most. The ADB is going to study the government's privatization plan for Napocor before it will release the second tranche of the remaining power sector reform loan, amounting to US$200 million, the newspaper said, citing Hecker. ================= S I N G A P O R E ================= ASIA PULP: IBRA Won't Foreclose On Sinar Mas Assets --------------------------------------------------- The Indonesian Bank Restructuring Agency (IBRA) assured creditors of Sinar Mas Group's Asia Pulp & Paper that it has no plans to either foreclose on or liquidate Sinar Mas assets, which have been provided to secure its loans, The Asian Wall Street Journal reported late last week. The Widjaja family-controlled Sinar Mas recently pledged its assets as counterpart to the agency's provision of guarantees to loans extended by the Bank Internasional Indonesia (BII), which used to be under the wing of the said family, to a number of the group's subsidiaries, the newspaper said. The counterguarantee, the newspaper said, includes personal assets of some group shareholders, and liens over group assets, like real properties and machinery and equipment, and shareholdings in the group firms. IBRA also expressed its commitment to work with creditors and uphold "a fair, transparent and expeditious debt restructuring," the newspaper said. DAIRY FARM: Managed Sell-Down Of Franklins Stores Begins -------------------------------------------------------- Dairy Farm International Holdings Limited announced yesterday that its wholly-owned Australian subsidiary, Franklins Limited, has reached an agreement to sell 67 out of its current portfolio of 282 stores to Woolworths Limited. The agreement is the first of a number of transactions anticipated as part of the managed sell-down process through which the Group will exit its Australian supermarket operations. Under this first agreement, Woolworths will acquire 67 stores for a cash consideration of US$119 million (A$229 million). As at 31 December 2000 the net carrying value of these stores was US$55 million (A$99 million) and the net loss before tax for the year ended 31st December 2000 attributable to these stores was some US$11.5 million (A$20 million). Woolworths will also acquire associated stock and certain personnel-related and other liabilities. The transaction has received in-principle clearance from the Australian Competition and Consumer Commission, subject to receipt of satisfactory undertakings. These are expected to be finalized shortly and the sale is expected to be completed within six months. The proceeds will be used to reduce debt in Australia. The surplus over carrying value related to this transaction is expected to be offset by closure and related costs of the managed sell-down process. Negotiations are advanced with other interested parties in respect of the remaining stores, and further announcements will be made in due course. Dairy Farm is a leading food and drugstore retailer in the Asia- Pacific Region. At 31 December 2000, the Group and its associates operated over 2,200 outlets, principally supermarkets, hypermarkets, convenience stores and drugstores, employed some 79,000 people in nine territories and had sales of US$6.6 billion in 2000. OSPREY MARITIME: Plans To Dispose Of LNG Ops -------------------------------------------- Osprey Maritime Ltd ("Osprey") has proposed to dispose of its LNG operations to a wholly-owned subsidiary, Golar LNG Ltd. Proposed Disposal Purchase Agreement. Osprey on 21 May 2001 entered into a purchase agreement with the Purchaser, a wholly-owned subsidiary of Osprey. Under the Purchase Agreement, Osprey will sell and transfer to the Purchaser or its subsidiary: * all of its shares in Gotaas-Larsen Shipping Corporation, Oxbow Holding Inc. and Golar Gas Cyrogenics Inc. (the LNG Companies) and Osprey Maritime Management Limited free of all encumbrances. The LNG Companies are the holding companies of Osprey's LNG carriers (Golar Mazo, Golar Spirit, Golar Freeze, Hilli, Khannur and Gimi) and related LNG-assets and operations; * all of its claims for money against the LNG Companies and Osprey Management and the subsidiaries of each of the LNG Companies and Osprey Management free of all encumbrances; and * all of its rights under a newbuilding contract with Daewoo Shipbuilding and Engineering Corporation Ltd for the construction of a new 138 cbm3 LNG carrier and an option to order one further LNG carrier. The first installment payment under the Newbuilding Contract is due in early June 2001. If the due date falls before Closing, the Purchaser or its subsidiary will advance an interest-free loan to Osprey to pay for the installment. Alternative Security. Under the Purchase Agreement, Osprey is required to deliver the LNG operations free of all encumbrances, except in connection with Golar Mazo. For this purpose, Osprey will, prior to Closing and in co-operation with the Purchaser arrange for alternative security for the existing loans secured by the assets of Osprey. Purchase Price. The purchase price for the LNG operations has been negotiated and agreed upon by the parties on a willing-buyer, willing- seller basis. The Purchase Price is based on the debt free value of the LNG Carriers of US$635,000,000 included in the Disposal, which is within the range of Osprey's own valuation thereof and which has been confirmed by external advisers. The Purchase Price will be paid by the Purchaser seven business days after closing of the Disposal. The Purchase Price will be the sum of: * US$635,000,000 less the outstanding principal of the loan secured against the Golar Mazo as of 31 May 2001 plus US$2,500,000; * the book value of the equity in each of the LNG Companies as of 31st May, 2001 exclusive of the LNG carriers and their financing but adjusted for the market value of an office lease in London; and * the first installment payment under the Newbuilding Contract. Assumption of Liabilities. The Purchaser will, as soon as reasonably practicable after Closing, procure the discharge of Osprey from all its liabilities and obligations (actual or contingent) in connection with the LNG operations (including, without limitation, the liabilities and obligations of Osprey under or in connection with the Newbuilding Contract or any guarantees, indemnities or securities made by Osprey for the benefit of the LNG operations). Closing. Closing of the Disposal shall take place on 31st May, 2001 or such subsequent business day in Singapore, Oslo and New York prior to 15th June, 2001 as the Purchaser shall nominate to Osprey. Rationale for Disposal WSL Reorganization. The Disposal is undertaken by Osprey in line with the proposal by World Shipholding Ltd (WSL), Osprey's controlling shareholder, to reorganize and consolidate all of its LNG interests, under Osprey and elsewhere, into the Purchaser with a view to a possible flotation of the Purchaser in Norway and the United States or such other means of strengthening the capital base of the LNG operations. Benefits to Osprey. The Disposal gives Osprey the opportunity to restructure its LNG assets and to repay its existing debt. After Closing, the Directors would review the on-going business of the Osprey group of companies . Financial Effects There will be no material financial impact of the Disposal on the issued and paid-up share capital of Osprey and on the net tangible assets, net gearing ratio and earnings per share of the Group. Interests of Directors and Substantial Shareholders Interests of Directors and Substantial Shareholders. None of the Directors or substantial shareholders has any interest, direct or indirect, in the Disposal, other than through their shareholdings in Osprey. The Purchaser. The Purchaser is a company incorporated under the laws of Bermuda and is a wholly-owned subsidiary of Osprey as at the date hereof. Following the Disposal, Osprey is also considering increasing the capitalization of the Purchaser as part of the review of the on-going business of the Group. =============== T H A I L A N D =============== SUN TECH: Additional Info Re Warrants Issue ------------------------------------------- Sun Tech Group Public Company Limited provided the additional information on the warrant issued to the existing shareholders according to the business reorganization plan. The details are as follows: 1. Shareholders whom entitled to warrant subscription. Shareholders whose names appear in the Share Register on December 20, 1999, the latest closing date prior to the date on which the Court ordered the company to reorganize the business, are entitle to the warrant subscription. 2. Subscription period. According to new 2,762 million ordinary shares reserved for warrant exercising, The plan require that warrant will be issued under these conditions: 2.1 The date at which the plan becomes effective. With the condition and rule of warrant will be based on the law and steering committee approval or 2.2 Prior to the plan becomes effective. If the objective of the issuance is to accommodate working capital and get approved by Steering committee. The Company then has to make this warrant available for trade after the plan becomes effective. The date at which the plan becomes effective is based on the following preconditions and each of which must be occurred before September 30, 2001 or with the exception from the steering committee. (1) The Plan is approved by Creditors. (2) The Plan is accepted by the Central Bankruptcy Court. (3) The company signed the plan procedure and debt restructure agreement. (4) Suntec through its Plan Administrator signed the liability agreement. (5) Suntec through its Plan Administrator to push the guarantor to sign the guarantee agreement. (6) The Company to withdraw working capital Bt100 million for business operation. This working capital might be comes from warrant issuing, capital increasing, borrowing or from operation. (7) The company has to convince Sawasdi Horrungruang and Takkapol Company Limited to sign a letter agreeing to transfer the share held by them for repaying the debt according to the plan and accepting their repayment after the creditors. (8) The Company has to convince Sawasdi Horrungruang and Chaiyaphon Horrungruang to sign the agreement to support the business reorganization plan. (9) Appoint Cash flow auditor, Credit representative and Collateral representative (10) The company's stock must be allowed for trading in SET. In case of the SET's rules allow the company's stock can be traded prior to the reorganization process. 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 Ni�eza, 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 ***