/raid1/www/Hosts/bankrupt/TCRAP_Public/021119.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, November 19, 2002, Vol. 5, No. 229
Headlines
A U S T R A L I A
ADULTSHOP.COM LIMITED: Posts Quarterly Financial Update
AMP LIMITED: Shaves AU$1.2 Billion Off its Balance Sheet
AQUILA ASIA: Fitch Cuts Rating to 'BB,' Reviews Negative Outlook
COLES MYER: Lew Pledges Return of 'Old' Discount Card Scheme
HIH INSURANCE: Probe in Homestretch; Only Two Witnesses Remain
NATIONAL FORGE: Second Creditors Meeting Set for February
NEW TEL: Trial of 'Contract Breach' Suit Versus Subsidiary Set
TOWER LIMITED: Decides to Retain TOWER Trust Subsidiary
C H I N A & H O N G K O N G
ASIA GLOBAL: Signs Definitive Restructuring Agreement
ASIA GLOBAL: Issues Voluntary Chapter 11 Case Summary
ASIA GLOBAL CROSSING: Issues Chapter 11 Update
CHINA JIANGSU: Winding Up Petition to be Heard December 18
CYBER NETWORK: Hearing on Wind Up Petition Set for December 18
FAITHFUL PROPERTIES: Court to Hear Wind Up Petition Next Week
FIVE STAR: Wind Up Petition Hearing Set for January Next Year
FOREDAK INDUSTRIAL: Wind Up Hearing Scheduled for December 18
LAI SUN: Off-loads Stake in Sunday Communications
LONG & LONG: High Court to Hear Wind Up Petition on December 18
SCORE BILLION: Hearing on Wind Up Petition Set for December 18
TARGET POWER: Wind Up Petition to be Heard November 27
I N D O N E S I A
ASTRA INTERNATIONAL: Submits Rights Issue Proposal to Regulator
BANK NEGARA: Posts Better 9-month Figure on Higher Interest Gain
J A P A N
FURUKAWA ELECTRIC: Posts Y101.5 Billion Net Loss in First Half
KAWASAKI HEAVY: FY02 Net Loss Widens to Y3.49B
KENWOOD CORPORATION: To File Application for Tax Break
KK KITAURA: Applies for Rehabilitation Proceedings
KK SOUGO: Golf Course Applies for Rehabilitation
KOKUNE CORPORATION: Collapses With Y42.9B in Debt
MATSUMOTO CORPORATION: Construction Firm Applies for Rehab
MITSUBISHI TOKYO: Expects FY02 Y100 Billion Loss
NIPPON TELEGRAPH: Expects to Return to Profit in H102
NTT DOCOMO: To Establish New U.S. Advisory Board
NTT DOCOMO: KPN Mobile Wants Capital Injection
SOFTBANK CORPORATION: Net Loss Widens to Y55.8 Billion
K O R E A
CHOHUNG BANK: KFB President Renews Interest to Bid
CHOHUNG BANK: KFIU Delays Strike to December 4
CHOHUNG BANK: Likely to Replace Executives
SAMSUNG CORP: Issues W350 Billion 3-5 Yr Bonds
M A L A Y S I A
AUTOINDUSTRIES VENTURES: Posts Update on Loan Default
KEMAYAN CORPORATION: Clarifies Proposed Restructuring Scheme
KSU HOLDINGS: Posts Status Update on Loan Default
MALAYSIAN RESOURCES: Hearing on Motion to Stay Execution Set
MGR CORPORATION: Commission Waives Mandatory Takeover Offer
MUHIBBAH ENGINEERING: Winds Up Unprofitable German Unit
SPORTMA CORPORATION: Commission OKs Changes on PPB Purchase
P H I L I P P I N E S
MANILA ELECTRIC: S&P Places 'BB' Rating on Credit Watch
MANILA ELECTRIC: State Control of Meralco Premature, Says Arroyo
NATIONAL BANK: Aims to Convert PDIC Loan Into Equity
PHILIPPINE AIRLINES: Reduces Debt Load to US$1.8 Billion
UNITRUST DEVELOPMENT: PBCom Not Renewing Bid Plans
S I N G A P O R E
CHARTERED SEMICONDUCTOR: Posts Notice of Business Organization
CHARTERED SEMICONDUCTOR: Unveils Principal Sources of Liquidity
CHEW EU: Restructuring Proposal to Settle Unit's Obligations
L&M GROUP: Court Grants Scheme of Arrangement
NATSTEEL LIMITED: Posts Update on Shareholder's Interest
NATSTEEL LTD: Oie Hong Mulls Financing for DBS' Offer
NATSTEEL LTD: Sanion Increases Shareholding to 17.81%
PARKWAY HOLDINGS: Posts Notice of Internal Restructuring
- - - - - - - -
=================
A U S T R A L I A
=================
ADULTSHOP.COM LIMITED: Posts Quarterly Financial Update
-------------------------------------------------------
Name of entity
Adultshop.Com Limited
ABN 4 months ended
92 009 147 924 31/10/2002
CONSOLIDATED STATEMENT OF CASH FLOWS
Cash flows related to Current Year to date
operating activities Month (4 months)
AUD'000 AUD'000
1.1 Receipts from customer 7,233 36,566
1.2 Payments for
(a) staff costs (618) (2,574)
(b) advertising and marketing (311) (1,106)
(c) research and development - -
(d) leased assets (14) (48)
(e) other working capital (9,103) (39,673)
1.3 Dividends received - -
1.4 Interest and other items of
a similar nature received 19 141
1.5 Interest and other costs of
finance paid - -
1.6 Income taxes paid - (2,100)
1.7 Other (provide details if material) - -
Net Operating Cash Flows (2,794) (8,794)
1.8 Net Operating Cash Flows (2,794) (8,794)
(carried forward)
Cash flows related to investing activities
1.9 Payment for acquisition of:
(a) businesses - (80)
(b) equity investments - -
(c) intellectual property (68) (337)
(d) physical non-current
assets (152) (635)
(e) other non-current assets - -
1.10 Proceeds from sale of:
(a) businesses - 106
(b) equity investments - -
(c) intellectual property - -
(d) physical non-current assets - -
(e) other non-current assets - -
1.11 Loans to other entities - -
1.12 Loans repaid by other entities 4 58
1.13 Other (provide details if material) - -
Net investing cash flows (216) (888)
1.14 Total operating and
investing cash flows (3,010) (9,682)
Cash flows related to financing activities
1.15 Proceeds from issues of
shares, options, etc. - -
1.16 Proceeds from sale of
forfeited shares - -
1.17 Proceeds from borrowings - -
1.18 Repayment of borrowings - -
1.19 Dividends paid - -
1.20 Other (provide details if material) - -
Net financing cash flows - -
Net increase (decrease) (3,010) (9,682)
in cash held
1.21 Cash at beginning of quarter/
year to date 10,818 17,490
1.22 Exchange rate adjustments - -
to item 1.20
1.23 Cash at end of quarter 7,808 7,808
NOTES
The negative net operating cash flow of $2,794,000 for the month
of October 2002 was a substantial turnaround from the September
result of positive $2,594,000 due mainly to the following
factors.
(a) The payment of $1.35 million to a third party credit card
processor formerly used by the Company. The payment related
to refunds for rejected credit card transactions - refer to
the Company's announcement dated October 31, 2002 for
further details.
(b) A delay in cash receipt of credit card processed
transactions by one of the Company's third party processors,
amounting to $834,000.
(c) Operational losses incurred by the online erotic
entertainment division attributable mainly to the terms and
conditions upon which it paid for traffic directed to its
Web sites.
Changes to the business model for the online erotic
entertainment division in early November 2002 (and foreshadowed
in the announcement dated October 31, 2002) are expected to
improve the monthly cash flow generation for the group over the
remainder of the quarter ending December 31, 2002.
AMP LIMITED: Shaves AU$1.2 Billion Off its Balance Sheet
--------------------------------------------------------
AMP is continuing the review of its activities and costs, in
line with the new Chief Executive Officer's five-point reform
agenda.
Last week, AMP updated the market on a number of early
decisions. This update included strategic decisions on AMP Bank
and the Corporate office and structural changes in Australian
Financial Services (AFS).
The review of the United Kingdom Financial Services (UKFS)
business is still in progress. However, AMP has formed the view
that there will be significant asset write-downs.
In the last few days AMP has accelerated its review of the
carrying value of its operating subsidiaries, primarily within
UKFS and the former AMP International business unit.
AMP's Chief Executive Officer Andrew Mohl said: "Previous
valuations are no longer appropriate in light of the substantial
falls in equity markets since June 30, 2002, difficult operating
conditions and the changes in the business arising from the
five-point reform agenda."
While uncertainty remains around precise valuations as an
independent valuation process and review will not be complete
for several weeks, AMP currently anticipates that a write-down
in the order of AU$1.2 billion is possible for the year to
December 31, 2002.
"AMP believes the carrying value of these assets is unlikely to
recover for some time and it will therefore be prudent to
reflect a more realistic view in the balance sheet," Mr. Mohl
said.
The possible AU$1.2 billion write-down broadly includes:
(a) AU$850 million related to UK assets including NPI, which
accounts for around AU$600 million; and
(b) AU$350 million related mainly to former AMP International
businesses.
"While these numbers are very preliminary and subject to change,
AMP believes it is important to keep the market informed," Mr.
Mohl said.
The write-downs in UKFS will largely be goodwill (i.e.
intangible assets) and will not impact on the net assets
invested in the UK businesses. Total capital invested in UKFS is
expected to be around AU$6.6 billion (after the write-downs) at
December 31, 2002. This compares with AU$6.1 billion at June 30,
2002 and takes into account the 500 million invested in UKFS in
the second half of the year, less the anticipated asset write-
downs.
The anticipated write-downs do not include restructuring costs
or other financial implications of the strategic review, details
of which will be made available when finalized.
"Payments of dividends and the Reset Preferred Securities (RPS)
distributions will not be affected by the write-downs," Mr. Mohl
said.
"Overall, notwithstanding these anticipated write-downs, AMP's
capital position remains strong. We are completely focused on
running the business to maximize long term shareholder value."
The original copy of the company press release may be viewed
through this link http://bankrupt.com/misc/amp_limited.pdf
Media inquiries:
Karyn Munsie
61 2 9257 9870
0421 050 430
Matthew Coleman
61 2 9257 2700
0421 611 138
Investor inquiries:
Mark O'Brien
61 2 9257 7053
AQUILA ASIA: Fitch Cuts Rating to 'BB,' Reviews Negative Outlook
----------------------------------------------------------------
Fitch Ratings has downgraded the senior unsecured rating of
Aquila Inc. (ILA) to 'BB' from 'BBB-' and the short-term rating
to 'B' from 'F3'. The obligations of Aquila Asia Pacific (ILA
Asia Pacific) and Aquila Canada Finance (ILA Canada Finance)
have also been downgraded to 'BB' from 'BBB-' by Fitch.
Approximately $3.6 billion of debt is affected. The ratings of
ILA, ILA Asia Pacific and ILA Canada Finance are placed on
Rating Watch Negative, pending a comprehensive review of the
outlook for the remaining core business and the refinancing of
credit facilities now set to come due on April 12, 2003. A full
description of the rating changes is detailed below.
All ratings of the UK operations of ILA, comprised of Avon
Energy Partners Holding (AVE, senior unsecured 'BBB-', short-
term 'F3' by Fitch), UK intermediate holding company Midlands
Electricity plc (ME, senior unsecured 'BBB-', short-term F3),
and UK electricity distributor Aquila Power Networks (APN,
senior unsecured 'BBB+', short-term 'F2'), remain on Rating
Watch Evolving, pending the anticipated sale of the UK business.
Discussions continue with bidders, and a determination regarding
acceptance of any offers is anticipated in December 2002. Fitch
notes that ME's currently outstanding Eurobond is guaranteed by
APN and is thus rated 'BBB+', also on Rating Watch Evolving.
Fitch will comment further on the prospects of the AVE group in
due course.
The rating actions on ILA reflect lower than expected operating
cash flows as the company exits the wholesale energy market.
Specifically, ILA's capacity services segment will continue to
be negatively impacted by lower power prices and spark spreads,
and higher capacity payments for tolling arrangements and
synthetic leases. Operating cash flow has also been depressed by
higher-than-anticipated restructuring charges and slow progress
in reducing staff count and operating expenses. While management
predicts a turn-around of cash from continuing operations into
the black early in 2003, the residual debt after applying the
proceeds of asset sales remains very high relative to recurring
operating income from ILA's U.S. and Canadian network utilities
less expected losses of the unregulated power generation
business.
Default of a financial covenant will trigger the need to
refinance, renegotiate or repay ILA's credit facility in April
2003. ILA's reported income for twelve-months ended Sept. 30 is
not in compliance with interest coverage requirements in its
$650 million credit facility, as well as guarantees relating to
three synthetic leases. ILA is not forecasted to be in
compliance with its interest coverage test until Dec. 31, 2003
at the earliest, a factor that eliminates the possibility for
ILA to exercise the one-year term-out option that would have
been available for the $325 million 364-day tranche. In exchange
for waivers obtained from the banks effective until April 12,
2003, ILA has paid down $158.6 million to those lenders and
agreed that 50% of any net cash proceeds under $1 billion, and
100% of net cash proceeds above $1 billion, received prior to
April 12, 2003, from domestic asset sales will be used to pay
off the lenders. As cash proceeds are used to reduce outstanding
loans under these arrangements, the amount of credit available
to ILA will decline permanently by a like amount. ILA has also
agreed to make reasonable efforts to obtain state regulatory
approvals to permit the company to pledge some regulated assets
as security for lenders.
The net book value of ILA's regulated assets in the U.S. is
approximately $2 billion. These assets are directly held by ILA,
not at subsidiaries. ILA also may be able to pledge the equity
of its subsidiaries in Canada and/or Australia if necessary, at
asset value in excess of $900 million. Fitch assumes that ILA's
liquidity will depend on its ability to provide sufficient
collateral to refinance some $300 to 400 million of loans and
letters of credit that will then be outstanding under the bank
facilities plus an amount relating to additional new funding
needed for 2003 capital spending, maturities, and working
capital estimated at or around $350 million. Assuming that ILA
will be successful in implementing a secured financing, the
existing senior notes and other similar unsecured obligations
will then be effectively subordinated relative to any new
secured claims. Resolution of the Rating Watch status is
expected to focus on the terms of any future financing and
developments in ILA's organic cash flow.
Favorable outcomes on several contingencies could benefit ILA's
Outlook, with execution risk regarding these alternatives.
Management has indicated that negotiations are ongoing in an
attempt to lower its contractual capacity payments on tolling
agreements to conserve cash and minimize the ongoing cash drain.
Fitch has assumed that the committed purchase of the Katy gas
storage facility takes place before the maturity of the bank
facilities, but has not assumed any other material asset sale
proceeds. As noted earlier, ILA has solicited bids for the sale
of its interests in Avon Energy Partners Holding. Fitch has not
assumed any residual cash to ILA from AVE's sale, but a more
favorable outcome could result in some modest positive proceeds
in the first half of 2003.
Ratings downgraded, on Rating Watch Negative:
Aquila Inc.
-- Senior unsecured debt to 'BB' from 'BBB-';
-- Short-term debt to 'B' from 'F3'.
Aquila Capital (formerly Utilicorp Capital)
-- PEPS to 'BB-'* from 'BB+'.
* Will be withdrawn upon imminent conversion on Nov. 18.
Aquila Canada Finance Corp. (formerly Utilicorp Canada Finance)
-- Senior unsecured debt to 'BB' from 'BBB-'.
Aquila Asia Pacific (formerly Utilicorp Asia Pacific)
-- Senior unsecured debt to 'BB' from 'BBB-'.
ILA, formerly Utilicorp, United Inc., provides network
distribution of electricity and gas in the U.S., Canada,
Australia and UK. It also is in the wholesale power generation
business in North America and is in the process of winding down
its wholesale energy trading activities.
COLES MYER: Lew Pledges Return of 'Old' Discount Card Scheme
------------------------------------------------------------
In a bid to draw to his side small shareholders who own 38% of
Coles Myer, Solomon Lew vowed on Sunday that he will push for
the reinstatement of the shareholder discount card if he is re-
elected to the board.
In his press conference, Mr. Lew said he will vigorously work
for the restoration of pre-March discount rates, adding that the
board needed "to recognize that it was wrong to terminate the
card."
According to the Sydney Morning Herald, the discount card phase
out was first announced in March. The discounts were estimated
to be costing the retail group AU$170 million a year in revenue.
The first tranche of cuts was introduced in July and included
Myer Grace Bros lowering its discount rate from 10 percent to
7.5 percent. The discount at Coles supermarkets decreased from 5
to 3 percent, the paper said.
Coles Myer CEO John Fletcher, however, is believed to be working
on an alternative discount scheme with other incentives,
including a discounted petrol purchase offer and an expanded,
co-branded credit card.
The group will hold its annual general meeting and election of
officers on Wednesday. It is not yet clear how the small
shareholders, who make up 38% of Coles Myer's share register,
will vote.
HIH INSURANCE: Probe in Homestretch; Only Two Witnesses Remain
--------------------------------------------------------------
The royal commission investigation into the collapse of HIH
Insurance continued yesterday with Packer family Ben Tilley and
entrepreneur Brad Cooper expected to take the witness stand.
According to the Australian Associated Press, Misters Tilley and
Cooper were paid AU$2 million for introducing the failed insurer
to the wealthy Packer clan. In addition, the two had formulated
a never-realized plan to sell HIH assets to Consolidated Press
Holdings.
Mr. Cooper and his companies were also said in the royal
commission to have been the recipient of "rivers of cash" in
HIH's final six months, more than $16 million, according to
documents tendered in the commission.
Last week, lawyers of HIH liquidator Tony McGrath of KPMG
secured a Supreme Court order that forced Mr. Cooper to
surrender his passport and give a written undertaking to appear
at the liquidator's examination.
The report says barring any late additions to the witness list,
and closing submissions from lawyers to be given periodically
over the next two months, Commissioner Justice Neville Owen is
expected to hand his report to the federal government at the end
of February next year.
He is expected to make recommendations for changes to
regulatory, auditing and accounting standards. He may also
offer his thoughts on legislative changes necessary to prevent
another HIH-style collapse, and possibly recommend that certain
people be charged with certain offences, including insider
trading, the report said.
The year-long probe has accumulated more than 18,000 pages of
transcript, written statements from 171 people, submissions on
future policy directions from 24 interested parties, and more
than 1.2 million other documents tendered in the commission.
NATIONAL FORGE: Second Creditors Meeting Set for February
---------------------------------------------------------
This is a letter addressed to the Australian Stock Exchange by R
J Cauci II, joint and several administrators for National Forge
Limited:
"I refer to previous correspondence regarding the [company] and
confirm that David James Lofthouse and I, Richard John Cauchi
were appointed Joint and Several Administrators of NFL on
October 21, 2002 and NFO on October 22, 2002 pursuant to a
resolution of the companies' directors in accordance with
Section 436A(l) of the Corporations Act 2001.
"On October 28-29, 2002, the first meetings of creditors
confirmed our appointment as Joint and Several Administrators,
and a Committee of Creditors were formed for each company.
"In order to allow me sufficient time to conduct the appropriate
investigations into the affairs of the above companies, I sought
leave of the court to extend the convening period with respect
to the holding of the second meetings of creditors.
"I confirm that Orders were made by the Supreme Court of
Victoria on Friday, November 8, 2002 extending the convening
period for the holding of the second meetings of creditors to
February 11, 2003. As such, the meetings of creditors will be
held no later than Tuesday, February 18, 2003.
"Investigations are continuing in regard to the affairs of the
above companies and a full report to creditors will be provided
by mid February 2003.
"In the interim, should you have any queries regarding the above
administrations, please do not hesitate to contact either
Michael Carrafa or Tim Brace of this office."
The original copy of the letter may be viewed through this link
http://bankrupt.com/misc/national_forge.pdf
NEW TEL: Trial of 'Contract Breach' Suit Versus Subsidiary Set
--------------------------------------------------------------
AKD Limited and Ashburton Minerals Ltd advice that the issue of
liability in the breach of drilling contract action against
Cable & Telecoms (formerly Cambridge Gulf Exploration NL) has
been entered for trial with the Supreme Court of Western
Australia. A trial date in the first half of 2003 is
anticipated.
AKD and Ashburton are claiming approximately AU$10 million in
damages from Cable and Telecoms Limited, which became a wholly
owned subsidiary of NewTel following a successful takeover
earlier this year. Shares in Newtel are currently suspended from
trading on ASX after the company failed to lodge its annual
audited accounts.
TOWER LIMITED: Decides to Retain TOWER Trust Subsidiary
-------------------------------------------------------
TOWER Limited announced Friday that the personal and corporate
trustee business of TOWER Trust in Australia and New Zealand is
no longer for sale.
A number of interested parties have completed due diligence and
submitted bids for the business in recent months, but TOWER has
decided that retaining this business, and incorporating it in
TOWER's growth strategies going forward, would be the best use
of shareholder capital.
TOWER Trust has built a strong reputation for its integrity and
reliability and is recognized as a provider of quality wealth
management and trustee services to individuals, organizations
and large corporations. TOWER Trust is a profitable and growing
business and it will continue to be an important contributor to
TOWER in enhancing its relationships with retail and wholesale
customers, particularly through utilizing its trustee status.
Recent changes in TOWER Group's management and structure, the
announcement of a loss for the 2002 financial year, together
with this decision not to proceed with the sale of TOWER Trust,
make it appropriate for TOWER to review some of the strategic
and operational initiatives it has been progressing. TOWER's
intention is to complete this review and announce the outcomes
early in the New Year.
TOWER is totally confident in the continued success of TOWER
Trust and its contribution and value to the Group in the future.
For further information please contact:
Keith Taylor Karyn Fenton
GROUP CHIEF EXECUTIVE OFFICER GROUP COMMUNICATIONS
MANAGER
64 4 498 7904 64 4 498 7397
64 21 436 833 64 21 598 161
================================
C H I N A & H O N G K O N G
================================
ASIA GLOBAL: Signs Definitive Restructuring Agreement
-----------------------------------------------------
Asia Global Crossing Ltd. announced yesterday that it has signed
a definitive agreement to sell substantially all of its
operations and assets to Asia Netcom, a new company organized by
China Netcom (Hong Kong) and expected to include Newbridge
Capital and Softbank Asia Infrastructure Fund as co-investors.
As part of the agreement and to facilitate the restructuring
process, certain Asia Global Crossing entities filed Monday for
Chapter 11 protection in the United States Bankruptcy Court for
the Southern District of New York and coordinated proceedings in
the Supreme Court of Bermuda.
Operations will continue uninterrupted during the
reorganization, and customers will not experience any change in
service. Asia Global Crossing's management team and employee
base will remain in place and will continue towards the
company's objective of providing cost-efficient network
infrastructure and data communications services to enterprise
and carrier customers throughout Asia.
Under the terms of the agreement, Asia Netcom will acquire
substantially all of Asia Global Crossing's operating
subsidiaries, excluding Pacific Crossing Ltd. and related
entities.
Completion of the transactions is conditioned on, among other
things, the approval by the courts in the U.S. and Bermuda as
well as certain foreign regulatory approvals.
In connection with the proposed transaction, Asia Global
Crossing's principal vendors have agreed to restructure the
obligations owed to them.
The new company will assume these obligations as well as
customer contracts and operating liabilities of the acquired
entities.
It is expected that, upon completion of the transaction,
approximately US$80 million of residual cash will be retained by
Asia Global Crossing to pay its other creditors and to settle
certain expenses in the Chapter 11 case and the Bermuda
proceeding. No recovery is expected for Asia Global Crossing
shareholders.
Asia Netcom will be funded by US$120 million of new equity from
the consortium members and additional bank financing, for the
future operations of the company.
The parties expect the Asia Netcom transaction to close during
the first quarter of 2003.
"We have been able to achieve our desired objective of ensuring
our company's ongoing -- and uninterrupted -- operations in the
future, without compromising customer service. We believe that
the transaction maximizes the return to creditors. Once
approved, this transaction will mark the successful completion
of the restructuring process we began in early 2002," said Jack
Scanlon, vice chairman and chief executive officer of Asia
Global Crossing.
"Asia Netcom will build upon the strengths of Asia Global
Crossing's existing operations, but its value and service
proposition will be greatly enhanced by the restructuring of its
balance sheet and the solid financial and commercial backing of
our new investors," he said.
Edward Tian, chief executive officer of China Netcom, said, "We
are pleased to be providing our support to the consortium. This
is Asia's premier submarine cable network and the transaction
allows the consortium to build market leadership at a very
reasonable cost.
"By allowing the new company to connect with China Netcom's
extensive nationwide network and strong domestic customer base
in China, we can also help enhance its service offering to both
existing and new customers.
"We believe that the newly recapitalized company will be well
positioned to capture a large share of the future data
communications needs of carriers and enterprises in the region.
This is a very exciting opportunity for both the investors and
as well as management and employees."
According to industry analyst IDC, revenue from broadband
services in China is set to double next year and the Asia-
Pacific region remains one of the fastest growing regions in the
global telecommunications market.
With Asia Global Crossing's pan-Asian sub-sea system East Asia
Crossing, its extensive city-to-city data services platform, and
access to China Netcom's extensive mainland network, Asia Netcom
will be able to both capitalize on the Asia-Pacific opportunity
and capture a large share of traffic originated and terminated
in China.
Under U.S. bankruptcy law, it is anticipated that the U.S.
Bankruptcy Court, prior to approving the sale, will require that
an auction be conducted to permit any higher offers to be
submitted.
Following completion of the sale, Asia Global Crossing intends
to submit a plan of reorganization to the U.S. Bankruptcy Court
for the purpose of selling any remaining assets and distributing
the value of such remaining assets among Asia Global Crossing's
creditors.
The agreement follows review and analysis of options available
to Asia Global Crossing followed by a several-month sale process
conducted by Lazard, Asia Global Crossing's financial advisor.
Salomon Smith Barney is the financial advisor to the consortium.
The agreement was unanimously approved by the board of directors
of Asia Global Crossing.
The company also announced today that it expects to sell its
ownership stake in Asia Global Crossing Taiwan, its majority-
owned joint venture in Taiwan, to a U.S.-based investor.
Asia Global Crossing Taiwan's customers will, however, continue
to have the benefit of the network and service platform that it
previously enjoyed and are not expected to experience any impact
as a result of this restructuring.
About Asia Global Crossing
Asia Global Crossing provides city-to-city connectivity and data
communications solutions to pan-Asian and multinational
enterprises, ISPs and carriers.
About China Netcom
China Netcom Corporation (Hong Kong) Ltd. (CNC) is a leading
telecommunications service provider in China. The company owns a
nationwide backbone as well as local metropolitan and access
networks in China.
CNC offers a broad range of telecommunications products and
services, including: domestic and international fixed-line
telecom network and infrastructure, as well as local wireless
loops; voice, data, image, and multimedia communications based
on such telecom networks. CNC is one of the three operators in
China licensed to operate international infrastructure.
About Newbridge Capital
Newbridge Capital is an investment firm dedicated to making
direct investments in Asia.
Established in 1994 by the Texas Pacific Group and Blum Capital
Partners of the United States, Newbridge Capital manages more
than US$1.7 billion of capital and operates out of offices in
Hong Kong, San Francisco, Mumbai, Seoul, Shanghai, Singapore,
and Tokyo.
About Softbank Asia Infrastructure Fund
Softbank Asia Infrastructure Fund is a US$1.05 billion private
equity fund investing in broadband and wireless
telecommunications & network infrastructure, media and
technology product & service companies in the Asia-Pacific
region and the United States.
SAIF was founded in February 2001 following the announcement of
a strategic partnership between Softbank and Cisco Systems, the
founding limited partner of the fund and the leading name
worldwide in network infrastructure.
For further information, please contact:
MADELYN SMITH
Los Angeles, CA
+1 310 481 4716
+1 310 962 9644
madelyn.smith@asiaglobalcrossing.com
SELENE LO
Hong Kong
+852 2121 2936
+852 9127 9038
selene.lo@asiaglobalcrossing.com
Asia Global Crossing Investor Relations
LOS ANGELES, CA
+1 310 481 4783
ASIA GLOBAL: Issues Voluntary Chapter 11 Case Summary
-----------------------------------------------------
Debtor: Asia Global Crossing Development Co.
11150 Santa Monica Blvd, Suite 400
Los Angeles, California 90025
Bankruptcy Case No.: 02-15750
Type of Business: An affiliate of Asia Global Crossing Ltd.
Chapter 11 Petition Date: November 17, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: David M. Friedman, Esq.
Kasowitz, Benson, Torres & Friedman, LLP
1633 Broadway
New York, NY 10019-6799
Tel: (212) 506-1700
Fax : (212) 506-1800
Estimated Assets: More than $100 Million
Estimated Debts: More than $100 Million
ASIA GLOBAL CROSSING: Issues Chapter 11 Update
----------------------------------------------
Debtor: Asia Global Crossing Ltd.
Mintflower Place
2nd Floor, 8 Par-la-Ville Road
Hamilton HM08
Bermuda
Bankruptcy Case No.: 02-15749
Type of Business: Asia Global Crossing Ltd., through its direct
and indirect subsidiaries, as well as through
a number of in-country joint ventures and
commercial arrangements with Asian partners,
provides the Asia Pacific region with a broad
range of integrated telecommunications and IP
services.
Chapter 11 Petition Date: November 17, 2002
Court: Southern District of New York (Manhattan)
Debtors' Counsel: David M. Friedman, Esq.
Kasowitz, Benson, Torres & Friedman LLP
1633 Broadway
New York, New York 10019
Tel: (212) 506-1700
Total Assets: $2,279,771,000
Total Debts: $2,616,316,000
Debtor's 8 Largest Unsecured Creditors:
Entity Nature Of Claim Claim Amount
------ --------------- ------------
The Bank of New York, Senior Notes $432,557
as Indenture Trustee for
the 13.375% Senior
Notes due 2010
Richard Haberstroh
101 Barclay Street
21W New York, NY 10286
NEC Corporation Guarantee $242,020
(Value of security
unknown)
Hutchison Global Crossing Capacity Commitment $148,671
360 Networks Ltd. and Guarantee $100,000
360 Pacific (Bermuda) Ltd.
Exodus Communications, Inc. Capacity Commitment $25,000
KDDI Submarine Cable Guarantee $23,678
Systems Inc. (Value of security
unknown)
Concert Global Network Capacity Commitment $20,000
Services, Limited
WorldCom Guarantee Unknown
CHINA JIANGSU: Winding Up Petition to be Heard December 18
----------------------------------------------------------
The High Court of Hong Kong will hear on December 18, 2002 at
9:30 in the morning the petition seeking the wind up of China
Jiangsu (Hong Kong) International Limited.
Bank of China (Hong Kong) Limited (the successor corporation to
Sin Hua Bank Limited pursuant to Bank of China (Hong Kong)
Limited (Merger) Ordinance (Cap. 1167) of 14th Floor, Bank of
China Tower, 1 Garden Road, Central, Hong Kong filed the
petition on October 10, 2002. Koo and Partners represents the
petitioner.
Creditors and other interested parties are encouraged to attend
the hearing. They only need to notify in writing Koo and
Partners, which holds office at the 21st-22nd Floors, Bank of
China Tower, No. 1 Garden Road, Central, Hong Kong.
CYBER NETWORK: Hearing on Wind Up Petition Set for December 18
--------------------------------------------------------------
Cyber Network Services (Hong Kong) Limited faces a winding up
petition, which the High Court of Hong Kong will hear on
December 18, 2002 at 10:00 in the morning.
Leung Ho Yin Stanley of No. 41. 16/F., Man Yiu Building, Ferry
Point, Kowloon, Hong Kong filed the petition on October 18,
2002. Tam Lee Po Lin, Nina represents the petitioner.
Creditors and other interested parties may attend the hearing.
They only need to notify in writing Tam Lee Po Lin, Nina, which
holds office at the 27th Floor, Queensway Government Offices, 66
Queensway, Hong Kong.
FAITHFUL PROPERTIES: Court to Hear Wind Up Petition Next Week
-------------------------------------------------------------
A petition seeking the winding up of Faithful Properties Limited
is scheduled for hearing before the High Court of Hong Kong on
November 27, 2002 at 9:30 in the morning.
Fila Marketing (Hong Kong) Limited whose registered office is
located at 12/F., Tower 3, China Hong Kong City, 33 Canton Road,
Tsimshatsui, Hong Kong brought the petion on September 27, 2002.
Richards Butler represents the petitioner.
Creditors and other interested parties may attend the hearing.
They only need to notify in writing Richards Butler, which holds
office at the 20th Floor, Alexandra House, 16-20 Chater Road,
Central, Hong Kong.
FIVE STAR: Wind Up Petition Hearing Set for January Next Year
-------------------------------------------------------------
The High Court of Hong Kong will hear on January 15, 2002 at
10:00 in the morning the petition seeking the winding up of Five
Star Wine Limited.
Wong Cheuk Wah of Room 1719, Fu Tong House, Yau Tong Estate,
Kowloon, Hong Kong brought the petition on November 1, 2002.
Thomas E. Kwong represents the petitioner.
Creditors and other interested parties are encouraged to attend
the hearing. They only need to notify in writing Thomas E.
Kwong, which holds office at the 27th Floor, Queensway
Government Offices, 66 Queensway, Hong Kong.
FOREDAK INDUSTRIAL: Wind Up Hearing Scheduled for December 18
-------------------------------------------------------------
The High Court of Hong Kong will hear on December 18, 2002 at
10:00 in the morning the petition seeking the wind up of Foredak
Industrial Limited.
by Bank of China (Hong Kong) Limited (the successor corporation
to The Kwangtung Provincial Bank, Hong Kong Branch pursuant to
Bank of China (Hong Kong) Limited (Merger) Ordinance (Cap. 1167)
of 14th Floor, Bank of China Tower, 1 Garden Road, Central, Hong
Kong brought the petition on October 21, 2002. Chu & Lau
represents the petitioner.
Creditors and other interested parties may attend the hearing.
They only need to notify in writing Chu & Lau, which holds
office at the 2nd Floor, The Chinese General Chamber of Commerce
Bldg., 24-25 Connaught Road, Central, Hong Kong.
LAI SUN: Off-loads Stake in Sunday Communications
-------------------------------------------------
Debt-laden Lai Sun Development Co Ltd has disposed another
shareholding, this time involving its stakes in Sunday
Communications, which trades in the Hong Kong Stock Exchange.
Lai Sun executive director Keith Wu Shiu-kee, in an interview
with the South China Morning Post recently, declined to say when
the sale took place and how much the firm earned for selling its
interest.
Lai Sun Development was a founding investor in Sunday, which
started operations in 1997. In March 2000, Lai Sun held 11.5%
of Sunday, but moved 9.87% of Sunday to associate e-Sun
Holdings.
Neither company is required to disclose the disposal as their
stakes are below 10%, the newspaper said.
Lai Sun has until December 31 to raise cash if creditors won't
extend further the repayment deadline for some HK$6 billion of
debts.
Last week, Troubled Company Reporter-Asia Pacific said the
company only has HK$238.38 million in ready cash to meet its
looming liabilities. This as losses ballooned to HK$1.94
billion this year compared to last year's HK$1.19 billion. Even
auditors Ernst & Young have expressed apprehensions that the
company won't last long if creditors won't accede to the current
restructuring scheme.
As of July 31, consolidated bank and other borrowings --
including a loan of HK$1.5 billion from associate eSun -- along
with bonds issued by the group, amounted to HK$7.14 billion, of
which HK$6.19 billion were liabilities due by the end of the
year. Earlier negotiations with bondholders saw repayments
deferred to December 31 this year. The group's principal banks
also agreed to hold off principal repayments to the same date,
TCR-AP said.
LONG & LONG: High Court to Hear Wind Up Petition on December 18
---------------------------------------------------------------
A petition seeking the winding up of Long & Long Limited is
scheduled for hearing before the High Court of Hong Kong on
December 18, 2002 at 9:30 in the morning.
Bank of China (Hong Kong) Limited (the successor corporation to
Sin Hua Bank Limited pursuant to Bank of China (Hong Kong)
Limited (Merger) Ordinance (Cap. 1167) of 14th Floor, Bank of
China Tower, 1 Garden Road, Central, Hong Kong filed the
petition on October 10, 2002. Koo and Partners represents the
petitioner.
Creditors and other interested parties are encouraged to attend
the hearing. They only need to notify in writing Koo and
Partners, which holds office at the 21st-22nd Floors, Bank of
China Tower, No. 1 Garden Road, Central, Hong Kong.
SCORE BILLION: Hearing on Wind Up Petition Set for December 18
--------------------------------------------------------------
Score Billion International Limited faces a winding up petition,
which the High Court of Hong Kong will hear on December 18, 2002
at 10:00 in the morning.
Tse Suet Ha of Flat 18, 16/F., Ming Kok House, Ming Tak Estate,
Tseung Kwan O, New Territories, Hong Kong brought the petition
on October 18, 2002. Tam Lee Po Lin, Nina represents the
petitioner.
Creditors and other interested parties are encouraged to attend
the hearing. They only need to notify in writing Tam Lee Po
Lin, Nina, which holds office at the 27th Floor, Queensway
Government Offices, 66 Queensway, Hong Kong.
TARGET POWER: Wind Up Petition to be Heard November 27
------------------------------------------------------
Target Power Limited faces a winding up petition, which the High
Court of Hong Kong will hear on November 27, 2002 at 9:30 in the
morning.
Fila Marketing (Hong Kong) Limited whose registered office is
located at 12/F., Tower 3, China Hong Kong City, 33 Canton Road,
Tsimshatsui, Hong Kong filed the petition on September 24, 2002.
Richards Butler represents the petitioner.
Creditors and other interested parties are encouraged to attend
the hearing. They only need to notify in writing Richards
Butler, which holds office at the 20th Floor, Alexandra House,
16-20 Chater Road, Central, Hong Kong.
=================
I N D O N E S I A
=================
ASTRA INTERNATIONAL: Submits Rights Issue Proposal to Regulator
---------------------------------------------------------------
Astra International was expected yesterday to submit its
proposed US$100 million right issue to the Capital Market
Supervisory Agency (Bapepam).
According to AFX-Asia, it is not yet clear how much the company
will price the rights issue, although speculations abound it
could be valued 1,300 rupiah a share.
President Director Budi Setiadharma would neither deny nor
confirm the report, when interviewed by the news agency: "We
have to wait for the EGM (decision). In the meantime we will
give a price range to Bapepam [Monday]."
"It is possible that 1,300 rupiah is within the price range," he
admitted.
Astra's rights issue is subject to a successful debt
restructuring. The company has said it will meet with creditors
on November 26 to seek approval for its proposed debt
restructuring. Astra has already received preliminary approval
from an umbrella group of international creditors to restructure
its US$726 million and 881 billion rupiah outstanding debt.
This umbrella group represents between 30-40 percent of
outstanding debt. Astra needs support from at least 67% of
creditors for the deal to go through before year's end to avoid
defaulting on some US$133 million and 165 billion rupiah in debt
falling due in December, the news agency said.
BANK NEGARA: Posts Better 9-month Figure on Higher Interest Gain
----------------------------------------------------------------
If the nine-month figures of Bank Negara are any indication,
then it is well on its way to recovery.
Net profits for the period ended September rose to 2.108
trillion rupiah from the year earlier 1.833 trillion rupiah, as
interest margin improved to 3.35% from 2.37%, AFX-Asia said.
Accordingly, the bank generated interest income of 10.802
trillion rupiah or an increase of 3.4% from last year. Net
interest income rose to 2.954 trillion rupiah from only 2.098
trillion on lower funding costs.
The bank said its capital adequacy ratio declined to 14.465 at
end-September from 18.15% as the loan to deposit ratio increased
to 37.51% from 35.30%.
Non-performing loans also declined to 4.05% from 4.49%. The
bank is 99.12% owned by the government.
=========
J A P A N
=========
FURUKAWA ELECTRIC: Posts Y101.5 Billion Net Loss in First Half
--------------------------------------------------------------
Furukawa Electric Co. Limited posted a net loss of 101.5 billion
yen in the first-half of this year to September, versus a 22.5
billion yen profit a year earlier, as the Company accounted 78.9
billion yen in extra losses due mainly to latent securities
losses, AFX Asia said on Monday.
Furukawa will continue to restructure its OFS unit, adding that
it will account 3.7 billion yen extra loss for OFS restructuring
charge in the second-half of the current fiscal year.
In the first-half of this year, the Company posted a current
loss of 38.3 billion yen compared with 16.0 billion yen profit,
and an operating loss of 32.3 billion yen, compared with 13.5
billion yen profit a year earlier.
KAWASAKI HEAVY: FY02 Net Loss Widens to Y3.49B
----------------------------------------------
Kawasaki Heavy Industries Limited posted a consolidated net loss
of 3.49 billion yen in the first half of this year, versus a
loss of 2.33 billion yen a year ago, Kyodo News reports.
The result was due to the yen's appreciation and weaker
aircraft-related demand since the September 11 terrorist attacks
in the U.S.
The heavy machinery and engineering Company posted the loss as
it tends to book profitable orders in the second half of the
fiscal year instead of the first half.
KENWOOD CORPORATION: To File Application for Tax Break
------------------------------------------------------
Audio equipment maker Kenwood Corporation said it will file an
application with the Ministry of Economy, Trade and Industry
(METI) to qualify for a tax break METI gives to viable firms,
Kyodo News said on Friday.
The application may be made on November 30, 2002.
The Company expects to receive 25 billion yen in financial
assistance from its main lender, Asahi Bank, in the form of a
debt-for-equity swap.
KK KITAURA: Applies for Rehabilitation Proceedings
--------------------------------------------------
KK Kitaura Golf Kaihatsu has applied for civil rehabilitation
proceedings, Tokyo Shoko Research reports.
The golf course has total liabilities of 39 billion yen.
The Company, which has 60 million yen in capital, is located at
Suginami-ku, Tokyo, Japan.
KK SOUGO: Golf Course Applies for Rehabilitation
------------------------------------------------
KK Sougo Kaihatsu has recently applied for civil rehabilitation
proceedings, according to Tokyo Shoko Research.
The Company has total liabilities of 25 billion yen.
The golf course, which has 140 employees, is located at
Oosaka-si, Oosaka, Japan.
KOKUNE CORPORATION: Collapses With Y42.9B in Debt
-------------------------------------------------
Construction firm Kokune Corporation filed for protection from
its creditors with the Tokyo District Court under the civil
rehabilitation law, Kyodo News said on Saturday.
The Company has total debts of 42.9 billion yen, 2 billion yen
of which are guaranteed obligations, the report said.
MATSUMOTO CORPORATION: Construction Firm Applies for Rehab
----------------------------------------------------------
Matsumoto Corporation, Co. Limited has applied for civil
rehabilitation proceedings, according to Tokyo Shoko Research.
The construction and civil engineering firm has total
liabilities of 9.2 billion yen.
The Company, which has 160 workers, is located at Okayama-si,
Okayama, Japan.
MITSUBISHI TOKYO: Expects FY02 Y100 Billion Loss
------------------------------------------------
Mitsubishi Tokyo Financial Group (MTFG) is likely to post a
group after-tax loss of over 100 billion yen ($830.3 million) in
2002, Reuters said on Saturday.
The loss will be incurred due to write-offs of the value of its
equities holdings following recent falls in Japanese share
prices.
As a result, the Company announced a downward revision from an
earlier forecast of a profit of 55 billion yen for the 2002 and
2003 business year to next March, when it announces its half-
year earnings on November 25.
MTFG officials were not immediately available for comment.
NIPPON TELEGRAPH: Expects to Return to Profit in H102
-----------------------------------------------------
Nippon Telegraph and Telephone (NTT) is likely to report a
strong rebound in half-year earnings this week but investors
will be looking for signs that streamlining will lead to more
growth, Reuters reports.
NTT posted a net loss of 261.8 billion yen ($2.18 billion) in
the first half to September 2001, when the Company took a
consolidated special charge of 762.4 billion yen on overseas
assets. Operating profit totaled 532.2 billion.
With NTT facing deteriorating demand at home for its fixed-line
business and unit DoCoMo's growth momentum slowing in the
maturing domestic market, the Company turned to overseas markets
for further growth and took stakes in several foreign carriers.
NTT DOCOMO: To Establish New U.S. Advisory Board
------------------------------------------------
NTT DoCoMo, Inc. announces that the Company would set up a
second U.S. Advisory Board with new members on November 15,
2002. The first Advisory Board, established in December 2000,
completed its mission in November 2002.
Chaired by Dr. C. Fred Bergsten, Founder & Director of the
Institute for International Economics, the new board consists of
distinguished experts from the American academic and business
communities.
The panel will meet twice a year in the U.S. to provide DoCoMo
with advice and insight on social and economic circumstances
from a global perspective regarding management policy. DoCoMo
believes that such counsel is important for the Company to
maintain its position as a leading global telecommunications
entity-one that is truly in touch with society and is
demonstrating this by creating a new "communication culture."
U.S. Advisory Board Member Title
Dr. C. Fred Bergsten
Founder & Director, Institute for International
Economics (IIE)
Mr. Sky Dayton
Founder & CEO, Boingo Wireless, Inc.
Founder & Chairman, EarthLink, Inc.
Professor David J. Farber
Moore Professor, The University of Pennsylvania
Visiting Professor, Carnegie Mellon University
Mr. J. Gregory Sidak
Resident Scholar, American Enterprise Institute for Public
Policy Research (AEI)
Dr. Rajendra Singh
Chairman Telcom Ventures, L.L.C.
Co-Founder, Teligent ('96-'01)
Mr. Raymond W. Smith
Founding Partner, Arlington Capital Partners
Chairman, Rothschild, Inc.
Chairman & CEO, Bell Atlantic ('89-'98)
Mr. Edwin D. Williamson
Partner, Sullivan & Cromwell
NTT DoCoMo is a unit of Nippon Telegraph and Telephone Co.
NTT DoCoMo www.nttdocomo.com s the world's leading mobile
communications Company with more than 44 million customers. The
Company provides a wide variety of leading-edge mobile
multimedia services. These include, the world's most popular
mobile internet service, which provides e-mail and internet
access to over 35 million subscribers, and , launched in 2001 as
the world's first 3G mobile service based on W-CDMA. In addition
to wholly owned subsidiaries in Europe and North and South
America, the Company is expanding its global reach through
strategic alliances with mobile and multimedia service providers
in the Asia-Pacific, Europe and North and South America. NTT
DoCoMo is listed on the Tokyo (9437), London (NDCM), and New
York (DCM) stock exchanges.
NTT DOCOMO: KPN Mobile Wants Capital Injection
----------------------------------------------
NTT DoCoMo Inc. has received a request from Dutch telecom
operator KPN Mobile N.V. to inject more capital into it and
maintain the Japanese operator's current 15 percent voting
interest, according to Reuters.
The request was made, as KPN N.V. (KPN) is to purchase new
shares to be issued by KPN Mobile, the report said.
NTT DoCoMo said it has not decided on its response, but will
make a decision by the middle of this month.
In October, NTT Docomo write down the value of its 15 percent
stake in KPN Mobile to zero from an initial investment of about
410 billion yen ($3.40 billion).
SOFTBANK CORPORATION: Net Loss Widens to Y55.8 Billion
------------------------------------------------------
Internet services group Softbank Corporation posted a group net
loss of 55.8 billion yen (US$463 million) for the first half of
this year to March, hit by heavy losses on shareholdings in
Internet-related companies, Reuters and the Star said.
On an operating basis, the Company's loss ballooned to 31.20
billion yen from last year's 8.70 billion yen, although revenues
rose 4.2 percent to 191.05 billion yen.
Softbank President Masayoshi Son said the Company's operations
were in the black except for its broadband infrastructure
segment. "The worst is almost behind us," he said. "Next year
will see quite an improvement in Softbank's earnings."
The Troubled Company Reporter-Asia Pacific reported that
Softbank issued 188.67 billion yen in interest-bearing bonds, of
which 21.5 billion yen are expected to mature by December and
43.6 billion yen by March 2004.
=========
K O R E A
=========
CHOHUNG BANK: KFB President Renews Interest to Bid
--------------------------------------------------
Korea First Bank (KFB) President Robert Cohen has once again
expressed his interest in state-owned Cho Hung Bank, leaving
many wondering what Cohen's real motive is, acting in defiance
to government's earlier decision to rule out KFB as a qualified
bidder for the state-owned bank, a report from the Digital
Chosun said.
Cohen said, "I beg your understanding that I cannot say any
words, although Korea First is interested in acquiring Cho
Hung." Cohen went on to say that his bank has been maintaining
excellent operations, compared to other Korean banks.
Financial-market observers hinted that Cohen's confidence in his
initiative for Cho Hung derives from the fact that KFB is set to
receive about KRW3.3 trillion from the Korean government, in
accordance with put-back options, as set forth in the earlier
contract to sell the bank to New Bridge Capital of the United
States. About KRWW1.6 to KRWW2 trillion of the fund is all that
would be required to buy Cho Hung.
Rumors also had it that KFB has been backed up in its financing
capability to woo Cho Hung by a United States investment fund.
The government, which owns 80 percent of Chohung Bank, is
planning to sell about a 10 percent-20 percent stake in its
latest block sale, but now is considering selling more than a 51
percent stake to speed up the bank's privatization. (M&A
REPORTER-ASIA PACIFIC, Vol. No.1, Issue No. 228, November 18,
2002)
CHOHUNG BANK: KFIU Delays Strike to December 4
----------------------------------------------
The planned general strike to protest the government's plan to
privatize Chohung Bank will be delayed to December 4 from the
scheduled November 20, the Korea Herald reported on Monday,
citing the Korea Financial Industry Union (KFIU).
KFIU is the umbrella organization of the trade unions at
domestic financial institutions.
The union decided to put off the strike as the Public Fund
Oversight Committee, which oversees the use of public funds
raised to bail out insolvent financial firms, delayed a meeting
on the Chohung Bank sale from November 20 to December 4.
CHOHUNG BANK: Likely to Replace Executives
------------------------------------------
The government may replace Chohung Bank executives, including
Chairman Wee Sung Bok and President Hong Serck Joo, to expedite
sale of the lender, Maeil Business Newspaper said, citing
Finance Minister Jeon Yun Churl.
The government, which owns most of Chohung Bank, may exercise
its right, as main shareholder to, change management.
The government is merging or selling state-controlled banks to
recoup some of the 157 trillion won it spent bailing out the
financial industry during the 1997-98 financial crisis.
SAMSUNG CORP: Issues W350 Billion 3-5 Yr Bonds
----------------------------------------------
Samsung Corporation would issue 350 billion won ($291.2 million)
in three-year and five-year bonds on November 21 to fund its
operations and repay maturing debts, Reuters said on Friday.
Samsung Corp is a construction and trading unit of Samsung
Group, the country's largest conglomerate.
The following are the details of the bonds:
First Tranche:
Issue Amount 100 billion won
Maturity Date Nov 21, 2007
Coupon 5 percent
Payment Date Nov 21, 2002
Second Tranche:
Issue Amount 250 billion won
Maturity Date Nov 21, 2005
DebtTraders reports that Samsung Corporation's 0.250%
convertible bond due in 2006 (SAMC06KRS1) trades between 132 and
134. For real-time bond pricing, go to
http://www.debttraders.com/price.cfm?dt_sec_ticker=SAMC06KRS1
===============
M A L A Y S I A
===============
AUTOINDUSTRIES VENTURES: Posts Update on Loan Default
-----------------------------------------------------
Further to the announcements made on December 14, 2001 and
subsequently on every month, the position of Autoindustries
Ventures Bhd in respect of its default in payments in the month
of November 2002 is as follows:
Name of Creditor Principal Interest Total
(RM) (RM) (RM)
(1) Pacven Walden 2,730,955.03 1,387,105.22 4,118,060.25
Ventures
Kedua III L.P
(2) BI Walden 1,069,577.00 543,256.74 1,612,833.74
Ventures Keempat
Sdn Bhd
(3) Financial 17,760,539.72 48,207.34 17,808,747.06
Institutions
TOTAL 21,561,071.75 1,978,569.30 23,539,641.05
(a) The reasons for the default in payments and the measures to
be taken by the Company are as announced to the Exchange on
December 14, 2001.
As announced to the Kuala Lumpur Stock Exchange (KLSE) on
November 7, 2002, the shareholders of the Company have
approved the following proposals at the Company's
Extraordinary General Meeting held on November 7, 2002, as
one of the measures taken by the Company to address the
default in payments:
(1) Proposed restricted issue of 13,000,000 new ordinary
shares of RM1.00 each in AIV (AIV Shares) at an issue
price of RM1.00 per share for cash; and
(2) Proposed issue of 2,000,000 new AIV shares to BI Walden
Ventures Keempat Sdn Bhd and Pacven Walden Ventures III
L.P. of 571,429 and 1,428,571 AIV shares respectively at
an issue price of RM1.00 per share as part settlement of
the amount due (collectively known as the Proposals).
Following the approval of the shareholders as mentioned
above, the Proposals are now pending the approval from
the KLSE for the listing of and quotation for the new
AIV shares to be issued pursuant to the Proposals on the
Second Board of the KLSE.
(b) There should not be financial and legal implications in
respect of the default in payments including the extent of
the Company's liability in respect of the obligations
incurred under the agreements for the indebtedness as the
Management is currently negotiating with the lenders on the
rescheduling of payment terms through the Proposed exercise.
(c) The Management is of the opinion that the default in
payments should not constitute any event of default under a
different agreement for indebtedness (cross default) due to
the management's initiative as indicated in Paragraph (b)
above.
CONTACT INFORMATION: Lot 22225, Batu 7
Jalan Bukit Kemuning
42450 Kelang
Selangor
Tel: 03-5212329
Fax: 03-5212494
KEMAYAN CORPORATION: Clarifies Proposed Restructuring Scheme
------------------------------------------------------------
Further to the announcement on October 23, 2002 by Public
Merchant Bank Berhad on behalf of Kemayan Corporation Bhd, we
wish to clarify:
(i) The proposed subscription by Rangkap Budi Sdn Bhd
(RBSB) of 100,000 new ordinary shares of RM1.00 each in
Major Entrepreneur Sdn Bhd (MESB) representing 99.99%
of the enlarged issued and paid-up capital of MESB is
for a consideration of RM97,600,000 to be satisfied by
cash of RM100,000 to MESB for the subscription of
100,000 new shares in MESB and the issuance of
97,500,000 new ordinary shares of RM1.00 each in RBSB
to the shareholders of MESB. (Proposed Subscription in
MESB) instead of the purchase consideration of
RM97,500,000 to be satisfied by the issuance of
97,500,000 new ordinary shares of RM1.00 each in RBSB
as announced earlier.
Details of the MESB shareholders and the number of new
RBSB Shares to be issued pursuant to the Proposed
Subscription in MESB are set out in Table 1 below.
There are no material effects on the share capital,
earnings, net tangible assets and shareholding
structure of RBSB.
(ii) The Proposed Restructuring Scheme contains departure
from the following requirements of the Securities
Commission's Guidelines on Issue/Offer of Securities in
respects of:
(a) Injection of assets (other than property
development/construction assets) to have a minimum
1 year after tax profit based on the latest audited
accounts, or 1 year of revenue (in the case of
assets which are not companies).
Based on the latest audited accounts of Kedah
Resort City Sdn Bhd (KRC), the sole subsidiary
company of MESB, which is an investment holding
company, has suffered losses after tax of RM2,780
as of December 31, 2001. However, pursuant to the
Proposed Restructuring Scheme, as RBSB will also be
acquiring Amber Resources Sdn Bhd (Amber), which
principal activity is that of property development,
the Proposed Restructuring Scheme would have the
track record in terms of profit after tax and the
experiences of completing numerous projects.
Therefore, the subscription in MESB will provide
the restructured KCB with the necessary land bank
and the acquisition of Amber will provide the track
record with a group of experienced management team
to manage the development of the land bank held
under the KRC and other projects in the enlarged
RBSB Group.
(b) Moratorium on the 50% of the new RBSB Shares to be
issued to the vendors of the acquiree companies,
pursuant to the proposed acquisitions within 1 year
from the date of issue.
The shareholdings of the vendors of Amber and CDM Sdn Bhd will
not be subject to the moratorium. As such, the portion of 50% of
their total consideration shares representing 8,000,000 new
ordinary shares of RM1.00 each in RBSB will not be subject to
moratorium. However, a waiver will be sought from the SC from
complying with the moratorium requirement on the 50% of
consideration shares of the vendors of Amber and CDM.
However, the moratorium requirement will be complied by the
vendors of MESB and Satujaya Sdn Bhd (Satujaya).
Furthermore, on November 14, 2002, RBSB entered into a
supplemental agreement with the vendors of Satujaya
(Supplemental Agreement) to vary and confirm certain terms as
set out in the conditional sale and purchase agreement entered
into between RBSB and the vendors of Satujaya on October 21,
2002 (SPA).
The following are the salient terms of the Supplemental
Agreement:
The commencement date of the three (3) years period within which
the net profit after tax warranted by the vendors of Satujaya
(Guaranteed Profit) as provided in the SPA, to be obtained by
Satujaya, shall be 1 April 2003 and therefore:
(a) the term "First Year" as stipulated in the SPA shall
mean the period commencing on April 1, 2003 and
expiring on March 31, 2004;
(b) the term "Second Year" as stipulated in the SPA shall
mean the period commencing on April 1, 2004 and
expiring on March 31, 2005; and
(c) the term "Third Year" as stipulated in the SPA shall
mean the period commencing on April 1, 2005 and
expiring on March 31, 2006.
COMPANY PROFILE
The Company originated as a plantation concern developing oil
palm plantations in Pahang and cocoa plantations in Sabah. It
undertook corporate exercises from 1993 to 1995 focusing on
construction and property related activities via the acquisition
of companies and projects. Besides these, the Group is also
involved in other activities like timber logging and saw-
milling, food manufacturing, retailing and trading, education,
aviation, hotel and tourism.
The 1997/1998 economic crisis faced by the country and the
region severely affected the Group's cashflow and operation of
projects. The Company and certain of its subsidiary companies
obtained a Restraining and Stay Order (RO) on August 12, 1998
from the High Court of Malaya under Section 176(10) of the
Companies Act, 1965 for the purpose of implementing a proposed
corporate restructuring scheme.
The Company entered into a second MOU on February 19, 2002 with
a White Knight for injection of assets and to propose a
corporate restructuring scheme.
CONTACT INFORMATION: 167, Jln Glasiar
Taman Tasek
80200 Johor Bahru
Johor
Tel: 07-2362390
Fax: 07-2365307
KSU HOLDINGS: Posts Status Update on Loan Default
-------------------------------------------------
As required by the KLSE Practice Note 1/2001, the Board of
Directors of KSU Holdings Bhd wishes to provide an update on the
details of all the facilities currently in default.
The default by KSU as of October 31, 2002 amounted to
RM33,459,966.15 of principal sum and RM2,048,901.74 of interest
for term loans and overdraft facilities.
There are no other new developments since our previous
announcement with regards to this Practice Note.
DEFAULT AS OF OCTOBER 31, 2002
(1) MAY PLASTICS INDUSTRIES BERHAD
BANK FACILITY PRINCIPAL DEFAULT INTEREST DEFAULT
MIMB/MIDF Term Loan RM28,528,191.15 RM583,006.29
(2) MAY PACKAGING INDUSTRIES SDN BHD
BANK FACILITY PRINCIPAL DEFAULT INTEREST DEFAULT
EON BANK Term Loan RM3,431,775.00 RM1,423,135.96
BHD
(3)KUMPULAN SEPANG UTAMA SDN BHD
BANK FACILITY PRINCIPAL DEFAULT INTEREST DEFAULT
EON BANK Overdraft RM1,500,000.00 RM42,759.49
BHD
TOTAL RM33,459,966.15 RM2,048,901.74
COMPANY PROFILE
The Company was formed as part of a rescue-cum-restructuring
scheme of May Plastics Industries Bhd (the original listed
vehicle). Upon completion of the scheme in April 2002, May
Plastics was de-listed from KLSE on May 10, 2002 and KSUH
assumed its listing status on the same day.
The KSUH Group's core business is property development, centered
on Taman Kenanga in Sepang, Selangor. Taman Kenanga is planned
as a self-contained mixed development township comprising 3,960
residential units, 1,982 commercial units, 111 industrial units,
commercial complex, primary and secondary school, private
kindergartens, medical centre, hotel, country club and 22-acre
recreational centre. Development of Taman Kenanga commenced in
1997 and is targeted to be completed in 2005. As of October 31,
2000, 1,613 residential units and 328 commercial units have been
sold with a total sales value of approx. RM259,730,624.
KSUH is also planning to develop its Abaco property, approx.
1,010 acres of freehold land situated in the Mukim of Beranang,
District of Ulu Langat, Selangor, into a self-contained mixed
development township comprising residential, commercial, orchard
lots, kindergartens, primary and secondary schools, colleges,
medical centre, multi-purpose hall, mosque and recreational
park. The entire project would be completed over a period of 15
to 20 years.
MALAYSIAN RESOURCES: Hearing on Motion to Stay Execution Set
------------------------------------------------------------
Further to the announcements on November 5, 2002 and November
11, 2002, we wish to announce that Malaysian Resources
Corporation Bhd has received the sealed copy of the winding-up
petition, which was previously advertised in The Sun on November
5, 2002.
The Court has fixed December 19, 2002 for hearing of both the
application for a stay of execution and the application to set
aside the judgment. The Court has also fixed January 6, 2003 for
hearing of the application to strike out the winding-up
petition.
MRCB remains confident that it will succeed in the above matters
before the Court.
MGR CORPORATION: Commission Waives Mandatory Takeover Offer
-----------------------------------------------------------
Further to the announcements on the Proposed Restructuring
Scheme dated June 3, 2002 and June 10, 2002, AmMerchant Bank
Berhad (formerly known as Arab-Malaysian Merchant Bank Berhad),
on behalf of MGR Corporation Bhd wishes to announce that the
Securities Commission has vide its letter dated November 13,
2002 (received on November 14, 2002) approved the Proposed
Exemption to the shareholders of Crest Builder Sdn Bhd (CBSB),
namely Yong Soon Chow (YSC), Koh Hua Lan, Pertiwi Positif Sdn
Bhd, Takrif Jaya Sdn Bhd and Capai Hasil Sdn Bhd (collectively
known as "CBSB Vendors") from the obligation to undertake a
mandatory take-over offer for the remaining ordinary shares of
RM1.00 each in Crest Builder Holdings Berhad (CBHB Shares) not
already owned by the CBSB Vendors upon the completion of the
acquisition of CBSB by Crest Builder Holdings Berhad (CBHB).
However, the Proposed Exemption to the CBSB Vendors from the
obligation to undertake a mandatory takeover offer for the
remaining CBHB Shares not already owned by the CBSB Vendors upon
the conversion/exercise of the Irredeemable Convertible
Unsecured Loan Stocks (ICULS)/ Redeemable Convertible Unsecured
Loan Stocks (RCULS)/Warrants of CBHB to be issued to/procured by
the CBSB Vendors pursuant to the Restructuring Scheme will only
be considered by the SC when the following conditions have been
fulfilled:
(i) YSC obtains the approval from the independent
shareholders of MGR/CBHB/Special Administrators (if
applicable) in accordance with the "white-wash"
procedures, as stated under paragraphs 5(b)(i)-(iv),
Practice Note 2.9.1 of the Malaysian Code on Take-Overs
and Mergers. Approval from the said shareholders, if
obtained, will be valid for the tenure of the ICULS,
RCULS and Warrants.
(ii) CBHB will not be allowed to undertake any corporate
proposals which would change the percentage
shareholding of YSC in CBHB, prior to YSC's
conversion/exercise of CBHB's ICULS/RCULS/Warrants
which would result in a mandatory take-over offer
obligation by YSC;
(iii) YSC is not allowed to be involved in any trading of the
CBHB Shares/ICULS/RCULS/Warrants during the whole
tenure of the said ICULS/RCULS/Warrants. However, YSC
may sell/convert/exercise the CBHB
Shares/ICULS/RCULS/Warrants which are owned by him on
the condition that his shareholding in the voting
shares of CBHB is maintained above 33%;
(iv) If the conversion/exercise of the ICULS/RCULS/Warrants
by YSC results in an increase in YSC's equity interest
in CBHB exceeding the mandatory take-over limit, YSC
and AmMerchant Bank are required to inform the SC of
the said transaction and confirm that all the
conditions to the approval as stated in paragraphs (i)
to (iii) above, have been fully satisfied. YSC and
AmMerchant Bank are required to make an appropriate
announcement to inform the CBHB's shareholders; and
(v) If YSC has converted/exercised the ICULS/RCULS/Warrants
held by YSC to a level where the exemption from the
mandatory take-over offer is no longer required, YSC
and AmMerchant Bank are required to make an appropriate
announcement to inform the CBHB's shareholders.
COMPANY PROFILE
The MGR Group is primarily engaged in the manufacturing,
marketing and trading of timber and timber related products in
Malaysia.
MGR was engaged in sawn timber trading when it began operations
in 1985. It later expanded into the sale of timber logs. In
1989, MGR ventured into downstream activities beginning with
wood mouldings. In mid-1996, MGR branched into the downstream
processing of plain plywood and subsequently supplemented its
furniture operation by moving into the manufacturing of doors.
The acquisition of a sawmill in 1993 enabled the Company to
capture foreign markets. Henceforth, high-end value-added wood
mouldings and interior furniture were manufactured for the
European and American markets.
Currently, the Company is in the process of undergoing a
restructuring scheme involving the acquisition of certain assets
of the Company, including its listed status. On March 5, 2002, a
conditional principal agreement was entered into with Crest
Builders Sdn. Bhd and its shareholders for the purpose of
implementing the scheme.
CONTACT INFORMATION: Wisma Aman, Mile 1 1/2
Jalan Tuaran
88400 Kota Kinabalu
Sabah
Tel: 088-239006
Fax: 088-239009
MUHIBBAH ENGINEERING: Winds Up Unprofitable German Unit
-------------------------------------------------------
The Board of Muhibbah Engineering (M) Bhd wishes to announce
that Rolf Knigge, a 65% controlled subsidiary of Muhibbah in
Germany has on November 14, 2002 applied to the court for a
members voluntary winding up of Rolf Knigge in accordance with
the laws in Germany.
Rolf Knigge was incorporated in Germany on December 8, 1990 and
involved in manufacturing and trading of machine. Muhibbah
acquired a 57.4% stake of Rolf Knigge in 1995 and the said stake
has been increased to 65% in 2000.
The sluggish European market has affected the business of Rolf
Knigge and coupled with a highly competitive market, Rolf Knigge
is unlikely to return to a profitable position.
The Board of Directors of Muhibbah is of the opinion that the
winding up of Rolf Knigge is in the best interest of the
Muhibbah Group and it will not have any material impact on the
Muhibbah Group's earning and net tangible asset for the year
ending December 31, 2002.
COMPANY PROFILE
The Company was formed to participate in the building and
construction industry in general with special emphasis on civil,
marine and structural engineering works which include the
construction of bridges, heavy concrete foundations, factory
complexes, marine ports and dams, and other mechanical and
electrical engineering projects. Muhibbah has since branched
into the manufacture of cold formed galvanised structural steel,
aluminium foil laminates, the paper conversion industry, ship
repair and building, manufacture of cranes, and manufacturing
and designing of airline support equipment.
Overseas, the Group has equity interest in the privatization of
Pochengtong Airport in Cambodia. Muhibbah has to-date secured
seven contracts for road projects in Cambodia valued at
approximately US$31.5 million. The Group has further expanded
its crane manufacturing activities overseas through the
acquisition and incorporation of crane companies based in
Denmark and the US in 1997 and 1998 respectively.
Among notable projects completed in 2000 and 2001 are the wharf
of Pelabuhan Tanjung Pelepas, the sub-structure works for
Universiti Teknologi Petronas, the berth for Bintulu Port
Authority, Teachers' Quarters in Kedah, a 600-metre container
wharf at West Port, a 100-metre wharf at North Butterworth
Container Terminal, infrastructure work for distripack and
renovation works for the airport terminal at Senai, Johor.
As of June 30, 2002, the Company's outstanding order book
amounts to RM770 million. As of September 2002, the Group's
crane division recorded an order book for year end 2002/2003 of
RM230 million for cranes to be delivered locally and to Vietnam,
Indonesia, UK, Denmark, Australia, Singapore, US, Canada,
Thailand and China.
In May 2001, the Company invested in a collaboration agreement
with Lembaga Tabung Angkatan Tentera for the construction of a
RM422 million Army Camp in Mersing, Johor and a RM366m Naval
Base at Teluk Sapangar, Sabah.
In 2Q2002, the Group's construction division secured a turnkey
project for constructing The National Hydrographic Base in Pulau
Indah for the Royal Malaysian Navy for a contract sum of RM96.5
million.
In September, the Company acquired 60% of ITS Konsortium Sdn Bhd
through several sales and purchase agreements to participate in
the Integrated Transport Information System Project for the
Klang Valley and the Multimedia Super Corridor awarded by the
Dewan Bandaraya Kuala Lumpur to ITS Konsortium Sdn Bhd. The
Project is valued at RM365 million.
CONTACT INFORMATION: Lot 586, 2nd Mile
Jalan Batu Tiga Lama
41300 Klang, Selangor
Tel: 603-3424322/4323
Fax: 3424327/9816
SPORTMA CORPORATION: Commission OKs Changes on PPB Purchase
-----------------------------------------------------------
Further to the announcement dated August 7, 2002, Affin Merchant
Bank Berhad on behalf of the Special Administrator (SA) of
Sportma Corporation Berhad is pleased to announce that the
Securities Commission (SC) via its letter dated November 13,
2002, approved the Proposed Modifications.
The above approval of the SC for the Proposed Modifications is
subject to the terms and conditions as set out in the SC's
approval letters dated August 30, 2000, November 6, 2000 and
January 31, 2002 as well as the following terms and conditions:
(i) The Proposed Acquisition of the Perdana Properties
Berhad (PPB) can only be implemented upon the
finalization and execution of the settlement agreement
with the Inland Revenue Board (IRB) in relation to the
outstanding tax liabilities owing to the IRB for the
1998-2000 assessment years by PPB;
(ii) Harn Len is required to disclose in the Information
Circular to the shareholders on the following
information:
(a) Direct/indirect interest of the substantial
shareholders/directors of Harn Len in Pelita
Pertama Sdn Bhd, Desamawar Runding Sdn Bhd and Suen
Tai (Sabah) Sdn Bhd; and
(b) Measures to address the conflict of interest by the
substantial shareholders/directors of Harn Len in
Pelita Pertama Sdn Bhd, Desamawar Runding Sdn Bhd
and Suen Tai (Sabah) Sdn Bhd.
(iii) The approval from the Kuala Lumpur Stock Exchange must
be obtained for the extension of time to meet the
public shareholding spread requirement;
(iv) Pursuant to the SC's approval on the Redeemable
Convertible Secured Loan Stock (RCSLS) by Harn Len:
(a) The SC's approval require for any amendments to the
terms and conditions of the RCSLS;
(b) A trust deed must be executed and disclosed to the
SC prior to the issuance of the RCSLS; and
(c) FMF/JPB Form (Facility Maintenance File) shall be
provided to the SC and Bank Negara Malaysia prior
to the issuance of the RCSLS by Harn Len.
COMPANY PROFILE
On September 9, 1999, Pengurusan Danaharta Nasional Bhd
appointed Special Administrators (SA) to manage the affairs of
the Company. Production activities were reduced to the minimum
during the Receiver & Manager's period and during the
appointment of the SA. Subsequently the Company ceased
operations following a Lease Agreement which was executed on
December 3, 1999 between the Company and Amalgamated Composite
Technologies Sdn Bhd (ACT) for the lease of fixed and hire
purchase assets of the Company and Silkprint Industries Sdn Bhd.
On March 15, 2000, the secured creditor of the Company approved
a scheme as proposed by the SA. The SA has prepared a revised
Proposed Corporate and Debt Restructuring Scheme (PRS) for the
Company and approval has been obtained from the SC on August 30,
2000 and November 6, 2000. The PRS was also approved by the FIC
on May 9, 2000 and the MITI on 13.7.2000.
The PRS involves cancellation of the entire share premium
reserves of Sportma, transfer of Sportma's listing status to
Harn Len Corporation Bhd by way of exchanging 10 existing
Sportma shares for one new share in Harn Len, rights issue,
injection of profit generating assets, disposal of non-
synergistic business and liquidation of existing non-viable and
defunct businesses.
As a result, shareholders of Sportma will become shareholders of
Harn Len and Sportma will become a wholly-owned subsidiary of
Harn Len. Harn Len will thus become the new ultimate holding
company of Sportma.
Sportma had commenced operations in 1990 producing tennis,
badminton, squash and racquetball racquets for leading brands
such as Wilson, Spalding, Rossignol, Kneissl and Adidas.
CONTACT INFORMATION: 12th Flr (Right Wing)
Menara Kemayan
160 Jln Ampang
50450 Kuala Lumpur
Tel: 03-2669660
Fax: 03-2669661
=====================
P H I L I P P I N E S
=====================
MANILA ELECTRIC: S&P Places 'BB' Rating on Credit Watch
-------------------------------------------------------
Standard & Poor's Ratings Services said Friday that it had
placed its 'BB' foreign currency corporate credit rating on
Philippine electricity distributor Manila Electric Co. (Meralco)
on Credit Watch with negative implications in advance of an
expected ruling by the Philippine Supreme Court that the Company
should refund customers for excess charges related to a 1998
regulatory decision.
Current estimates of the total amount to be refunded ranged from
11.3 billion pesos (US$ 211 million) to 28 billion pesos (US$
523 million).
The ruling is expected to put extreme pressure on Meralco. The
Company's financial performance is already weak and it is facing
liquidity pressures, which could negatively affect its ability
to repay debt amounting to PhP 5.0 billion (US$ $94 million, or
18 percent of its total debt) and maturing in 2003, PhP 7.2
billion (US$135 million, 26 percent) maturing in 2004, and PhP
6.4 billion (US$120 million, 23 percent) maturing in 2005.
The Company has not made any provision against the potential
liability, and its resources to reimburse customers and meet
other financial obligations are limited.
Meralco's net income totaled 1.5 billion pesos in fiscal 2001,
and its cash balances totaled 7.9 billion pesos as of September
30, 2002.
The placement of the rating on the Company on CreditWatch will
remain in effect pending the expected ruling.
MANILA ELECTRIC: State Control of Meralco Premature, Says Arroyo
----------------------------------------------------------------
Calls for the government to take over Manila Electric Co.
(Meralco) in the wake of a Supreme Court ruling that it refund
consumers for over billings between 1994 and 1998 are premature,
AFX Asia reports, citing President Gloria Arroyo's spokesman
Rigoberto Tiglao said.
The Philippine President will undertake all necessary measures
to ensure that the Supreme Court's decision is strictly
implemented.
The high court on Friday ruled that Meralco would have to refund
28.15 billion pesos to its consumers for several years of
overcharging.
The Company warned that the court decision could put it out of
business or severely impair earnings and its credit standing.
Arroyo hopes that the high court acts expeditiously if Meralco
attempts to appeal, Tiglao said, but stressed the executive
branch "cannot in any way influence the court to rush it into a
decision."
NATIONAL BANK: Aims to Convert PDIC Loan Into Equity
----------------------------------------------------
The Philippine National Bank (PNB) aims to convert 6.1 billion
pesos owed to the Philippine Deposit Insurance Corporation
(PDIC) into equity, the Philippine Daily Inquirer and AFX Asia
reported, citing PNB President Lorenzo Tan.
The report said the conversion of its debt to the state-run PDIC
would boost its capital funds by another 25 percent from the
end-September level of 24 billion pesos. It would also increase
the government's stake in the bank from the current 44.98
percent.
Tan said if the government does not agree, PNB plans to issue 5
billion pesos in long-term convertible bonds.
PHILIPPINE AIRLINES: Reduces Debt Load to US$1.8 Billion
--------------------------------------------------------
Philippine Airlines (PAL) reduced its debt load to US$1.8
billion from 2.4 billion in 1999, AFX Asia said on Saturday.
PAL majority owner Lucio Tan said he expects PAL to "be at the
forefront of this region's rally for rebound."
According to PAL's Chief financial officer Andrew Huang, the
airline will continue to exercise prudence to maintain yearly
debt payments of US$230 million, and PAL expects to repay its
debt on schedule according to its rehabilitation plan.
The Troubled Company Reporter-Asia Pacific reported in October
that trustee banks have refused to release 150 million pesos
worth of retirement benefits that retired pilots of Philippine
Airlines, Inc. (PAL) have asked to withdraw.
The banks will not release the money unless a new retirement
board for the fund is duly reconstituted and unless the new
board makes the request for release.
UNITRUST DEVELOPMENT: PBCom Not Renewing Bid Plans
--------------------------------------------------
Philippine Bank of Communications (PBCom) President Isidro
Alcantara Jr. told the Business World that PBCom is not renewing
its bid to rehabilitate Unitrust Development Bank under the
present terms and conditions, unless the bank is liquidated.
"When we looked at legal aspects before, it was too complicated
and we could not identify the real owners so we did not
participate in the second bid because there were the same
problems as in the first bid," Mr. Alcantara said.
"At this point, under the terms and conditions, no," he said
when asked if the bank will renew its bid.
Meanwhile, Citystate Savings Bank, another bank keen on reviving
Unitrust, failed to get the consent of the closed bank's
shareholders on its rehabilitation bid within the deadline set
by the Philippine Deposit Insurance Corp. (PDIC).
"The deadline lapsed. We were negotiating at that point. The
negotiations were not yet final at that time. It will be moot
and academic if we continue negotiating as the deadline has
lapsed," Citystate Saving's executive vice-President Rey D.
Delfin told the Business World.
The right to rehabilitate Unitrust was first given by PDIC to
PBCom but the latter backed out due to the unresolved ownership
issues in the closed bank. The deposit insurer later offered
Unitrust to other parties but only Citystate Savings came
forward.
Last month, the PDIC decided to give Citystate Savings until
October 15 as final deadline to submit duly authenticated
documents embodying the required consent of stockholders
representing at least 67 percent of the ownership of Unitrust.
Last November 5, the Makati Regional Trial Court (RTC) concluded
that Unitrust is better off being nursed back to health rather
than liquidated to pay the bank's lenders and depositors.
In a court order, Judge Rebecca Mariano said, "if Unitrust would
be given a chance to rehabilitate, there will be less damage and
prejudice to the bank, to its stockholders, creditors and
depositors, rather than to allow it to undergo liquidation."
Liquidation involves the distribution of a Company's assets
among its creditors and members prior to its dissolution,
effectively bringing the life of the Company to an end.
PBCom was earlier interested in renewing its bid to rehabilitate
Unitrust.
PBCom, however, questioned the decision of PDIC to reopen the
said bidding process to other proponents. (M&A REPORTER-ASIA
PACIFIC, Vol. No.1, Issue No. 228, November 18, 2002)
=================
S I N G A P O R E
=================
CHARTERED SEMICONDUCTOR: Posts Notice of Business Organization
--------------------------------------------------------------
Chartered Semiconductor Manufacturing Ltd. currently owns, or
has an interest in, six fabrication facilities, all of which are
located in Singapore. Fabs 1, 2 and 3 are wholly owned and
operated by the Company. The Company does not have a Fab 4.
Silicon Manufacturing Partners Pte operates fab 5. Ltd. SMP,
which is jointly owned with Agere Systems Singapore Pte. Ltd.
Agere. Chartered Silicon Partners Pte operates fab 6. Ltd. CSP,
a consolidated subsidiary, which is jointly owned with Agilent
Technologies Europe B.V. Agilent, Singapex Investments Pte. Ltd.
Singapex, a wholly owned subsidiary of Singapore Technologies
Pte. Ltd. ST and EDB Investments Pte. Ltd. EDBI. Our sixth fab,
Fab 7, is currently in the process of being developed as the
Company's first 300-mm facility. Fab 7 is wholly owned and will
be operated by the Company. Based on current assessment of the
market demand, initial production from Fab 7 is expected in late
third quarter of 2003.
The Company was incorporated in Singapore in 1987. As of
September 30, 2002, the Company was 60.5 percent owned by ST,
and its affiliates. ST is one of Singapore's largest industrial
conglomerates and is indirectly wholly owned by the Government
of Singapore.
Basis of Presentation
The interim condensed consolidated financial statements are
prepared in accordance with US GAAP and reflect interim
adjustments, all of which are of a normal recurring nature and
which, in the opinion of management, are necessary for a fair
presentation of the results for such interim periods. The
results reported in these un-audited condensed consolidated
financial statements should not be regarded as necessarily
indicative of results that may be expected for the entire year.
These financial statements should be read in conjunction with
the audited consolidated financial statements included in the
Company's Annual Report on Form 20-F for the year ended December
31, 2001.
Principles of Consolidation
The accompanying condensed quarterly financial statements
reflect the consolidated financial statements of Chartered
Semiconductor Manufacturing Ltd. and its majority owned and
controlled affiliates. All significant inter-Company balances
and transactions have been eliminated in consolidation.
Contingencies
As is typical in the semiconductor industry, the Company from
time to time receives communications from third parties
asserting patents that cover certain of its technologies and
alleging infringements of certain intellectual property rights
of others. The Company has acquired certain technology licenses
and may seek to obtain other licenses in the future. There can
be no assurance that the Company will be able to obtain such
future licenses on commercially reasonable terms, or at all.
DebtTraders reports that Chartered Semiconductor Mnfg's 2.500
percent convertible bond due in 2006 (CSM06SGN1) trades between
89 and 91. For real-time bond pricing, go to
http://www.debttraders.com/price.cfm?dt_sec_ticker=CSM06SGN1
CHARTERED SEMICONDUCTOR: Unveils Principal Sources of Liquidity
---------------------------------------------------------------
As of September 30, 2002, the principal sources of liquidity of
Chartered Semiconductor Manufacturing Limited included $735.6
million in cash and cash equivalents and $545.4 million of
unutilized banking and credit facilities consisting of short and
medium term advances and bank guarantees.
Net cash provided by operating activities totaled $132.7 million
for the nine months ending September 30, 2001. Net cash used in
operating activities totaled $23.3 million for the nine months
ended September 30, 2002.
The decrease was primarily due to the higher net loss incurred
for the nine months ended September 30, 2002, compared with the
corresponding period in 2001, after taking into account the
effect of non-cash adjustments and the unfavorable working
capital change.
CHEW EU: Restructuring Proposal to Settle Unit's Obligations
------------------------------------------------------------
The Directors of Chew Eu Hock Holdings Ltd (CEH) refer to the
previous announcement of the Company dated October 16, 2002 in
relation, inter alia, to the proposed scheme of arrangement
under section 210 of the Companies Act, Cap. 50 (the Scheme) to
be implemented by the Company and its principal subsidiary, Chew
Eu Hock Construction Co. Private Limited CEH Construction, and
the unsecured creditors of CEH Construction (the "Creditors and
would like to announce the principal terms of the Scheme and
details of the meeting of the Creditors.
The Scheme will provide for a debt-restructuring plan comprising
the following:
(i) The Company shall assume the total liabilities owing by
CEH Construction to the Creditors whose proofs of debt
and the extent or amount of which shall have been
admitted and acknowledged by the judicial manager of
CEH Construction (the "Judicial Manager or approved by
the High Court (the "Debts and as full and final
settlement of the Debts, the Company will allot and
issue up to 801,799,929 shares of S$0.005 shares each
in the capital of the Company (the "Creditor Shares,
based on the Debts provided for by the Judicial Manager
amounting to $56.1 million, at the conversion price of
S$0.07 for each Creditor Share according to the amount
of that part of the Debts attributed to each Creditor;
and
(ii) Chew Eu Hock, a majority shareholder of the Company,
shall convert his outstanding loan to the Company of
S$13,098,649 as at 30 October 2001 into 187,123,557 new
shares of S$0.005 each in the capital of the Company
(the "Converted MS Shares, and offer to transfer up to
48,652,125 of the Converted MS Shares, representing
approximately 26.0% of the Converted MS Shares, to the
shareholders of the Company (other than to himself, Mdm
Wong Swee Choo and their respective associates), on a
pro-rata basis, at nil consideration. Based on the
shareholding record of the Company as at 30 September
2002, the shareholders of the Company would receive
approximately 0.75 Converted MS Shares for every 1
share held by such shareholders, fractional
entitlements to be disregarded. The entitlement of the
shareholders to the Converted MS Shares shall be non-
renounceable and non-transferable.
The Converted MS Shares will be transferred or directly allotted
to shareholders of the Company pursuant to Chew Eu Hock's
direction to the Company on the basis of their shareholdings as
at a books closure date which will be determined and announced
by the Directors in due course.
A meeting of the Creditors (the "Creditors Meeting will be held
for the purpose of receiving, considering and if thought fit,
approving (with or without modifications) the following:
(a) The Scheme; and
(b) The statement of proposals dated 15 November 2002 pursuant
to sections 227M and 227N of the Companies Act, Chapter 50
(the "Statement of Proposals, and to consider any other
matters as appropriate.
The Creditors Meeting will be held at Fort Canning Lodge, 6 Fort
Canning Road, Singapore 179494 on the 29 November 2002 at 3.00
p.m.
All Creditors who have lodged their proofs of debt with the
Judicial Manager by 18 July 2002 and whose debts have been
acknowledged, admitted and/or provided for by the judicial
manager will be sent copies of the Scheme document, an
explanatory statement in relation to the Scheme and the
Statement of Proposals together with the requisite notices and
proxy forms.
All forms appointing proxies must be delivered to the Judicial
Manager c/o Chew Eu Hock Construction Co. Private Limited (Under
Judicial Management) at 58 Kallang Pudding C.E.H. Industrial
Building Singapore 349330 by no later than 3.00 p.m. on 27
November 2002.
Statement of Material Facts
In connection with the proposed issue of the Creditor Shares to
the Creditors pursuant to the Scheme, a statement of material
facts dated 15 November 2002 Statement of Material Facts has
been lodged with the Monetary Authority of Singapore and the
Singapore Exchange Securities Trading Limited. A copy of the
Statement of Material Facts is enclosed.
L&M GROUP: Court Grants Scheme of Arrangement
---------------------------------------------
L&M Group Investments Limited announced that the High Court of
Singapore has on October 30, 2002 granted its approval Order A
to the Scheme of Arrangement Scheme A proposed by L&M
Prestressing Pte Ltd Prestressing for its partially secured
creditors whose claims are guaranteed or payable by the Company
the Partially Secured Creditors. Order A was lodged with the
Registry of Companies and Businesses on 5 November 2002.
Under the terms of Scheme A, the Partially Secured Creditors of
Prestressing participating in Scheme A would be issued shares in
the Company in full and final settlement of all debts as at 20
September 2002 owed by Prestressing to them. Scheme A is still
subject to the approval of the shareholders of the Company.
(2) Unsecured Creditors
The Company wishes to announce that the High Court of Singapore
has on 1 November 2002 granted its approval Order B to the
Scheme of Arrangement Scheme B proposed by Prestressing for its
unsecured creditors the Unsecured Creditors. Order B was lodged
with the Registry of Companies and Businesses on 12 November
2002.
Under the terms of Scheme B, the Unsecured Creditors of
Prestressing participating in Scheme B would be issued shares in
the Company in full and final settlement of all debts as at 30
September 2002 owed by Prestressing to them. Scheme B is still
subject to the approval of the shareholders of the Company.
(B) APPROVAL IN-PRINCIPLE TO THE LISTING AND QUOTATION OF
1,094,386,339 NEW ORDINARY SHARES OF S$0.01 EACH IN THE CAPITAL
OF THE COMPANY PURSUANT TO THE SCHEMES OF ARRANGEMENT PROPOSED
BY L&M PRESTRESSING PTE LTD
The Company wishes to announce that the SGX-ST has on 14
November 2002 given its approval in-principle to the listing and
quotation of 1,094,386,339 new ordinary shares of S$0.01 each in
the capital of the Company at S$0.025 each subject to the
following conditions:
(a) The Company's shareholders duly approving the issuance of
the 1,094,386,339 new ordinary shares of S$0.01 each at
S$0.025 each and the proposed capital reduction as announced
on 30 August 2002; and
(b) The Company's compliance with the requirements in the SGX-
ST's Listing Manual and guidelines.
The SGX-ST's approval in-principle herein is not an indication
of the merits of the issue.
NATSTEEL LIMITED: Posts Update on Shareholder's Interest
--------------------------------------------------------
Natsteel Limited posted a notice of cessation of substantial
shareholder DBS Group Holdings Ltd's interest:
Date of notice to Company: 15 Nov 2002
Date of change of deemed interest: 15 Nov 2002
Name of registered holder: DBS Nominees (Private) Limited
Circumstance(s) giving rise to the interest: Others
Please specify details: Please see Appendix
Shares held in the name of registered holder
No. of shares of the change: 53,905,915
% of issued share capital: 14.67
Amount of consideration per share excluding brokerage,GST,stamp
duties,clearing fee: $2.03
No. of shares held before change: 53,905,915
% of issued share capital: 14.67
No. of shares held after change: 0
% of issued share capital: 0
Holdings of Substantial Shareholder including direct and deemed
interest
Deemed Direct
No. of shares held before change: 53,905,915
% of issued share capital: 14.67
No. of shares held after change: 0
% of issued share capital: 0
Total shares: 0
Based on 367,568,237 shares issued as at 31 October 2002.
NATSTEEL LTD: Oie Hong Mulls Financing for DBS' Offer
------------------------------------------------------
Goh Kian Hwee, lawyer of Oei Hong Leong who controls Sanion
Enterprises, told the Channel News Asia that Oei Hong is in
discussions with DBS Bank about financing a possible general
offer for NatSteel Ltd. But Goh added that Oei has not yet
decided on an offer and is still reviewing his position.
"Discussions with DBS Bank are still on-going. DBS Bank had
kindly given to Sanion a discussion term sheet for financing,
with the terms revised twice since November 11," Goh Kian said.
Oei's Sanion Enterprises raised its stake in Natsteel to 17.81
percent from 14.70 percent previously, when it purchased 11.492
million Natsteel shares at SGD2.04 per share Wednesday. (M&A
REPORTER-ASIA PACIFIC, Vol. No.1, Issue No. 228, November 18,
2002)
NATSTEEL LTD: Sanion Increases Shareholding to 17.81%
-----------------------------------------------------
Sanion Enterprises, controlled by Indonesian businessman Oei
Hong Leong, has raised its stake in Natsteel Ltd to 17.81
percent from 14.7 percent previously, reiterating that it will
continue to review its options on Natsteel.
Sanion said it purchased a total of 11.492 million Natsteel
shares at SGD2.04 per share Wednesday.
The M&A Reporter Asia Pacific reported Friday that the DBS Group
sold its 14.67 percent stake in Natsteel to 98 Holdings at
SGD2.03 per share, after declining Sanion's offer for its stake
at a higher price of SGD2.05.
98 Holdings had then raised its offer price to all Natsteel
shareholders to SGD2.03 from SGD2.0 previously.
Sanion also said that it has appointed GK Goh Stockbrokers Pte
Ltd as its financial adviser.
It added that it has had exploratory discussions with DBS Bank,
one of the three financial institutions it said it has had
discussions with previously, concerning financing of a possible
offer for Natsteel. (M&A REPORTER-ASIA PACIFIC, Vol. No.1, Issue
No. 228, November 18, 2002)
PARKWAY HOLDINGS: Posts Notice of Internal Restructuring
--------------------------------------------------------
The Directors of Parkway Holdings Limited (Parkway) has
undertaken an internal restructuring exercise whereby its
wholly-owned subsidiary, Gleneagles International Pte Ltd, has
transferred its entire equity interest in one of it's wholly-
owned subsidiary, Parkway Shenton Pte Ltd comprising 2 ordinary
shares of $1.00 each to its immediate holding company, Parkway
Group Healthcare Pte Ltd, which is in turn a wholly-owned
subsidiary of Parkway, at its book value of $2.00 (the
Restructuring).
The Restructuring is part of an on-going review of the Group's
corporate structure and streamlining of its healthcare
businesses in order to maximise operational efficiency and
achieve a leaner and slimmer organizational structure to take
advantage of available business opportunities and respond to
market changes. The Parkway Shenton Pte Ltd group's main
activities are in primary healthcare, which is identified as one
of Parkway's strategic core competencies for expansion and
revenue growth. The Restructuring will position the Parkway
Shenton Pte Ltd group as a strategic business unit to achieve a
seamlessly integrated total healthcare service.
The Restructuring will not have any material effect on the
earnings per share or the consolidated net tangible assets per
share of Parkway for the financial year ending 31 December 2002.
None of the Directors or controlling shareholder of Parkway
represented on the Board of Parkway has any interest, direct or
indirect, in the Restructuring, except as shareholders of
Parkway.
According to Wright Investor's Service, at the end of 2001,
Parkway Holdings Limited had negative working capital, as
current liabilities were 278.68 million Singapore Dollars while
total current assets were only 134.72 million Singapore Dollars.
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,
Larri-Nil Veloso, Maria Cristina Pernites-Lao, Editors.
Copyright 2002. All rights reserved. ISSN: 1520-9482.
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