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T R O U B L E D C O M P A N Y R E P O R T E R
A S I A P A C I F I C
Friday, March 6, 1998, Vol. 1, No. 13
Headlines
C H I N A
H O N G K O N G
I N D O N E S I A
BOURAQ AIRLINES: Faces Bankruptcy
DERAYA AIRLINES: Faces Bankruptcy
NAMDALA AIRLINES: Faces Bankruptcy
PT ASTRA SEDAYA: Bankers Try to Put Squeeze on Loans
SEMPATI AIRLINES: Faces Bankruptcy
J A P A N
FUJI BANK: Plans to Trim 850 Jobs
INDUSTRIAL BANK OF JAPAN LTD.: Applies for Rescue Funding
KOMATSU LTD.: Electronics Division Downturn
LONG-TERM CREDIT BANK: Applies for Rescue Funding
NIPPON CREDIT BANK: Applies for Rescue Funding
TAKEFUJI CORP.: Shares Fall on Stockholder Movement
TOKYO-MITSUBISHI LTD.: Applies for Rescue Funding
TOSHOKU CORP.: Shares Fall
YASUDA TRUST: S&P Affirms Yasuda Trust--Outlook Negative
K O R E A
HAITAI GROUP: Receives Reprieve from Merchant Banks
KIA MOTORS: Chairman's Departure Leaves Fate Unclear
RAS LAFAN: Remains on S&P CreditWatch
M A L A Y S I A
ARAB-MALAYSIAN FINANCE: Still Waiting for A Merger Suitor
BANK BUMIPUTRA: Government Ready to Inject Capital
SIME BANK BHD: Bank Negara Asserts Need for Funds
U-WOOD HOLDINGS BHD: Announces Losses
P H I L I P P I N E S
S I N G A P O R E
DEVELOPMENT BANK: Reports Huge Profit Losses
PT ASTRA SEDAYA: Bankers Try to Put Squeeze on Loans
TAT LEE: Reports Profit Losses
T H A I L A N D
CENTRAL BANK OF THAILAND: Reveals Real Extent of Damage
NAKORNTHAI STRIP MILL: Foreign Investor Funds Interested
=========
C H I N A
=========
=================
H O N G K O N G
=================
=================
I N D O N E S I A
=================
BOURAQ AIRLINES: Faces Bankruptcy
---------------------------------
Four national airlines in Indonesia faced bankruptcy as a
result of the depreciation of the rupiah against the US
dollar, Secretary General of the Indonesian Air Carriers
Association (INACA) Benny Rungkat said.
The airlines Bouraq, Sempati, Mandala and Deraya were
likely to announce their bankruptcy between April and June
this year, he said. This was owing to big losses they were
sustaining due to the protracted monetary crisis.
About 11,000 skilled staff, including pilots, accounting
and engineering personnel, would lose their jobs if those
companies decided to stop operating, he said.
INACA was to ask the government to provide a facility (a
guarantee fund of about $US250 million) for debt
settlement, he said. INACA had also asked the government to
become the mediator of meetings among national operators
and creditors (insurance companies, lessors and spare parts
vendors). Investors were also to be invited to change the
companies to become foreign-owned.
(Asia Pulse 5-Mar-1998)
DERAYA AIRLINES: Faces Bankruptcy
---------------------------------
Four national airlines in Indonesia faced bankruptcy as a
result of the depreciation of the rupiah against the US
dollar, Secretary General of the Indonesian Air Carriers
Association (INACA) Benny Rungkat said.
The airlines Bouraq, Sempati, Mandala and Deraya were
likely to announce their bankruptcy between April and June
this year, he said. This was owing to big losses they were
sustaining due to the protracted monetary crisis.
About 11,000 skilled staff, including pilots, accounting
and engineering personnel, would lose their jobs if those
companies decided to stop operating, he said.
INACA was to ask the government to provide a facility (a
guarantee fund of about $US250 million) for debt
settlement, he said. INACA had also asked the government to
become the mediator of meetings among national operators
and creditors (insurance companies, lessors and spare parts
vendors). Investors were also to be invited to change the
companies to become foreign-owned. (Asia Pulse 5-Mar-1998)
NAMDALA AIRLINES: Faces Bankruptcy
----------------------------------
Four national airlines in Indonesia faced bankruptcy as a
result of the depreciation of the rupiah against the US
dollar, Secretary General of the Indonesian Air Carriers
Association (INACA) Benny Rungkat said.
The airlines Bouraq, Sempati, Mandala and Deraya were
likely to announce their bankruptcy between April and June
this year, he said. This was owing to big losses they were
sustaining due to the protracted monetary crisis.
About 11,000 skilled staff, including pilots, accounting
and engineering personnel, would lose their jobs if those
companies decided to stop operating, he said.
INACA was to ask the government to provide a facility (a
guarantee fund of about $US250 million) for debt
settlement, he said. INACA had also asked the government to
become the mediator of meetings among national operators
and creditors (insurance companies, lessors and spare parts
vendors). Investors were also to be invited to change the
companies to become foreign-owned. (Asia Pulse 5-Mar-1998)
PT ASTRA SEDAYA: Bankers Try to Put Squeeze on Loans
----------------------------------------------------
PT Astra Sedaya Finance, an Indonesian joint venture auto-
finance company of GE Capital Services, has battled with
its bankers, some of whom are trying to force it into
default--even though it is profitable and up to date on
loan payments. The dispute centers on a technicality that
GE Capital says is easily resolved. This is a bad time to
be in the car-loan business in Indonesia in the view of
many bankers, and a bad time to be lending to a lender in
Indonesia. So when Astra Sedaya ran afoul of a covenant
governing its loans late last year, some of its bankers
seized on the opportunity as a way of getting out of the
loans, or at least of getting themselves some better
protection. (Wall Street Journal 5-Mar-1998)
SEMPATI AIRLINES: Faces Bankruptcy
----------------------------------
Four national airlines in Indonesia faced bankruptcy as a
result of the depreciation of the rupiah against the US
dollar, Secretary General of the Indonesian Air Carriers
Association (INACA) Benny Rungkat said.
The airlines Bouraq, Sempati, Mandala and Deraya were
likely to announce their bankruptcy between April and June
this year, he said. This was owing to big losses they were
sustaining due to the protracted monetary crisis.
About 11,000 skilled staff, including pilots, accounting
and engineering personnel, would lose their jobs if those
companies decided to stop operating, he said.
INACA was to ask the government to provide a facility (a
guarantee fund of about $US250 million) for debt
settlement, he said. INACA had also asked the government to
become the mediator of meetings among national operators
and creditors (insurance companies, lessors and spare parts
vendors). Investors were also to be invited to change the
companies to become foreign-owned. (Asia Pulse 5-Mar-1998)
=========
J A P A N
=========
FUJI BANK: Plans to Trim 850 Jobs
---------------------------------
Japan's Fuji Bank plans to close 38 branches and lay off
850 people over the next three years to cut costs. The
announcement came soon after Standard & Poor's Ratings
Group cut its ratings on the bank's long-term senior debt
to triple-B-plus from single-A-minus. The unit of S&P cited
the depressed Japanese economy and Asia's problems.
(Wall Street Journal 5-Mar-1998)
Moody's Investor's Service assessed the relative exposure
of 12 mojor banking systems to the Asian financial crisis
and found that large Japanese banks have by far the
greatest exposure to potential losses, with $182 billion of
claims against regional borrowers. That is more than 13
times as much as the total annual profits of the top 10
Japanese banks before provisions for loan losses.
(Wall Street Journal 5-Mar-1998)
INDUSTRIAL BANK OF JAPAN LTD.: Applies for Rescue Funding
---------------------------------------------------------
A string of Japanese banks Thursday applied for more
than two trillion yen (16 billion dollars) in rescue
funding under a government scheme to prop up their weak
capital, officials said. But their demands fell far short
of the total 13 trillion yen on offer, disappointing the
stock market and analysts. Industrial Bank of Japan Ltd.,
the country's largest long term credit bank, asked for 100
billion yen. (Agence France-Presse 5-Mar-1998)
KOMATSU LTD.: Electronics Division Downturn
-------------------------------------------
The lacklustre performance of its group electronics
division is likely to take the wind out of Komatsu Ltd.'s
consolidated earnings.
Behind all the doom and gloom is Komatsu Electronic Metals
Co., its silicon-wafer subsidiary. Anticipating continued
expansion in the market for semiconductor silicon wafers,
the Komatsu group shelled out 81.6 billion yen in capital
investment this fiscal year for new silicon-wafer plants -
nearly triple last year's level - to beef up its global
market share. But the worldwide glut in the semiconductor
market is now haunting Komatsu's management.
The Komatsu group had already projected a 50% drop in its
electronics division's operating profit for the current
fiscal period, to 6 billion yen, due to higher
depreciation. Now, however, a 10% decline in silicon-wafer
prices is likely to force the group to revise its estimates
even further downward. (Asia Pulse 5-Mar-1998)
LONG-TERM CREDIT BANK: Applies for Rescue Funding
-------------------------------------------------
A string of Japanese banks Thursday applied for more
than two trillion yen (16 billion dollars) in rescue
funding under a government scheme to prop up their weak
capital, officials said. But their demands fell far short
of the total 13 trillion yen on offer, disappointing the
stock market and analysts. Long-Term Credit Bank of Japan
applied for 200 billion yen, sources said. (Agence France-
Presse 5-Mar-1998)
NIPPON CREDIT BANK: Applies for Rescue Funding
----------------------------------------------
A string of Japanese banks Thursday applied for more
than two trillion yen (16 billion dollars) in rescue
funding under a government scheme to prop up their weak
capital, officials said. But their demands fell far short
of the total 13 trillion yen on offer, disappointing the
stock market and analysts.
Nippon Credit Bank Ltd. said Thursday it would raise 60
billion yen via a preference share issue and would also
raise more funds through subordinate loans, without
specifying the amount. Nippon Credit is seeking to raise a
combined 300 billion yen, the largest of the applications,
an industry source said. (Agence France-Presse 5-Mar-1998)
TAKEFUJI CORP.: Shares Fall on Stockholder Movement
---------------------------------------------------
Takefuji Corp. (8564 JP ) fell 470 yen to 6,150. Four of
Takefuji Corp.'s stockholders -- 3 unlisted companies and
an individual -- will sell a total of 13 million shares
overseas, the company said. The existing shares will be
sold abroad through an underwriting syndicate led by Swiss
Bank Corp. (Bloomberg Japan Equity Movers 5-Mar-1998)
TOKYO-MITSUBISHI LTD.: Applies for Rescue Funding
-------------------------------------------------
A string of Japanese banks Thursday applied for more
than two trillion yen (16 billion dollars) in rescue
funding under a government scheme to prop up their weak
capital, officials said. But their demands fell far short
of the total 13 trillion yen on offer, disappointing the
stock market and analysts.
The nation's nine commercial city banks, led by the world's
largest Bank of Tokyo-Mitsubishi Ltd., applied for 100
billion yen each, to be raised via preference share issues,
subordinate bonds or loans. Six of Japan's seven trust
banks, the three long-term credit banks and three regional
banks also applied for money. Banks were at first reluctant
to ask for the funds until Tokyo-Mitsubishi's president,
Satoru Kishi, encouraged them to think again.
Japanese banks are typically heavily staffed and boast
large assets but bring lower profits than their Western
competitors. Tokyo-Mitsubishi alone has more than 18,000
employees. (Agence France-Presse 5-Mar-1998)
Bank of Tokyo-Mitsubishi Ltd. (8315 JP ) fell 20 yen to
1,740. (Bloomberg Japan Equity Movers 5-Mar-1998)
TOSHOKU CORP.: Shares Fall
--------------------------
Toshoku Corp. (8034 JP ) fell 1 yen to 2. The firm's shares
have been among trading volume leaders on the Tokyo Stock
Exchange since the food trading company declared bankruptcy
in late December. Trading volume in the company's shares
has averaged 9.1 million shares over the past month.
(Bloomberg Japan Equity Movers 5-Mar-1998)
YASUDA TRUST: S&P Affirms Yasuda Trust--Outlook Negative
--------------------------------------------------------
Standard & Poor's CreditWire 3/5/98-- Standard & Poor's
today affirmed its double-'B'-plus long-term and single-'B'
short-term ratings on Yasuda Trust & Banking Co. Ltd. and
related entities (see list of related entities below). The
outlook on the long-term ratings remains negative.
On Feb. 6, 1998, Yasuda Trust unveiled a revised
restructuring plan that included the allocation of new
common shares worth %100 billion to five other companies in
the Fuyo group, including Fuji Bank Ltd. The capital
injection should help speed up Yasuda Trust's efforts to
restore its seriously impaired asset quality. In addition,
such tangible support extended by the Fuyo group is an
indication of Yasuda Trust's importance to other group
members.
In Standard & Poor's view, however, the new share issue
does not materially alter Yasuda Trust's overall
creditworthiness. The bank must still cope with the
possible emergence of additional credit costs stemming from
a recessionary economy in Japan and financial turmoil
elsewhere in Asia; the heightened market risk of the bank's
stock portfolio; and intensifying competition.
The strengthened alliance between Yasuda Trust and Fuji
Bank that will result from the increased support by the
latter will be relatively well positioned to offer a broad
range of banking services. Nevertheless, both institutions
continue to be challenged by a worsening operating
environment. (BusinessWire 5-Mar-1998)
=========
K O R E A
=========
HAITAI GROUP: Receives Reprieve from Merchant Banks
---------------------------------------------------
South Korea's merchant banks have agreed to swap
some 150 billion won (95 million dollars) of loans they
extended to the troubled Haitai Group for convertible
bonds, Haitai officials said Thursday. "We agreed in
principle to convert some 150 billion won of loans into
convertible bonds," a Haitai official told AFP, adding that
the agreement was reached between Haitai Electronics Co.
and 17 merchant banks.
The 17 merchant banks also agreed to give Haitai a 12-month
grace period for interest payment of their loans and to
lower interest rates from between 15 percent and 17 percent
to the prime rate of 12.5 percent. Another 150 billion won
owed by Haitai to other merchant banks that have been
closed for insolvency have yet to be settled, the official
said.
Haitai, the 24th-largest South Korean conglomerate, has
sought court protection for rescheduling of its debts. Of
Haitai's debts of 3.4 trillion won (2.2 billion dollars),
two trillion won is owed to merchant banking and other non-
banking companies. With total assets of 3.8 billion dollars
and 15 subsidiaries, Haitai's businesses range from soft
drinks, dairy products and confectionary to construction,
electronics, trading and telecommunications.
The group was gripped by the financial turmoil caused by a
spate of insolvencies which have engulfed large
conglomerates including steel giants Hanbo and Sammi,
brewery Jinro, distributor Dainong and automotive
manufacturer Kia. (Agence France-Presse 5-Mar-1998)
KIA MOTORS: Chairman's Departure Leaves Fate Unclear
----------------------------------------------------
The fate of the financially troubled Kia Motors Corp.
became clouded when its court-appointed chairman, Jin Nyum,
joined Korea's new administration as top budget planner on
Wednesday.
Jin's departure from the nation's third-largest carmaker
came only four months after he was named the custodian of
Kia's assets. Since then he has been the centerpiece of the
drive to normalise the operations of the troubled motor
company. With Jin's departure, Kia is now rudderless, and
the uncertainty is expected to last indefinitely.
Business watchers agree that a third party takeover
will become a likely alternative; the state-run Korea
Development Bank would convert its loans to Kia into a
stake, about 30 percent, and then, in due course, sell its
stake to another corporation.
What becomes intriguing under this scenario will be the
move Samsung Motors Inc., long mentioned as likely
candidate of a third-party takeover, will make to acquire
Kia, possibly by teaming up with Ford Motor Co.
(Asia Pulse 5-Mar-1998)
RAS LAFAN: Remains on S&P CreditWatch
-------------------------------------
Standard & Poor's triple-'B'-plus ratings on Ras Laffan
Liquefied Natural Gas Co. Ltd.'s bonds and triple-'B'-plus
issuer credit rating remain on CreditWatch with negative
implications.
The ratings were originally placed on CreditWatch Dec. 12,
1997. This CreditWatch update follows Standard & Poor's
Feb. 18, 1998 revision of its foreign currency rating on
the Republic of Korea to double-'B'-plus/Stable/single-'B'
from single-'B'-plus/CreditWatch, Developing/'C'. Standard
& Poor's also raised its local currency rating to triple-
'B'-plus/Stable/'A-2' from triple-'B'-minus/CreditWatch,
Developing/'A-3'.
While the credit risk profiles for Korea and related
entities have improved since the Ras Laffan ratings have
been on CreditWatch with negative implications, Standard &
Poor's remains concerned that the economic situation
in Korea has potentially impaired Korea Gas' (Kogas)
ability to honor the terms of the liquefied natural gas
(LNG) sale and purchase agreement with the project. Kogas,
which is Ras Laffan's sole contracted LNG offtaker, is
50.1% owned by the Republic of Korea and 34.5% owned by
Korea Electric Power Corp. (Kepco; single-'B'-
plus/CreditWatch, Positive/'C'). Given that these Korea
sourced LNG revenues will account for about 75% of the
project's revenue base, project cash flows post-
construction are more at risk than when Standard & Poor's
originally assigned its triple-'B'-plus/Stable ratings to
the bonds.
(BusinessWire 4-Mar-1998)
===============
M A L A Y S I A
===============
ARAB-MALAYSIAN FINANCE: Still Waiting for A Merger Suitor
---------------------------------------------------------
Arab-Malaysian Finance Bhd (AMFB), which has been
identified by Bank Negara as one of the five anchor
companies to which smaller firms could attach themselves,
said it had not been approached by any finance company
regarding a possible merger. AMFB managing director Mohamed
Azmi Mahmood said yesterday that the company had indicated
to other finance firms that it was "single and available."
The pressure to merge was not on the anchor companies but
on the non-anchor companies, Azmi told a press conference
yesterday after the signing of an agreement between AMFB
and Global Imp-Act Sdn Bhd. The 39 finance companies in the
country have been given up to March 31 to identify
potential merger partners and begin preliminary
discussions.
Azmi said it was unfair to say the company was in trouble.
"If we are in trouble, Bank Negara would not have picked us
as one of the five anchor companies. The central bank's
endorsement speaks for itself as to where we stand in terms
of financial position and strength," he said.
(The Star Online 4-Mar-1998)
BANK BUMIPUTRA: Government Ready to Inject Capital
--------------------------------------------------
The state-owned ailing Bank Bumiputra Malaysia Bhd would
receive an injection of fresh capital from the government
if needed, Prime Minister Dr Mahathir Mohamad said.
The government majority-owned Bank Bumiputra needs a
capital injection of RM750 million ($US197 million) to stay
on course. But Dr Mahathir said "whatever the government
does to help help Bank Bumiputra, it would be accused of
trying rescue or a bailout.
"This is not a bailout. This is a usual support that
government has to give to institutions which has the trust
of the public," he told a press conference.
(Asia Pulse 5-Mar-1998)
PLUTONIC RESOURCES LTD.: Posts Net Loss
---------------------------------------
Plutonic Resources Ltd, whose major shareholder is Malaysia
Mining Corp, has posted a A$62.29mil net loss. It came at a
time many said would be the company's last year as a
publicly listed company because of a A$986mil scrip offer
by California's Homestake Mining Company.
The company loss for calendar 1997 included A$84.3mil of
abnormal losses during the first half when it decided to
write down the carrying value of most of its project to
reflect lower gold prices. The company reported a A$40.7mil
net profit in the previous year.
Plutonic does not have to worry about the drying up of
exploration funding as the Homestake merger is likely to be
finalised as it had been accepted by the boards of both
companies as well as accepted by institutional
shareholders.
The offer of 34 Homestake shares for every 100 Plutonic
shares has continued to maintain Plutonic share at above
the A$2 trading price.
(The Star Online 5-Mar-1998)
SIME BANK BHD: Bank Negara Asserts Need for Funds
-------------------------------------------------
BANK Negara said Sime Bank Bhd, having incurred a pre-tax
loss of RM1.57 billion for the six months ended December 31
1997, will need a capital injection of RM1.2 billion. The
additional funds are necessary to meet the minimum Risk
Weighted Capital Adequacy Ratio (RWCR) requirement of 8 per
cent, Bank Negara Governor Tan Sri Ahmad Don told a press
conference in Kuala Lumpur yesterday.
He stressed that Sime Bank is not insolvent. "It only needs
to be recapitalised."
"Since the existing shareholders will be maintaining their
current interests in Sime Bank and in view of the current
policy of encouraging mergers of banking institutions, Bank
Negara will facilitate negotiations with institutions with
the necessary financial capacity.
"In the interim, the existing board of directors and
management of Sime Bank will continue to be responsible for
its operations," he added.
Asked if Sime Bank's existing shareholders will inject the
capital required, Ahmad said the question should be asked
of Sime Darby Bhd, which owns 60.35 per cent of the bank.
KUB Malaysia Bhd holds another 30.01 per cent in the bank.
Sime Darby is scheduled to announce its results on
Saturday.
Ahmad Don said Sime Bank has a positive net worth of RM368
million or net tangible assets of RM0.74 per share. This
does not take into account the potential gain from the
disposal of investments in subsidiaries.
(BusinessTimes 4-Mar-1998)
U-WOOD HOLDINGS BHD: Announces Losses
-------------------------------------
U-Wood Holdings Bhd. has posted a group pre-tax operating
loss of RM5.743mil for the half-year ended Nov 31, 1997,
compared with RM5.217mil previously. Announcing its
unaudited results, it said group turnover stood at
RM8.333mil against RM2.992mil in the corresponding period
in 1996.
(The Star Online 4-Mar-1998)
=====================
P H I L I P P I N E S
=====================
=================
S I N G A P O R E
=================
DEVELOPMENT BANK: Reports Huge Profit Losses
--------------------------------------------
Asia's economic crisis has begun to take its toll on
Singapore banks, with the announcement yesterday of a 35
percent fall in 1997 group net profits by Development Bank
(DBS), the city state's largest bank. The results--the
first to be announced in the current reporting season--were
struck after a sharp increase in provisions at the bank to
cover possible losses on regional lending. DBS said its net
profit of S$436m (US$267m) followed a near-sixfold increase
in provisions to S$496m.
Bank shares were further unsettled yesterday as news
filtered out of a proposal by DBS for a one-for-five rights
issue that will raise about S$1bn to fund acquisitions and
future expansion.
(Financial Times 5-Mar-1998)
Moody's Investors Service on Thursday lowered the ratings
outlook of six Singapore banks to negative from stable,
"reflecting the possibility of further deterioration in
regional conditions," a statement said. The credit assessor
said the ratings outlook "was not in response" to the
release by DBS, Keppel and Tat Lee on Wednesday of their
profits for 1997, which factored in exceptional provisions
for loans to the region and mirrored the impact of the
Asian financial crisis. Moody's was pessimistic about the
six banks' earnings outlook for 1998 and 1999.
(Agence France-Presse 5-Mar-1998)
TAT LEE: Reports Profit Losses
------------------------------
Asia's economic crisis has begun to take its toll on
Singapore banks, with the announcement yesterday of a net
loss at Tat Lee, a small bank which is being merged with
Keppel. The results--the first to be announced in the
current reporting season--were struck after a sharp
increase in provisions at the bank to cover possible losses
on regional lending. Analysts said Tat Lee's net loss of
S$39m after a profit of S$68m in 1996 came as a jolt, as
this is the first time in living memory that a Singapore
bank has announced an annual loss.
The announcement prompted a separate statement from the
Monetary Authority (MAS), Singapore's central bank, which
said Tat Lee was financially sound and stressed its risk-
weighted capital ratio of 19 percent--well in excess of the
locally prescribed norm. MAS said it was confident the
merger with Keppel Bank, which yesterday announced a 21
percent fall in group net profits to S$73m, would create a
more resilient bank.
(Financial Times 5-Mar-1998)
Moody's Investors Service on Thursday lowered the ratings
outlook of six Singapore banks to negative from stable,
"reflecting the possibility of further deterioration in
regional conditions," a statement said. The credit assessor
said the ratings outlook "was not in response" to the
release by DBS, Keppel and Tat Lee on Wednesday of their
profits for 1997, which factored in exceptional provisions
for loans to the region and mirrored the impact of the
Asian financial crisis.
Moody's was pessimistic about the six banks' earnings
outlook for 1998 and 1999. Moody's said the merger of
Keppel Bank and Tat Lee in January was positive" for both
banks and that Keppel's strong capital base would absorb
the problems of Tat Lee's "higher than average exposure to
Indonesia."
(Agence France-Presse 5-Mar-1998)
===============
T H A I L A N D
===============
CENTRAL BANK OF THAILAND: Reveals Real Extent of Damage
-------------------------------------------------------
The central Bank of Thailand (BoT) has revealed the full
extent of its liabilities following its doomed lending
spree to salvage debt-wracked finance firms, reports said
Wednesday. After an unprecedented six-hour grilling by
furious cabinet ministers Tuesday, officials said the BoT
had total assets and contingent liabilities of 1.1 trillion
baht (25.6 billion dollars) as of the middle of last month.
The figure included 716 billion baht in outstanding loans
made to the country's financial sector over the past two
years as the BoT tried in vain to stave off the collapse of
the economy. About half of the loans will never be
recovered following the closure of 56 failed finance firms
in December, the Bangkok Post reported. Previous estimates
of the outstanding finance-sector loans amounted to 800
billion baht.
(Agence France-Presse 4-Mar-1998)
NAKORNTHAI STRIP MILL: Foreign Investor Funds Interested
--------------------------------------------------------
Reports have surfaced that a group of prominent foreign
investors were considering buying a stake in Nakornthai
Strip Mill PCL, a listed company that is a unit of NTS
Steel Group PCL. One of those investors is McDonald & Co.
Investments, Cleveland. David Stickler, managing director
of the securities company, said his firm is part of a
consortium of investors negotiating to buy about 25% of
Nakornthai Strip Mill.
"Nothing has closed yet," Mr. Stickler said. "However, the
transaction involves approximately $650 million in total
financing" to help the company expand its operations. Of
that amount $50 million will be an equity stake in the
company, he said. Many stock analysts said that despite the
interest McDonald & Co. and other foreign investors, it is
a risky bet in an industry where steel companies have been
sustaining big losses.
(Wall Street Journal 4-Mar-1998)
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