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

      Thursday, March 26, 1998, Vol. 1, No. 27

                    Headlines


C H I N A   &   H O N G   K O N G  

PEREGRINE INVESTMENTS: Reveals $2.5 Billion of Assets


I N D O N E S I A



J A P A N  

HOKKAIDO TAKUSHOKU BANK: Possible Takeover by Chuo Trust
JOSHIN DENKI: Shares Fall on Losses
YAMAICHI SECURITIES: Officials Indicted
YASUDA TRUST & BANKING: Details on Moody's Downgrade


K O R E A

HANBO STEEL: Proposal Greeted Positively
KIA MOTORS: Assails Hyundai's Takeover Move
KIA MOTORS: Discussions with Ford Continue
KIA MOTORS: Hyundai Forms Task Force on Takeover


M A L A Y S I A



P H I L I P P I N E S

EVER GOTESCO: Creditor Banks Reach Agreement


S I N G A P O R E



T H A I L A N D

BANGKOK BANK OF COMMERCE: Central Bank to Cede Control
ROBINSON: Debt-Ridden Store Reveals New Management




C H I N A   &   H O N G   K O N G

PEREGRINE INVESTMENTS: Reveals $2.5 Billion of Assets
-----------------------------------------------------
Price Waterhouse has defended itself against growing
criticism of its liquidation of Peregrine Investments
Holdings, revealing it has recovered about $2.5 billion of
the collapsed group's assets. The multinational accountant
also said it had a "different perception" of a number of
scathing remarks made in court by Mr Justice Anthony Rogers
that it had failed to act in the best interests of
creditors (TCRAP 09-Mar-1998).

The Price Waterhouse partner in charge of the liquidation,
David Hague, said: "Total realisations so far are
approximately $2.5 billion, primarily out of the fixed-
income side."

He said he hoped to recover sizeable amounts from
Peregrine's direct investment portfolio, overseas brokerage
operations in Thailand, the Philippines and Indonesia as
well as its bond and equity portfolios. Mr Hague warned it
could take up to five years to handle the claims of every
Peregrine creditor, but emphasised initial payments to
former employees were pending.
(South China Morning Post 25-Mar-1998)


I N D O N E S I A




J A P A N  

HOKKAIDO TAKUSHOKU BANK: Possible Takeover by Chuo Trust
--------------------------------------------------------
Shozo Endo, president of Chuo Trust & Banking Co., recently
told The Nihon Keizai Shimbun that the bank plans to ask
for public funds of about 140 billion yen to cover the cost
of taking over the failed Hokkaido Takushoku Bank's
(Takugin) Honshu operations. Apart from this, the bank is
scheduled to receive 60 billion yen in public funds to
improve its capital ratio by the end of the current fiscal
year.
(Asia Pulse 25-Mar-1998)


JOSHIN DENKI: Shares Fall on Losses
-----------------------------------
Joshin Denki Co. (8173 JP ) fell 8 yen to 382. The
electronic appliance retailer yesterday reversed its
previous forecast to a pretax loss of 2.9 billion yen for
the year ending March 31. That's 480 percent less than the
most recent forecast by Toyo Keizai. The company also
reversed its group forecast to a pretax loss of 3.6 billion
yen for the same period. That's 620 percent less than the
most recent forecast by Toyo Keizai.
(Bloomberg Japan Equity Movers 25-Mar-1998)


YAMAICHI SECURITIES: Officials Indicted
---------------------------------------
A former chairman and a former president of Yamaichi
Securities Co. were both indicted on Tuesday for hiding
massive off-the-book losses. The Tokyo District Public
Prosecutors Office indicted Tsugio Yukihira, 66, a former
Yamaichi chairman, and Atsuo Miki, 62, a former Yamaichi
president, on charges of forging a securities report for
fiscal 1996 to make it possible for the financially
troubled brokerage to pay 6 billion yen in dividends
(TCRAP 19-Mar-1998).

The Securities and Exchange Law bans the forging of
financial documents and the Commercial Code prohibits firms
from making dividend payments based on falsified records.
(Mainichi Shimbun 25-Mar-1998)


YASUDA TRUST & BANKING: Details on Moody's Downgrade
----------------------------------------------------
US ratings agency Moody's Investors Service said Tuesday it
cut to junk bond status its senior debt rating for Japan's
struggling Yasuda Trust and Banking Co. Ltd. (TCRAP 25-Mar-
1998)

It said although Yasuda will be given 150 billion yen (1.22
billion dollars) in public funds under the government's
bailout measures for the country's banks, its capital was
still weak. On paper Yasuda is expected to boast a 12
percent capital-to-asset ratio, Moody's said, well above
the minimum eight percent required by the Basel-based
Bank for International Settlments for banks operating
internationally.

"Nevertheless, in Moody's opinion, the bank's true economic
captial remains mediocre and insufficient to absorb
prospective credit expenses," it added.

Yasuda also benefitted from support from the Fuyo Group,
its "keiretsu" or group of companies interlocked by mutual
shareholdings. The group also included Yamaichi Securities
Co. Ltd., which collapsed spectacularly in November under
massive debts.

"Nevertheless, in Moody's opinion, the financial resources
of the supporting group itself have decreased considerably
in recent months under an adverse operating environment.

"This suggests that the level of future keiretsu support
available for Yasuda Trust has been affected and therefore
its deposit rating was downgraded."

Yasuda had banking assets of 8.2 trillion yen and trust
assets of 28.6 trillion yen at the end of September 1997,
Moody's said.
(Agence France-Presse 24-Mar-1998)


K O R E A

HANBO STEEL: Proposal Greeted Positively
----------------------------------------
The proposed partnership between U.S. Steel and Pohang Iron
and Steel Co. for a joint takeover of bankrupt Hanbo Steel
Industry. Co. could prove a boon for both companies,
analysts said yesterday. Officials at the state-funded
steel mill, widely known as POSCO, confirmed that the
company is corresponding with U.S. steel concerning a
possible joint takeover of Hanbo.

"After receiving an inquiry letter, we have forwarded
information on Hanbo as requested (by U.S. Steel)," a POSCO
spokesman said. He quickly added, however, that no decision
has been made at this stage. POSCO is the world's second
largest steelmaker with an annual production capacity of 23
million tons. Bankrupt Hanbo went into court receivership
last September. As of the end of last year, Hanbo had
accumulated a debt totaling 7.9 trillion won (about $5.6
billion in current exchange rate).

POSCO and U.S. Steel are no strangers to one another.
Through a 1986 joint deal, the two have already had the
experience of playing "doctor" to then ailing UPI (United
Pittsburgh Industry). Hence, analysts are betting that the
partnership will come through, even though Hanbo's huge
debt is reportedly a source of concern for POSCO.

Observers also suggest the influence of Park Tae-joon may
have been a factor in POSCO's move. Park, a POSCO
strongman-turned-party leader, shared in the election
victory with President Kim.

Analysts also say that the outcome of the Hanbo takeover
deal could influence the fate of scores of other bankrupt
Korean companies. Bankruptcies have been soaring since last
year as the financial crisis gripped the country.
(Korea Herald 26-Mar-1998)


KIA MOTORS: Assails Hyundai's Takeover Move
-------------------------------------------
Hyundai Motor Co.'s campaign to take over Kia Motors Corp.
turned into a bitter battle Monday that illustrated the
difficulties of mergers among South Korea's major
manufacturers regardless of their dire financial state.
A day after the Hyundai group, South Korea's largest
chaebol, or conglomerate, said Hyundai Motor, one of its
largest companies, would take over Kia in the near future,
Kia Motors attacked Hyundai's plan with the fury of an
aggrieved underdog.

Park Je Hyuk, president of Kia Motors, portraying Kia as
"the victim of this distorted economic structure," blamed
the chaebol in general and Hyundai in particular for
attacking Kia "like hyenas." Kia, in a statement, said the
Hyundai plan contradicted "the efforts of the new
government to restructure the economy" and ran counter to
the promises of the chaebol to streamline.

Kia executives said their group was distinct from other
chaebol in that the members of its founding family had long
since sold most of their shares and left control in the
hands of professional managers. They argued that Kia, which
ranked among South Korea's 10 largest chaebol before it ran
into debt trouble last year and subsequently applied for
court receivership, was a relatively small organization of
the sort that President Kim Dae Jung promised during his
election campaign last autumn to encourage.

Beneath the bravado, however, ran an undercurrent of
pessimism as Kia awaited word on whether a court would
approve the group's application for receivership or
liquidate its assets. If the court grants the receivership,
as expected, Kia must then renegotiate its debts with its
creditors. The government-run Korea Development Bank is
expected to take over 35 percent of the shares in Kia
Motors as payment of debt. Hyundai executives said Kia
Motors, under receivership, would have no choice but to
agree to a purchase of a majority of its shares by Hyundai
Motor.

Kia's precarious struggle contrasted with the success of
the Halla group, South Korea's 12th-largest chaebol, in
luring interim financing of $1 billion from Rothschild Inc.
of New York at an interest rate of 12 percent. The deal
was announced Monday.

Kia Motors' stock closed at 7,080 won ($4.87), up 750, or
11.8 percent. Hyundai Motor closed at 23,800, up 100.
(International Herald Tribune 24-Mar-1998)


KIA MOTORS: Discussions with Ford Continue
------------------------------------------
South Korea's Kia Motors Corp. and Ford Motor Co. will
discuss bilateral cooperation and the third-party takeover
of the debt-ridden automaker Wednesday, according to a Kia
spokesman. Paul Drenkow, responsible for the U.S. firm's
Asia-Pacific operations, is scheduled to visit Kia
Wednesday afternoon to have a meeting with Kia officials,
including Kia president Park Je-hyuk.

Both companies reportedly are nearing their views  
concerning two options. Firstly, Kia is to supply 2,000-cc  
engines to Ford while exporting its cars of Avellas,
Sephias and Sportages to overseas markets via Ford's sales
channels. Secondly, Ford will participate in Kia's
development of the next model of the compact car Avella.

On the issue of a capital raise for Kia, the U.S. automaker  
plans to finalize its stance after it completes an
evaluation of Kia's financial standing and assets. The
visit by the top man in the U.S. firm's Asian operations
draws keen attention from the country's auto industry as he
is reported to pay a visit to Samsung Motors, which is
engaging in joint-venture negotiations with Ford, and  
Hyundai Motor, which has made public its intention to take
over Kia.
(Asia Pulse 25-Mar-1998)


KIA MOTORS: Hyundai Forms Task Force on Takeover
------------------------------------------------
The Hyundai Motor Co. has formed a seven-member task force
named automobile research team, headed by chairman Chung
Mong-gyu, to deal with the takeover of Kia Motors Corp.
following its announcement that it will take over the
ailing motor company. A Hyundai Motor spokesman said that
the team will handle the takeover issue and other
automobile issues. Hyundai plans to take part in the
probable international bidding of Kia Motors projected by
the government. Fledgling Samsung Motors, Inc., is expected
to join the competition.
(Korea Times 25-Mar-1998)


M A L A Y S I A



P H I L I P P I N E S

EVER GOTESCO: Creditor Banks Reach Agreement
--------------------------------------------
The 29 creditor banks of the Ever Gotesco Group of
Companies today reached an agreement to jointly study and
implement measures that will help the conglomerate
rationalize its business operations.

"The creditor banks of Ever Gotesco are basically in
agreement that the conglomerate's problem is one of cash
flow and not insolvency. At P24.6 billion (US$626 million),
the group's total assets far exceed their total liabilities
of P16.1 billion, Thus, we have agreed to work together to  
restructure some of the Group's outstanding obligations and  
settle some maturing loans. This arrangement will help all
of us reach a common ground that will help Ever Gotesco
play its strengths to yield a more reliable cash flow
situation," UPCB senior vice president Angelo V. Manahan
said.

The Ever Gotesco Group consists of four major business
units namely, the Ever Group of Stores, Ever Gotesco
Holdings and Resources, Inc. Gotesco Land, Inc., and
Gotesco Properties, Inc.
(Asia Pulse 25-Mar-1998)


S I N G A P O R E



T H A I L A N D

BANGKOK BANK OF COMMERCE: Central Bank to Cede Control
------------------------------------------------------
Thailand's central bank plans to relinquish direct control
over Bangkok Bank of Commerce (BBC), which collapsed two
years ago amid a loans scandal, officials said Tuesday.
BBC president Aswin Kongsisri said the state-owned
Industrial Finance Corporation of Thailand (IFCT) had
agreed to buy a 51-percent stake in the BBC from the
central bank's Financial Institutions Development Fund.
"With IFCT as a major shareholder, the bank will not merge
with the other three FIDF-owned banks," he said.

In an effort to clean up the debt-laden banking sector
here, the central Bank of Thailand (BoT) in January took
over three Thai commercial banks which had failed to find
fresh sources of capital. The nationalized banks were the
Bangkok Metropolitan Bank, Siam City Bank and First City
Bangkok Bank. All, in addition to the BBC, were forced to
write down bad debt and ordered to seek fresh capital.

The International Monetary Fund, which arranged a 17.2
billion dollar bailout for Thailand last year, has told the
central bank to offload the banks as quickly as possible,
or to merge those that could not be sold.

Aswin said the IFCT had agreed to sign a contract by the
end of this month to take a controlling interest in the
bank which was taken over by the FIDF after its collapse in
1996. FIDF currently holds a 97 percent stake in BBC. He
said the bank may have to increase capital again to comply
with the BoT's expected new rules on loan-loss provisioning
but ruled out a second capital write-down exercise.

A BBC official who requested anonymity said the bank would
likely require fresh capital of 15 billion baht (395
million dollars) in order to meet the central bank's new
provisioning requirements.
(Agence France-Presse 24-Mar-1998)


ROBINSON: Debt-Ridden Store Reveals New Management
--------------------------------------------------
Debt-ridden Robinson Department Store Plc Tuesday revealed
a new management structure in a crucial move to shore up
its operating results amid rapidly-slowing sales.

Earlier, the company reported to the stock exchange an
unrealised loss of Bt6.2 billion based on an exchange rate
of Bt47.5 to the US dollar up to Dec 31, 1997. However, the
company is planning to revamp its operating and financial
structures as well as seeking a financial adviser to
discuss with creditors ABN Amro (Asia) and Dhana Siam
Finance and Securities Plc the rolling over of a US$300
million loan. Meanwhile, the company is to dilute its
equity stake in other businesses as part of its
restructuring plan and concentrate on operating its
department stores.

Besides the operational improvement, the company is
considering whether some loss-making branches should be
shut down. Robinson currently operates 20 branches, 11 of
which are in Bangkok. However, the company disclosed that
the branches that generated sales below targets include
Robinson at Victory Monument, Robinson at Fashion Island
Shopping Mall on Ram Indra road, Robinson at Seacon Square
on Srinakarin Road, Robinson Nakhon Sri Thammarat and
Robinson Chiang Mai.
(The Nation 25-Mar-1998)





S U B S C R I P T I O N   I N F O R M A T I O N

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