TCRAP_Public/980401.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      

      Wednesday, April 1, 1998, Vol. 1, No. 30


C H I N A   &   H O N G   K O N G

CHINA VENTURETECH: Government Orders Cleanup of Firm
FIRST PACIFIC: Asian Turmoil Takes Toll on First Pacific
ITC CORPORATION: 1997 Operating Results
LION ASIA: 1997 Operating Results
MANSION HOLDINGS: Mr. Yip Further Decreases Shareholdings
PEREGRINE INVESTMENTS: Hopewell Makes $14.2m Provision
UDL HOLDINGS: Admits Financial Difficulties; Bank Sues

J A P A N  

FUJITA: Shares Slide on News of Restructuring


DOOSAN GROUP: $550m from Interbrew and Seagram
KIA MOTORS: Rebuts Takeover Reports; Launches Committee
KIA MOTORS: Struggle Indicates Other Battles to Come


ISLACOM: Delgados Want Out of Company

C H I N A   &   H O N G   K O N G

CHINA VENTURETECH: Government Orders Cleanup of Firm
China's ruling State Council has shuffled the management
and ordered a cleanup of one of its top investment firms,
China Venturetech Investment Corp., as part of a financial
housecleaning, said those familiar with the development.
The changes weren't publicly announced, but officials with
Venturetech said the move was part of Beiging's efforts to
bring order to the country's ill-regulated, nonbanking
financial institutions.

Set up by Beijing in 1985 to finance high-technology
industries, Venturetech is known for aggressiveness and has
been a sought-after partner for foreign bankers scouting
deals in China. Following the reshuffle, Venturetech
President Zhou Xiaohe was reassigned to the post of vice
chairman, a move widely seen as a face-saving method of
demotion. Venturetech is thought to have improved since a
reshuffle in November 1994. At the time, company founder
and president, Zhang Xiaobin, relinquished control of
Venturetech after it racked up losses in property
investments, foreign-currency trading and unrecoverable,
unapproved high-interest loans.
(Wall Street Journal 31-Mar-1998)

FIRST PACIFIC: Asian Turmoil Takes Toll on First Pacific
The Asian currency crisis has sliced US$438.6m off net
assets at First Pacific, one of the region's biggest
conglomerates. The company, which focuses on Hong Kong and
China as well as three of the countries affected by sharp
currency devaluations -- Indonesia, Thailand and the
Philippines -- said it had taken "full and complete
provisions against foreign currency movements" on both its
profit and loss statement and balance sheet.  The first
priority would be equity injections -- mainly through
rights issues -- at a number of subsidiaries, which would
help them reduce gearing. Earnings per share for the year
rose 2.9 percent, from 8.73 US cents to 8.98 cents.
Excluding exceptionals, earnings per share fell 18.3
percent, from 8.62 cents to 7.04 cents. The full-year
dividend has been cut 19.2 percent, from 2.71 cents to 2.19
(Financial Times 31-Mar-1998)

ITC CORPORATION: 1997 Operating Results
ITC Corporation Limited reported a total operating loss of
HK$71.2 million on turnover of HK$135 million  for the
period from January 1, 1997 through December 31, 1997.  
This compares to a net of HK$278.9 million on turnover of
HK$431 million for the corresponding 1996 period. (SEHK 27-

LION ASIA: 1997 Operating Results
For the period from January 7, 1997 through December 31,
1997, Lion Asia Limited reports an HK$24 million loss on
turnover of $162 million.  This compares to a net profit of
HK$21.6 million on turnover of HK$85 million for the
corresponding 1996 period. (SEHK 27-Mar-1998)

MANSION HOLDINGS: Mr. Yip Further Decreases Shareholdings
The board of directors (the "Board") of Mansion Holdings
Limited (the "Company") announced that it has been informed
by Mr. Jason Yip Chi Fun ("Mr. Yip"), that on 26th March,
1998, the shareholding of Mr. Yip and Silver Lotus Ventures
Ltd. ("Silver Lotus") in the Company was further reduced by
1,000,000 shares (the "Disposed Shares"), representing
approximately 0.2 per cent. of the issued share capital of
the Company as a result of further share disposal (the
"Disposal") by the lenders (the Lenders") of Mr. Yip and
Silver Lotus on the market. Silver Lotus is owned by a
discretionary trust the beneficiaries of which include Mr.
Yip, Ms. Mak Wai Fong, a former director of the Company and
sister-in-law of Mr. Yip, and their families. The Disposed
Shares were held by Silver Lotus.

Immediately after the Disposal, Mr. Yip and Silver Lotus
hold a total of 61,058,200 shares (the "Remaining Shares")
in the Company, representing approximately 12.1 per cent.
of the issued share capital of the Company. Mr. Yip has
informed the Company that of the Remaining Shares, only
9,403,800 shares (representing approximately 1.9 per cent.
of the issued share capital of the Company) were pledged to
the Lenders as security and he is not aware whether the
Lenders will foreclose and dispose the said shares. Mr. Yip
has undertaken to inform the Company as and when he is
informed by the Lenders that further shares in the Company
have been foreclosed and disposed. The Company will then
inform the public of such foreclosure and disposal.

As a result of the Disposal and taken into consideration of
the 3,300,000 shares in the Company owned by Mr. C.K. Ip,
Mr. Yip's brother, the total shareholding interest in the
Company held by Mr. Yip, Silver Lotus and parties acting in
concert with each of them has been further reduced from
65,358,200 shares (representing approximately 13.0 per
cent. of the issued share capital of the Company) to
64,358,200 shares (representing approximately 12.8 per
cent. of the issued share capital of the Company). Out of
such shares, 54,954,400 shares (representing approximately
10.9 per cent. of the issued share capital of the Company)
are not pledged. (SEHK 27-Mar-1998)

PEREGRINE INVESTMENTS: Hopewell Makes $14.2m Provision
Hopewell Holdings, the Hong Kong property and
infrastructure group, has made provisions of HK$110m
(US$14.2m) against its holding in Peregrine, the collapsed
investment bank--only marginally less than its operating
profit of HK$117.8m for the six months to December 31. The
group, controlled by Sir Gordon Wu, was one of the founding
inve3stors in Peregrine, which collapsed earlier this year
because of heavy exposure to troubled Asian economies,
Hopewell invested HK$153m in Peregrine, some of which has
been recouped through dividends.
(Financial Times 31-Mar-1998)

UDL HOLDINGS: Admits Financial Difficulties; Bank Sues
UDL Holdings Limited ("UDL" and together with its
subsidiaries, except KEL Holdings Limited ("KEL"), the
"Group") issued a statement earlier this week clarifying
the present financial position of the Group.

   (1) The Group is in significant liquidity problems and
has difficulties meeting its day to day working capital
requirements. It is in active discussions with its  
financiers with a view to restructuring the terms of its
financial arrangements. Whether the Group has sufficient
working capital for its present requirements depends on
whether supports from its financiers for the Group's
financial restructuring proposals can be obtained.

   (2) One of the Group's bankers filed a writ against the
Group on 25th March, 1998 for failure to repay on demand a
total amount of about HK$50.8 million (inclusive of
principal and interest).

   (3) In an effort to increase UDL's working capital, the
Board is also considering offering UDL's shareholders the  
opportunity to purchase its 300 million shares in KEL.
However, it should be noted that terms of such proposal
have not been finalised and such proposal may or may not
(SEHK 27-Mar-1998)

J A P A N  

FUJITA: Shares Slide on News of Restructuring
Fujita, the troubled Tokyo-based construction group,
yesterday unveiled a restructuring plan as the shares
tumbled more than 11 percent in heavy trading. The shares,
which were as high as Y500 tow years ago, have since
dropped more than 75 percent to Y121. Fujita, which has
extensive holdings in the troubled property market, said it
planned to cut staff from 5,460 to 4,500 by March 2000. A
previously announced plan aimed to cut employees to 4,900.
In addition, the group will reduce the number of managers
by 40 percent to 650. No timescale was given.
(Financial Times 31-Mar-1998)


DOOSAN GROUP: $550m from Interbrew and Seagram
South Korea's brewery giant, Doosan Group, said Monday it
will obtain 500 million dollars from two foreign companies
-- Interbrew Co. Ltd. of Belgium and Seagram Co. Ltd. of
the United States. In a statement, the group, which ranks
among South Korea's 15 top conglomerates, said the deal
involves selling its stake in a joint venture of Doosan
Seagram to Seagram, but gave no details of the transaction.

Doosan also said it has signed a memorandum of
understanding with Interbrew Co. Ltd. to set up a joint
venture this year in a bid to earn operating funds for OB
Brewery Co. Doosan and Interbrew will each take half equity
in the venture, with Doosan providing production and
distribution facilities and Interbrew extending financing.
Doosan said the fresh cash injection would enable it to
improve its financial structure, reducing its debt-to-
equity ratio to 200 percent from the current 500 percent.

Doosan, with 23 subsidiaries, is built around beverages,
especially its OB Brewery. But in Monday's statement it
said it was carrying out a major restructuring plan under
which it will combine the 23 subsidiaries into four
separate companies and sell six units to a third party.

Doosan said the restructuring is expected to increase
management transparency, resolve cross-subsidiary payment
guarantees and streamline financial reporting. The group
also said, without mentioning the sum involved, that it
will purchase a remaining stake in Allied Signal of the
United States, in which it holds a 19.9 percent stake, to
promote products by Doosan Electro-Materials.
(Agence France-Presse 30-Mar-1998)

KIA MOTORS: Rebuts Takeover Reports; Launches Committee
South Korea's ailing Kia Motors on Monday fended off rumors
of an imminent takeover by its domestic rivals by launching
an in-house committee dedicated to setting the bankrupt
company back on its feet.

"The launch of this committee is important in that it shows
Kia's will to stand on its own feet at a time when Samsung,
Hyundai and Daewoo are seeking to take us over," Kia said
in a statement. The statement followed a report in a
leading South Korean daily Monday that Samsung Motors Inc.
is seeking to set up a joint venture with Ford Motor Co. of  
the United States to take over Kia. The Chosun daily cited
a Samsung Group official as saying Ford Motor may take a
stake in Samsung Motors to turn it effectively into a joint
venture, which in turn will take over Kia.
(Agence France-Presse 30-Mar-1998)

KIA MOTORS: Struggle Indicates Other Battles to Come
A growing battle between South Korea's two largest business
groups for a rival motor vehicle company has set the stage
for struggles over the remains of bankrupt enterprises
caught in the country's economic crunch. For many of the
country's huge but financially frail conglomerates, or  
chaebol, this mating dance to capture weaker partners in
coming months will become, simply, a matter of life and
death. The Hyundai and Samsung groups, ranked first and
second in South Korea, are fighting to gain control of Kia
Motor Co., flagship of a second-tier group that faces the
immediate need to renegotiate $10 billion in debts under
court order.

This desperation captures the mood of all of Korea's
chaebol as they try to shed money-losing entities,
negotiate for mergers and pursue such foreign investors as
Ford Motor Co. On a larger scale, moreover, analysts
believe that such talks portend the entry of scores of
other foreign investors with key roles to play in slimming  
down bloated industrial fields, bringing in foreign
expertise as well as capital and, in the long run, reviving
and restructuring the entire economy.

That process is likely to go on for four or five years,
said Robert Felton, manager of the Seoul office of McKinsey
& Co., a consulting firm that advises many of Korea's
chaebol. Mr. Felton predicts "basic restructuring, numerous
mergers and acquisitions, foreign investment and a lot of
layoffs." But he sees Korea "restabilizing its economy and
returning to more attractive growth." It's at that point,
he  believes, that "we'll see an increasingly world-class
manufacturing sector, an  expanding service sector and a
lot of employment."

The question, however, is whether the scrap over Kia, whose
executives say publicly that they are determined to stave
off all attempts at a takeover, may indicate quite a
different scenario one in which the chaebol spend so much  
time, energy and badly needed resources in fighting each
other that they lose sight of the basic revisions needed
for economic recovery.

McKinsey released a report Friday that attacked the Korean
performance in a wide range of industrial sectors,
including motor vehicles. Fat bureaucracies, closed markets
and poor quality were cited as some of the major cases for
economic crisis that finally forced the government last
November to go to the International Monetary Fund for a
rescue package of nearly $60 billion. Although Korea now
ranks as the world's fifth-largest maker of motor vehicles,
the report said, "Korea lags significantly behind industry
benchmarks  in labor, capital and total factor

The report lambasted the Korean motor vehicle industry for
producing too many different types of cars, ignoring basic
principles of manufacturing and assembly and failing to
bring about efficiency in its work force, all problems  
reflected throughout Korean business and industry. The
McKinsey report, saying the country "no longer has the
luxury of being shielded from the world's best practices,"
called on motor vehicle makers to stop rewarding managers
for "producing more cars rather than maximizing profits."

That's a lesson that all Korean motor vehicle makers seem
to overlook as they talk of the need to consolidate
companies to increase volume. For Hyundai, the ultimate
dream is to make 2.5 million vehicles, the total capacity
of both the Hyundai and Kia motor vehicle plants. Motor
vehicle makers appear oblivious to the report's criticism
of labor practices in which Korean labor unions fight
against not only layoffs but also reduced working hours and
refuse to agree on plans for workers to perform more than
one task.
(International Herald Tribune 28-Mar-1998)


ISLACOM: Delgados Want Out of Company
The Delgado family is looking for a way out of Isla
Communications Co., Inc. (Islacom). Islacom chief finance
officer Ramon Diaz told reporters the Delgados are scouting
for investors willing to take the company's shareholdings
in the telephone company. Mr. Diaz said the family is
thinking of just consolidating its hold in its more
profitable business ventures in shipping and catering.

The Delgados have a stake in MIASCOR, Royal Port Services
and Citadel Holdings Corp. They have controlling interest
in Islacom through the 55.6% stake of Asia Communications
and another 4.4% of Citadel. Deutsche Telecom AG holds 10%
while Shinawatra Computer and Communications Plc has the
remaining 30%. Mr. Diaz said a few companies have expressed
interest in getting the Delgado's stake but declined to
name those companies. Deutsche Telecom had earlier said it
wants to increase its stake in the firm after Shinawatra
said it is giving up its holdings.
(BusinessWorld 31-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

Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Princeton, NJ USA, and Beard Group, Inc., Washington,
DC USA.  Debra Brennan and Lexy Mueller, Editors.

Copyright 1998.  All rights reserved.  This material is
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