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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      

  Wednesday, April 15, 1998, Vol. 1, No. 40

                    Headlines


C H I N A   &   H O N G   K O N G

SIPING OIL AND FAT: Ailing Company JV with Henkel


I N D O N E S I A

BAKRIE GROUP: Banks in Group Ready for Merger
BANK ASIA PASIFIC: Bank Ready for Merger
PT SEMEN CIBINONG: Halting Debt Payments


J A P A N  

SEIYU LTD: Store Operator Reports Large Losses


K O R E A

KIA MOTORS: Creditor Banks Recommend Receiver
KIA MOTORS: Rejects Rumors of Possible Public Sale
KOREA FIRST BANK: Ministry to Expand Fund for Bad Loans
NEW CORE: Seeks Private Mediation Instead of Receivership
POHANG IRON: Slump in Auto Sector Affects Steelmakers
SEOUL BANK: Ministry to Expand Fund for Bad Loans


M A L A Y S I A

EKRAN BHD: Net Loss of 405.3 Million Ringgit for 1997


P H I L I P P I N E S

A. SORIANO: No Dividend on 70% Net Income Loss
AIR PHILIPPINE: Reduces Flights and Closes Station


T H A I L A N D

BANGKOK BANK: Still Holding Talks on Recapitalisation
TELECOM ASIA: NEC Corp. will Suspend Payment
THAI FARMERS BANK: Completes Recapitalisation Plan



=================================
C H I N A   &   H O N G   K O N G
=================================

SIPING OIL AND FAT: Ailing Company JV with Henkel
-------------------------------------------------
Among the 18 Henkel factories in China, the Siping Henkel
detergent factory is a profit leader. The family-owned
German Henkel Corporation is a world leader in washing
powder, cosmetics, and metal surface technology, with a
turnover of $84 billion last year. Henkel has shown that
the depressed state-owned industries provide  opportunities
for foreign investors because the bankrupt state firms are
willing to break up their companies and sell them off.

Henkel found a decayed state-owned company, the Siping Oil
and Fat Corporation, which had 2,000 staff but was so deep
in debt the authorities had put in on the bankruptcy list.
Originally Siping Oil and Fat was Henkel's joint venture
partner in the detergent factory, a 60:40 joint venture
where the Germans held the majority. Now Henkel is buying
out the cash-strapped local firm and last week took a  
further 20 per cent stake at a cost of more than US$3
million.

Soon Henkel will own 95 per cent of the company. This joint
venture, and a look at the area around it, show that only
three things can save the depressed Northeast. Firstly,
huge infrastructure investments by the Central and  
provincial governments. Secondly, the injection of capital
and technical and marketing know-how by foreigners. And
finally, local entrepreneurship. (South China Morning Post
12-Apr-1998)


=================
I N D O N E S I A
=================

BAKRIE GROUP: Banks in Group Ready for Merger
---------------------------------------------
Several banks ready to  undergo a merger have arranged a
meeting with the Indonesian Banks Restructuring Agency
(IBRA) here.  The banks concerned included Bank Asia
Pasific (Aspac)  represented by its chief commissioner,
Thomas Suyatno and the banks within the Bakrie Group duly
represented by Bank  Nasional chief commissioner Nirwan
Bakrie. The purpose of the two chief commssioners was to
report on the development of the merger, which was planned
well in advance. A similar report has been made with the
central bank, Bank Indonesia. Presently two foreign
investors have already indicated their interest to invest
capital in the new merged bank planned to be established
sometime this year.  (Asia Pulse 14-Apr-1998)


BANK ASIA PASIFIC: Bank Ready for Merger
----------------------------------------
Several banks ready to  undergo a merger have arranged a
meeting with the Indonesian Banks Restructuring Agency
(IBRA) here.  The banks concerned included Bank Asia
Pasific (Aspac)  represented by its chief commissioner,
Thomas Suyatno and the banks within the Bakrie Group duly
represented by Bank  Nasional chief commissioner Nirwan
Bakrie. The purpose of the two chief commssioners was to
report on the development of the merger, which was planned
well in advance. A similar report has been made with the
central bank, Bank Indonesia. Presently two foreign
investors have already indicated their interest to invest
capital in the new merged bank planned to be established
sometime this year.  (Asia Pulse 14-Apr-1998)


PT SEMEN CIBINONG: Halting Debt Payments
----------------------------------------
PT Semen Cibinong, one of Indonesia's big three cement
makers, says it's halting payments on its debts and is in
talks with its creditors to reschedule its repayment terms.
Cibinong said it's seeking a solution to its debt problems
that is fair to all sides, and that the company is now
working with legal and financial advisors on the plan.
Cibinong didn't say how much debt it has.  (Bloomberg News
14-Apr-1998)


=========
J A P A N  
=========

SEIYU LTD: Store Operator Reports Large Losses
----------------------------------------------
Major Japanese chain store operator Seiyu Ltd. said Monday
debt-ridden finance units meant it was bracing for a group
net loss of 59.5 billion yen (469 million dollars) in the
past year to February. The company reversed an initially
projected 1.0 billion yen in profit, due to write-offs of
non-performing loans and loan losses at such affiliates as  
Tokyo City Finance as well as heavier-than-expected losses
at the parent firm. It forecast pre-tax profit in the year
at 6.7 billion yen, down from 18.0 billion yen forecast in
April last year, with sales estimated at 1,231.2 billion
yen, down from the originally estimated 1,330.0 billion
yen. In the year to February 1997, Seiyu incurred a group
loss of 3.0 billion yen and pre-tax profit of 13.9 billion
yen on sales of 1,298.7 billion yen. Seiyu also said it
planned to generate capital gains of 14.6 billion yen  
from the sale of part of its securities holdings.
(Agence France-Presse 13-Apr-1998)


=========
K O R E A
=========

KIA MOTORS: Creditor Banks Recommend Receiver
---------------------------------------------
Creditor banks Monday recommended Yoo Jong-yol, vice
president of Hyosung Heavy Industries Co., as candidate to
manage Kia Motors Co. under court receivership. The Korea
Development Bank, representing a group of creditor banks,
forwarded its recommendation to Seoul District Court, and
the court's civil panel is expected to accept it to  
appoint Yoo as Kia's manager. After appointing the manager,
the court is expected to hand down a decision, possibly
Tuesday, to commence the official court receivership of
Korea's third largest carmaker, which filed for it under
mounting cash flow problems.  (Asia Pulse 14-Apr-1998)


KIA MOTORS: Rejects Rumors of Possible Public Sale
--------------------------------------------------
South Korea's ailing Kia Motors Corp rejected defiantly a
public sale yesterday, buoyed by good first quarter results
and dividends from massive cost-cutting. The embattled car
firm posted a net profit from recurring activities of 45
billion won (S$51.8 million dollars) in the first quarter
of this year, said Kia Motors president Park Je-Hyuk.

"The profit will strengthen our footing to repay debts," he
said, forecasting Kia's 1998 net profit would reach 150
billion won, compared to a loss of 380 billion won last
year. Its total sales in the first quarter of this year
were also up from 1.23 trillion won a year ago to 1.38
trillion won, helped by cost reduction, downsizing and
robust exports, Kia officials said.

Mr Park argued against any attempt to sell Kia Motors to a
third party through open bidding, complaining it was
undermining Kia's sales and efforts to attract foreign
capital.  (Straits Times 14-Apr-1998)


KOREA FIRST BANK: Ministry to Expand Fund for Bad Loans
-------------------------------------------------------
The Ministry of Finance and Economy will set up funds
totaling 10 trillion won ($7.16 billion) to help finance
and encourage industrial restructuring. In order to speed
up financial sector restructuring, it also will expand its
fund for purchasing bad loans from financial institutions
to 30 trillion won more, while allowing the issue of asset-
backed securities. The government will facilitate the sale
of two ailing commercial banks -- Korea First Bank and
Seoul Bank -- which had been scheduled to be sold by
November 15 under an agreement with the International
Monetary Fund. Under a similar context, the 4-percent limit
in individual shareholder's equity will be sharply raised.
(Korea Herald 15-Apr-1998)


NEW CORE: Seeks Private Mediation Instead of Receivership
---------------------------------------------------------
The New Core Group, which had been denied mediation from
the court for the first time after the revised court
mediation law was put into force in February, is seeking
private mediation instead of court receivership. The move
has come out for New Core to avoid possible deprivation of
the management of the owner in case of the application for
court receivership.

A New Core executive said yesterday, "We have discussed the
future of our group and are considering private mediation
instead of court receivership to guarantee management
rights as the court mediation was rejected."

He said, "We are discussing with commercial trading
creditors private mediation. If granted, we will formally
suggest the application for private mediation to creditor
banks."

Private mediation means that creditors and debtors conclude
a contract on the implementation of liabilities one to one
to guarantee the owner's management right. However, private
mediation requires the consent of all creditors and it has
poor legal binding force compared to court mediation
arrangements.

New Core has suggested that it will offer 4,600 apartments
for rent in six regions, distribution shops and direct
sales shops across the country as collateral either free of
charge or on lease terms to minor commercial trading
creditors. Commercial trading creditors prefer mediation
rather than court receivership which needs a longer
period for collection of their credits, the New Core
official said, adding that they are likely to accept
the proposal when the repayment terms are laid out.

As most creditor financial institutions accepted court
mediation when applied and it has enough collateral,
creditors will not object to private mediation, he
predicted.  (Korea Times 14-Apr-1998)


POHANG IRON: Slump in Auto Sector Affects Steelmakers
-----------------------------------------------------
The slump in the Korean auto industry has caused a chain
reaction among local steel makers, including Pohang Iron &
Steel Co. (POSCO), which are main suppliers to the car
makers. Sources said yesterday that the slowdown in auto
assembly lines has been a leading factor in the epidemic
downturn at local steel plants.

Meanwhile, auto industry data show that leading car makers
-- including Hyundai Motor Co. and Kia Motors Corp. -- have
drastically reduced their operation ratio to an
unprecedented 40 to 60 percent level in recent weeks.  
Based on car sales for the first 10 days of April, industry
sources estimate that the number of unsold cars in Korea
could be as high as 128,500 units. This is invariably bad
news for steel makers, who may soon find their long-term
supply lines cut off.

By the institute's own calculations, the car industry's
"contribution" to the steel industry measures 35.8 percent,
compared to the machinery sector's 32 percent and the
construction industry's considerably lower 20.1 percent.
Based on POSRI's projection, the Korean steel industry
faces a 10.6-percent slash in demand from the domestic car
industry alone. The institute further predicts that the
steel industry's total domestic demand will tumble to 29
percent in the second quarter alone.  (Korea Herald
15-Apr-1998)


SEOUL BANK: Ministry to Expand Fund for Bad Loans
-------------------------------------------------
The Ministry of Finance and Economy will set up funds
totaling 10 trillion won ($7.16 billion) to help finance
and encourage industrial restructuring. In order to speed
up financial sector restructuring, it also will expand its
fund for purchasing bad loans from financial institutions
to 30 trillion won more, while allowing the issue of asset-
backed securities. The government will facilitate the sale
of two ailing commercial banks -- Korea First Bank and
Seoul Bank -- which had been scheduled to be sold by
November 15 under an agreement with the International
Monetary Fund. Under a similar context, the 4-percent limit
in individual shareholder's equity will be sharply raised.
(Korea Herald 15-Apr-1998)


===============
M A L A Y S I A
===============

EKRAN BHD: Net Loss of 405.3 Million Ringgit for 1997
-----------------------------------------------------
Ekran Bhd, the previous developer of the stalled Bakun
hydroelectric dam in Sarawak yesterday announced a net loss
of 405.3 million Malaysian ringgit (S$176.6 million) for
the year ended June 1997. The audited results differ
sharply from its earlier announcement of an unaudited net
profit of RM93.4 million. In addition, the company
disclosed an extraordinary loss of RM217.95 million from
its investment in 32.8 per cent unit Wembley Industries
Holdings Bhd, which was placed in the hands of receivers
earlier this month after failing to service its debt of
more than RM100 million. Ekran yesterday said the loss was
due to the provision for costs incurred in the RM15.5
billion Bakun dam project, which was taken over by the
Ministry of Finance in November last year.

The beleaguered group is expected to report its interim
results for the period to December 1997 before the end of
this month, which is later than usual as the company has
obtained an extension from the Securities Commission.  
Besides the sharp reversal in the group's fortunes, Ekran
is being probed by the securities watchdog on the
utilisation of RM1.47 billion from its rights issue last
May. Ekran had raised the money to finance its 32 per cent
stake in Bakun Hydroelectric Company, the owner of the
Bakun dam project, for RM660 million.

It had also planned to use RM273 million to repay loans for
the acquisition of the Wembley stake and RM155.6 million to
subscribe to Wembley's rights issue. The balance was
supposed to be used as working capital for some of its
projects and to retire Ekran's debt. Ekran has not
disclosed how the proceeds have been utilised.
(Singapore BusinessTimes 14-Apr-1998)


=====================
P H I L I P P I N E S
=====================

A. SORIANO: No Dividend on 70% Net Income Loss
----------------------------------------------
Holding firm A. Soriano Corp. (Anscor) will not be
declaring any dividends this year to its stockholders after
the company posted a 70% slump in its net income for 1997.
"We will defer the declaration of any dividends this year
as a result of the present economic condition that has
hindered" the company's performance, Andres Soriano III,
Anscor chairman and chief executive officer (CEO), said
during the company's annual stockholders meeting yesterday.
In July last year, the company declared a 25% stock
dividend to its shareholders.

Last year, Anscor's net income dropped to 141 million
Philippine pesos (PhP) from PhP462 million in 1996. This
was after the currency turmoil in the second half reversed
the company's gains earlier in the year. Also, Mr. Soriano
said the lower income was partly due to the deferment of
some asset sales targeted last year and the drop in
earnings in the firm's subsidiaries.

For 1998, Mr. Soriano said Anscor will focus on expanding
its core investments which are banking, port operation, and
cable and wire manufacturing. The firm will also
restructure its investment portfolio "to eliminate
undertakings with limited potentials" and pursue new
opportunities.  (BusinessWorld 14-Apr-1998)


AIR PHILIPPINE: Reduces Flights and Closes Station
--------------------------------------------------
Air Philippine International Corp. has closed down its Naga
station and reduced the frequency of flights of its YS-11
aircraft. The Gatchalian-owned passenger and cargo airline
has started implementing its own cost-cutting measures due
to financial difficulties. Air Philippines is the fourth
local carrier to complain of financial problems due to the
ongoing economic turmoil. Earlier, Philippine Airlines,
Cebu Pacific Air and Grand International Airways have
informed the Department of Labor and Employment (DOLE) of
their moves to cut down flights and manpower. At least 19
personnel have been retrenched from Naga station.

In a letter to DOLE, Air Philippines president and chief  
executive officer Augustus Paiso said the company has been  
experiencing financial difficulty in the recent months, a  
situation aggravated by the economic crisis. Among the
other reasons cited by Air Philippines for the closure of
its Naga station and reduction of personnel were lack of
market demand, high production cost and the peso  
depreciation.

Air Philippines earlier increased its authorized capital  
stock to P3.5 billion from P2 billion. The Securities and
Exchange Commission (SEC) approved the increase on March
11. The move is expected to give the company more leeway in  
getting more funds. Paiso concedes the economic crunch has
hurt the firm's operations as fuel accounts for 40 percent
of the firm's operating expenses, while imported spare
parts accounted for 26 percent. Air Philippines started
operations on February 1, 1996 with a capital stock of P500
million.  (Asia Pulse 13-Apr-1998)


===============
T H A I L A N D
===============

BANGKOK BANK: Still Holding Talks on Recapitalisation
-----------------------------------------------------
Thailand's commercial banks are seeking additional capital,
with the state-owned Thai Military Bank Plc expected to go
ahead with a call for a further 5.0 billion to 10 billion
baht. The moves follow an earlier lift in capital from 5.13  
billion baht to 12 billion baht, with the Thai military  
maintaining a 30-35 pct stake in the bank. Reports said
only Thai Farmers Bank Plc - the third largest  private
commercial bank - had completed its recapitalisation  plan
following a recent overseas bond issue. Bangkok Bank Plc
said it was still holding talks with  foreign partners with
a plan to issue 700 million shares expected to lift foreign
shareholding in the bank from 25 pct to 49 pct. The steps
to recapitalise come amid warnings that some 150 banks in
Asia were considered "technically bankrupt", but were  
still operating due to state liquidity injections.
President of credit rating agency Thomson BankWatch Asia,  
Philippe Delhaise, said the 150 banks were mostly
concentrated in India, China, Indonesia, and South Korea.
(Asia Pulse 13-Apr-1998)

Bangkok Bank of Commerce's new president Aswin Kongsiri is
positive the bank's future will be brighter than the other
three nationalised banks. Aswin is convinced the Financial
Institution Development Fund's move to shoulder all problem
loans of the bank, once destined for closure, will produce
favourable results. First, in addition to the purchase of
loans amounting to Bt60 billion at 80 per cent discount,
the FIDF bought loans worth Bt15 billion at a 60 per cent
discount to clean up the bank's balance sheets during the
first week it took over BBC management, Aswin said. Second,
the FIDF converted Bt10 billion in liquidity-easing loans
extended to BBC to equity after the bank reduced its
capital from Bt35.54 billion to Bt1.77 billion. The FIDF
will also convert additional loans worth Bt10 billion into
equity. BBC is scheduled to sign an agreement for the
conversion in June.  (The Nation 15-Apr-1998)


TELECOM ASIA: NEC Corp. will Suspend Payment
--------------------------------------------
NEC Corp. will approve the request of Telecom Asia Corp. to
suspend payment for equipment and facilities supplied by
the Japanese firm, NEC officials said Thursday. Telecom
Asia has been setting up a communications network
incorporating PHS (personal handyphone system) service, but
the Asian currency turmoil has left it in financial
difficulty. The Thai firm's Personal Cordless Telephone
network is based on a combination land-line/PHS service. If
introduced on schedule last October, it would have been the
first  non-Japanese use of PHS technology. (Asia Pulse
13-Apr-1998)


THAI FARMERS BANK: Completes Recapitalisation Plan
--------------------------------------------------
Thailand's commercial banks are seeking additional capital,
with the state-owned Thai Military Bank Plc expected to go
ahead with a call for a further 5.0 billion to 10 billion
baht. The moves follow an earlier lift in capital from 5.13  
billion baht to 12 billion baht, with the Thai military  
maintaining a 30-35 pct stake in the bank. Reports said
only Thai Farmers Bank Plc - the third largest  private
commercial bank - had completed its recapitalisation  plan
following a recent overseas bond issue. Bangkok Bank Plc
said it was still holding talks with  foreign partners with
a plan to issue 700 million shares expected to lift foreign
shareholding in the bank from 25 pct to 49 pct. The steps
to recapitalise come amid warnings that some 150 banks in
Asia were considered "technically bankrupt", but were  
still operating due to state liquidity injections.
President of credit rating agency Thomson BankWatch Asia,  
Philippe Delhaise, said the 150 banks were mostly
concentrated in India, China, Indonesia, and South Korea.
(Asia Pulse 13-Apr-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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