TCRAP_Public/980501.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      

      Friday, May 1, 1998, Vol. 1, No. 50


C H I N A   &   H O N G   K O N G

CP POKPHAND: Stock Finally Stabilises
CHINA EVERBRIGHT: Stages Strong Turnaround
H B INT'L: Results Announcement
MARIA'S BAKERY: Liquidation Certain
S. MEGGA: Status Report on Restructuring
TUNG FONG HUNG: Results Announcement

J A P A N  

JAPAN AIRLINES: S&P Cuts Debt Rating to Junk Status


KIA MOTORS: Corruption Probe Makes Third Party Sale Likely


HALIM SECURITIES: Uniphoenix Unit Served Wind-up Petition
INNOSABAH SECURITIES: KLSE Orders Firm's Trading Restricted
KONSORTIUM: Ships to be Acquired by MISC


NAPOCOR: Reveals Cash Flow Problems


RATANAKOSIN INSURANCE: Warning on Rehabilitation Plan
SAHAVIRIYA STEEL: Prepares Restructuring Plan
THAI PETROCHEMICAL: Creditors Agree on Debt Moratorium
U-SAT: Contract Terminated, Facilities Withdrawn

C H I N A   &   H O N G   K O N G

CP POKPHAND: Stock Finally Stabilises
CP Pokphand Co, whose shares have been savaged in recent
sessions as the firm talks to creditors to reschedule its
debts, saw its stock stabilise yesterday in very heavy
trade. Analysts said the Hong Kong arm of the Thai-based
conglomerate, which is a major investor in the mainland,
might owe Hongkong Bank about $500 million. Hongkong Bank
officials declined to comment, while Pokphand
representatives would confirm only that talks with
creditors were still under way. Yesterday, Pokphand shares
bucked a falling market to gain 6.17 per cent to 43 cents,
paring some of the massive losses that came after the firm
said last week it risked default on a floating-rate note

Pokphand has asked holders of US$92.8 million of five-year
notes due in 2000 not to redeem the paper early as it is
facing cash-flow problems and could default if the put
options were exercised. A meeting with bondholders is set
for May 29. Analysts said that figuring the exact extent of
the company's liabilities was difficult because there could
be substantial off-balance obligations held by subsidiaries
in which it had an equity interest of less than 50 per
(South China Morning Post 30-Apr-1998)

CHINA EVERBRIGHT: Stages Strong Turnaround
China Everbright Ltd, the State Council-controlled red
chip, has staged a strong turnaround back into profit in
the nine months to December, earning an attributable result
of $53.56 million. The turnaround, from a net loss of
$202.24 million in the previous 12 months to the end of
March last year, was engineered with the help of
contributions from associate companies and exceptional
gains from the disposal of its retail businesses. The
conglomerate, which during the year focused on broadening
its base to include finance, banking, insurance, property
and telecoms interests, also announced a bonus warrant
issue on a one-for-10 basis. The warrants will entitle
holders to subscribe for shares at $5.55 between
July 3, 1998 and January 5, 2000.

This mainly included a nine-month contribution of $60.6
million from its 20 per cent stake in Hong Kong-listed
International Bank of Asia. Everbright Bank, in which the
company bought a stake in September, generated an after-tax
profit of $45.3 million. National Mutual Asia, where it
owns a 5 per cent stake, provided an after-tax profit of
$26.6 million, but its contribution only reflected six
months to September. The results also included exceptional
gains of $71.3 million arising from the sale of retail
businesses in Singapore and Hong Kong. In August, the group
sold its 56 per cent interest in the Wescorp Group which
holds 99 per cent of the retail operation in Singapore, to
Theme International Holdings for $336 million. At the same
time, it used proceeds and internal cash of $51.5 million
to buy a 19.93 per cent interest in Theme. It also sold its
entire interest in the retail operation and a warehouse in  
Hong Kong to Frankie Dominion in September.

Overall turnover for the nine-month period plunged to
$571.6 million compared with $1.53 billion for the year to
March.  The company attributed the decline to the sale of
retail interests and a change in its year-end date to
December.  Losses of ordinary activities, which included
the continued and discontinued operations, were $59.87
million. This compared with losses of $243.07 million
during the 12-month period in the preceding year.

The company said it would continue to explore possible
equity and debt financing to fund ongoing or possible
future investments to enhance shareholder value.
(South China Morning Post 28-Apr-1998)

H B INT'L: Results Announcement
For the period August 1, 1997 to January 31, 1998, H B
International Holdings Limited reports a net loss of
HK$50,614,000 on turnover of HK$521,675,000. This compares
to a profit of HK$29,795,000 on turnover of HK$651,006,000
for the corresponding 1996-1997 period. The Directors
consider it prudent to make a general provision of
HK$10,000,000 against receivables from debtors. The
earnings per share for the period ended 31 January 1997 has
been adjusted for the effect of a right issue of 2 for 5
made by the Company in March 1997.
(SEHK 30-Apr-1998)

MARIA'S BAKERY: Liquidation Certain
Only $30,000 was found in the safe at the Maria's Bakery To
Kwa Wan headquarters, the chain's provisional liquidator
said yesterday. Ernst & Young said the crumbling empire's
cash assets left it "definitely unable to pay the
outstanding salaries in April alone", estimated at $3

"There was only about $30,000 in the safe but, if cash
generated on the last day of business from its 23 shops was
collected, the total amount of cash assets should be over
$100,000," said liquidation department principal Stephen
Liu Yiu-keung. All bank accounts were frozen and their
balance was being calculated. Mr Liu refused to disclose
the extent of Maria's indebtedness, but employees said it
exceeded $100 million. He called on interested parties to
contact Ernst & Young as soon as possible. About 10 groups
had contacted Maria's management before liquidation.

Coupon holders would be treated as ordinary creditors if no
buyer came forward, and it was unlikely anyone knew how
many coupons were still outstanding, he said. The Consumer
Council yesterday received more than 114 complaints from
Maria's coupons holders, involving 5,705 cards. The average
value was $44 for a dozen cakes. One person held 300

Company directors Maria Lee Tsang Chiu-kwan, 70, and Fung
Lau Shun-kwan are due to face a press conference, with the
liquidator, tonight. Mrs Lee, founder of the chain of
shops, remained in seclusion yesterday but is understood to
be at her Kadoorie Avenue home.

Other assets were being valued, but Federation of Trade
Unions vice-chairman Leung Fu-wah - who took part in a
meeting between Ernst & Young, the Labour Department and
employees representatives - said the company had no
property and rented all its shops and headquarters.

The Labour Department said the 400 employees could expect
to receive their unpaid salaries and severance payment from
its insolvency fund in six weeks. Employees' representative
Lau Chi-kin said the company had failed to pay its
suppliers for nine months.
(South China Morning Post 30-Apr-1998)

S. MEGGA: Status Report on Restructuring
S. Megga International Holdings Limited has been in ongoing
discussions with a number of potential investors in regard
to its financial restructuring. At this time, however, no
agreements have been reached and discussions with the
interested parties are still continuing. The directors of
the Company (the "Directors") believe that it is not in the
long-term best interests of the Company and its
shareholders to resume trading in its shares at this time
since they believe that if trading is resumed the Company's
restructuring may be jeopardized.  It is the Directors'
current intention to request that trading in the Company's
shares resume promptly upon the conclusion of an agreement
in principle for the restructuring of the Company.

The Board of Directors (the "Board") announced on 27th
February 1998, that the Company and its subsidiaries (the
"Group") required a financial restructuring involving the
injection of new equity capital and a restructuring of its
indebtedness to its bankers and convertible note holders
(the "Restructuring").  To assist in the Restructuring the
Company has appointed Price Waterhouse as its general
advisor.  The Company has also sought the assistance of
Standard Chartered Asia Limited and Managing Partners

Since February 1998, the Board has been involved in
numerous discussions with various parties which have
expressed an interest in investing in the Company.  
Information memoranda on the Group have been provided to
these parties in connection with their possible investment
in the Company and their participation in the
Restructuring.  A number of these parties are in ongoing
discussions with the Company and are also engaging in more
detailed meetings with the Company's management and
advisers.  It is expected that these discussions and a due
diligence review of the Group will continue until the end
of May 1998.  The Directors expect that by the end of May
1998 negotiations will have commenced between the Company,
its bankers, the interested investors and the
representatives of the convertible note holders to finalise
the terms of the Restructuring.

While it is not possible at this time to give any firm
indication as to when an agreement between the relevant
parties will be reached, it is anticipated that in
principle agreements will be entered into by early to mid-
June 1998.  Once in principle agreements have been
concluded, the Directors intend to request that trading in
the Company's shares be resumed.  At this point in time the
Directors believe that the Company is making significant
progress towards completing its restructuring.  Further
announcements will be made as and when appropriate.  In the
meantime, trading in the Company's shares remains

On behalf of the Board
Leung Ho Man, Paul
Chairman and Managing Director

Hong Kong, 28th April 1998

(SEHK 29-Apr-1998)

TUNG FONG HUNG: Results Announcement
For the period August 1, 1997 to January 31, 1998, Tung
Fong Hung (Holdings) Limited reports a loss of
HK$387,483,000 on turnover of HK$515,661,000. This compares
to a profit of HK$54,487,000 on turnover of HK$270,581,000
for the corresponding 1996-1997 period.
(SEHK 30-Apr-1998)

J A P A N  

JAPAN AIRLINES: S&P Cuts Debt Rating to Junk Status
Standard & Poor's Corp. cut Japan Airlines Co.'s long-term
credit rating to "junk" status, from an investment grade.
The news was largely expected, as the airlines' troubles
have long been known to investors. Japan Airlines Co. (9201
JP ) rose 1 yen to 402 after falling as much as 4 yen to
(Bloomberg Japan Equity Movers 30-Apr-1998)


KIA MOTORS: Corruption Probe Makes Third Party Sale Likely
Analysts say the widening investigation into allegations of
corruption by a former Kia Motors Corp chief shows the
South Korean Government will sell the nation's third-
largest car-maker to a third party despite strong labour
opposition. Kim Sun-hong, Kia's chairman until October,
will be questioned next week on allegations he created a
slush fund last year to lobby government officials and
bankers against pushing for Kia to go into court
receivership, and for his resignation. Last week,
prosecutors raided Mr Kim's house and investigated his bank

"All indications we get from the government are that Kia
will be auctioned off to a third party," ABN Amro Asia's
Seoul branch research head Del Ricks said. "It appears the
government and [Kia's] creditors agreed that Kia cannot
stand on its own."

Analysts said the allegations against Mr Kim, if proved,
would put further pressure on Kia's labour union to drop
its demand that the company retain its management and not
be sold to a third party.
(South China Morning Post 30-Apr-1998)


HALIM SECURITIES: Uniphoenix Unit Served Wind-up Petition
Uniphoenix Corp Bhd said its unit, Halim Securities Sdn
Bhd, was served a winding-up petition filed by Multi-
Purpose Bank Bhd for 16.075 million Malaysian ringgit
(S$6.8 million), Bernama news agency reported. Uniphoenix
said it has applied for a court order to strike out the
(Singapore BusinessTimes 30-Apr-1998)

INNOSABAH SECURITIES: KLSE Orders Firm's Trading Restricted
Innosabah Securities Bhd's trading activities will be
restricted by the Kuala Lumpur Stock Exchange (KLSE) from
today. The move will prevent Innosabah from buying shares
with borrowed money until the securities firm has
"regularised its financial position to the satisfaction of
the exchange", KLSE said. That means investors will be
required to pay cash up front to trade stock through
Innosabah. The company joins a list of 11 other brokerages
that have had their trading restricted by the stock
(Singapore BusinessTimes 30-Apr-1998)

KONSORTIUM: Ships to be Acquired by MISC
Malaysia International Shipping Corp (MISC) said it        
will make an announcement today on its proposed        
acquisition of shipping assets. A press conference will be
held after MISC's annual general meeting in Kuala Lumpur,
MISC said yesterday.

MISC said in March that it planned to acquire ships from
haulage firm Konsortium Perkapalan Bhd for an undisclosed
amount. Analysts said the moves were part of a rescue of
the ailing Konsortium, controlled by Mirzan Mahathir, son
of Prime Minister Mahathir Mohamad. In a related deal,
Petronas was to inject its tankers division into MISC,
raising its stake in the shipper to over 50 per cent from
29.34 per cent. MISC shares were last traded on April 20 at
6.35 Malaysian ringgit.
(Singapore BusinessTimes 30-Apr-1998)


NAPOCOR: Reveals Cash Flow Problems
The Philippines' National Power Corp (Napocor) is suffering
cash flow problems after oil refiners dropped an
arrangement which enabled the state utility to settle
obligations with tax credit certificates, an official
source said Wednesday.

"Consequently, Napocor's cash position has been adversely
affected," according to the text of a government report
provided by the sources. They did not give exact figures.  
Napocor ordinarily uses the certificates, which represent
its tax refunds from the government, to settle part of its
obligations from oil companies which supply the bulk of the
fuel that runs its power generating plants. The power
company is tax-exempt, but oil companies pass on taxes and
duties for the oil products to Napocor. The company issues
the certificates, whose value is equivalent to taxes and
duties of the oil it buys, instead of paying the full cost
to the oil companies. The oil companies then use the
certificates to offset corresponding liabilities they owe
to the Bureau of Internal Revenue.
(Agence France-Presse 29-Apr-1998)


RATANAKOSIN INSURANCE: Warning on Rehabilitation Plan
The rehabilitation plan of the cash-strapped Ratanakosin
Insurance, due to be submitted to the Insurance Department
today, must be practical and provides a clear timeframe, a
source from the Insurance Department said. The plan must
also include details of the company's assets and
liabilities. The source said the Insurance Department can
revoke the licence of Ratanakosin Insurance if the company
fails to satisfy the department over its rehabilitation
plan, though the company's asset values are estimated to be
higher than its liabilities. He said the Commerce Ministry
can cite the law stipulating that the ministry can order
the closure of any company which it finds to having caused
damage to the people.

As at December 31 last year, Ratanakosin had assets of 1.79
billion baht including uncollected premiums worth 529.38
million baht, while its liabilities totalled 1.46 billion
baht including 675.15 million baht unpaid claims. The
source said based on this financial statement, Ratanakosin
has been suffering severe tight liquidity, though its net
loss seems to be only about 145.77 million baht.
(Bangkok Post 30-Apr-1998)

SAHAVIRIYA STEEL: Prepares Restructuring Plan
After losing majority equity stakes in two of its three
core steel companies to Japanese investors, the Sahaviriya
Group is attempting to maintain majority ownership in the
remaining unit, hot-rolled steel-sheet producer Sahaviriya
Steel Industries Plc (SSI). SSI, burdened with US$360
million in foreign debts, is preparing a debt-restructuring
plan in which it hopes to generate Bt3 to Bt4 billion in
fresh equity funds from a capital increase, according to
its president Adisak Lowjun.

This plan would provide the company with sufficient funding
and pave the way for negotiations with Siam Commercial Bank
and Bank of Ayudhya to convert its short-term debts to
long-term debts. Wit Viriyaprapaikit, chief executive
officer of Sahaviriya group, urged Thai investors to
subscribe to the new shares to be offered by SSI. He said
Thais should try to keep a 51-per-cent control in SSI.

SSI will hold a shareholders' meeting on April 28 to
approve the increase in capital from Bt5.1 billion to
Bt15.2 billion whereby 225 million new shares will be
offered to existing shareholders and 500 million shares to
new investors through private placements, while another 225
million shares will be reserved for the exercise of
warrants offered to the subscribers of the new shares.

Sahaviriya group also operates property and information
technology businesses which have been hit hard by the
economic crisis. Although operating at only about one-
fourth of its capacity, SSI reported an operating loss of
Bt91 million in the first quarter and a foreign-exchange
gain of Bt3.1 billion. SSI recorded a loss of Bt10.6
billion in 1997.

"The company is preparing to receive financial support from
Japan which might be in the form of loans or equity worth
about Bt2 billion to Bt3 billion as a reserve to back up
our working capital," he said.

TCRSS's Japanese shareholders include NKK, Marubeni, Tomen,
Nichimen, Okura & Co and Toyota Tsusho. The Prime Minister
Chuan Leekpai presided at the official opening ceremony of
the $545-million steel plant yesterday, attended also by
the Japanese ambassador and hundreds of Japanese and Thai
(The Nation 30-Apr-1998)

THAI PETROCHEMICAL: Creditors Agree on Debt Moratorium
Creditors of Thai Petrochemical Industry Plc (TPI) have
agreed to allow the country's largest integrated
petrochemical concern to suspend servicing its huge US$3.8-
billion loan, TPI executives said yesterday. The debt
moratorium agreement involving 140 creditors will allow the
company more time to revive its operations, led by the
integration of its Rayong complex which was brought online
last year. TPI anticipates a substantial rise in export
earnings from sales of petrochemical products.

The company has asked to suspend payment of interest due
this year. The total amount was not known, but last year
TPI paid five billion baht in loan interest.

The company reported a 1997 consolidated net loss of 69.26
billion baht, the largest annual loss in Thai corporate
history. Much of the loss was due to huge unhedged foreign-
denominated liabilities and the baht's depreciation since
last July. TPI's year-end accounts included 66.81 billion
baht in foreign exchange losses, of which the company
realised 3.44 billion baht during 1997.
(Bangkok Post 30-Apr-1998)

U-SAT: Contract Terminated, Facilities Withdrawn
U-SAT Co has become the first telecom concessionaire to be
shut down amidst the economic crisis, while others are
striving to achieve a compromise on the payment of royalty
fees. Most of the companies have been granted licences
through the Communications Authority of Thailand (CAT).

The royalty fees do not only drive up the costs of telecom
services: they can also create unfair competition among the
players. However, ironically, some firms want licences even
though they have to pay steep royalty fees, hoping that
they can negotiate a reduction at a later date. A CAT
official said that U-Sat's contract had been terminated
earlier this month and all the facilities had been
withdrawn. As the company has only a few customers, there
should be no severe impact.

U-Sat provides very-small-aperture terminal services
(Vsats), a satellite-based communication link mostly used
in banking and finance and those businesses who need to
link their branches to one network. The company, owned by
major publishing house Wattachak Group Plc, entered the
market when the sector had already become saturated while
having to shoulder a high royalty-fee rate. In its 22-year
concession, U-Sat is supposed to pay CAT a total of Bt2
billion, a figure veteran Vsat operators consider
financially unviable due to the nature of the business.
(The Nation 30-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

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
copyrighted and any commercial use, resale or publication
in any form (including e-mail forwarding, electronic re-
mailing and photocopying) is strictly prohibited without
prior written permission of the publishers.  Information
contained herein is obtained from sources believed to be
reliable, but is not guaranteed.

The TCR -- Asia Pacific subscription rate is $875 per month
delivered via e-mail.  Additional e-mail subscriptions for
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