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             A S I A   P A C I F I C      

      Wednesday, May 6, 1998, Vol. 1, No. 53

                    Headlines


C H I N A   &   H O N G   K O N G

CATHAY PACIFIC: Cost-cutting Plan will Involve Layoffs
WING ON: Warns of New Layoffs, Reduces Staff by 20%


K O R E A

SAMMI STEEL: Dispute with U.S. Subsidiary


M A L A Y S I A

EKRAN BHD: Buys Back Bonds from Failed Dam Project


P H I L I P P I N E S

PEREGRINE SECURITIES PHILS: Firm Purchased by ATR


T H A I L A N D

ALPHATEC ELECTRONICS: Firm Reveals B10.6bn Loss
RATANAKOSIN INSURANCE: Seeks More Time to Prepare Plan


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

CATHAY PACIFIC: Cost-cutting Plan will Involve Layoffs
------------------------------------------------------
Cathay Pacific Airways has set itself an aggressive 13 per
cent cost-cutting target for the year which analysts say
will inevitably involve massive staff cuts if it is to be
achieved. Cathay chairman Peter Sutch said cutting unit
costs from $2.57 per available tonne kilometre (ATK) - a
widely used measure - to $2.40 per ATK was achievable.

Salaries are one of Cathay's biggest costs and the airline
has already trimmed about 870 people from its workforce
this year. Mr Sutch said there were no specific plans to
further cut staff numbers.

It is the first time Cathay has published cost targets. SG
Securities regional airline analyst Ian Wild said he
doubted whether the cost target would be achieved. "To my
knowledge it would be the first time in the history of the
airline industry that costs have been reduced 13 per cent
year-on-year," he said. Achieving the target would involve
the loss of at least 800 jobs, he said.

Cathay has also been desperately exploring means of
boosting revenue. The airline has said it was likely to
enter an alliance with several other regional and global
carriers.
(South China Morning Post 05-May-1998)


WING ON: Warns of New Layoffs, Reduces Staff by 20%
----------------------------------------------------
Wing On Department Stores issued a new warning of mass lay-
offs yesterday after announcing the immediate sacking of
nearly 20 per cent of its staff.

About 270 sales assistants and managers were told they had
lost their jobs when they reported for work yesterday
morning - a move unionists condemned as uncivilised. The
sackings, hitting some staff who had worked for the company
for more than 20 years, came despite workers offering to
forego a pay rise.

Founded in Shanghai 91 years ago, Wing On is one of Hong
Kong's oldest department stores, with nine branches and
about 1,600 staff before the lay-offs. The parent company,
Wing On Company International, had to pump in $150 million
to its stores last month to help survive the retail slump.

It was not enough to stop personnel officers arriving at
branches yesterday to hand out letters of termination to
targeted employees, asking them to go immediately. The
victims were paid last salaries, payment in lieu of notice
and long service pay.
(South China Morning Post 05-May-1998)


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

SAMMI STEEL: Dispute with U.S. Subsidiary
-----------------------------------------
It appears that Al Tech Specialty Steel Corp. will not be
hampered in its plans to use the bankruptcy courts to free
itself from its parent company, Sammi Steel Co. Ltd. of
Seoul, South Korea.

"We will emerge with new owners, although I have no idea
who," said Kevin Sanvidge, corporate director of
administration for Al Tech. McDonald & Co. Securities Inc.,
an investment banking firm in Cleveland, was hired April 13
to market Al Tech and to pursue leads. The company should
fetch upwards of $30 million, which is the liquidation
value of Al Tech, Sanvidge said.

Al Tech, a Dunkirk, Chautauqua County-based manufacturer of
specialty steel products that operates a plant in
Watervliet, filed Dec. 31 for Chapter 11 bankruptcy
protection in U.S. Bankruptcy Court in Buffalo.

In papers filed in the bankruptcy, Al Tech charged that
Sammi Steel was siphoning off cash and other assets to
bolster its own faltering financial position. Al Tech also
charged that Sammi Steel had breached its fiduciary
responsibility to Al Tech, and sought to sever ties to the
parent company. Sammi Steel, which is publicly traded on
the Korean stock exchange, filed for bankruptcy protection
a year ago. It currently is operating under a court-
appointed monitor.

In January, Al Tech was successful in obtaining an
injunction preventing Sammi Steel from tampering with
existing management, and from diverting cash and assets for
its own benefit. While it had appeared that Sammi Steel
would fight the ruling, the company apparently has backed
off. Officials of Sammi Steel have declined to be deposed
in the Al Tech bankruptcy proceedings, and Sanvidge said it
appeared that the Korean company would permit Al Tech's
exit without a struggle.

"Sammi is a non-issue right now. They will let us go. We
are insolvent; we owe the creditors and Sammi does not have
the money to bail us out," Sanvidge said.

Al Tech's bankruptcy petition listed $90.3 million in
assets and $250.8 million in liabilities, which includes
debts to Sammi Steel affiliates that are being contested.

Since the bankruptcy filing, Al Tech has been making
progress toward profitability.
(Capital District Business Albany 04-May-1998)


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

EKRAN BHD: Buys Back Bonds from Failed Dam Project
--------------------------------------------------
Ekran Bhd said it used cash raised from a 300 million
ringgit (S$81.9 million) bond sale to buy back those bonds.
The money was to have been used to finance the Bakun Dam
hydroelectric project, which was shelved last year due to
the economic downturn sparked by South-east Asia's currency
turmoil. "As the company has not identified any alternative
investment opportunities, it has decided to utilise (the
money) to purchase the bonds as a means of extinguishing
the debt," Ekran said in a statement.
(Singapore BusinessTimes 05-May-1998)


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

PEREGRINE SECURITIES PHILS: Firm Purchased by ATR
-------------------------------------------------
ATR International Holdings Ltd., a company registered in
the British Virgin Islands, is taking over Peregrine
Securities Phils. Inc. by acquiring majority ownership of
Peregrine Capital Phils. Inc. which owns the local
brokerage firm. In a letter to the Securities and Exchange
Commission, Bautista, Picazo, Tan & Fider law offices said
ATR International Holdings Ltd. is buying a 51 percent
equity in Peregrine Capital.

Through its lawyers, ATR International said it will buy 40
percent of Peregrine Capital from existing stockholders and
11 percent from ATR Holdings Ltd. which will bring its
ownership to 51 percent. ATR International is asking the
SEC to approve its final equity in Peregrine Capital which
will effectively exceed 40 percent.

Peregrine Capital is a joint venture between Peregrine
International Ltd. of United Kingdom and Peregrine
Securities Ltd. of Hong Kong (40 percent) and ATR Holdings
(60 percent), a domestic corporation owned by Ramon Arnaiz,
Manuel Tordesillas, and Lorenzo Diaz. Peregrine Capital
said it expects to finalize by May 7 the transaction
involving the transfer of 1.94 million shares to ATR
International.

The planned sale follows negotiations held by Peregrine
Investment Holdings Ltd. of Hong Kong and Peregrine
Securities on the possible sale by the foreign company's
shares in the local brokerage house to prospective
investors to further stabilize the operations of the
latter. Assets of Peregrine Investments are up for sale due
to its serious liquidity problems resulting from heavy
losses in Indonesia. The High Court of Hong Kong had
already appointed three joint provisional liquidators to
oversee the disposal of the assets and manage the affairs
of the holding company.

Peregrine has an excess net capital of P126.6 million and
P108.62 million as of end-December last year and Jan. 13,
1998. Aggregate indebtedness amounted to P36.41 million and
P104.99 million as of the same periods. The audit showed
Peregrine Securities' brokers account at P126.83 million
consisting of P78.63 million from local clients and P48.2
million from foreign investors. Of the amount, 93 percent
are fully secured.
(Manila Times 05-May-1998)


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

ALPHATEC ELECTRONICS: Firm Reveals B10.6bn Loss
-----------------------------------------------
Debt-ridden Alphatec Electronics yesterday announced a
reviewed consolidated net loss in the first six months of
last year of 10.628 billion baht, compared with a net
profit of 316.46 million baht in the same quarter of 1996.
The company recorded a reviewed quarterly net loss in the
second quarter of 1997 totalling 10.255 billion baht,
compared with 148.72 million baht net profit in the same
period of 1996.

The financial statement for the quarter was announced after
a lengthy dispute between the company's major shareholders
led by Charn Aswachoke, the company's founder, and
creditors. The company recently said it could not repay
trade and financial creditors unless they were willing to
convert much of the debt to equity. The computer-chip maker
is behind on payments exceeding US$450 million.

Mr Charn's group has opposed the appointment of new auditor
Price Waterhouse in place of Peat Marwick Suthee, which his
group supported. The company's problems stem from
overinvestment in Thailand and abroad, compounded by the
slump in the world electronics market last year.

Later, Price Waterhouse, an external auditor hired by the
creditors, found irregularities in the electronics firm's
auditing process. They said management had overstated
profits by ten billion baht over the past three years.
Several transactions were discovered showing that Mr Charn
had approved up to four billion baht in transfers to other
companies within the Alphatec group, without the approval
of the company board. The company also defaulted on $43
million in Euroconvertible debentures.
(Bangkok Post 05-May-1998)


RATANAKOSIN INSURANCE: Seeks More Time to Prepare Plan
------------------------------------------------------
Ratanakosin Insurance yesterday asked the Commerce Ministry
for more time to prepare a rehabilitation plan. It also
applied for loans worth between 80 million and 100 million
baht from the General Life Insurance Association, using its
old building on Vibhavadi Rangsit Road as collateral.

"Ratanakosin's letter was no different from the letters it
submitted earlier," Deputy Commerce Minister Paitoon
Kaewthong said. "There remains no transparency in terms of
where it could find money to solve its liquidity problem."
Chai Sophonpanich, president of the General Life Insurance
Association, said the association could not extend any
loans because it had no policy to carry out such
activities. Besides, he said, it did not have such large
sums of money on hand.

However, the association and its 20 non-insurance members
would accept the transfer of 240,000 active policies worth
about 100 million baht in premiums from Ratanakosin
Insurance, Mr Chai added.

Ratanakosin was ordered suspended on April 16, after
failing to pay claims to policyholders, garages, and
employee salaries worth more than 100 million baht.
In addition, it failed to maintain a capital fund of at
least 10% against policy reserves, as required by law since
the end of last year. The company was given two weeks to
prepare a rehabilitation plan and find cash to pay
outstanding debts, but its first proposal failed to satisfy
the Insurance Department.

The department said the plan lacked clear signs in terms of
where and how it would find funds. The company has tried
several approaches, all of them unsuccessful. They include
speeding up the raising of 50 million baht in unpaid
registered capital, laying off staff, acquiring loans or
disposing of its 350-million-baht headquarters.
Its latest attempt to sell the building drew an offer of
just 150 million baht from Singaporean interests.
(Bangkok Post 05-May-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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