TCRAP_Public/980601.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     

      Monday, June 1, 1998, Vol. 1, No. 70

                    Headlines


C H I N A   &   H O N G   K O N G

CHEERFUL HOLDINGS: Seeking $106.9 Through Rights Issue
DC FINANCE: 1997 Results Announcement
EASYKNIT INTERNATIONAL: Suspension of Trading
SUN HUNG KAI: Denies Rumours that Banks Demand Repayment
UDL HOLDINGS: Denies Reports of Restructuring Proposals


I N D O N E S I A

BANK CENTRAL ASIA: IBRA Steps in to Take Over
SALIM GROUP: Ties to Suharto Regime Spell Trouble for Group


J A P A N

ALL NIPPON AIRWAYS: Posts First-ever Loss
BANK OF TOKYO-MITSUBISHI: Downgraded by Moody's
DAI-ICHI KANGYO BANK: Downgraded by Moody's
HITACHI: Earnings Results Lower
INDUSTRIAL BANK OF JAPAN: Downgraded by Moody's
MITSUBISHI MOTORS: Posts $743 Million Loss
SAKURA BANK: Downgraded by Moody's
SUMITOMO BANK: Downgraded by Moody's


K O R E A

HANWHA GROUP: To Sell Oil Refinery Group
KOREA EXCHANGE BANK: Commerzbank Investment Landmark


M A L A Y S I A

EON BHD: Cash Reserves Down Sharply
LAND & GENERAL: Chairman Sells Large Piece of Company


T H A I L A N D

NTS STEEL: Industry Faces Hard Times
SAHAVIRIYA STEEL: Industry Faces Hard Times


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

CHEERFUL HOLDINGS: Seeking $106.9 Through Rights Issue
------------------------------------------------------
Brokerage Cheerful Holdings is seeking $106.9 million
capital, before expenses, from shareholders through a
rights issue. The firm yesterday proposed selling 1.06
billion new shares to shareholders on a five-for-one basis,
largely to aid cash flow. The cash call was part of a
restructuring plan led by controlling shareholder CCT
Telecom Holdings after it took over the cash-strapped
brokerage in February.

Cheerful chairman Bankee Kwan Pak-hoo said: "The company's
results were hit hard by the stock market crash last year
but we have launched a restructuring to improve its
performance." The restructuring involved reinforcing
internal management and risk control, offloading non-core
businesses, reducing the debt ratio, renaming the company
Celestial Asia Securities Holdings (Cash) and moving its
headquarters to The Centre, Central, he said.

Restructuring will be funded partly by the rights issue.

Cheerful planned to sell the shares at 10 cents each, a
67.7 per cent discount to the last closing of 31 cents on
Wednesday.

CCT Telecom pledged to subscribe for its portion of the
entitlement of 550 million rights shares valued at $55
million and an extra 250 million rights shares at $25
million. This will boost CCT Telecom's Cheerful stake to
74.8 per cent from 51.4 per cent.

Cheerful yesterday reported an audited net loss last year
at $109.53 million compared with a $30.14 million net
profit in 1996. The loss arose mainly from a $273.2 million
bad and doubtful debt provision, with at least half
attributed to margin lending on Leading Spirit Holdings and
Leading Spirit Conrowa Electric shares.
(South China Morning Post 29-May-1998)

"The board of directors of Cheerful Holdings Limited
announces that the Board is proposing for a rights issue
for the Company and has accordingly requested for the
suspension of trading in the securities of the Company on
the Stock Exchange from 10:00 a.m. on 28th May 1998 pending
the publication of a formal announcement in relation
thereto.  Upon full publication thereof, the Board will
request for the resumption of trading in due course.

The Board also wishes to emphasise that the temporary
suspension was made at the request of the Company and ONLY
relates to the trading of its securities due to the Rights
Issue being proposed and NOT in any case relates to the
principal business of the Group.

    For and on behalf of
    Cheerful Holdings Limited
    Joan E Kwok
    Company Secretary

    28th May, 1998"

(SEHK 28-May-1998)


DC FINANCE: 1997 Results Announcement
-------------------------------------
For the period January 1, 1997 to December 31, 1997, DC
Finance (Holdings) Limited reports a net loss of
HK$398,133,000 on turnover of HK$756,032,000. This compares
to a profit of HK$188,068,000 on turnover of HK$264,076,000
for the corresponding 1996 period.
(SEHK 28-May-1998)


EASYKNIT INTERNATIONAL: Suspension of Trading
---------------------------------------------
At the request of Easyknit International Holdings Limited,
trading in its shares will be suspended with effect from
10:00 a.m. today (28/5/1998) pending an announcement.
(SEHK 28-May-1998)


SUN HUNG KAI: Denies Rumours that Banks Demand Repayment
-------------------------------------------------------
Developer Sun Hung Kai Properties (SHKP) yesterday denied
suggestions that one of its creditor banks has asked it to
repay loans before maturity.

"We have not received any letters from banks wanting to cut
our credit," SHKP general manager of corporate finance Au
Man-to said. "All of our bankers will continue lending to
us - whether European, Japanese or local banks. The
nationalities of our bankers are very diversified."

One local fund manager said earlier this week that a
European bank had written to its Hong Kong clients -
including SHKP - wanting repayment of all loans within six
weeks.

Mr Au dismissed this: "All of SHKP's current credit lines
can be renewed and I want to emphasise that we have even
received proposals from new banks [that we have not dealt
with before] to extend us new lines of credit.

"We have no shortfall between this year's cash flow and
current liabilities."

Mr Au declined to reveal SHKP's present liabilities, saying
instead that SHKP had sold $24 billion worth of flats since
July.

He said net debt was about 20 per cent of total shareholder
funds, in line with company policy.

"Whether we take on new credit or not depends on the banks'
proposals - if their conditions are favourable then it
would be only reasonable that we would take their money."
(South China Morning Post 29-May-1998)


UDL HOLDINGS: Denies Reports of Restructuring Proposals
-------------------------------------------------------
The board of directors of UDL Holdings Limited has noted a
press article in Hong Kong Economic Journal today which
mentions there are three different proposals for the debt
restructuring of the Company, namely, (i) a 5-year
repayment scheme, (ii) cash injection of HK$200 million
into the Company by China Construction Holdings Limited,
the holding company of Sino Group Limited which is not
listed on the Stock Exchange and presently owns
approximately 20.21 per cent of the issued share capital of
the Company, in return for a controlling stake in the
Company and (iii) a cash injection proposal for the Company
by an independent third party which is a listed company on
the Stock Exchange.

The Board would like to clarify that :

1. As a self rescue plan, the Company has proposed a debt
repayment proposal to its bankers and / or financial
institutions (together the "Financiers") relating to
repayment of project loans totalling HK$240 million by the
end of 2002, unsecured loans totalling HK$400 million by
March, 2004 and secured loans totalling HK$560 million by
March, 2004.

2. It has received a preliminary proposal from Sino
representing themselves, other independent investors and
Mr. Leung Yat Tung who is the Chairman of the Company,
regarding cash injection into the Company of about HK$200
million in exchange for equity issued by the Company.  The
equity issue may or may not involve a change in controlling
stake in the Company.

3. It is currently holding preliminary discussions with an
independent third party which is a listed company on the
Stock Exchange relating to a proposal of possible
investment in the Company and / or equity issued by the
Company.  The equity issue may or may not involve a change
in controlling stake in the Company.

However, terms of the above three proposals have not been
finalized and such proposals may or may not proceed.

In addition, the Board confirms that it is currently
holding preliminary discussions with several independent
potential investors relating to a possible proposal of cash
injection into the Company and / or equity issued by the
Company.  However, terms of such proposal have not been
finalized and such proposal may or may not proceed.

Shareholders of the Company should exercise caution when
dealing in the shares of the Company.  Further announcement
will be made when there is any material development to the
above-mentioned matters.

By Order of the Board

Leung Yat Tung
Chairman

Hong Kong, 28 May 1998

(SEHK 28-May-1998)


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

BANK CENTRAL ASIA: IBRA Steps in to Take Over
---------------------------------------------
The Indonesian Bank Restructuring Agency (IBRA) stepped    
in to take over BCA after the bank's net worth was      
eroded by a rush of depositors withdrawing money, which
necessitated the central bank pumping in a massive eight
trillion rupiah (S$1.1 billion) to honour obligations.

IBRA's shocking takeover of BCA, which has assets of 54
trillion rupiah, is a telling sign of the sudden change in
fortunes for the Salim Group, the country's largest
business conglomerate. Analysts said the Salim Group's
close ties to Mr Suharto are proving to be a major
liability and the group faces a major political backlash.
The resignation of President Suharto is leading to a major
realignment in the country's close-knit business and
political establishment. While the Salim Group controls 70
per cent of BCA, the other shareholders are Mr Suharto's
eldest daughter, Siti Hardiyanti Rukmana, and son Sigit
Harjojudanto.

The Media Indonesia newspaper reported yesterday that the
group was planning to buy out the Suharto family's interest
in BCA, in an attempt to distance itself from the former
First Family. But there was no official comment yesterday
from the bank on the proposed sale and the central bank
governor also declined to speak on the issue.

The 82-year-old Mr Liem is due to return from Los Angeles
early next week to forestall the crisis in the group. Mr
Liem's son, Anthony Salim, who has day-to-day control of
the group, could not be reached for comment in Jakarta
yesterday.

Banking sources told BT last night that Anthony Salim had
made several appeals to the government on Wednesday to
prevent an IBRA takeover of BCA. But he threw in the towel
after depositors continued to withdraw money from the bank
yesterday morning.

The Salim Group initially announced that it would inject
one trillion rupiah (S$144 million) into the bank to boost
its capital base. But depositors were not reassured and the
group turned to the central bank for help. Since May 18,
Bank Indonesia has pumped liquidity credits equivalent to
200 per cent of BCA's shareholders funds. Under IBRA rules,
a bank that draws liquidity credits equivalent to 200 per
cent of its shareholders funds is liable to be taken over
by the agency.

IBRA said in a statement that it would take the necessary
steps to restructure BCA by conducting due diligence and
placing a supervisory team to monitor its operations. The
government has stated that it will guarantee all deposits
in BCA, as it did for other banks either liquidated or
taken over by IBRA.
(Singapore BusinessTimes 29-May-1998)

Standard & Poors (S&P) today revised its counterparty
rating on PT Bank Central Asia (BCA) from "CCCpi" to "N.M."
(not meaningful) to indicate the uncertain future financial
outlook of the Indonesian bank. S&P said the change in
rating was in response to the bank coming under the
supervision of IBRA.
(Asia Pulse 29-May-1998)


SALIM GROUP: Ties to Suharto Regime Spell Trouble for Group
-----------------------------------------------------------
The Salim Group's troubles started on May 14 when Jakarta
witnessed unprecedented rioting. An angry mob descended on
Mr Liem's central Jakarta residence and destroyed
everything in sight. Several branches and automated teller
machines of Band Central Asia were also destroyed in the
two days of rioting, crippling the country's largest
private bank.

Since May 18, when most Jakarta banks partially re-opened
for business, BCA has witnessed unprecedented withdrawals
by several thousand depositors. Analysts feel the primary
reason was a loss of depositor confidence.

On Wednesday, the Jakarta Stock Exchange suspended trading
in PT Indofood, the world's largest instant noodle maker,
because its share price plunged 31 per cent. Investors
bailed out because of market perception that Mr Suharto's
resignation will lead to the cancellation of special
benefits to Indofood, in which the former First Family has
sizeable equity. A key Indofood unit is PT Bogasari Flour
Mills, which has a stranglehold over the processing of
wheat flour in Indonesia.

The Suharto family's close ties with the Salim Group are
also evident in several other listed firms. Mr Suharto's
cousin, Sudwikatmono, is president-director of PT
Indocement, one of the Indonesia's largest cement
manufacturers. Members of the Suharto clan also have
sizeable equity in Indocement.
(Singapore BusinessTimes 29-May-1998)


=========
J A P A N
=========

ALL NIPPON AIRWAYS: Posts First-ever Loss
-----------------------------------------
All Nippon Airways has tumbled into the red for the first
time in 30 years, dragged down by tough price competition
and a pilots' strike. ANA, Japan's second largest airline,
took a parent net loss of 2.7 billion yen (about HK$152.2
million) in the past year to March after a 3.9 billion yen
profit the previous year. Pretax profit tumbled 69.7 per
cent to 5.2 billion yen, with sales up just 2.6 per cent at
910.3 billion yen, ANA said yesterday.
(South China Morning Post 29-May-1998)


BANK OF TOKYO-MITSUBISHI: Downgraded by Moody's
-----------------------------------------------
Five of Japan's largest banks yesterday had their credit
and stability ratings downgraded by Moody's, the credit
agency. The report by Moody's, which described Japan's
banking system as being in a state of slow-motion collapse
with a "third wave" of economic crisis threatening "to
overwhelm many banks' internal resources", confirmed many
analysts' worst fears about the impact the stagnant
Japanese economy and the crisis in Asia is having on banks
in Japan.
(Guardian 28-May-1998)


DAI-ICHI KANGYO BANK: Downgraded by Moody's
-------------------------------------------
Five of Japan's largest banks yesterday had their credit
and stability ratings downgraded by Moody's, the credit
agency. The report by Moody's, which described Japan's
banking system as being in a state of slow-motion collapse
with a "third wave" of economic crisis threatening "to
overwhelm many banks' internal resources", confirmed many
analysts' worst fears about the impact the stagnant
Japanese economy and the crisis in Asia is having on banks
in Japan.
(Guardian 28-May-1998)


HITACHI: Earnings Results Lower
-------------------------------
Hitachi today unveiled dismal earnings results for the  
last business year as protracted weakness in memory chip
prices and poor consumer electronics sales threw a wrench
into its profit engine. The leading Japanese electronics
maker said its group net profit for the 1997/98 business
year ended on March 31 plunged about 96 percent to $25.4
million. But rationalization measures in its semiconductor
business and drastic spending cuts would help to lift its
profit this year, the company said. It predicted group net
profit bouncing back in the current business year,
forecasting a figure of 40 billion yen.

The company also plans to spin off part of its troubled air
conditioner and refrigerator operations in July.

Moody's Investors Service said on Tuesday it had put the
Aa2 long-term debt rating of Hitachi under review for a  
possible downgrade. It said the action reflected its
concern that weak earnings and cash flow caused by the
unfavorable operating environment for Hitachi's core
businesses would continue.
(Reuters 28-May-1998)


INDUSTRIAL BANK OF JAPAN: Downgraded by Moody's
-----------------------------------------------
Five of Japan's largest banks yesterday had their credit
and stability ratings downgraded by Moody's, the credit
agency. The report by Moody's, which described Japan's
banking system as being in a state of slow-motion collapse
with a "third wave" of economic crisis threatening "to
overwhelm many banks' internal resources", confirmed many
analysts' worst fears about the impact the stagnant
Japanese economy and the crisis in Asia is having on banks
in Japan.
(Guardian 28-May-1998)


MITSUBISHI MOTORS: Posts $743 Million Loss
------------------------------------------
Mitsubishi Motors Corp. said today it fell into the red for
the fiscal year ended March 31, stung by low consumption at
home and the financial crisis in Asia. It was the first
time that Mitsubishi posted a net and pretax loss on both a
parent and group basis since listing on the stock exchange
in December 1988. Mitsubishi posted a group net loss of
101.9 billion yen ($743.8 million), compared with a group
profit of 11.6 billion ($84.7 million) a year earlier.
(AP Wire 28-May-1998)


SAKURA BANK: Downgraded by Moody's
----------------------------------
Five of Japan's largest banks yesterday had their credit
and stability ratings downgraded by Moody's, the credit
agency. The report by Moody's, which described Japan's
banking system as being in a state of slow-motion collapse
with a "third wave" of economic crisis threatening "to
overwhelm many banks' internal resources", confirmed many
analysts' worst fears about the impact the stagnant
Japanese economy and the crisis in Asia is having on banks
in Japan.
(Guardian 28-May-1998)


SUMITOMO BANK: Downgraded by Moody's
------------------------------------
Five of Japan's largest banks yesterday had their credit
and stability ratings downgraded by Moody's, the credit
agency. The report by Moody's, which described Japan's
banking system as being in a state of slow-motion collapse
with a "third wave" of economic crisis threatening "to
overwhelm many banks' internal resources", confirmed many
analysts' worst fears about the impact the stagnant
Japanese economy and the crisis in Asia is having on banks
in Japan.
(Guardian 28-May-1998)


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

HANWHA GROUP: To Sell Oil Refinery Group
----------------------------------------
South Korea's Hanwha Group, which struck a deal Thursday
with AES Corp. of the United States to sell Hanwha Energy
Co.'s power plant, will also sell oil refinery division of
Hanwha Energy by the year's third quarter. Hanwha Energy
president Woo Wan-shik told reporters that negotiations to
sell the refining sector are proceeding well, predicting
the signing of a contract by September at the latest.

Woo admitted that his company has negotiated with Daewoo
Group and National Iranian Oil Co. (NIOC) over joint take-
over prospects.

"But they're just one of many possibilities. Nothing has
been fixed because negotiations are still at the early
stage," Woo said. Foreign candidates that have offered to
buy the refining sector include the U.S. giant Caltex, and
another U.S. oil giant, and NIOC, and another Middle-East
oil-producing nation and a European investment bank, Woo
explained.

Hanwha Energy wants to sell the sector outright, but if
conditions are not right, it may have to seek a joint
venture, he said.

Woo said it took six months to finalize the power plant  
sale, and therefore, the sale of the refining unit is
unlikely to be realized within the first half. Meanwhile,
an informed source at Hanwha Energy's main creditor bank,
Hanil Bank, told reporters that joint acquisition by Daewoo
and NIOC is Hanwha's first choice.
(Asia Pulse 29-May-1998)


KOREA EXCHANGE BANK: Commerzbank Investment Landmark
----------------------------------------------------
The agreement between the Korea Exchange Bank (KEB) and
Commerzbank of Germany that the German bank will invest
US$250 million in the KEB via acquisition of new shares is
interpreted here as a landmark in the country's efforts to
step up restructuring of the domestic financial industry.

The purchase of KEB stocks by such a leading international  
bank as Commerzbank is expected to improve the country's  
credit ratings overseas.

Vogt explained that his bank decided to purchase the stocks  
at such a good price because Commerzbank is positive about
the future of KEB and the Korean economy in the long run.
Commerzbank's new gain is in line with its global strategy  
to reinforce its position in Asia, an area where it was not
as well known as other global banking players, the German
bank's chief representative said.

Hong noted that the stock acquisition will boost KEB's
capital from 825 billion won to 1,175 billion won.
Commerzbank will become the biggest private shareholder.

With the tie-up, KEB perhaps can play an active role now in  
restructuring the banking industry.
(Asia Pulse 29-May-1998)


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

EON BHD: Cash Reserves Down Sharply
-----------------------------------
Eon Bhd, the main distributor of Proton cars, saw its total
cash reserves dwindle by two-thirds to 198.5 million
Malaysian ringgit (S$85.9 million) in 1997 on poor sales,
according to its latest annual report. Indeed, the decline
in EON's cash position was matched by a four-fold surge in
its stock of Proton units. EON reported that it ended up
with RM541 million worth of finished Proton vehicles at
end-1997, compared to RM135 million worth in 1996.

Car sales have seen their steepest falls this year of up to
60 per cent, but for EON, the fall-off in sales started as
early as last November due to harsher credit terms imposed
by Malaysian banks. Continued sluggish demand for cars and
tight credit conditions have since led both EON and Proton
to negotiate a distribution arrangement more amenable to
EON, analysts said.
(Singapore BusinessTimes 29-May-1998)


LAND & GENERAL: Chairman Sells Large Piece of Company
-----------------------------------------------------
Land & General chairman Wan Azmi Wan Hamzah recently sold a
chunk of the company but he is not bailing out altogether.

"I'm not selling out of the company," the prominent
businessman told BT on Wednesday. He said the sale of a
block of L&G shares was to meet his "obligations" but
declined to elaborate.

Mr Wan Azmi sold 12.14 million shares or about 2.4 per cent
of the company's share capital at an undisclosed price
through a private placement and in the open market. He now
has 73.77 million shares, or 14.8 per cent of the company.  
The second single largest shareholder in the company is the
Employees Provident Fund, with a 13.4 per cent stake.

L&G was badly hit last year due to the property slump and
unfavourable conditions faced by its other businesses --
timber, oil and gas, and investments. The company recorded
a group net loss of 258.9 million Malaysian ringgit (S$112
million) in 1997 compared to a net profit of RM204.7
million in 1996. It was capitalised at RM358.6 million at
the end of last year compared to its high of RM3 billion in
1996.

Yesterday, the stock closed 1.5 sen down at 63 sen. This is
a far cry from its high of RM7.50 in 1996. Its all-time
high was RM14 in 1994.
(Singapore BusinessTimes 29-May-1998)


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

NTS STEEL: Industry Faces Hard Times
------------------------------------
Some 50 Thai steel-makers were forced to shut up shop in
the first quarter of the year as a result of the economic
crisis, a research report said Thursday. The report,
published by Thai Farmers Bank Research Centre, said the
firms had been forced out of business due to severe
liquidity problems, and a sharp drop in demand from the
construction and automotive industries. To cope with the
crisis, described as the worst in the sector's history,
steel firms here are desperately seeking foreign partners
and trying to negotiate debt restructuring with local and
overseas creditors. NTS Steel Group recorded accumulated
debts of 16.9 billion baht over the quarter.
(Agence France-Presse 28-May-1998)


SAHAVIRIYA STEEL: Industry Faces Hard Times
-------------------------------------------
Some 50 Thai steel-makers were forced to shut up shop in
the first quarter of the year as a result of the economic
crisis, a research report said Thursday. The report,
published by Thai Farmers Bank Research Centre, said the
firms had been forced out of business due to severe
liquidity problems, and a sharp drop in demand from the
construction and automotive industries. To cope with the
crisis, described as the worst in the sector's history,
steel firms here are desperately seeking foreign partners
and trying to negotiate debt restructuring with local and
overseas creditors.

One of Thailand's larger hot-rolled steel producers,
Sahaviriya Steel Industries plc, recorded a net loss in
1998 of nearly 10 billion baht (256 million dollars) in the
first quarter on an outstanding debt of 15 billion baht,
the report said.
(Agence France-Presse 28-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

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