/raid1/www/Hosts/bankrupt/TCRAP

/raid1/www/Hosts/bankrupt/TCRAP_Public/980605.MBXT 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, June 5, 1998, Vol. 1, No. 74 Headlines C H I N A & H O N G K O N G CP POKPHAND: Stock Exchange May Take Action FORTUNA INTERNATIONAL: Loss Forces Shift of Focus MARIA'S BAKERY: Maria's New Owners May Rehire Workers MING FUNG GROUP: Hearing Set on Wind up of Ming Fung Units TOP BALL PROPERTIES LIMITED: Winding up Notice J A P A N ALL NIPPON AIRWAYS: Strike May Resume HOKKAIDO TAKUSHOKU BANK: Shareholders to Meet in June MAKITA CORP: Moody's May Cut Debt Rating NIPPON STEEL CORP: Steel Firms Receive Cuts in Debt Rating K O R E A DAEWOO GROUP: Rumored to be on Government's Hit List DONG AH CONSTRUCTION: Dong Ah Creditors Name New Chairman HYUNDAI ELECTRONICS: Cuts Chip Production HYUNDAI GROUP: Rumored to be on Government's Hit List JINRO COORS: Takeover of Brewery Will be Finalized Soon KWACHON INDUSTRY: Bankruptcy Filing Announcement LG GROUP: Rumored to be on Government's Hit List SK GROUP: Rumored to be on Government's Hit List SAMSUNG GROUP: Rumored to be on Government's Hit List M A L A Y S I A CYGAL BHD: Applies to Strike Out Winding up Petition HO WA GENTING: Unit Defaults on PB Securities Loan SENHONG ELECTRICAL SDN BHD: Winding up Notice UNITED ENGINEERS: To Sell 20% of Unit to Pay Debt S I N G A P O R E PC CORP: Defaults on Loan Repayment T H A I L A N D BANGCHAK PETROLEUM: Signs a US$150M Loan Agreement BANGKOK LAND: Posts Losses for 1997 KRUNG THAI BANK: Share Sale to Ease Credit Crunch THAI MILITARY BANK: Clarifies News on Recapitalization ================================= C H I N A & H O N G K O N G ================================= CP POKPHAND: Stock Exchange May Take Action -------------------------------------------- The stock exchange has reserved its right to take action against CP Pokphand for failing to disclose connected transactions worth $129.3 million last year. The company said yesterday certain subsidiaries advanced loans to a firm ultimately controlled by two directors and to a joint venture in which the firm was a partner. FORTUNA INTERNATIONAL: Loss Forces Shift of Focus ------------------------------------------------- Hong Kong-listed Fortuna International Holdings is shifting its core business to food and beverages from electronic products after the company posted a loss on the business last year. The acquisition of the company's Firstone Investment and Shenzhen Capstone Industrial by Guangnan Hong (Group) is expected to be completed by end July. The company said it might continue to dispose of some of the electronic business during the year. Vice chairman Liang Siaoqian said the group would soon announce a string of new investment opportunities. MARIA'S BAKERY: Maria's New Owners May Rehire Workers ----------------------------------------------------- Edible oil manufacturer Hop Hing announced yesterday it would purchase various assets of Maria's including fixtures and equipment at its retail outlets for a new chain of bake shops which are expected to reopen business next week under the name Maria's Bakery. Hop Hing said as many jobs as possible would be provided but there's no concrete plans yet about cake coupons issued by Maria's. However, Hop Hing would not take responsibility for any liability that Maria's had incurred over the redemption of its coupons by two cake shop chains which were said to be planning to take Maria's to court for non- payment of cakes bought with the coupons. Complaints involving cakes worth over $3.5 million had been filed with the Consumer Council which is urging businesses to consider self-insurance schemes and self-indemnity funds, in order to regain consumer confidence. Consumers are also urged to weigh the pros and cons when buying into pre-payment schemes. MING FUNG GROUP: Hearing Set on Wind-up of Ming Fung Units ---------------------------------------------------------- According to provisional liquidator KPMG Peat Marwick, a hearing to wind up the four firms in the Ming Fung Group has been set for July 8 and negotiations were underway with buyers for Ming Fung's business generally and for individual licences and memberships. An informal meeting with the clients of Ming Fung will be held next week for the provisional liquidators to report to the clients on the progress of the provisional liquidation. Ming Fung Group majority shareholder and managing director Chan Kwong-hung was arrested on May 23 for alleged theft of client funds to cover loss-making positions in his personal futures trading. The SFC applied to the court to wind up the four companies under the group: stockbroking arm Chark Fung Securities, futures trading arm Winton Commerce, leveraged foreign exchange company Ming Fung Bullion, and its margin financing company Kee Fung Sing International Finance. The group has eight licences which would be valuable to potential buyers interested in entering the local market. There are three stock exchange licences, a commodities trading licence, a futures licence, a futures clearing licence, a gold dealer's licence and one for leveraged foreign exchange trading. TOP BALL PROPERTIES LIMITED: Winding up Notice ---------------------------------------------- A notice on the Hong Kong Standard of June 4 says that a petition for the winding up of Top Ball Properties Limited was presented to the High Court on the 20th day of May 1998 by Kwok Sau Ha of Flat C, 2nd Floor, Shanghai House, Tsuen Wan Centre, Tsuen Wan, New Territories, Hong Kong. The petition was directed to be heard before the Court at 11:00 am on the 24th day of June 1998. ========= J A P A N ========= ALL NIPPON AIRWAYS: Strike May Resume ------------------------------------- All Nippon Airways Co. (9202 JP ) fell 17 yen to 485, according to Bloomberg Japan Equity Movers of June 3. Pilots of Japan's second-largest airline said they may resume a strike next Tuesday over pay cuts if talks with management fail. HOKKAIDO TAKUSHOKU BANK: Shareholders to Meet in June ----------------------------------------------------- The Kyodo News of June 4, 1998 reports that the final shareholders meeting of collapsed Hokkaido Takushoku Bank (Takugin) will take place June 26 at Makomanai Ice Arena, bank officials said Thursday. There were some 40,000 total Takugin shareholders as of the end of March. Last year's shareholders meeting drew a record 581 people. Bank executives will report on the recent agreement by North Pacific Bank to take over Takugin's Sapporo headquarters and 108 branches located in Hokkaido, and on the transfer of its branches in Japan's largest main island of Honshu to Chuo Trust and Banking Co., based in Tokyo. Takugin became the first of Japan's top 10 nationwide banks to go bankrupt after a heavy load of bad loans caused it to suspend operations last November. MAKITA CORP: Moody's May Cut Debt Rating ---------------------------------------- Makita Corp. (6586 JP ) fell 33 yen to 1,456, according to Bloomberg Japan Equity Movers. Moody's Investors Service Inc. said it may cut Makita's long-term debt ratings amid concern about pressure from competition in foreign markets and an expected weakening demand in Japan's power-tool market. NIPPON STEEL CORP: Steel Firms Receive Cuts in Debt Rating ---------------------------------------------------------- Moody's Investor Service has cut the debt ratings for four prominent Japanese Steel producers and warned three more may follow. The downgrades included the world's largest steel-maker, Nippon Steel Corp. Nippon Steel had its long- term debt rating cut to medium grade Baa1 from A3, Kawasaki Steel Corp was sliced to Baa2 from Baa1 and the smaller Tokyo Steel Manufacturing was dropped to junk bound status Ba1 from Baa2. Sumitomo Metal Industries' rating was cut to Baa3 from Baa2. Moody's said it was reviewing its ratings for three more steel-makers, NKK Corp., rated at Baa2, as well as Kobe Steel and the smaller Daido Steel. It also cut to negative its outlook for Nisshin Steel, in which Nippon Steel is the largest stockholder, but kept its Baa2 rating unchanged. ========= K O R E A ========= DAEWOO GROUP: Rumored to be on Government's Hit List ---------------------------------------------------- The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency that is spearheading corporate and financial-sector restructuring, issued instructions to all of the nation's 26 commercial banks to sort out troubled companies belonging to the five largest family-owned chaebols for immediate liquidation. The June 3, 1998 announcement by Lee Hun-jai, chairman of the FSC, called on banks to classify subsidiaries of the top five chaebols into three groups - normal, viable, and nonviable. Banks were further directed to stop extending loans to those chaebol firms seeking relief loans if they are on the list of nonviable companies. According to the Korea Times, the five chaebols whose subsidiaries are being targeted by this announcement include: Hyundai, Samsung, Daewoo, LG, and SK. Earlier reports suggested that the nation's banks had only placed a small number of firms on the non-viable firm list and had excluded affiliates of the top five chaebols. The revised list is now due out on June 20. DONG AH CONSTRUCTION: Dong Ah Creditors Name New Chairman --------------------------------------------------------- The Dong Ah Group's creditor banks named Korea's former construction Minister Koh Byung-woo as the new chairman of the financially troubled conglomerate's flagship company, the Dong Ah Construction Industrial Company. Dong Ah has been under an extreme liquidity crunch since Korea's financial crisis began late last year and has been kept operating by syndicated cooperation loans of 940 billion won ($670 million) from creditor banks. Mr. Koh replaces Mr. Choi Won-suk, who resigned after taking responsibility for the group's problems. HYUNDAI ELECTRONICS: Cuts Chip Production ----------------------------------------- The Associated Press reports on June 3, 1998 that Hyundai Electronics Co. temporarily stopped making computer memory chips today to help ease a global supply glut and shore up falling chip prices. The move by Hyundai, South Korea's No. 2 chip maker, was expected to be followed by Samsung and LG. The three South Korean firms supply 40 percent of the world's memory chips, called Dynamic Random Access Memory (DRAM) chips. Hyundai said its plant outside Seoul will remain idle until next Tuesday. The company normally produces 19 million 16-megabit DRAM chips and eight million 64-megabit DRAM chips a month, or 10 percent of the world supply. HYUNDAI GROUP: Rumored to be on Government's Hit List ----------------------------------------------------- The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency that is spearheading corporate and financial-sector restructuring, issued instructions to all of the nation's 26 commercial banks to sort out troubled companies belonging to the five largest family-owned chaebols for immediate liquidation. The June 3, 1998 announcement by Lee Hun-jai, chairman of the FSC, called on banks to classify subsidiaries of the top five chaebols into three groups - normal, viable, and nonviable. Banks were further directed to stop extending loans to those chaebol firms seeking relief loans if they are on the list of nonviable companies. According to the Korea Times, the five chaebols whose subsidiaries are being targeted by this announcement include: Hyundai, Samsung, Daewoo, LG, and SK. Earlier reports suggested that the nation's banks had only placed a small number of firms on the non-viable firm list and had excluded affiliates of the top five chaebols. The revised list is now due out on June 20. JINRO COORS: Takeover of Brewery Will be Finalized Soon ------------------------------------------------------- Foreign takeover of the ailing Korean beer maker, Jinro Coors Brewing Co., will likely be decided around the end of this month, officials said. The Korea Herald of June 4, 1998 reports that officials at the Jinro Group and its creditor banks, Jinro's U.S. joint-venture partner Adolph Coors Co. has recently said that it would put forth final terms and conditions for its proposed takeover of the Korean brewer June 21. The U.S. brewing giant has reportedly reached a conclusion on terms of investment in Jinro Coors and plans to present them to creditor banks and its brokering institution Union Bank of Switzerland in a meeting at Shilla Hotel, the officials said. Representatives from Korean Development Bank (KDB), main creditor bank for Jinro Coors, and other creditor banks be invited to presentation, but none from the Jinro Group, they said. Jinro Coors has debts of 770 billion won ($550 million) against 660 billion in capital. KWACHON INDUSTRY: Bankruptcy Filing Announcement ------------------------------------------------ The District Court in Seoul placed an announcement in the Korean language Maeil Kyungje newspaper that Kwachon Industry Development Company had filed for bankruptcy. The address of the company is 60-1 Chungmuro3-ga, Chung-gu, Seoul, and the president is Mr. Kim Won-jung. Creditors have until June 26th, 1998 to file their claims. LG GROUP: Rumored to be on Government's Hit List ------------------------------------------------ The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency that is spearheading corporate and financial-sector restructuring, issued instructions to all of the nation's 26 commercial banks to sort out troubled companies belonging to the five largest family-owned chaebols for immediate liquidation. The June 3, 1998 announcement by Lee Hun-jai, chairman of the FSC, called on banks to classify subsidiaries of the top five chaebols into three groups - normal, viable, and nonviable. Banks were further directed to stop extending loans to those chaebol firms seeking relief loans if they are on the list of nonviable companies. According to the Korea Times, the five chaebols whose subsidiaries are being targeted by this announcement include: Hyundai, Samsung, Daewoo, LG, and SK. Earlier reports suggested that the nation's banks had only placed a small number of firms on the non-viable firm list and had excluded affiliates of the top five chaebols. The revised list is now due out on June 20. SK GROUP: Rumored to be on Government's Hit List ------------------------------------------------ The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency that is spearheading corporate and financial-sector restructuring, issued instructions to all of the nation's 26 commercial banks to sort out troubled companies belonging to the five largest family-owned chaebols for immediate liquidation. The June 3, 1998 announcement by Lee Hun-jai, chairman of the FSC, called on banks to classify subsidiaries of the top five chaebols into three groups - normal, viable, and nonviable. Banks were further directed to stop extending loans to those chaebol firms seeking relief loans if they are on the list of nonviable companies. According to the Korea Times, the five chaebols whose subsidiaries are being targeted by this announcement include: Hyundai, Samsung, Daewoo, LG, and SK. Earlier reports suggested that the nation's banks had only placed a small number of firms on the non-viable firm list and had excluded affiliates of the top five chaebols. The revised list is now due out on June 20. SAMSUNG GROUP: Rumored to be on Government's Hit List ----------------------------------------------------- The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency that is spearheading corporate and financial-sector restructuring, issued instructions to all of the nation's 26 commercial banks to sort out troubled companies belonging to the five largest family-owned chaebols for immediate liquidation. The June 3, 1998 announcement by Lee Hun-jai, chairman of the FSC, called on banks to classify subsidiaries of the top five chaebols into three groups - normal, viable, and nonviable. Banks were further directed to stop extending loans to those chaebol firms seeking relief loans if they are on the list of nonviable companies. According to the Korea Times, the five chaebols whose subsidiaries are being targeted by this announcement include: Hyundai, Samsung, Daewoo, LG, and SK. Earlier reports suggested that the nation's banks had only placed a small number of firms on the non-viable firm list and had excluded affiliates of the top five chaebols. The revised list is now due out on June 20. =============== M A L A Y S I A =============== CYGAL BHD: Applies to Strike Out Winding up Petition ---------------------------------------------------- Cygal Bhd, listed on the KLSE, applied to the Kuala Lumpur High Court on March 21 to strike out the petition filed by Syarikat Lian Ping Enterprise Sdn Bhd to wind-up Cygal over non-payment of RM3.2mil in interior design works. Cygal's executive director said a dispute has arisen between Cygal and the developer of the Grand Bluewave Hotel for amounts due to the various parties that undertook the interior fitting job and that the dispute is being arbitrated. He also said the company has a strong case to set aside the petition based on several grounds - failure by Syarikat Lian Ping to adhere to provisions for arbitration provided in the contract. The executive director of Cygal also further said that the company is solvent and recently announced its preliminary profits of RM9.4mil. A hearing was set for June 9, 1998. HO WA GENTING: Unit Defaults on PB Securities Loan -------------------------------------------------- A Ho Wah Genting unit has defaulted on a 4.54 million Malaysian ringgit (S$1.9 million) payment to PB Securities Sdn Bhd. According to Singapore BusinessTimes of June 4, 1998, Ho Wah Genting said yesterday that the amount was due to contra losses incurred by Ho Wah Genting Capital Sdn Bhd's clients when the stock market crashed. SENHONG ELECTRICAL SDN BHD: Winding up Notice --------------------------------------------- Kenwood Electronics (M) Sdn Bhd (petitioner) has petitioned for the winding-up of Senhong Electrical Sdn Bhd (respondent) on May 2, 1998. A hearing shall be set for July 15, 1998. UNITED ENGINEERS: To Sell 20% of Unit to Pay Debt ------------------------------------------------- United Engineers (Malaysia) Bhd, Malaysia's largest construction company, is close to finalising a sale of about 20% of its toll-expressway unit to raise funds to repay debt. The company's managing director Ramli Mohamad indicated after the company's annual shareholders meeting yesterday of the need to dispose a minimal amount of assets to reduce debt. He declined to say how much UEM would get for its stake in Projek Lebuhraya Utara-Selatan (Plus) and did not say who would buy the stake. Mr Ramli also said the company plans to raise funds through other instruments. UEM's move came amid Malaysia's stock market slump and rising interest rates, which made it more costly for the company to repay its M$2.8 billion of debt, most of which were short-term and had to be restructured. UEM's situation underscores the problems faced by construction companies in Asia, where expansion plans came to a halt with surging interest rates, currency slides and drying up of new projects as governments cut spending. UEM's debt increased after it bought in a 32.6% stake in Renong, its parent company for $2.34 billion in November, a deal perceived by investors as a bailout of Renong. To pay for the purchase, UEM took on short-terms, some which are coming due. It will need an increase in toll rates to ease the strain in its finances and also to woo potential buyers of its toll unit. Plus was due to receive an increase in its toll rate on January 1, but the company is prepared for not receiving a toll increase this year, Mr Ramli said, and he thought the company's financial position could not be sustained beyond this year. ================= S I N G A P O R E ================= PC CORP: Defaults on Loan Repayment ----------------------------------- PC Corp has missed a loan repayment of US$8 million (S$13.4 million), believed to be the second installment of a US$70 million bank loan, according to Singapore BusinessTimes of June 4, 1998. This is said to be the first time the personal computer maker has failed to repay a bank loan on time, a sign that it is facing a cashflow mismatch. A company spokesman confirmed last week that IPC paid the first installment of US$8 million last December, but declined comment on the status of other loans. He said: "As part of our on-going business, we would restructure our loans and banking facilities from time to time. We have done so in the past, and are doing so now. The details, terms and conditions are confidential and have not been finalised yet. All this is done in the best interests of the company." The US$8 million was due on March 31. Bankers said the loan is being rolled over on an overnight basis at a pre-agreed default rate of prime plus 4 per cent -- about 11.5 per cent currently. =============== T H A I L A N D =============== BANGCHAK PETROLEUM: Signs a US$150M Loan Agreement -------------------------------------------------- The Bangchak Petroleum Public Company Limited reports that it has successfully completed a US$150 million, (Baht 6,000 million) syndicated loan agreement. Coordinating arrangers of this loan facility are ABN AMRO Bank N.V., BA Asia Limited, The Bank of Nova Scotia Limited, Barclays Capital, Standard Chartered Bank and Sumitomo Bank. The lending term is for one year at LIBOR+0.90% in exclusion of the arranging expenses. The transaction attracted subsciptions of US$220 million, representing a 45% over subscription. The proceeds will be used to substitute for Thai Baht working capital in financing the company's import and to benefit the company's liquidity in Thailand during this period. BANGKOK LAND: Posts Losses for 1997 ----------------------------------- Bangkok Land, Thailand`s biggest property developer , posted a big losses of 17.7 billion baht (HK$3.27 billion) last year. The company said much of the loss was due to sharp fall in the value of baht and the declining consumer demand. Analysts believe the loss was an indication of the structural problem in the Thailand property sector. KRUNG THAI BANK: Share Sale to Ease Credit Crunch ------------------------------------------------- Bank of Thailand governor said that state-controlled Krung Thai Bank plans to sell shares to offset mounting debts and help its investment banking unit, Krungthai Thanakit, take over seven seized finance companies. A share sales would help ease a national credit crunch. The governor said that a specific plan had not been set, refuting Thai newspaper reports that Krung Thai aims to raise as much as 70 billion baht, or two thirds of its enlarged capital, by selling shares and debt, and that part of the money would come from a long-term loan from the Asian Development Bank, which would also help Krung Thai find equity investors. Standard & Poor's Corp estimates that about 35% of loans by Thailand's 16 commercial banks will soon be delinquent by at least 3 months, with defaults triggered by a currency devaluation and the country's recession. A loan for Krung Thai might be easier to arrange. Otherwise Krung Thai would have to compete with other lenders. Siam Commercial Bank last week said it planned to raise at least 34 billion baht by selling shares and another US1 billion by selling bonds. Just four months ago Krung Thai raised 20 bilion baht selling shares, mostly to the government, at which time its president Mr Sirin said that the capital increase would be enough for the next five years and that foreigners would not be allowed to increase their stake beyond the then 17% level. Krung Thai's biggest rivals, Bangkok Bank and Thai Farmers Bank, raised about $2 billion between them in April in private sales to foreign institutional investors and the 2 banks are now 49% foreign-owned. Standard & Poor's director of financial institutions ratings remarked that there are a lot of markets for foreign investors to invest in, and people's perception of the Thai government is very important to investment decisions. He also said that "there is an outstanding issue as to whether Bangkok Bank or Thai Farmers Bank may need to raise more capital in the future." THAI MILITARY BANK: Clarifies News on Recapitalization ------------------------------------------------------ In connection with a news report published in the June 3, 1998, Krungthep Thurakij, The Thai Military Bank has announced that it has not considered or set a time frame for its recapitalization. Should the bank have a definite recapitalization plan that has been approved by our board of directors, we will immediately inform the Stock Exchange of Thailand. 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 members of the same firm for the term of the initial subscription or balance thereof are $25 each. For subscription information, contact Christopher Beard at 301/951-6400. * * * End of Transmission * * *