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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, June 10, 1998, Vol. 1, No. 77
Headlines
C H I N A & H O N G K O N G
CHONG FAT CLUB: Winding-up Order
CITIC PACIFIC: Yung Dismisses Cash Concerns
CIVILIZATION BOOK STORE LIMITED: Winding-up Notice
EVOLUTION SHIP: Notice of Members' and Creditors' Meetings
FENSON LTD: Winding-up Notice
GAIN EASE DEVELOPMENT: Winding-up Order
GUANGDONG BAO SHUN TRANSPORTATION: Creditors' Meeting
KOOKMIN BANK: Bank to Raise $2.7b in Sell-off
KOSONIC INTERNATIONAL: Results Announcement
NEW CITY LASER: Voluntary Winding-up and Creditors' Meeting
PEREGRINE INVESTMENTS: Independent Crash Probe Considered
POWER MASTER HOLDINGS: Winding-up Order
RENONG: Debt Agency Eyes Company
SPECIAL SONG: Winding-up Order
SUPREME CONTRACTORS: Members' and Creditors' Meetings
SWIRE PACIFIC: Moody's Places Swire Under Review
TAT FUNG STAINLESS: Winding-up Notice
J A P A N
INAX CORP: To Cut Staff, Director Salaries In Restructuring
LONG-TERM CREDIT BANK: Shares Fall on Sale Rumor
MITSUI WHARF: Files for Bankruptcy
NIPPON CREDIT BANK: Creditors May Not Extend Loans
K O R E A
HANBO STEEL: Foreign Investor Sought
KOREA LIFE: Signs $1-billion Deal With Metlife
LA-IN CONSTRUCTION: Announces Bankruptcy
M A L A Y S I A
HEXSEN SDN BHD: Winding-up Petition
MESRAKAWAN SDN BHD: Winding-up Notice
MUSICLAND PRODUCTION (M) SDN BHD: Winding-up Order
OMIC LABORATORY (M) SDN BHD: Winding-up Petition
PEMBINAAN TLN SDN BHD: Winding-up Petition
PROMET BHD: Refutes Auditor's Claims
SPK-SENTOSA CORP BHD: Deeper Into Red
SANTOSH ENTERPRISE SDN BHD: Winding-up Petition
STRATEGI KENCHANA SDN BHD: Winding-up Petition
SYARIKAT MAJU PUDU SDN BHD: Winding-up Petition
TIMBERMASTER: Guarantors Repay Unsecured Bonds
WESTMONT INDUSTRIES: Confident of SaShip's prospects
P H I L I P P I N E S
PHILIPPINE AIRLINES: PAL Says Strike Threatens Solvency
T H A I L A N D
CHAROEN POKPHAND GROUP: To Merge Agro-Industrial Arms
=================================
C H I N A & H O N G K O N G
=================================
CHONG FAT CLUB: Winding-up Order
--------------------------------
Notice of winding-up order in the high court of the Hong
Kong Administrative Region Court of First Instance,
Companies Winding-up Proceedings N0. 183 of 1998
Name of Company
Chong Fat Club Limited
Date of Order
May 27,98
Date of Presentation of Petition
March 16, 98
CITIC PACIFIC: Yung Dismisses Cash Concerns
-------------------------------------------
The SCMP of June 9 says that Citic Pacific chairman Larry
Yung Chi-kin dismissed the day before market concern about
his personal finances, sparked by the recent Citic price
slide, saying he has spent more than $15.6 million on the
day buying a further one million shares, on top of 1.7
million shares bought between May 29 and June 4 at prices
ranging from $17.55 to $18.70 according to a stock exchange
disclosure.
The article says that rumors have been circulating in the
market for several months that banks had been dumping
shares believed to be held as collateral against funds
loaned to him to finance a large part of his 18.75 Citic
stake. The rumors saw Citic close 2.78 per cent down at
$15.70 after hitting a low of $15.3 and coinciding with a
4.43 per cent, or 47.43 points slump in the Hang Seng
China-Affiliated Corporations Index - the red-chip index -
to 1,021.95.
Mr Yung hinted that the group's shares might have fallen
victim to investors' deliberately depressing the stock so
they could cash in on short positions. He said that the net
asset value of Citic Pacific is far above the current share
price, adding that the company's immediate parent Citic HK
had also bought back some shares yesterday, the details
of which will be recorded in a stock exchange disclosure
report.
Yesterday's fall in the shares followed heavy losses last
Friday after Moody's Investors Service said it was
reviewing the ratings of parent company Citic Beijing for
possible downgrade.
Analysts said the fall in red chips and H shares had more
to do with concern about the possible devaluation of the
yuan following Singapore Senior Minister Lee Kuan Yew's
comments last Friday that Beijing might have to devalue the
yuan within 18 months, and the slowdown in the mainland
econonmy.
CIVILIZATION BOOK STORE LIMITED: Winding-up Notice
--------------------------------------------------
The Hong Kong Standard of June 9 shows a notice saying that
a petition was presented to the High Court by Ha Wai Man on
the 27th day of May for the winding up of Civilization Book
Store Limited and that the petition is directed to be heard
before the court at 11:00 am on the 8th day of July.
EVOLUTION SHIP: Notice of Members' and Creditors' Meetings
----------------------------------------------------------
Name of Company
Evolution Ship Management Limited (in creditors' voluntary
liquidation)
Date of Meeting
June 22,98 10:35 am
Place
Wing On Center, 111 Connaught Road Central, HK
FENSON LTD: Winding-up Notice
-----------------------------
Notice of winding-up order in the high court of the Hong
Kong Administrative Region Court of First Instance,
Companies Winding-up Proceedings N0. 197 of 1998
Name of Company
Fenson Ltd
Date of Order
May 27,98
Date of Presentation of Petition
March 19, 98
GAIN EASE DEVELOPMENT: Winding-up Order
---------------------------------------
Notice of winding-up order in the high court of the Hong
Kong Administrative Region Court of First Instance,
Companies Winding-up Proceedings N0. 185 of 1998
Name of Company
Gain Ease Development (Holdings) Limited
Date of Order
May 27,98
Date of Presentation of Petition
March 16, 98
GUANGDONG BAO SHUN TRANSPORTATION: Creditors' Meeting
-----------------------------------------------------
Notice of members' and creditors' meetings Companies
Winding-up no. 282 of 1998
Name of Company
Guangdong Bao Shun Transport Co. Ltd
Date of Meeting
June 22,98 10:35 am
Place
Wing On Center, 111 Connaught Road Central, HK
KOOKMIN BANK: Bank to Raise $2.7b in Sell-off
---------------------------------------------
The Hong Kong Standard of June 9 quotes the above named
bank as saying that they were holding talks with one or two
financial institutions to sell a 20-30 per cent stake to
one or two foreign financial institutions to turn the bank
into a joint venture. It is said that potential buyers
will most probably come from European banks rather than
from the US. The sell-off is aimed at raising US$350
million.
KOSONIC INTERNATIONAL: Results Announcement
-------------------------------------------
Kosonic International Holdings Ltd (Stock no 342) has
posted a total operating loss of HK$235 million for the
year 96/97. Last fiscal year (95/96), the company had an
operating loss of HK$277 million.
NEW CITY LASER: Voluntary Winding-up and Creditors' Meeting
-----------------------------------------------------------
A meeting of the creditors of New City Laser & Video
Company Limited will be held on 15th June 1998 to appoint
Joint and Several Liquidators and to consider further
matters relevant to the voluntary winding-up of the
company.
PEREGRINE INVESTMENTS: Independent Crash Probe Considered
---------------------------------------------------------
Senior Government officials are considering whether there
are sufficient grounds to appoint an independent inspector
to launch a full-scale investigation into the collapse of
Peregrine Investment Holdings.
Deputy Secretary for Financial Services Rebecca Lai Ko
Wing-yee yesterday confirmed the Securities and Futures
Commission had finished the report on its probe of the
collapse and had handed it to the Financial Services
Bureau.
Sources said that if such an investigation took place, it
probably would probe whether fraud was the cause of
Peregrine's losses and why it lent such a large sum -
US$265 million - to Indonesian taxi company Steady Safe.
The loan triggered Peregrine's demise when it became clear
it could not be repaid after the rupiah plunged. It would
also look into whether Peregrine had informed the market
about its financial health in a timely manner.
Under Section 143 of the Companies Ordinance, Mr Tsang can
appoint an inspector to investigate Peregrine's affairs if
there appear to be circumstances suggesting its business
had been conducted with intent to defraud creditors.
Meanwhile, a stock exchange source said the exchange was
also conducting inquiries into the collapsed group's former
directors to see if Peregrine misled the market about its
financial health ahead of its collapse in January.
POWER MASTER HOLDINGS: Winding-up Order
---------------------------------------
Notice of winding-up order in the high court of the Hong
Kong Administrative Region Court of First Instance,
Companies Winding-up Proceedings N0. 184 of 1998
Name of Company
Power Master Holdings Ltd
Date of Order
May 27,98
Date of Presentation of Petition
March 16, 98
RENONG: Debt Agency Eyes Company
--------------------------------
A news summary on the SCMP of June 9 quotes Singapore's
Business Times as saying that certain Renong assets were
expected to be among the first to be absorbed by Malaysia's
new debt agency, and that according to banking sources, the
second highway link project to Singapore and the Putra
light rail project were ripe for takeover by the Asset
Management Co.
SPECIAL SONG: Winding-up Order
------------------------------
Notice of winding-up order in the high court of the Hong
Kong Administrative Region Court of First Instance,
Companies Winding-up Proceedings N0. 193 of 1998
Name of Company
Special Song Limited
Date of Order
May 27,98
Date of Presentation of Petition
March 18, 98
SUPREME CONTRACTORS: Members' and Creditors' Meetings
-----------------------------------------------------
Name of Company
Supreme Contractors Limited (in creditors' voluntary
liquidation)
Date of Meeting
June 22,98 10:35 am
Place
Wing On Center, 111 Connaught Road Central, HK
SWIRE PACIFIC: Moody's Places Swire Under Review
------------------------------------------------
Swire Pacific is being tipped as the latest major corporate
likely to tap Hong Kong's syndicated loan market.
Moody's Investors Service announced it had placed the debt
ratings of Swire Pacific and its subsidiaries under review
for a possible downgrade. The review reflected concerns
over Swire's changing business profile from diversified
conglomerate to a company mainly reliant on property
development.
About $7.8 billion of the group's securities stand to be
affected by the possible downgrade.
An analyst with a Japanese brokerage house said that as of
end of fiscal 1997, some 54% of Swire Pacific's debts had
fixed-rate interest.
He forecast the group's net debt-to-equity ratio at the end
of fiscal 1998 to be 17%, with net debt amounting to $16
billion.
TAT FUNG STAINLESS: Winding-up Notice
-------------------------------------
Notice is hereby given that a petition for the winding-up
of Tat Fung Stainless Steel Engineering Company Limited by
the High Court of Hong Kong was, on the 28th day of May,
1988, presented to the said Court by Yu Pui Chun and the
petition is heard on 8th of July, 1998. Other creditor who
support or oppose the making of the order may appear at the
time of the hearing.
=========
J A P A N
=========
INAX CORP: To Cut Staff, Director Salaries In Restructuring
-----------------------------------------------------------
INAX Corp. plans to reduce its work force by some 11% to
7,200 by mid-October under a restructuring program
announced Monday. The Nihon Keizai of June 9 reports other
planned cutbacks include month-long layoffs at 10 domestic
plants and 10-25% monthly paycuts in directors' salaries.
The maker of household fittings posted net loss of 600
million yen for the half-year ended April.
LONG-TERM CREDIT BANK: Shares Fall on Sale Rumor
------------------------------------------------
Long-Term Credit Bank of Japan Ltd. (8303 JP ) fell
14 yen to 167, amid concern Swiss Bank Corp. may be selling
its shares in the Japanese bank. Bloomberg reports June 9
that both LTCB and Swiss Bank Corp. said there is no change
in their tie-up plan. LTCB shares have also been hurt by
reports that its bad debt problem is larger than expected,
after Shukan Post magazine reported the bank has bad loans
of more than 3 trillion yen, higher than the 1.38 trillion
yen the bank said it had in March.
MITSUI WHARF: Files for Bankruptcy
----------------------------------
Bloomberg reports Mitsui Wharf Co. (9352 JP ) fell 92 yen
to 8. The Japanese harbor-freight company, whose debts
exceeded its assets by 7.8 billion yen, said it filed for
bankruptcy court protection yesterday.
NIPPON CREDIT BANK: Creditors May Not Extend Loans
--------------------------------------------------
Nippon Credit Bank Ltd. (8304 JP ) fell 4 yen to
122. Two major creditors of Nippon Credit bank Ltd.,
privately held companies Asahi Life Insurance Co. and Meiji
Life Insurance Co., said they are cautious about extending
the maturity of loans provided to the financially troubled
bank, the Nihon Keizai newspaper said. Asahi Life and Meiji
Life, two of 22 insurance companies which together provided
217.5 billion yen in subordinated loans to the bank, may
demand the bank repay the money.
=========
K O R E A
=========
HANBO STEEL: Foreign Investor Sought
------------------------------------
The bankrupt Hanbo Steel Industry Co. will be sold to
foreign investors within this year because of a lack of
interests from local steel producers, its creditor banks
said yesterday.
Creditor banks, led by Korea First Bank, said that the lead
manager for an international sell-off will be named around
June 25. Among the eight contenders expected to submit
sell-off plans are Merrill Lynch & Co., CSFB (Credit
Suisse First Boston) Bank and ING Barings.
Analysts said that the announcement of concrete sell-off
plans signals the start the serious shape-up regime in the
Korean corporate sector.
U.S. Steel (USX) has reportedly shown an interests in
Hanbo, though it is early to judge how deep its interest
runs.
Banking sources also said that as many as nine steel
producers, most from developing countries, may be
interested in buying out Hanbo.
The countries cited were Taiwan, India, and Brazil.
Further, a Dutch steel company has inquired about Hanbo.
For the buyer of Hanbo, the biggest advantage would be
securing a solid manufacturing base in the Asian region,
which is still regarded as a high-growth market over the
long term, despite the current crisis.
Kim Joo-han, a steel analyst at government-run KIET (Korea
Institute for Economics & Trade) said, "Securing Hanbo
would provide U.S. or other steel makers with a prime
chance to enter the Asian steel market."
Hanbo, once Korea's second largest steel producer, went
bankrupt early last year because of its aggressive
expansion plans.
Although Hanbo at one point produced 3 million tons of
steel products a year, the company collapsed on a bank debt
estimated at $6 billion.
Hanbo's demise led to the outbreak of financial crisis,
threatening to push over creditor banks including Korea
First Bank.
It's not that Hanbo lacked potential buyers altogether.
Pohang Iron & Steel Co. (POSCO), the world's second largest
steel company, early last year said that it would be
willing to buy Hanbo at 2 trillion won.
But creditor banks turned down the offer, saying that the
amount was far below the 4 trillion won reportedly being
sought at the time. Creditor banks are so far keeping
silent on the price.
Meanwhile, POSCO took its hands off Hanbo this week,
recalling four of its court-appointed managers. POSCO also
said its sales company will no longer handle sales and
buying for Hanbo.
KOREA LIFE: Signs $1-billion Deal With Metlife
----------------------------------------------
Korea Life Insurance Co. said yesterday that it would sell
of a 50-percent stake to Metlife of the United States for
$1 billion in bridge loan.
The exact terms of the agreement were not immediately
available. But a spokesman for Korea Life said that company
Chairman Choi Soon-young signed an MOU (memorandum of
understanding) at the Metlife's New York headquarters
Sunday.
Bridge loan is a short-term loan to help recipient
restructure its debts.
Along with Samsung and Kyobo, Korea Life make up the big-
three in the Korean life insurance industry. Chairman Choi
was quoted as saying at the signing ceremony, "With
Metlife, I'm confident that Korea Life will emerge a
leading underwriter in Asia."
The company has an asset totaling 13.9 trillion won ($9.9
billion) and a capital of 30 billion won ($214 million) as
of the end of the first quarter.
LA-IN CONSTRUCTION: Announces Bankruptcy
----------------------------------------
La-In Construction Company, headquartered in Kwangju, Korea
announced its bankruptcy today after its affiliate Sinhan
Industry Company could not pay bank notes totaling
417,000,000 won.
According to the Korean language Maeil Kyungje, the total
debt of La-In Construction Company and its affiliate Sinhan
Industry now stands at 570,000,000,000 won, which marks the
second biggest bankruptcy of Korea's Cholla Province (after
the Duksan Group became insolvent in February 1995.)
===============
M A L A Y S I A
===============
HEXSEN SDN BHD: Winding-up Petition
-----------------------------------
Pengkalen Securities Sdn Bhd (petitioner) on April 16, 1998
petitioned for the winding-up of Hexsen Sdn Bhd
(respondent). Hearing shall be on June 26, 1998.
MESRAKAWAN SDN BHD: Winding-up Notice
-------------------------------------
The members of Mesrakawan Sdn Bhd have on June 5, 1998
resolved to wind-up the company. Creditors must submit
their claims by July 7, 1998.
MUSICLAND PRODUCTION (M) SDN BHD: Winding-up Order
--------------------------------------------------
A winding-up order was made on May 29, 1998, against
Musicland Production (M) Sdn Bhd (respondent), by APL Hotel
Sdn Bhd (petitioner).
OMIC LABORATORY (M) SDN BHD: Winding-up Petition
------------------------------------------------
The members of Omic Laboratory (M) Sdn Bhd have on June 1,
1998 resolved to wind-up the company. Creditors are to
submit their claims by July 10, 1998.
PEMBINAAN TLN SDN BHD: Winding-up Petition
------------------------------------------
Samabagia Enterprises Sdn Bhd (petitioner), on May 5, 1998,
petitioned for the winding-up of Pembinaan TLN Sdn
Bhd(respondent). Hearing shall be on September 4, 1998.
PROMET BHD: Refutes Auditor's Claims
------------------------------------
Promet Bhd, a company listed in the KLSE, refuted auditor's
claims that unsatisfactory financial information was
provided.
The chairman of Promet commented "There are things that
should be kept within the circle and the shareholders,"
adding that the board had explained to shareholders "why
things are reported like that."
Promet incurred a pre-tax loss of RM169.7mil for the year
ended April 4, 1997.
SPK-SENTOSA CORP BHD: Deeper Into Red
-------------------------------------
SPK Sentosa, listed in the KLSE, recorded a group pre-tax
loss of RM8.42mil for the year 1997, compared to loss of
RM1.79mil in 1996.
SANTOSH ENTERPRISE SDN BHD: Winding-up Petition
-----------------------------------------------
The members of the company has resolved to wind-up Santosh
Enterprise Sdn Bhd on 2/6/98. Creditors are given up to
July 13, 1998 to submit their claims.
STRATEGI KENCHANA SDN BHD: Winding-up Petition
----------------------------------------------
Woodworld Sdn Bhd (petitioner) has served a winding-up
petition against Strategi Kenchana Sdn Bhd (respondent) on
April 14, 1998. Hearing will be on July 17, 1998.
SYARIKAT MAJU PUDU SDN BHD: Winding-up Petition
-----------------------------------------------
Marco Corporation (M) Sdn Bhd (petitioner) on November 24,
1997 petitioned the winding-up of Syarikat Maju Pudu Sdn
Bhd (respondent) over a claim of RM19,254.
TIMBERMASTER: Guarantors Repay Unsecured Bonds
----------------------------------------------
Timbermaster Industries Bhd (TIB), listed in the KLSE,
announced that guarantors had repaid both the interest and
pricipal sum amounting to RM76.9mil in respect of its 5%
redeemable abnk-guaranteed unsecured bonds due 2001.
The company was unable to meet its obligation due to a
cash-flow problem.
TIB is seeking legal, financial and corporate advice on the
issue and making the appropriate arrangement to resolve the
matter.
WESTMONT INDUSTRIES: Confident of SaShip's prospects
----------------------------------------------------
Westmont Industries Bhd(WIB), whose shares were suspended
on the KLSE due to a pending group restructuring scheme is
confident of the long-term potential of its crown jewel
Sabah Shipyard Sdn Bhd as well as support from creditors.
WIB presently has debts amounting to RM974.2mil compared to
a paid-up capital of RM233.1mil. The group had also
incurred a post-tax loss of RM719.5mil for the year ended
1996.
A final scheme of arrangement would be presented to
creditors for their vote on Aug 29. The composite
restructuring scheme will provide the WIB group with the
financial ability to contribute its operations on a going-
concern basis and, in the long-term, to regain a position
of profitability.
On Feb 4, the High Court granted a restraining order on WIB
creditors to allow the group's restructuring scheme to go
through.
The scheme involves the reduction of 33sen of each fully
paid-up share of RM1, thus cancelling RM77.7mil in
accumulated losses.
Cash would be raised from a proposed restricted issue and
sale of assets. Efforts are currently being made to remove
an order to restrain the company from selling some of its
assets.
WIB is also in a legal suit against the former shareholders
and directors of Saship (its subsidiary) for misreporting
earlier profits and irregularities relating to the
construction of power barges.
=====================
P H I L I P P I N E S
=====================
PHILIPPINE AIRLINES: PAL Says Strike Threatens Solvency
-------------------------------------------------------
The Wall Street Journal of June 9 reports that Philippine
Airlines warns its pilots' union strike threatens the
company's solvency and has thwarted interest by foreign
investors, particularly U.S.-based Northwest Airlines. The
airline fired more than 600 pilots on Sunday, and on Monday
the government ordered them back to work. The Airline
Pilots Association of the Philippines has vowed to continue
the strike, saying it is protesting the company's
retirement policy. The flag carrier took on debt to pay for
new planes when the economic crisis hit. The airline lost
8.08 billion pesos (US$205.9 million) in the year ended
March 31.
===============
T H A I L A N D
===============
CHAROEN POKPHAND GROUP: To Merge Agro-Industrial Arms
-----------------------------------------------------
The SCMP of June 9 reports that Thailand's CP Group, which
recently threatened to default on a US$100 million bond, is
merging its Thai agro-industrial ventures into one giant
company with sales of more than 50 billion baht. Four
listed Thai companies will combine their poultry and
seafood businesses under the CP Feedmill umbrella. The
Bangkok Agro-Industrial Products, Bangkok Merchandising and
Charoen Pokphand Northeastern companies will be delisted
after a series of share swaps, leaving the public with 43
per cent and CP Group and its subsidiaries with 57 per
cent, including cross holdings. CP Group will take up a one
billion baht four-year warrant. A number of privately held
companies will also be absorbed into the group, which will
operate under the "CP" brand label.
The company said yesterday this would make it easier to
sell off non-core businesses and increase its corporate
power. Heavy borrowings, underperforming assets and a dire
credit squeeze have forced the group to try to protect core
businesses such as its successful chicken and prawn
operations.
The reports says that the listed Hong Kong arm, CP
Pokphand, was recently forced to ask holders to approve a
floating rate note to defer repayment demands or face a
default. A once prized 50 per cent stake in a motorcycle
factory and a stake in a brewery in China have been
declared "non-core" businesses and are being sold.
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
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contained herein is obtained from sources believed to be
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The TCR -- Asia Pacific subscription rate is $875 per month
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* * * End of Transmission * * *