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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, July 1, 1998, Vol. 1, No. 92
Headlines
C H I N A & H O N G K O N G
CATHAY PACIFIC AIRWAYS: Links With Swissair
CHINA ENTERTAINMENT: Staff Faces Ax as Deal Falls Through
CROSS HARBOUR TUNNEL: Loses Contract for Aberdeen Tunnel
DAO PONG UNITED: Winding-up Petition
FIRST ASIA CONDENSERS LIMITED: Winding-up Petition
FORLUXE FINANCE LIMITED: Winding-up Petition
FORLUXE SECURITIES LIMITED: Winding-up Petition
GOODWAY EXPRESS TOURS LIMITED: Winding-up Petition
HOLLAND O`KAWA LIMITED: Winding-up Petition
IMG FAR EAST LIMITED: Winding-up Petition
KAM WAI GARMENTS LIMITED: Winding-up Petition
KOSONIC INTERNATIONAL: Results
POINTCAST ASIA: Falls Victim to Economy and 'Other Factors'
WELL BOND GROUP LIMITED: Winding-up Petition
J A P A N
DAIDO CONCRETE: Marubeni Abandons Support
LONG TERM CREDIT: Mulls Increase In Loss Reserves
TOTO LIMITED: Jobs Announcement
K O R E A
CHUNG CHONG BANK: Management Allegedly Transferred Accounts
DONG AH TV: Dong Ah TV and Dabicom Will be Liquidated
DONGHWA BANK: Employees Protest Take-Over of Five Banks
HYUNDAI ELECTRONICS: LSI Agrees to Take Symbios
ORIENTAL BREWERY: Plans Joint Venture with Interbrew
M A L A Y S I A
CONSTRUCTION AND SUPPLIES: Accounts Qualified by Auditors
KASAWA (M) SDN BHD: Winding-up Petition
KONSORTIUM PERKAPALAN: Sales Proceeds Used for Loans
LEADER UNIVERSAL BHD: To Focus on Export Market
PWE INDUSTRIES BHD: Records Losses
SIA SWEE SENG SDN BHD: Auction Announcement
P H I L I P P I N E S
VICTORIAS MILLING: Union and Management Agree to Meet
T H A I L A N D
TANAYONG: Results Announcement
TOTAL ACCESS: Motorola 'Interested in Purchase'
=================================
C H I N A & H O N G K O N G
=================================
CATHAY PACIFIC AIRWAYS: Links With Swissair
-------------------------------------------
The Wall Street Journal reports Cathay Pacific Airways and
Swissair have tentatively agreed to link up on flights
between Hong Kong and Zurich.
CHINA ENTERTAINMENT: Staff Faces Ax as Deal Falls Through
---------------------------------------------------------
According to the Hong Kong Standard of June 30, China
Entertainment Television Broadcast announced yesterday that
it did not have the funds to pay its 76 staff since
investors pulled out of a deal to buy 80 per cent of the
company.
Last October, the chairman of China Asia-TV Arts Centre,
Tsang Kan-shu, led a group of five companies to negotiate
the 80 per cent investment in CETV.
The other four companies involved in the deal were Mega
Fortune Investment, Chinese TV Artists Association,
Chinacomm International, and Asia Pacific Xinhua (Group)
Investment.
The company has been in trouble since December when five
Chinese companies failed to pay it US$35 million.
It is now in talks with two potential buyers and is
expecting to open discussions with two others later this
week.
CROSS HARBOUR TUNNEL: Loses Contract for Aberdeen Tunnel
--------------------------------------------------------
According to the Hong Kong Standard of June 30, the
Transport Department confirmed yesterday that Secro
Guardian, the management company for the airport and Lion
Rock tunnels, will take over the management of the 16-year-
old Aberdeen tunnel when the government's contract with the
Cross Harbour Tunnel Co expires in September.
DAO PONG UNITED: Winding-up Petition
------------------------------------
A petition for the winding-up of Dao Pong United Good
Manufacturing Limited was presented to the high court of
the Hong Kong Administrative Region Court of First Instance
April 9, 1998.
FIRST ASIA CONDENSERS LIMITED: Winding-up Petition
--------------------------------------------------
A petition was presented for the winding-up of First Asia
Condensers Limited to the high court of the Hong Kong
Administrative Region Court of First Instance Name on
May 8, 1998.
FORLUXE FINANCE LIMITED: Winding-up Petition
--------------------------------------------
A petition for the winding-up Forluxe Finance Limited was
presented to the high court of the Hong Kong Administrative
Region Court of First Instance on May 8, 1998.
FORLUXE SECURITIES LIMITED: Winding-up Petition
-----------------------------------------------
A petition for the winding-up of Forluxe Securities Limited
was presented to the high court of the Hong Kong
Administrative Region Court of First Instance on May 8,
1998.
GOODWAY EXPRESS TOURS LIMITED: Winding-up Petition
--------------------------------------------------
A notice in the Hong Kong Standard of June 30 says that a
petition was presented to the High Court by Wong Yin Yin on
June 25 for the winding-up of Goodway Express Tours
Limited, and that the petition was directed to be
heard before the court at 9:30 am on July 22.
HOLLAND O`KAWA LIMITED: Winding-up Petition
-------------------------------------------
A petition for the winding-up of Holland O'Kawa Limited was
presented to the high court of the Hong Kong Administrative
Region Court of First Instance on May 11, 1998.
IMG FAR EAST LIMITED: Winding-up Petition
-----------------------------------------
A petition for the winding-up of was presented to the high
court of the Hong Kong Administrative Region Court of First
Instance on May 14, 1998.
KAM WAI GARMENTS LIMITED: Winding-up Petition
---------------------------------------------
A notice on the Hong Kong Standard of June 30 says that a
petition was presented to the High Court by Leung Ming Kwok
on June 22 for the winding up of Kam Wai Garments Limited,
and that the petition was directed to be heard before the
court at 9:30 am on July 22.
KOSONIC INTERNATIONAL: Results Announcement
-------------------------------------------
Kosonic International Holdings Limited, a listed company in
Hong Kong, has announced a half-year interim (from 1/10/97-
3/13/98) total operating loss of HK$14 million and an
additional provision for corporate restructuring costs for
closure of production facilities in the PRC during and
after the interim period.
POINTCAST ASIA: Falls Victim to Economy and 'Other Factors'
-----------------------------------------------------------
According to the SCMP of June 30, PointCast Asia, the six-
month-old content provider and a joint venture between
PointCast Inc and Xinhua-controlled China Internet Corp
(CIC) says it will dissolve on July 1.
CIC Chief financial officer Keith Oliver said that "as a
result of recent economic developments in Asia, among other
factors, PointCast and CIC were unable to finalise a
definitive agreement to form a joint venture company to
operate the Asian edition."
The letter of intent was signed last February, when the
companies announced plans to release English and Chinese
versions of PointCast and establish a Southeast Asia office
in Singapore. Only the English-language PointCast was
realised.
Sources said lack of advertising and internal issues led to
PointCast's demise.
It's also said that management friction between CIC and
PointCast was caused in part by CIC's partnership with
Netscape to launch a Chinese-language site.
PointCast Asia was created as a regional offshoot of
PointCast's original United States-based service. It uses
"push" technology to deliver personalised content to users'
screens in a screen saver format from providers including
the SCMP, Dow Jones and CNN.
PointCast had filed for an initial public offering last
month, according to Business Week magazine. It quoted
sources as claiming, however, that PointCast was seeking a
buyer.
According to news reports, News Corp had considered buying
PointCast last year for about US$450 million.
PointCast was the first leading US company to sign a deal
with CIC, which runs the PRC-focused China Wide Web.
CIC has since formed partnership with Netscape and America
Online, which it will help to establish as an Internet
service provider in Hong Kong by next year. Its latest
alliance, announced last week, is with California-based
Cybersource. The plan is to offer electronic commerce
services to on line retailers in China, Hong Kong and Asia.
CIC and CyberSource said they would establish a data centre
in Hong Kong this year.
WELL BOND GROUP LIMITED: Winding-up Petition
--------------------------------------------
A petition for the winding-up of Well Bond Group Limited
was presented to the high court of the Hong Kong
Administrative Region Court of First Instance on June 5,
1998.
=========
J A P A N
=========
DAIDO CONCRETE: Marubeni Abandons Support
-----------------------------------------
Kyodo News reports Japanese trading house Marubeni Corp.
has decided to abandon support for Daido Concrete Co.,
which declared bankruptcy in February, Marubeni officials
said Tuesday.
Marubeni initially showed a positive attitude toward
helping Daido Concrete, including financial assistance.
However, lack of effective management skills for
reconstruction prompted the trading house to withdraw that
position, the company officials said.
The Tokyo-based concrete pile maker filed for bankruptcy
Feb. 28 with the Tokyo District Court with debts totaling
19.5 billion yen.
Daido Concrete and Marubeni in April started to work out
ways to put Daido's business in order, following court
protection procedures under the Corporate Rehabilitation
Law.
Daido will seek new partners or reconstruct by itself, the
officials said.
LONG TERM CREDIT: Mulls Increase In Loss Reserves
-------------------------------------------------
Nihon Keizai reports Long-Term Credit Bank of Japan is
considering a substantial increase in its loan loss
reserves to deal with "category-two" loans whose recovery
is considered to be at risk.
LTCB may raise its reserve ratio from the current 2% to 10%
or higher, standard levels at U.S. and European banks,
which have set aside loan loss reserves of 30% or more for
loans to Southeast Asian borrowers that are at risk.
Nonperforming loans will be sold to the Resolution and
Collection Bank if LTCB is judged insolvent after an
inspection by the Financial Supervisory Agency. If the
agency's inspection, due to end as early as late July,
recognizes the bank to be in a sound state, the loans would
be bought by Cooperative Credit Purchasing Co.
LTCB is proceeding with talks on a merger with Sumitomo
Trust & Banking Co. (8403) and hopes that, even if risky
loans are not taken over by a public institution, more debt
provisions will reduce risk for the new entity and smooth
the way for the merger.
TOTO LIMITED: Jobs Announcement
-------------------------------
Nihon Keizai reports Toto Ltd. announced Monday it will
suspend production of its mainstay bathroom fixtures and
faucets at six factories for up to 11 days from July to
September. Declining demand due to a drop in housing starts
is blamed for the move.
The leading manufacturer of bath and toilet fixtures also
plans to reduce the capacity utilization rates at the six
plants from September, cutting production by 20% this year.
Further, Toto will transfer 1,000 employees to sales and
new business divisions and 500 to subsidiaries or to design
and distribution work by the end of March 1999.
Pretax profit dropped almost 40% year on year to 12.86
billion yen in fiscal 1997 and is expected to remain flat
in the current fiscal year ending March. The company also
announced in May a plan to slash its payroll by 1,000 to a
total of 10,000 by the end of March 2000.
=========
K O R E A
=========
CHUNG CHONG BANK: Management Allegedly Transferred Accounts
-----------------------------------------------------------
A news summary in the SCMP of June 30 says that Chung Chong
Bank management allegedly transferred about 50 billion won
into their own accounts as severance payments on Sunday
night before the government ordered the bank and four
others to shut down.
Management at the bank, based in the Southern province of
Chung Chong, held an extraordinary meeting late on Sunday
to agree to resign in an attempt to receive their severance
payments. The decision came amid growing speculation the
bank would be targeted for closure.
Financial Supervisory Commission vice chairman Yoon Won-bae
said the move was not lawful and legal charges were
possible.
DONG AH TV: Dong Ah TV and Dabicom Will be Liquidated
-----------------------------------------------------
According to the Korean language Maeil Kyungje, the Dong Ah
Group (one of Korea's 10 largest conglomerates) has decided
to liquidate its affiliate Dong Ah TV (cable TV channel 34)
and its program provider, Dabicon.
Last year, Dong Ah TV had a 600 million won deficit making
the company's total losses reach 34.3 billion won,
exceeding the company's assets of 25 billion won.
In addition to the liquidation of Dong Ah TV and Dabicon,
the Dong Ah Group has previously liquidated Daehan Sea-
Transport and Dong Ah Investment Development Company. Dong
Ah Engineering Company was included on a recently released
list of 55 nonviable firms that will be subject to
immediate liquidation as creditor banks are to stop
providing them with new loans.
DONGHWA BANK: Employees Protest Take-Over of Five Banks
-------------------------------------------------------
Employees at the five banks ordered to merge with stronger
banks hampered take-over work and other essential business.
The Korea Herald reported that about 1,000 unionized
workers at the Donghwa Bank staged a sit-in demonstrations
at the bank's headquarters in Seoul. During this protest,
they scuffled with a take-over team from the Shinhan Bank
and the Financial Supervisory Commission (FSC) to prevent
them from entering the building.
HYUNDAI ELECTRONICS: LSI Agrees to Take Symbios
-----------------------------------------------
The Financial Times reports US chipmaker LSI Logic
Corporation has agreed to acquire Symbios from Hyundai
Electronics America. The price is $760 million plus
assumption of debt.
Adaptec had originally offered $775 million to purchase
Symbios, but backed out on the proposal a few days ago.
ORIENTAL BREWERY: Plans Joint Venture with Interbrew
----------------------------------------------------
The Financial Times reports Korea's largest brewery,
Oriental Brewery, will join with Interbrew of Belgium in
all its beer-related operations. Interbrew plans to invest
as much as $250 million in the joint venture.
Oriental Brewery is a subsidiary of Doosan, which is
selling assets to reduce debts.
===============
M A L A Y S I A
===============
CONSTRUCTION AND SUPPLIES: Accounts Qualified by Auditors
---------------------------------------------------------
The auditors of CASH (listed in the KLSE) qualified the
accounts of the company due to the company's deteriorating
financial position which "appears to affect its continued
operation as a going concern."
The group's substantial and controlling shareholders have
given assurances to the auditors that they will continue to
provide financial support to the group.
The board of the company is concerned with the group's
present position and has been seriously looking into all
avenues, including "exploring various corporate exercises"
to make the group profitable again.
KASAWA (M) SDN BHD: Winding-up Petition
---------------------------------------
Ceil Tech Sdn Bhd (petitioner) on 30/4/98 petitioned for
the winding-up of Kasawa (M) Sdn Bhd (respondent). The
petition is directed to be heard on 28/7/98.
KONSORTIUM PERKAPALAN: Sales Proceeds Used for Loans
----------------------------------------------------
Singapore BusinessTimes reports Konsortium Perkapalan Bhd's
total loans at company level would be reduced to US$50
million (S$85.4 million) from US$230 million this year,
following disposal of its shipping business and assets to
Malaysian International Shipping Corporation Bhd (MISC) for
US$220 million cash. The group executive chairman said 70
per cent to 80 per cent of the sales proceeds will be used
to repay the loans.
The disposal, expected to be concluded on Aug 31, 1998
comprised the entire issued and paid-up capital of PNSL
Limited, 51 per cent of the issued and paid-up capital of
both Asia LNG Transport Sdn Bhd and Asia LNG Transport Dua
Sdn Bhd, and the nine vessels and two new shipbuilding
contracts of PNSL Bhd.
LEADER UNIVERSAL BHD: To Focus on Export Market
-----------------------------------------------
Leader Universal Bhd, listed in the KSLE, recorded an post-
tax loss of RM86.8mil for 1997 against a post-tax profit of
RM126.2mil in 1996. The group plans to concentrate more on
exporting businesses, in view of the weaker local currency.
PWE INDUSTRIES BHD: Records Losses
----------------------------------
PWE Industries Bhd (Listed in the KLSE) recorded a group
pre-tax loss of RM63.85mil for the year ended 31/3/98,
against RM74.66mil pre-tax profit for the 31/3/97 year end.
The losses were due to the reversal of the biomass removal
fee and increase in depreciation charge in respect of heavy
machinery and equipment.
SIA SWEE SENG SDN BHD: Auction Announcement
-------------------------------------------
A piece of land owned by Sia Swee Seng Sdn Bhd (chargor)
and charged to Bank Bumiputra Malaysia Bhd (chargee) is
scheduled to be auctioned to the public on 16/7/98 at a
reserve price of RM358,000.
=====================
P H I L I P P I N E S
=====================
VICTORIAS MILLING: Union and Management Agree to Meet
-----------------------------------------------------
A settlement has been reached between members of Victorias
Milling Company Supervisors Union and VMC management over
money claims conducted by the National Conciliation and
Mediation Board.
Presided by conciliator/mediator Tomas Biboso, the parties
agreed to meet within this month or upon the arrival of VMC
executive vice president Norberto B. Capay from abroad, to
resolve issues cited in the complaint.
The issues include wage distortion, a collective bargaining
agreement, tax exemption and benefits for retirees under
the Miguel J. Ossorio Pension Foundation, Inc.
===============
T H A I L A N D
===============
TANAYONG: Results Announcement
------------------------------
Tanayong Public Company Limited reports a net loss of baht
6.4 billion for the period ending March 31.
TOTAL ACCESS: Motorola 'Interested in Purchase'
-----------------------------------------------
Total Access Communication Plc plans to increase its
registered capital to 5.35 billion baht from 4.15 billion
by issuing 120 million new shares through a private
placement, according to the Bangkok Post. The shares would
be issued to foreign strategic partners, with whom the
company is still negotiating.
In a statement to the Stock Exchange of Thailand, the
mobile-phone operator also said it had cancelled a previous
plan to issue 20 million new shares.
Shareholders will be asked to approve the revised plan at
an extraordinary meeting on July 27. Registration to attend
the meeting will close on July 13.
Poosana Premanoch, honorary chairman of TAC, said the
company was negotiating with several potential foreign
investors to become its strategic partners. He declined to
name all of them but said one was US-based Motorola Inc.
Foreign creditors have given TAC two years to find
strategic partners, after which the company will have to
repay debts using the money raised from the capital
increase.
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.
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