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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
Thursday, July 9, 1998, Vol. 1, No. 97
Headlines
C H I N A & H O N G K O N G
AMGLO HONG KONG LIMITED: Winding-up order
BEST COLLECTION PROMOTION LIMITED: Winding-up order
CHINA EVERBRIGHT: Kumagai denies aiding China Everbright
FUTURE SOLUTIONS LIMITED: Winding-up order
GUANGZHOU ETHYLENE: Plant shuts after only three months
HOI YUET CHIU CHAU LIMITED: Winding-up order
JET GARDEN RESAURANT LIMITED: Winding-up order
JOY TOWN INVESTMENT LIMITED: Winding-up order
JUMBO MASS INVESTMENT LIMITED: Winding-up order
SINKO COMPANY LIMITED: Winding-up order
SINOAMERICAN TELECOM: Court Denies Asset Sale
SUPERFAITH INDUSTRIES LIMITED: Winding-up order
TURKEWAY DEVELOPMENT LIMITED: Winding-up order
I N D O N E S I A
PT SEMEN GRESIK: Cemex to buy stake in state cement plant
J A P A N
NISSAN DIESEL: Truckmaker considers lay-offs
SANWA SECURITIES: Parent liquidates US affiliate
SUZUKO KOGRYO K.K.: Bankers won't let machine shop fail
K O R E A
KOHAP GROUP: Four subsidiaries to be restructured
SEYANG SHIPPING COMPANY: Completes Liquidation Plan
P H I L I P P I N E S
SAN MIGUEL: Cojuangco confirmed as chairman
S I N G A P O R E
L&M GROUP INVESTMENTS: Loan Payment Delay Leads to Default
T H A I L A N D
CAPETRONIC: Reports progress on rehabilitation plan
CENTRAL PAPER: Production stoppage to continue
CHRYSLER THAILAND: IBJ obtains order to seize vehicles
MODERN HOME DEVELOPMENT: Results Announcement
=================================
C H I N A & H O N G K O N G
=================================
AMGLO HONG KONG LIMITED: Winding-up order
-----------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 246 of 1998
shows Amglo Hong Kong Limited presented its petition April
16, 1998.
BEST COLLECTION PROMOTION LIMITED: Winding-up order
---------------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0.333 of 1998,
shows Best Collection Promotion Limited
presented its petition on May 15, 1998.
CHINA EVERBRIGHT: Kumagai denies aiding China Everbright
--------------------------------------------------------
According to the SCMP of July 8, Kumagai Gumi (Hong Kong)
has rejected claims its move to replace China Everbright
Holdings (CEH) in making a rescue bid for Siu-Fung Ceramics
Holdings is due to a lack of resources at CEH.
Kumaigai managing director Rupert Li Xiaoru, also an
assistant to the chairman of CEH's listed arm, China
Everbright International, claimed Kumagai's move to rescue
Siu-Fung was an independent decision.
In a bid to guarantee the consortium's interest, the
proposed acquisition of Siu-Fung would not proceed if Siu-
Fung failed to reach a debt-restructuring agreement with
its banks by the end of this month.
Mr Li said banks have indicated preliminary support about
the proposed acquisition.
Mr Li said under the restructuring proposal, Siu-Fung would
write off half of about $2.5 billion in debt it owes
bankers; 20 per cent of its debt, or $500 million, would be
repaid in cash, while the balance of 30 per cent debt would
be converted into equity at $2.20 a share.
Siu-Fung would resume trading when the acquisition deal was
completed in about 60 days.
The consortium goal was to enable Siu-Fung to break even
next year and make a profit by 2000 or 2001.
Mr Li said the proposed acquisition would not put pressure
on Kumagai's finances, saying its gearing ratio would stand
at 50 per cent after the deal.
The company would need to arrange a bank loan of about $400
million to $450 million while the balance would be financed
by internal resources. Mr Li said several banks have
expressed interest in arranging finance and he did not rule
out the possibility of seeking facilities from mainland
banks.
He said there would be a new management team at Siu-Fung
and a new name might be considered later.
According to executive director Chen Libo, Siu-Fung would
make a long-term profit contribution. It had the biggest
ceramic manufacturing operation in PRC, is the bigggest
producer of building materials with 41 joint manufacturing
ventures there and an annual production capacity of 60
million square meters of building materials. It would help
Kumagai win building and infrastructure projects on the
mainland. About 17 manufacturing plants were still in
operation while the rest were suspended due to lack of cash
injection.
Mr Chen expected the consortium would need to inject about
$50 million to reactivate Siu-Fung.
The Hong Kong Standard reports on the same incident, saying
that Siu-Fung Ceramics Holdings has put forward a debt
restructuring proposal to its creditors and hopes to reach
an agreement with them this month.
Kumagai managing director Li Xiaoru expected share trading
to resume 2 months after the debt restructuring deal was
signed. He said that shares in the firm will likely to
start trading by October 31 the latest.
It is expected that China Everbright chairman Zhu Xiaohua
will become Siu-Fung's chairman after the restructuring.
FUTURE SOLUTIONS LIMITED: Winding-up order
------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0.340 of 1998
shows Future Solutions Limited presented its petition on
May 19, 1998.
GUANGZHOU ETHYLENE: Plant shuts after only three months
-------------------------------------------------------
According to the SCMP of July 8, reports on the Economic
Information Daily said that the eight billion yuan
Guangzhou ethylene plant has closed after only 3 months of
operation.
It began operation in August last year, funded 90 per cent
by the city government and 10 per cent by China National
Petrochemical Corp, but stopped operating in November due
to financial difficulties and it is not known when, or if,
production will resume.
Three reasons have been suggested for its closure.
First, its capacity of 150,000 tonnes was too small, with a
plant of its kind needing output of at least 300,000 tonnes
a year to be economically viable.
Second, its debt to equity ration was 90 per cent, with
debts of 700 million yuan owed in taxes on imported
equipment, money owed to the builder of the plant and
suppliers of raw materials.
Third, there is a miscalculation of the market for
ethylene. In the 1980s, with the rapid expansion of demand
from textiles, electronics and other factories in the Pearl
River delta, the price of ehtylene rose to 10,000 yuan a
tonne. It has since fallen to 5,000 yuan a tonne because
supply has caught up with demand.
The original expectation was to see a return in less than 9
years.
HOI YUET CHIU CHAU LIMITED: Winding-up order
--------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 262 of 1998
shows Hoi Yuet Chiu Chau Limited presented
its petition on April 22, 1998.
JET GARDEN RESAURANT LIMITED: Winding-up order
----------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 341 of 1998
shows Jet Garden Restaurant Limited presented its petition
on May 21, 1998.
JOY TOWN INVESTMENT LIMITED: Winding-up order
---------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 350 of 1998
shows Joy Town Investment presented its petition on May 21,
1998.
JUMBO MASS INVESTMENT LIMITED: Winding-up order
-----------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 263 of 1998
shows Jumbo Mass Investment Limited presented its petition
on April 22, 1998.
SINKO COMPANY LIMITED: Winding-up order
---------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 341 of 1998
shows Sinko Company Limited presented its petition on May
19, 1998.
SINOAMERICAN TELECOM: Court Denies Asset Sale
---------------------------------------------
The SCMP reports an urgent bid to sell off the assets of
insolvent Sinoamerican Telecom to aid its mainland pager
venture was quashed at the High Court yesterday.
Liquidators for the company had tried to overturn a
previous ruling that Sinoamerican's assets could not be
sold to Phoenix Telecommunication.
Sinoamerican had networks in Hong Kong and the mainland -
with a business carried out through Remoco (HK) which,
through its Ligao Telecom holding, operated a mainland
joint venture. A similar system is operated in Hong Kong by
Rightone Telecom (HK), in which Sinoamerican has a stake.
Cashflow difficulties caused by Sinoamerican's insolvency
resulted in Ligao having problems paying staff, rent and
suppliers, the court heard.
"Unless such obligations are met, it will be impossible for
the business of Rightone and Ligao to continue," counsel
argued. Sinoamerica owes creditors US$17 million.
Provisional liquidators were appointed by a court order
dated May 14, this year.
Yesterday liquidators Ferrier Hodgson & Marfan failed in
their bid to overturn Madam Justice Doreen Le Pichon's
ruling that the Phoenix offer be declined.
SUN KEE GARMENT FACTORY: Winding-up order
-----------------------------------------
A notice of winding-up order on June 24, 1998, in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 346 of 1998,
shows Sun Kee Garment Factory Limited presented its
petition on May 20, 1998.
SUPERFAITH INDUSTRIES LIMITED: Winding-up order
-----------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 248 of 1998
shows Superfaith Industries Limited presented its petition
on April 17, 1998.
TURKEWAY DEVELOPMENT LIMITED: Winding-up order
----------------------------------------------
A notice of a winding-up order on June 24, 1998 in the high
court of the Hong Kong Administrative Region Court of First
Instance, Companies Winding-up Proceedings N0. 343 of 1998
shows Turkeway Development Limited presented its petition
on May 20, 1998.
=================
I N D O N E S I A
=================
PT SEMEN GRESIK: Cemex to buy stake in state cement plant
---------------------------------------------------------
Asia Pulse reports the Indonesian government has agreed to
sell an additional five per cent of its shares in the state
cement plant PT Semen Gresik (SG) to Mexican cement
producer, Cemex SA de CU, in the event the company fails to
obtain 16 per cent of SGs shares on the capital market.
"If Cemex fails to obtain the additional 16 per cent from
the market in order to own 51 per cent of SG shares, then
the government is ready to dispose of an additional five
per cent of its shares," special assistant to the minister
for empowerment of state companies in charge of
communication, Sofyan Djalil said here.
Sofyan said the second tender offer is part of a government
privatisation plan of SG which is proceeding in a
transparent manner through open tenders.
=========
J A P A N
=========
NISSAN DIESEL: Truckmaker considers lay-offs
--------------------------------------------
The Financial Times reports Japanese truckmaker Nissan
Diesel may follow Hino Motors in considering temporary lay-
offs. The company did not announce the number of employees
involved.
Last year the company reported a Y1.3bn loss compared with
earnings of Y3.4bn the previous year. Reduced demand in
construction and manufacturing has been blamed for slower
sales for the truckmaker.
SANWA SECURITIES: Parent liquidates US affiliate
------------------------------------------------
A news brief in the Wall Street Journal reports Sanwa Bank
is liquidating Sanwa Securities (USA). The US affiliate
will withdraw from the US government securities business.
SUZUKO KOGRYO K.K.: Bankers won't let machine shop fail
-------------------------------------------------------
A front page article in the Asian Wall Street Journal cites
the case of Suzuko Kogryo K.K., a small machine shop in
Tokyo Ohta Ward with almost $2 million in debt to 5 banks,
as typical of how Japanese banks refuse to let businesses
fail.
The shop owes more than 10 times it projected annual
revenue, and there are at least four mortgages on the
property. According to the article, as long as payment is
made on even part of the original interest on his loans,
the banks will not put him on their bad debt ledgers. The
original loan from one bank was at 8 percent interest, but
this was reduced to 5.6 percent when the loan was rolled
over in 1993, and cut again to 3 percent in 1995.
=========
K O R E A
=========
KOHAP GROUP: Four subsidiaries to be restructured
-------------------------------------------------
One of the main creditor banks of the Kohap Group, the
Hanil Bank, has designated four subsidiaries to be subject
to restructuring (or the so-called "workout"). The Korea
Herald reports that these four subsidiaries are Kohap Ltd.,
Kohap Incorporated, Kohap Petroleum Corporation, and
Kohap General Chemical Company.
Hanil will hold meetings with creditors on July 14 to fix a
reprieve period for the collection of the debts of these
four firms and to seek ways give relief to these affiliated
firms.
Three other Kohap firms were included on the June 19 list
of 55 nonviable firms that were subject to immediate
liquidation as creditor banks are to stop providing them
with new loans.
The firms on this list of 55 were Kohap International
Technology Ltd., Kohap Textile Co., and Kohap Precision
Chemical.
The list was generated at the request of the Financial
Supervisory Commission by the nation's 26 commercial banks
which classified their business loan-clients into three
groups - normal, viable, and nonviable.
SEYANG SHIPPING COMPANY: Completes Liquidation Plan
---------------------------------------------------
According to the Korean language Maeil Kyungje's Business
Briefs section, the Seoul District Court has issued an
approval of the Seyang Shipping Company's liquidation plan.
=====================
P H I L I P P I N E S
=====================
SAN MIGUEL: Cojuangco confirmed as chairman
-------------------------------------------
SCMP reports Eduardo Cojuangco yesterday regained control
over San Miguel Corp, the Philippines' largest
manufacturing concern and private employer, after 12 years
of frustration at the hands of the Aquino and Ramos
administrations.
Mr Cojuangco was unanimously elected chairman and chief
executive yesterday morning by an eight-member board
dominated by nominees of former president Fidel Ramos.
Mr Cojuangco is widely believed to be President Joseph
Estrada's foremost financial supporter.
=================
S I N G A P O R E
=================
L&M GROUP INVESTMENTS: Loan Payment Delay Leads to Default
----------------------------------------------------------
Singapore BusinessTimes reports L&M Group Investments has
been talking to banks for more than three months to
refinance a $54 million syndicated loan due this month. The
specialist engineering group said this in a statement to
the stock exchange in relation to the liabilities mentioned
in its latest annual report.
According to the company's latest annual report, the
facility came with terms which included certain covenants
by the group. L&M said the group failed to meet one of
these covenants as at Dec 31, leading to a "technical
default".
It had been discussing with the creditor banks and
obtained a roll-over of the amounts outstanding until the
end of the facility on July 19.
L&M also disclosed in its annual report that it had
about a dozen outstanding suits and claims against it
totalling $27 million.
===============
T H A I L A N D
===============
CAPETRONIC: Reports progress on rehabilitation plan
---------------------------------------------------
Capetronic International (Thailand) Public Company Limited
has provided the Stock Exchange of Thailand (SET) with a
status report on its rehabilitation plan.
On 20th May 1996, the company submitted its plan to the
SET. The plan was approved by the SET on 25th September
1996, and included a proposed Rights Issue to be conducted
in 1997.
The Grande Holdings Limited (Grande), the ultimate holding
company of Capetronic, confirmed that it would commit to
arrange for any unsubscribed portion of the Rights Issue to
be underwritten.
In response to Thailand's poor economic and fiscal
conditions, on 14th May 1997, the Company submitted a
proposal to revise the terms of the Rights Issue (the
Revised Proposal) to the SET. The Rights Issue was
completed on 5th September 1997.
The Company is in the process of issuing 63.22 million
Warrants to the shareholders who subscribed to the Rights
Issue in September 1997 (the application lodged and the SEC
is reviewing it now. Approval is expected over the next few
weeks).
For the year ending 31st December 1998, the Company plans
to increase its monitor sales volume by 19 per cent as well
as to control its cost of sales to be approximately 90 per
cent of its total sales.
On 8th November 1997, Grande announced, on behalf of two of
its wholly owned subsidiaries, the Grande Capetronic
Holdings Limited (Grande Capetronic) and the Alpha Capital
Limited (Alpha Capital), a conditional agreement to sell
the subsidiaries approximately 72.5 per cent holdings in
the common shares of Capetronic International Holdings
Limited (CIHL) to Carrington Gold Corporation (Carrington)
for HK$ 0.95 per share.
Carrington is a private investment holding company
incorporated in the British Virgin Islands on 15th October
1997. Since its incorporation, Carrington has not conducted
any business activities other than the entering into the
above Agreement and currently it has no assets other than
its interests under the Agreement. In addition, its related
companies and its directors are not involved in any other
electronic businesses.
CENTRAL PAPER: Production stoppage to continue
----------------------------------------------
Central Paper Industry Plc.(CPICO) will further stop
production for another 3-month period from July 16th,1998
to October 15th, due to the present economic situation. A
little decrease in amount of Inventory due to the drop in
sales volume.
CHRYSLER THAILAND: IBJ obtains order to seize vehicles
------------------------------------------------------
The Industrial Bank of Japan Ltd. (IBJ) said Tuesday it had
obtained a court order in Thailand to seize vehicles
assembled by US auto giant Chrysler Corp.'s joint venture
saying it has delayed loan payments, reports Agence Presse-
France.
A spokesman said IBJ and Deutsche Bank AG took legal action
on behalf of eight other banks including Citibank Finance
Ltd., Fuji Bank Ltd. and ING Bank as they jointly gave 40
million dollars in loans to the Thai venture one-and-a-half
years ago.
"The vehicles are the collateral," said the IBJ spokesman.
"We have obtained the court order to seize more than 200
vehicles, which were bound for Britain," he said.
Detroit-based Chrysler did not guarantee the loan and was
not involved in the talks.
MODERN HOME DEVELOPMENT: Results Announcement
---------------------------------------------
Modern Home Development reports a net loss of Bt72.837m
compared to the previous year's net profit of Bt10.686m, as
of March 31, 1998.
S U B S C R I P T I O N I N F O R M A T I O N
Troubled Company Reporter -- Asia Pacific is a daily
newsletter co-published by Bankruptcy Creditors' Service,
Inc., Princeton, NJ USA, and Beard Group, Inc., Washington,
DC USA. Debra Brennan and Lexy Mueller, Editors.
Copyright 1998. All rights reserved. This material is
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* * * End of Transmission * * *