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/raid1/www/Hosts/bankrupt/TCRAP_Public/980715.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 Wednesday, July 15, 1998, Vol. 1, No. 101 Headlines C H I N A & H O N G K O N G ASSOCIATED INTERNATIONAL HOTELS: Results announcement BENELUX: Shenzhen assembler seeks debt repayment CATHAY PACIFIC: Air cargo ban could lower earnings CHING KUNG INDUSTRIAL COMPANY LIMITED: Winding-up notice EASYKNIT INTERNATIONAL: Reports borrowings GOLDLION HOLDINGS: Results announcement HB INTERNATIONAL HOLDINGS: Phone-maker still in talks ITC CORP: Will vigorously defend Hoi Sing liquidator's writ S MEGGA: Shareholders demand relisting SUI FUNG CERAMICS: Shareholders demand relisting THEME INTERNATIONAL: Faces provision for Emporium VINCENT INTERNATIONAL: Results announcement I N D O N E S I A BAKRIE SECURITIES: Bourse Suspends Bakrie Securities PT DANAMON INTERNASIONAL: Results announcement PERUSAHAAN LISTRICK NEGARA: Firm fails to pay power bills J A P A N PACIFIC METALS: Workforce reductions TOKYU DEPARTMENT STORE: Results announcement K O R E A CHO HUNG BANK: Restructuring efforts stymied COMMERCIAL BANK OF KOREA: Restructuring efforts stymied HANBO GROUP: Illegal fund uncovered in Swiss account HANIL BANK: Restructuring efforts stymied KIA MOTORS: Hyundai, Daewoo uncommitted to Kia bidding KOREA EXCHANGE BANK: Restructuring efforts stymied TERA COMPANY: Completes Creditor Reconciliation M A L A Y S I A ASIAN GLAMOUR (M) SDN BHD: Winding-up petition BK LAMP BULB MANUFACTURING: Voluntary winding-up BESCORP INDUSTRIES: Building materials firm defaults BINA COBANA SDN BHD: Winding-up petition PRIMA KONTRAKTOR (M) SDN BHD: Winding-up petition TAN NEOH LYE & SONS SDN BHD: Winding-up petition TIAN TECK LAND: Results announcement S I N G A P O R E CHOMEL: To shut down businesses in Singapore and Malaysia EMPORIUM HOLDINGS: Results announcement FLYERS: To shut down businesses in Singapore and Malaysia ================================= C H I N A & H O N G K O N G ================================= ASSOCIATED INTERNATIONAL HOTELS: Results announcement ----------------------------------------------------- Associated International Hotels announced its results for the year ending March 31, 1998, which has posted a total operational loss of HK$71 million and a loss after tax of HK$99 million. BENELUX: Shenzhen assembler seeks debt repayment ------------------------------------------------ According to the SCMP of July 14, floppy disk maker Benelux Manufacturing, part of the company recently renamed South East Group, is facing legal action for breaching a loan agreement concerning $37.9 million owed to its Shenzhen assembler, Shenzhen Benelux Enterprise, and for defaulting in paying its monthly fees. Shenzhen Benelux had carried out processing, assembly and packaging work on materials supplied by Benelux Manufacturing since March 1991 for the production of audio and video cassette tapes and floppy disks. In February 1995, a verbal agreement was made between the two companies to help Benelux Manufacturing purchase materials, but since mid-1995, Benelux Manufacturing has failed to repay the loan and failed to pay processing fees promptly or at all. By September the total amount due in processing fees and loan repayments was $36.2 million. Overall indebtedness had escalated to $37.9 million by March. The amount remains outstanding despite repeated demands. CATHAY PACIFIC: Air cargo ban could lower earnings -------------------------------------------------- The temporary ban on air cargo at the new Hong Kong Chek Lap Kok airport could cost Cathay Pacific, the local carrier, at least HK$160 million in earnings, enough to push the airline into red this year. The daily revenue loss from the nine-day air-cargo ban at Chek Lap Kok was about HK$16 million, translating to a HK$176 million revenue loss, based on last year`s HK$7.78 billion air-cargo receipts. Because of the large fixed cost, most of the revenue loss would be passed directly to the bottom line, the brokerage said. ABN Amro analyst Jim Lam said he expected Cathay to make just a $4 million profit this year, far short of the market consensus of HK$1.27 billion. CHING KUNG INDUSTRIAL COMPANY LIMITED: Winding-up notice -------------------------------------------------------- According to a notice in the Hong Kong Standard of July 14, a petition for the winding-up of Ching Kung Industrial Company Limited was presented to the High Court on July 6 by Chan Wing Kui and that such petition was directed to be heard before the court at 9:30 am on August 5. EASYKNIT INTERNATIONAL: Reports borrowings ------------------------------------------ Directors of Easynit International Limited, a Hong Kong Listed company, announced at the close of business May 31, 1998, the group had total bank and borrowings of HK$1.06 billion. The group also decided to dispose of certain properties to reduce its exposure in the property market. GOLDLION HOLDINGS: Results announcement --------------------------------------- Hong Kong retailer Goldlion Holdings has made a write-off and provisions for bad debts and inventory of up to HK$50 million. Financial Controller Jona Lam Kai-cheung said Goldlion made a write-off for bad debts relating to bankrupt Yaohan Department Stores, the shutdown of loss-making stores and declining fixed assets. He said the provisions were also made for inventory as a result of slow retailing and wholesaling operations locally, in the mainland and in Singapore. HB INTERNATIONAL HOLDINGS: Phone-maker still in talks ----------------------------------------------------- According to the SCMP of July 14, troubled phone-maker HB International Holdings told the stock exchange yesterday it was still in negotiations with its creditors for a formal standstill agreement. The company says it has requested a one-month extension but says it has yet to hear back from the respective banks. ITC CORP: Will vigorously defend Hoi Sing liquidator's writ ----------------------------------------------------------- According to the SCMP of July 14, ITC Corp will vigorously defend a writ for $297 million issued by liquidator Nelson Wheeler Corporate Reconstruction and Insolvency on behalf of Hoi Sing Construction, which collapsed last year. The liquidator said the cash was apparently owed by Hoi Sing Builders, a former fellow subsidiary of ITC, which is also in liquidation. The audited accounts for Hoi Sing Construction for the year to December 31, 1995 stated the amount then owed to Hoi Sing by Hoi Sing Builders was guaranteed by ITC. But ITC Corp, formerly Pacific Rim Infrastructure Management Enterprises (Prime), is also a creditor of Hoi Sing Construction and, according to a proof of debt, is owed $308.2 million. ITC Corp is likely to attempt to get any guaranteed amount set off against the cash it is owed, but this highlights a legal grey area where there is conflicting case law. S MEGGA: Shareholders demand relisting -------------------------------------- According to the SCMP of July 14, Siu-Fung Ceramics and S Megga have been accused of acting against the interests of their shareholders by refusing to resume trading despite prolonged suspensions. Repeated stock exchange requests to the two companies to resume trading have been rejected. Both companies have been running businesses and considerable assets despite financial difficulties. S Megga, which has not conducted trading since November of last year, said it was in talks with three parties interested in investing in the company and would acquire all or part of its assets in connection with its financial restructuring. It said it would resume trading once agreement was reached. Rules allow the stock exchange to suspend trading and to de-list companies that have been suspended for more than 18 months and that do not have any operational businesses, but do not empower it to force companies to resume trading. A source said the exchange will continue to negotiate with the two companies to urge them toward an early resumption of trading. SUI FUNG CERAMICS: Shareholders demand relisting ------------------------------------------------ According to the SCMP of July 14, Siu-Fung Ceramics and S Megga have been accused of acting against the interests of their shareholders by refusing to resume trading despite prolonged suspensions. Repeated stock exchange requests to the two companies to resume trading have been rejected. Both companies have been running businesses and considerable assets despite financial difficulties. The buyers of Siu-Fung, Kumagai Gumi (Hong Kong), teamed up with China State Bureau of Light Industry and Beijing First Light Industry Group, indicating the company would seek to resume trading once the deal was completed in two months' time. Rules allow the stock exchange to suspend trading and to de-list companies that have been suspended for more than 18 months and that do not have any operational businesses, but do not empower it to force companies to resume trading. A source said the exchange will continue to negotiate with the two companies to urge them toward an early resumption of trading. THEME INTERNATIONAL: Faces provision for Emporium ------------------------------------------------- According to the SCMP of July 14, beleaguered retailer Theme International Holdings faces an estimated $440 million provision from Singapore-based subsidiary Emporium Group, which is under bankruptcy protection. Accounting experts said the provision would not cover Emporium's $1.12 billion total liabilities as Theme had not guaranteed its debts or provided any financial support to Emporium. However, they were concerned about the depreciating value of Emporium's 11 commercial properties, which were worth about $1 billion at the start of the year and which represented 63 per cent of Theme's net assets on September 31 last year. A company source said Theme would make a substantial one- off loss containing provisions and write-offs for its fashion retailing business in Hong Kong and exposure to Emporium in the year ended March. Emporium is 99.5 per cent owned by Wescorp which is in turn held 56 per cent by Theme and the rest by mainland state- council controlled China Everbright. Emporium saw an unaudited net loss widen to $37.8 million in the six months ending September last year from an audited $700,000 net loss for the six months ending in March last year. Theme assured investors its retailing operations remained intact and it was close to finalising a much-awaited standstill agreement with its 18 bank creditors for the repayment of $216 million total debts. However, two creditors recently sued Theme for $16.33 million. VINCENT INTERNATIONAL: Results announcement ------------------------------------------- Vincent International (Holdings) Limited announced its results for the year ending April 30, 1998, which has posted an operational loss of HK$3.5 million and a total operational loss of HK$7.69 million. ================= I N D O N E S I A ================= BAKRIE SECURITIES: Bourse Suspends Bakrie Securities ---------------------------------------------------- The Asian Wall Street Journal reports that PT Bakrie Securities, a unit of listed diversified holding company PT Bakrie & Brothers, was suspended from trading at the Jakarta Stock Exchange. The securities company is said to have failed to meet the exchange's requirement of minimum working capital. It is reported that there is no time limit for the suspension and when the securities company meets the requirement, it will be allowed to trade again. The Bakrie company has been hit by the rapidly declining rupiah and the slump of its core business. The group seeks to reach an agreement with its international lenders on $1.2 billion in foreign debt by the end of the year. PT DANAMON INTERNASIONAL: Results announcement ---------------------------------------------- PT Bank Danamon Internasional of Indonesia reported a net loss of 1.5 trillion rupiah ($99 million) for the first quarter, compared to a net profit of 50.8 billion rupiah year-earlier quarter. The bank recorded a 1.5 trillion rupiah operational loss, compared to 69.7 billion rupiah in operational income last year. The company did not provide any explanation for its performance. PERUSAHAAN LISTRICK NEGARA: Firm fails to pay power bills --------------------------------------------------------- The Hong Kong Standard of July 14 says that Australia's Energy Equity Corp, a stakeholder in Indonesia's Sengkang gas and power project, has said that an Indonesian state- owned power company has only partially paid a March invoice due to be paid by July 10, leaving US$1.9 million owed to the project, and an April invoice also had US$1.9 million outstanding. ========= J A P A N ========= PACIFIC METALS: Workforce reductions ------------------------------------ Bloomberg reports diversified metal maker Pacific Metals Co. will cut one-fourth of its workforce to save 235 million yen this year with the closure of unprofitable divisions, the company said in a press release. The company is setting aside 1.3 billion yen for early retirement payments for employees who volunteer to leave. It expects 264 employees to take early retirement. TOKYU DEPARTMENT STORE: Results announcement -------------------------------------------- Tokyu Department Store Co. said it expects to report unconsolidated pretax and net losses for its first half of the fiscal year ending July 31. The Japanese department store said it expects a parent pre-tax loss of 500 million yen (US$3.5 million) and a net loss of 1.1 billion yen. As Japan's personal consumption has remained in a slump, Tokyu said its monthly sales have continued to fall short of the year-earlier level since May. ========= K O R E A ========= CHO HUNG BANK: Restructuring efforts stymied -------------------------------------------- The Korea Herald reports that restructuring efforts by Korea's four large banks have been held off by conflicting pressures from government regulators and labor union leaders. The four banks, including Cho Hung Bank, were exempted from exit orders late last month on the condition that they would make self-rehabilitation plans, including mergers and capital increases, by the end of July 1998. The Korean government has since urged that these banks merge among themselves. However, the banks have sought to attract foreign capital as a means of staying afloat in order to, for example, avoid deepening conflicts with labor unions. Lately, the prospects for foreign capital infusion have dimmed. Not only are potential foreign investors laying down demanding conditions, but the government also refuses to purchase bad loans from these banks. COMMERCIAL BANK OF KOREA: Restructuring efforts stymied ------------------------------------------------------- The Korea Herald reports that restructuring efforts by Korea's four large banks have been held off by conflicting pressures from government regulators and labor union leaders. The four banks, including Commercial Bank of Korea, were exempted from exit orders late last month on the condition that they would make self-rehabilitation plans, including mergers and capital increases, by the end of July 1998. The Korean government has since urged that these banks merge among themselves. However, the banks have sought to attract foreign capital as a means of staying afloat in order to, for example, avoid deepening conflicts with labor unions. Lately, the prospects for foreign capital infusion have dimmed. Not only are potential foreign investors laying down demanding conditions, but the government also refuses to purchase bad loans from these banks. HANBO GROUP: Illegal fund uncovered in Swiss account ---------------------------------------------------- Digital Chosunilbo reports the Seoul District Prosecutors' Office announced Wednesday it has discovered that the Hanbo business Group illegally transferred company funds of US$32.7 million out of the country and deposited it in a secret account at a Swiss bank. Chung Han-kun, the fourth son of Chung Tai-soo (the former chairman of Hanbo Group) is known to have received the money from Hanbo's sell-out of its share in an oil exploration joint venture which Hanbo established with a Russian partner in November last year. HANIL BANK: Restructuring efforts stymied ----------------------------------------- The Korea Herald reports that restructuring efforts by Korea's four large banks have been held off by conflicting pressures from government regulators and labor union leaders. The four banks, including Hanil Bank, were exempted from exit orders late last month on the condition that they would make self-rehabilitation plans, including mergers and capital increases, by the end of July 1998. The Korean government has since urged that these banks merge among themselves. However, the banks have sought to attract foreign capital as a means of staying afloat in order to, for example, avoid deepening conflicts with labor unions. Lately, the prospects for foreign capital infusion have dimmed. Not only are potential foreign investors laying down demanding conditions, but the government also refuses to purchase bad loans from these banks. For instance, a US investment bank offered to inject $3 billion into Hanil Bank should the Korean government take over the bank's nonperforming loans, which are estimated at 2 trillion won. The Financial Supervisory Commission (FSC), Korea's newly created financial watchdog agency, declined the request. Rather the FSC vowed to toughen its screening procedures on foreign funds flowing into Korean domestic market. KIA MOTORS: Hyundai, Daewoo uncommitted to Kia bidding ------------------------------------------------------ Digital Chosunilbo reports Hyundai and Daewoo have not yet decided whether they will join forces to participate in the international bidding process for ailing Kia Motors. According to the Korea Industrial Bank (KIB), Samsung and the Ford Motor Company of the US have signaled their intention to jointly bid for Kia. KIB explained further that it plans to make public the scale of Kia's liability on Wednesday, and on July 27 when a pre-bidding meeting is scheduled, the writing-off and repayment method for Kia's loans and the evaluation criteria of the biddings will be explained, the bank said. KOREA EXCHANGE BANK: Restructuring efforts stymied -------------------------------------------------- The Korea Herald reports that restructuring efforts by Korea's four large banks have been held off by conflicting pressures from government regulators and labor union leaders. The four banks, including Korea Exchange Bank, were exempted from exit orders late last month on the condition that they would make self-rehabilitation plans, including mergers and capital increases, by the end of July 1998. The Korean government has since urged that these banks merge among themselves. However, the banks have sought to attract foreign capital as a means of staying afloat in order to, for example, avoid deepening conflicts with labor unions. Lately, the prospects for foreign capital infusion have dimmed. Not only are potential foreign investors laying down demanding conditions, but the government also refuses to purchase bad loans from these banks. TERA COMPANY: Completes Creditor Reconciliation ----------------------------------------------- Seoul Distrit Court announced in the Korean language Maeil Kyungje that Tera Company completed its creditor reconciliation procedure on July 6, 1998. The company's address is 461-28 Seokyo-dong, Mapo-gu, Seoul and the president is Mr. Park Sang-hun. =============== M A L A Y S I A =============== ASIAN GLAMOUR (M) SDN BHD: Winding-up petition ---------------------------------------------- Primason Sdn Bhd on 2/6/98 petitioned for the winding-up of Asian Glamour (M) Sdn Bhd. The petition is directed to be heard on 22/9/98. BK LAMP BULB MANUFACTURING: Voluntary winding-up ------------------------------------------------ The members of BK Lamp Bulb Manufacturing (M) Sdn Bhd on 6/7/98 resolved to wind-up the company voluntarily. Creditors are required to submit their claims before 12/8/98. BESCORP INDUSTRIES: Building materials firm defaults ---------------------------------------------------- A news summary in the SCMP of July 14 says that Malaysian building materials supplier Bescorp Industries and some of its subsidiaries have defaulted on loans and interest payments worth a combined M$130 million. Bescorp said it missed the payments because of a lack of cash flow and the withdrawal of its credit lines. In March, Malaysia's Multi-Purpose Bank sued Bescorp to retrieve about $5.5 million outstanding debt. A Bloomberg article on the same subject in the Hong Kong Standard also says that Multi-Purpose Bank sued Bescorp to retrieve nearly 5.5 million ringgit in outstanding debt and to shut down its building materials business. Bescorp, which has obtained court protection to keep creditors at bay, said in April it was working on a plan to reconstruct the business and to renegotiate its debt. The company's losses widened 40.3 percent to 65.2 million ringgit, or 3.47 ringgit per share, for the year ended 31 December. The company's stock has been halted from trading since April 10. BINA COBANA SDN BHD: Winding-up petition ---------------------------------------- Lion Engineering Sdn Bhd on 26/6/98 petitioned for the winding-up of Bina Cobana Sdn Bhd. PRIMA KONTRAKTOR (M) SDN BHD: Winding-up petition ------------------------------------------------- Primason Sdn Bhd on 2/6/98 petitioned for the winding-up of Prima Kontraktor (M) Sdn Bhd. The petition is directed to be heard on 22/9/98. TAN NEOH LYE & SONS SDN BHD: Winding-up petition ------------------------------------------------ Pioneer Concrete (Malaysia) Sdn Bhd on 29/6/98 petitioned for the winding-up of Tan Neoh Lye & Sons Sdn Bhd. TIAN TECK LAND: Results announcement ------------------------------------ Property and hotel firm Tian Teck Land yesterday revealed a HK$38 million net loss for the year to March 31, attributing the decline to a HK$254 million exceptional loss from write-downs and currency losses due to the tumbling Malaysian ringgit. ================= S I N G A P O R E ================= CHOMEL: To shut down businesses in Singapore and Malaysia --------------------------------------------------------- Singapore BusinessTimes reports retailers Chomel and Flyers are in the process of closing all eight stores in the group. Contacted by BT, a spokesperson for holding company Chomel Pte Ltd confirmed the rumours and said: "We decided to close despite having slashed losses last year by more than 50 per cent to $1.4 million because of the bleak regional economic outlook." Sources told BT that Chomel Pte Ltd is negotiating with all its landlords to terminate its leases. Records lodged with the Registry of Companies and Businesses show Chomel Pte Ltd had a group turnover of $23.9 million for the year ended Sept 30, 1997. The company, with paid-up capital of $4.5 million, had accumulated losses of about $13 million. EMPORIUM HOLDINGS: Results announcement --------------------------------------- Emporium Holdings (Singapore) Ltd and five of its units have liabilities totalling S$1.13 billion (US$653.2 million), according to Theme International Holdings Ltd, which owns 56% of Wescorp (Wescorp owns 99.8% of Emporium). Theme said the liabilities were for the six months ending September 30, 1997. Total Emporium group liabilities were less than total group assets of S$1.61 billion, the statement from Theme said. Liabilities for the six-month period ended March 31, 1997 were S$1.17 billion. The group also incurred a net loss of S$28.6 million for the year ended March 31, 1997. FLYERS: To shut down businesses in Singapore and Malaysia --------------------------------------------------------- Singapore BusinessTimes reports retailers Chomel and Flyers are in the process of closing all eight stores in the group. Contacted by BT, a spokesperson for holding company Chomel Pte Ltd confirmed the rumours and said: "We decided to close despite having slashed losses last year by more than 50 per cent to $1.4 million because of the bleak regional economic outlook." Sources told BT that Chomel Pte Ltd is negotiating with all its landlords to terminate its leases. Records lodged with the Registry of Companies and Businesses show Chomel Pte Ltd had a group turnover of $23.9 million for the year ended Sept 30, 1997. The company, with paid-up capital of $4.5 million, had accumulated losses of about $13 million. 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 * * *