TCRAP_Public/980804.MBX 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      

      Tuesday, August 4, 1998, Vol. 1, No. 114

                    Headlines


C H I N A   &   H O N G   K O N G

GKC HOLDINGS: Citic takes over GKC
GILBERT HOLDINGS: Gilbert in talks on debt stand
HB INTERNATIONAL: HB International seeks rescue
IDEAL PACIFIC HOLDINGS: Ideal gives report on accounts
LAI SUN DEVELOPMENT: Textile tycoon in Lai Sun debt deal

ORIENT LIMITED: Petition for winding-up
POLYSMART INTERNATIONAL LIMITED: Petition for winding-up
RHINE HOLDINGS: Court date set for Rhine
SING TAO HOLDINGS: Sing Tao may sell portion of associate
UDL HOLDINGS: Restructuring plan for UDL Holdings


J A P A N  

LONG TERM CREDIT: S&P downgrades long-term debt to junk
MITSUBISHI TRUST & BANKING: S&P cuts credit rating
OBAYASHI CORP: Contractor's orders fall
SUMITOMO: S&P cuts credit rating


K O R E A

CHO HUNG BANK: Cho Hung appears to be in precarious state
COMMERCIAL BANK OF KOREA: To merge with Hanil Bank
HAITAI CONFECTIONERY: Creditors urged to convert debt
HANIL BANK: To merge with Commercial Bank of Korea
HWANYOUNG STEEL CO.: Liquidation plan approved

SSANGYONG SECURITIES: Firm loses money in Hong Kong
SEORYONG PRODUCTION CO.: Company liquidation
SHIN DONG AH GROUP: Chairman's embezzlement probe delayed


M A L A Y S I A

BORLAND (MALAYSIA) SDN BHD: Creditors' voluntary winding-up
DELTA HARDWARE ENGINEERING SDN BHD: Voluntary winding-up
ELMAS ELETTRONICA SDN BHD: Winding-up petition
GRENWORLD INDUSTRY SDN BHD: Winding-up Petition
H&R JOHNSON BHD: Results announcement

HAMDEN & RAHIM SDN BHD: Voluntary winding-up
KHSB SDN BHD: Voluntary winding-up
KUALA LUMPUR INDUSTRIES HOLDINGS BHD (KLIH): Massive losses
PERUSAHAAN SADUR TIMAH: Massive losses
RENONG BHD: No choice but to divest assets


T H A I L A N D

TOTAL ACCESS COMMUNICATION: Details of debt restructuring
UNITED COMMUNICATION INDUSTRY: Working to restructure debt


=================================
C H I N A   &   H O N G   K O N G
=================================

GKC HOLDINGS: Citic takes over GKC
----------------------------------
According to the SCMP, Citic Beijing has taken over the
management of kitchen material supplier GKC Holdings after
directors allegedly involved in a fraud case resigned.

The Commercial Crime Bureau has yet to make arrests and
investigations are continuing.

The company said it was seeking to appoint two independent
non-esecutive directors to replace Jenny Cheung Tze-shan
and Lee Kin-hung.

GKC's board now comprises representatives of Citic
Beijing's wholly owned subsidiary, Shortridge: Sun Xiaowen,
Wang Wenxi and William Chan Tak-chi.

GKC's problems have prompted seven creditor banks and one
finance company to recall $170 million in loans.

The company has warned it now faced serious cash flow
problems and has also warned of a possible removal of
financial support from Shortbridge, given the company's
limited finances.

As its auditors have yet to start work, GKC said it was not
in a position to comment on its liquidity.


GILBERT HOLDINGS: Gilbert in talks on debt stand
------------------------------------------------
According to the SCMP, shares in garment maker Gilbert
Holdings hit a historic low yesterday after the company
revealed it had $800 million in outstanding debt.

The company said it was holding talks with unrelated
parties while discussing its position with bank creditors.

However the company has not received any demands from
HongkongBank requiring a pledge or freeze on assets and is
operating within its current working capital facilities.


HB INTERNATIONAL: HB International seeks rescue
-----------------------------------------------
According to the SCMP, troubled telephone-maker HB
International yesterday said a consortium formed by its
management and third-party investors had put forward a
rescue package to creditor banks. It was still in
discussions with the banks for a standstill agreement.


IDEAL PACIFIC HOLDINGS: Ideal gives report on accounts
------------------------------------------------------
According to the Hong Kong Standard, Ideal Pacific Holdings
has submitted a report to the Commercial Crime Bureau
relating to sales transactions, missing cash and accounting
irregularities amounting to $443 million.

According to the report, the $443 million includes $300
million in potential bad debts arising from sales
transactions uncovered during the year to last March, for
which a provision of $310 million had been made.

Ideal Pacific said its net asset value, after making
provision for irregularities, was about $118 million on the
basis that no further adjustment was required.

Central China Enterprises, which bought 44.7 per cent of
Ideal Pacific from Mr Ip in January for $98 million,
pledged to stand by Ideal Pacific in the short term, but
directors conceded that support was subject to
continuous review of the financial position.


LAI SUN DEVELOPMENT: Textile tycoon in Lai Sun debt deal
--------------------------------------------------------
According to the SCMP, Lai Sun Development turned to a
long-time friend, textile and property tycoon Chen Dinhwa
for help to raise much needed funds to pay off multi-
billion debts.

Mr Chen agreed to double its stake from 9 per cent to 18
per cent by acquiring 161 million new shares for $152.95
million through privately run Nan Fung Textiles
Consolidated.

Lai Sun's massive debts primarily stemmed from its
aggressive $6.9 billion takeover of Furama Hotel
Enterprises last year. It has an estimated gearing of about
50 per cent despite raising more than $3 billion from a
series of asset disposals since late last year and
conducting a $503 million rights issue.

According to the Hong Kong Standard, Mr Chen and his family
will raise their stake in Lai Sun to 18 per cent from 9.79
per cent. According to the report, Lai Sun refused to
confirm which side had initiated the deal but said that
both parties were interested.

An analyst said that there's no pressing financial pressure
on Lai Sun although it had $920 million worth of
convertible bonds which are due to mature in April next
year. He said the group had secured $3 billion in cash by
selling its property developments and non-core assets
during the current financial year.

Lai Sun had total debts of $11 billion, of which interest
expenses alone cost some $700 million to $800 million a
year.


ORIENT LIMITED: Petition for winding-up
---------------------------------------
Notice is hereby given that a petition for the winding-up
of Orient Limited by the High Court of Hong Kong was, on
the 29th day of July, 1988, presented to the said Court by
Chan Wai Kwong. The petition is scheduled to be heard on
2nd of September, 1998. Creditors who support or oppose the
making of the order may appear at the time of the hearing.


POLYSMART INTERNATIONAL LIMITED: Petition for winding-up
--------------------------------------------------------
Notice is hereby given that a petition for the winding-up
of Polysmart International Limited by the High Court of
Hong Kong was, on the 28th day of July, 1988, presented to
the said Court by Wong See Fong. The petition is scheduled
to be heard on 26th of August, 1998. Creditors who support
or oppose the making of the order may appear at the time of
the hearing.


RHINE HOLDINGS: Court date set for Rhine
----------------------------------------
Jewelry maker Rhine Holdings is to face a winding-up
petition by bank creditors on August 26. Banque Nationale
de Paris, Credit Agrcole Indosuez , Bayerische Vereinsbank,
KBC Bank and Daiwa and have filed to wind up Rhine and its
wholly owned subsidiary Rhine Jewelry. Rhine owes HK$6.29
million in an unsecured loan.


SING TAO HOLDINGS: Sing Tao may sell portion of associate
---------------------------------------------------------
According to the SCMP, publisher Sing Tao Holdings is
believed to be finalising a deal to sell part of its 43 per
cent interest in publishing associate Culturecom Holdings
to Culturecom chairman Tang Lap-yan, which would raise
Tang's stake in Culturecom to almost 35 per cent from 0.15
per cent.

Sources said Mr Tang was paying about $20 million for
almost 35 per cent, or about 377 million shares of
Culturecom and, backed by high profile associates in the
publishing sector, was likely to take control of Culturecom
from Sing Tao.

Separately, Sing Tao said yesterday Ms Aw was still at
various stages of discussion with a number of independent
third parties for the sale of all or part of her 50.04 per
cent of Sing Tao.

Sources said local and overseas companies had expressed
interest in Sing Tao, but only about five were likely to
make offers and these are now conducting due diligence over
Sing Tao's operations and profit and loss records.

Jardine Fleming Securities has been advising Ms Aw over the
sale.


UDL HOLDINGS: Restructuring plan for UDL Holdings
-------------------------------------------------
According to the Hong Kong Standard, UDL Holdings Ltd., a
Hong Kong construction, shipbuilding and dredging company,
says it faces $96.11 million in legal claims from its
creditors. The company said 20 of its 33 financiers had
agreed to a restructuring plan, which includes a freeze and
rescheduling of its debt repayment obligations.

UDL is also negotiating a possible share placement, to
raise $250 million, with its chairman Leung Yat Tung, the
closely-held Sino Group, a major shareholder, and an
independent investor.


=========
J A P A N  
=========

LONG TERM CREDIT: S&P downgrades long-term debt to junk
-------------------------------------------------------
Standard & Poor Corp has cut the rating of Long-Term Credit
Bank of Japan's long-term debt to junk. The rating company
also downgraded LTCB's long-term senior debt, certificates
of deposit and counterparty credit ratings to BB plus or
junk, non-investment grade, from BBB minus.

S&P said the ratings remained on CreditWatch with
developing implications, where they were placed June 11.

LTCB is the second largest of three Japanese banks that
specialize in making long-term loans to corporations. LTCB
is struggling with 1.4 trillion yen in bad debt.
  

MITSUBISHI TRUST & BANKING: S&P cuts credit rating
--------------------------------------------------
Standard and Poor's Rating Group said that it downgraded
the credit rating Mitsubishi Trust and Banking Corporation.
The long-term rating of the bank was reduced from A- to
BBB, and the short-term rating fell from A-2 to A-3.  
Mitsubishi's ratings outlook is now stable.  


OBAYASHI CORP: Contractor's orders fall
---------------------------------------
Bloomberg reports contractor Obayashi Corporation's orders
fell 33 percent in the April-June quarter from a year ago.
ING Baring Securities (Japan) Ltd. maintained its "sell"
recommendation on the stock.


SUMITOMO: S&P cuts credit rating
--------------------------------
Standard and Poor's Rating Group said that it downgraded
the credit rating of Sumitomo Trust and Banking Co. Ltd.
The long-term rating of the banks was reduced from A- to
BBB, and the short-term rating fell from A-2 to A-3.  

Standard and Poor's Rating Group left Sumitomo on
CreditWatch with negative implications.  

The downgrade of Sumitomo reflects unresolved asset-quality
problems and reduced financial flexibility in coping with
the worsening operating environment for financial
institutions in Japan.


=========
K O R E A
=========

CHO HUNG BANK: Cho Hung appears to be in precarious state
---------------------------------------------------------
The Korea Times published a feature article in its
Business/Finance section highlighting the fact that Cho
Hung Bank seems to be in the most precarious state of
Korea's major ailing banks. The Korea Times cited a bank
analyst at a foreign brokerage house in Seoul as saying
that while other banks are swiftly adapting to changing
circumstances, Cho Hung has failed to chart its own future,
and is employing a piecemeal approach to ride out the
current crisis. The acting President has reportedly
been aggressively lobbying politicians to avoid having his
bank forcibly merged with another bank. According to this
source, the executives at this bank appear ignorant of the
need for real change, and behave as if influence peddling
tactics will ensure survival.  

A foreign analyst was also quoted as saying that the bank
has no chance of surviving independently, and that even if
it succeeds in attracting foreign capital, a one time
capital injection cannot normalize Cho Hung. Cho Hung
remains unable to gain access to international capital
markets as its credit rating has been kept below investment
level since late last year. One bank official admitted that
they do not know when they can resume fresh borrowing
overseas. The Korea Times article reports that Cho Hung's
capital may be completely depleted by the end of the
year.  

The Financial Supervisory Commission (FSC), Korea's
financial watchdog institution, established an evaluating
committee in June to diagnose 12 commercial banks
(including Cho Hung), which failed to meet the minimum 8
percent capital adequacy requirements set by the Bank for
International Settlements (BIS). It issued a closure order
for five banks in late June, and has asked seven other
banks (including Cho Hung) to provide drastic self
rehabilitation plans. These plans were to include payroll
cuts, management layoffs, capital increases or decreases,
and mergers with stronger banks. The FSC reportedly plans
to keep alive only those banks that are able to meet the 8
percent BIS capital adequacy ratio by June 2000 via these
new rehabilitation plans.  


COMMERCIAL BANK OF KOREA: To merge with Hanil Bank
--------------------------------------------------
According to the AP of July 30, two major Korean banks
announced a merger Thursday. The marriage between two of
the nation's top five banks, Hanil Bank and Commercial Bank
of Korea, will create South Korea's largest bank with
combined assets of 102 trillion won ($82 billion).

The two banks asked the government to take over a portion
of their non-performing loans estimated at $10.4 billion.
Lee Kwan-woo, head of Hanil Bank, said the banks will ask
the government to invest up to $6.4 billion to help write
off bad loans or buy new shares.

Hanil Bank reported a loss of $659 million in the first six
month of the year, shifting from a profit of $26 million a
year ago. Commercial Bank also swung to a net loss of $447
million from a $34 million profit a year before.


HAITAI CONFECTIONERY: Creditors urged to convert debt
-----------------------------------------------------
The Korea Herald reports that Granny Goose, a California
based food company has suggested that it may invest up to
$200 million into Haitai Confectionery Company on the
condition that Haitai's creditors turn liabilities into
equity. According to the article, Granny Goose recently
submitted a letter of intent to invest between $100 to $200
million along with several US investment firms (including
Spencer Christian) on condition of liability to equity
conversion.  

A similar report in the Korea Times said that Haitai
chairman Park Kun-bae has been talking with Granny Goose
CEO Keith Kim and Douglas Park, chairman of the investment
house Spencer Christian to complete proposed investments.  
The Korea Times also stated that since last year Haitai has
been asking its lead creditor, Cho Hung Bank, to turn its
debt into equity.  

The Haitai Group, a food and beverage giant that was once
Korea's 24th largest conglomerate, was composed of 15
subsidiaries, 10 of which were declared bankrupt in the
final two months of last year. The group reportedly has 3.4
trillion won in debt.


HANIL BANK: To merge with Commercial Bank of Korea
--------------------------------------------------
According to the AP of July 30, two major Korean banks
announced a merger Thursday. The marriage between two of
the nation's top five banks, Hanil Bank and Commercial Bank
of Korea, will create South Korea's largest bank with
combined assets of 102 trillion won ($82 billion).

The two banks asked the government to take over a portion
of their non-performing loans estimated at $10.4 billion.
Lee Kwan-woo, head of Hanil Bank, said the banks will ask
the government to invest up to $6.4 billion to help write
off bad loans or buy new shares.

Hanil Bank reported a loss of $659 million in the first six
month of the year, shifting from a profit of $26 million a
year ago. Commercial Bank also swung to a net loss of $447
million from a $34 million profit a year before.


HWANYOUNG STEEL CO.: Liquidation plan approved
----------------------------------------------
According to the Korean language Maeil Kyungje's Business
Briefs section, Hwanyoung Steel company's liquidation plan
was approved by the Pusan District Court.


SSANGYONG SECURITIES: Firm loses money in Hong Kong
---------------------------------------------------
The Korea Herald reported that Ssangyong Investments and
Securities Co. is expected to incur losses of approximately
10 billion won ($8.1 million) from its equity participation
in Hong Kong based Caspian Securities Company.

Caspian Securities, founded in 1995 by Christopher Heath, a
former investment professional of ING Baring, suffered
considerable losses investing mainly in emerging markets in
Asia and South America. Caspian recently held a board
meeting, and unable to recoup its losses, decided to close
the company.  

The Korea Herald stated that this Hong Kong loss will be
adding more bad news that Ssangyong Group has received from
its securities affiliate. The parent group has already had
to reaffirm its support for Ssangyong Securities to prevent
its forced closure.  


SEORYONG PRODUCTION CO.: Company liquidation
--------------------------------------------
In the Korean language Maeil Kyungje, Seoryong Production
Company advertised that the company is decided to be
liquidated at a stock holders' meeting on July 24, 1998.  
The company's creditors have two months from today to file
their claims.  The company's address is 71-11 Dujeong-dong,
Cheonan-shi, Chungcheongnam-do and the president is Mr. Kim
Dae-hwan.


SHIN DONG AH GROUP: Chairman's embezzlement probe delayed
---------------------------------------------------------
Prosecutors of the Shin Dong Ah (a.k.a. Shindong-a)
Chairman Choi Soon-young's embezzlement charges will delay
their investigation in order not to adversely affects
ongoing negotiations between one of Shin Dong Ah's
affiliates and a foreign investor.  

The Korea Herald reported that Daehan Life Insurance
Company, a subsidiary of Shin Dong Ah is currently
conducting meetings with representatives of the US based
Metropolitan Life Insurance Company. According to the terms
of the original agreement worked out with Metropolitan
Life, the US firm is scheduled to deposit a total of $1
billion in two stages in late August and early September in
exchange for a 50 percent share in Daehan Life.

The Korea Times reports that Choi is under suspicion for
allegedly smuggling $160 million out of Korea using a
phantom company in the US, and for forging export papers.  
Shin Dong Ah's subsidiary Shinawon was allegedly able to
receive export loans totaling $172 million from four Korean
banks using fabricated documents indicating that it had
exported electrical goods to Russia and other countries
after first importing them into American via the phantom US
company (named Steve Young Co.). Most of the diverted money
was learned to have been deposited into secret Swiss bank
accounts.

The Korea Times additionally reports that Choi is also
suspected of selling diamonds that the company received as
export payment from a Russian republic to the local mafia,
and laundered the $50 million proceeds via Hong Kong to
send it to a Swiss bank.  

Kim Chon-eun, a former executive of Shinawon, was also
arrested for having extorted 1 billion won from Choi in
return for keeping quiet about the illegal transaction.  

However, the Korea Herald reports that Daehan Life
Insurance officials claim that Kim Chon-eun acted with a
complete power of attorney, and carried out the
transactions. Furthermore, when Kim was unable to return
the full amount of the loaned money back to Korean bank
accounts, Kim allegedly threatened to blackmail Choi with
charges of money laundering. Daehan officials said
that Shin Dong Ah went to the authorities to ask for an
investigation.

===============
M A L A Y S I A
===============

BORLAND (MALAYSIA) SDN BHD: Creditors' voluntary winding-up
-----------------------------------------------------------
The members and creditors of Borland (Malaysia) Sdn Bhd on
30/7/98 resolved to wind-up the company voluntarily. A
general meeting will be held on 14/8/98 for this purpose.


DELTA HARDWARE ENGINEERING SDN BHD: Voluntary winding-up
-----------------------------------------------------------
The members of Delta Hardware Engineering Sdn Bhd on
27/7/98 resolved to wind-up the company voluntarily.
Creditors of the company are requested to submit their
claims before 31/8/98.


ELMAS ELETTRONICA SDN BHD: Winding-up petition
----------------------------------------------
Oon Chee Seng Enterprise Sdn Bhd on 13/5/98 petitioned for
the winding-up of Lemas Elettronica Sdn Bhd. The petition
is directed to be heard on 24/9/98.


GRENWORLD INDUSTRY SDN BHD: Winding-up Petition
-----------------------------------------------
HBP Builders Sdn Bhd on 12/1/98 petitioned for the winding-
up of Grenworld Industry Sdn Bhd. The petition is directed
to be heard on 7/8/98.


H&R JOHNSON BHD: Results announcement
-------------------------------------
H&R Johnson Bhd, listed in the KLSE, announced a post-tax
loss of RM6.418mil for the half year ended 30/6/98,
compared to RM0.215mil loss previously. Loss per share rose
about 2,890% from RM0.0033 to RM0.0987 for the same period.


HAMDEN & RAHIM SDN BHD: Voluntary winding-up
--------------------------------------------
The members of Hamden & Rahim Sdn Bhd on 30/7/98 resolved
to wind-up the company voluntarily.


KHSB SDN BHD: Voluntary winding-up
----------------------------------
The members of KHSB Sdn Bhd on 27/7/98 resolved to wind-up
the company voluntarily. Creditors of the company are
requested to submit their claims before 26/8/98.


KUALA LUMPUR INDUSTRIES HOLDINGS BHD (KLIH): Massive losses
-----------------------------------------------------------
KLIH, a property based and manufacturing group listed in
the KLSE, reported a group pre-tax loss of RM400.6mil for
the year ended 31/3/98, compared to RM5.5mil pre-tax loss
previously.

Losses at the company level is at RM468mil against RM2mil
previously.

The huge losses were due to the sharp increase in interest
rates, amortisation of goodwill of RM121mil, realised loss
on sale of investment of RM107mil and diminution in value
of investments and property development of RM53mil.

The KLIH group had been adversely affected by the regional
economic slowdown and had defaulted on a major part of its
banking facilities.

The counter has been removed from the KLSE composite index.


PERUSAHAAN SADUR TIMAH: Massive losses
--------------------------------------
Perstima (Malaysian's sole tinplate manufacturer listed in
the KLSE) registered a pre-tax loss of RM163.9mil for the
year ended 31/3/98 against RM23.2mil loss previously.

At the company level, Perstima incurred RM177.8mil pre-tax
losses compared to RM16.5mil previously.

The losses were attributed by the higher interest rates,
higher raw material costs and the depreciation of the local
currency.


RENONG BHD: No choice but to divest assets
------------------------------------------
Renong Bhd (listed in the KLSE), a high profile
infrastucture company, may likely to divest some assets to
raise funds to service its mounting debts. Many projects
undertaken are still in their gestation stage, which
includes light rail transits and expressways.


===============
T H A I L A N D
===============

TOTAL ACCESS COMMUNICATION: Details of debt restructuring
---------------------------------------------------------
The Asian Wall Street Journal reported details of the deal
that Total Access Communication PCL has reached with
creditors to restructure $537.7 million of foreign-currency
debts. The plan will not give away any equity to creditors,
board seats, nor any additional say in management.

The plan instead calls for higher interest rates in
exchange for extending maturities of foreign loans by as
much as 6 years. There will be extensions of 11 separate
credit facilities that had maturities or principle payments
due in 1998. Final debt maturity will now be reached
in November of 2004. The average interest rate will rise by
an average of 1.11 percent from 6.98 to 8.08 percent.  

However, creditors have reportedly agreed to lower interest
rates by 0.375 percent in the event certain Total Access
can raise $70 million in equity within 18 months. If Total
Access raises an additional $80 million during the
subsequent 18 months, the rates will fall another 0.375
percent.  

The single largest creditor of Total Access is the US
Export-Import Bank with $101 million in loans. Other
lenders signing the agreement with Total Access include
Citibank, Chase Manhatten, nine Japanese banks
(representing $150 million in loans0, and four each from
Britain and France, four in Germany, and Italy.  

Total Access is listed on the Singapore Stock Exchange, and
its parent company, United Communications Industries PCL,
is listed on the Thai Stock Exchange. Total Access has
about $1 billion on foreign currency debts, although prior
to the July 1997 float of the Thai baht, it was one of the
most profitable telecommunication companies in Thailand.  


UNITED COMMUNICATION INDUSTRY: Working to restructure debt
----------------------------------------------------------
The Asian Wall Street Journal reported that the United
Communication Industry PCL (or UCOM) is working with
creditors to restructure a $540 million debt (including
$200 million in bonds). UCOM is the parent company of Total
Access Communication PCL of Thailand, and Mr. Boonchai
Bencharongkuk is the controlling shareholder of both
companies. These negotiations were mentioned in an article
detailing the terms of a recent agreement Total Access
Communication PCL reached with its creditors.


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 * * *