TCRAP_Public/980908.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, September 8, 1998, Vol. 1, No. 138

                    Headlines


* C H I N A   &   H O N G   K O N G *

CHINA INTERNATIONAL TRUST: JRII cuts CITIC's ratings
CITIC HONG KONG FINANCE: JRII cuts Citic HK's ratings     
GOLDEN HARVEST ENTERTAINMENT: Company $70m in red


* I N D O N E S I A *

ASTRA INTERNATIONAL: Astra resumes production


* J A P A N *

AIWA COMPANY: Shares fall on production concerns
HITACHI LIMITED: Moody's, S&P may downgrade Hitachi rating
KAWASAKI ENTERPRISES: Group affiliate to aid in cleanup
LONG TERM CREDIT: Opposition vows to stem public fund
TOA STEEL: Offers details on liquidation


* K O R E A *

HANWHA ENERGY: Government announces 'Big Deal'
HYUNDAI ELECTRONICS: Government announces 'Big Deal'
HYUNDAI OIL REFINERY: Government announces 'Big Deal'
HYUNDAI PETROCHEMICAL: Government announces 'Big Deal'
HYUNDAI SEMICONDUCTOR AMERICA: Stays on CreditWatch Neg
KEOSUNG INDUSTRY: Trading may be suspended
KIA MOTORS: Main creditor considers writing off some debts
LG SEMICON: Government announces 'Big Deal'
SAMSUNG GENERAL CHEMICAL: Government announces 'Big Deal'
SAMYANG FOODS: Receives court protection
SHINHWA COMPANY: Trading may be suspended
TAEHEUNG LEATHER: Trading may be suspended
YOUNGJIN TRADING: Trading may be suspended


* M A L A Y S I A *

BEST WORLD LAND BHD: Unit defaults in bank payment
BINA SATU SDN BHD: Winding-up petition
HZB ASSOCIATES SDN BHD: Voluntary winding-up
JAMES CORNWELL & COMPANY SDN BHD: Voluntary winding-up
KBBK ENTERPRISE SDN BHD: Voluntary winding-up
KILANG PAPAN SELATAN MALAYSIA SDN BHD: Winding-up petition
KOBENA TERAS SDN BHD: Winding-up order
MERAPI EMAS SDN BHD: Winding-up petition
ORIENT APPAREL BHD: Winding-up petition
PASARAYA YAHONA LOOKING GOOD: Winding-up petition
UTAMA DEPARTMENT STORE SDN BHD: Winding-up petition


* P H I L I P P I N E S *

ALLIED BANKING: S&P lowers ratings
CHINA BANKING: S&P lowers ratings
EQUITABLE BANKING: S&P lowers ratings
PHILIPPINE NATIONAL BANK: S&P lowers ratings
RIZAL COMMERCIAL BANKING: S&P lowers ratings
SECURITY BANKING: S&P lowers ratings
SOLIDBANK: S&P lowers ratings
UNION BANK OF THE PHILIPPINES: S&P lowers ratings
UNITED COCONUT PLANTERS BANK: S&P lowers ratings


* S I N G A P O R E *

VIKAY INDUSTRIAL: Discussions with potential investors


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

CHINA INTERNATIONAL TRUST: JRII cuts CITIC's ratings
----------------------------------------------------
The Asia Wall Street Journal reported that the Japan Rating
and Investment Information Inc. has downgraded the senior
long-term debt of the China International Trust &
Investment Corporation (CITIC).

This move reportedly affects five series of Samurai bonds
issued by CITIC.

According to the article, this downgrade reflects the
deterioration of the companies' asset quality and
profitability and the worsening economic conditions in
China. It was also noted that reform of the Chinese
financial sector has prevent the Chinese government from
easily extending financial support to CITIC. In 1997, it
was estimated that up to 60 percent of CITIC's pretax
profits (excluding pretax profits and losses) was due to
government support.

CITIC's senior long-term debt rating was lowered from A+ to
A by the Japan Rating and Investment Information Inc.

Earlier this week, Moody's Investor Services also lowered  
CITIC's long-term foreign currency debt rating from Baa1 to
Baa2, and its financial strength rating was moved from D+
to D.


CITIC HONG KONG FINANCE: JRII cuts Citic HK's ratings     
-----------------------------------------------------
The Asia Wall Street Journal reports that the Japan Rating
and Investment Information Inc. has downgraded the senior
long-term debt of the Citic Hong Kong Finance Ltd.

This move reportedly affects one series of Samurai
bonds issued by this financial company. Citic Hong Kong
Finance Ltd.'s senior long-term debt rating and its foreign
currency senior long-term debt ratings were lowered from A+
to A.  

According to the article, this downgrade reflects the
deterioration of the China International Trust & Investment
Corporation (CITIC)'s asset quality and profitability and
the worsening economic conditions in China.


GOLDEN HARVEST ENTERTAINMENT: Company $70m in red
-------------------------------------------------
According to the SCMP, Golden Harvest Entertainment
(Holdings) saw an unaudited loss of $70.27 million for the
nine months to March 31 this year. An exceptional loss of
$41.52 million related to provisions for bad and doubtful
debts was recorded as well as an exchange loss of $43.55
million.


=================
I N D O N E S I A
=================

ASTRA INTERNATIONAL: Astra resumes production
---------------------------------------------
According to the SCMP, car maker Astra International has
resumed production. An Astra official the company had
started producing again as demand from farmers in Menado
and Sulawesi increased after good harvests of tobacco
and other cash crops.

The company is only producing its Toyota-Astra cars, with
other brands still being sold from existing stocks. Astra,
like other Indonesian companies, suffered as the cost of
imported parts and debt repayment soared with the more than
70 per cent plunge in the rupiah against the US dollar.


=========
J A P A N  
=========

AIWA COMPANY: Shares fall on production concerns
------------------------------------------------
Bloomberg reports shares of Aiwa Co. fell 220 yen to 4,000
amid concern that the company's production in Malaysia will
be hurt by the country's imposition of tight restrictions
on currency convertibility. In the past two years, the
maker of stereos and televisions shifted about 90 percent
of its production overseas, particularly to Southeast Asian
countries like Malaysia.


HITACHI LIMITED: Moody's, S&P may downgrade Hitachi rating
----------------------------------------------------------
Newsbytes reports following an announcement of corporate
restructuring, large job cuts and the expectation of large
losses by Hitachi, Ltd., Moody's Investors Service has
announced plans to place its debt ratings for the company
under review.

"This action reflects the rating agency's concern that
further deterioration in the operating environment
surrounding Hitachi's core businesses and its poor  
operating performance may result in weaker debt protection
measurements over the intermediate period," said Moody's in
a statement.

The agency is placing under review the Aa3 senior unsecured
debt ratings of Hitachi, Ltd., and its financially-
supported subsidiaries, Hitachi America, Ltd.; Hitachi
International (Holland) B.V.; Hitachi Finance (UK) Plc.;
and Hitachi Asia Ltd.

Likewise, Standard & Poor's announced it has placed its
double-'A' long-term and 'A-1'-plus short-term ratings of
Hitachi Ltd. and related entities on CreditWatch with  
negative implications.

S&P cited the change in estimates is poor performance in
Hitachi's core information systems and electronics segment
and deterioration in the global dynamic random access
memory (DRAM) market.

In resolving the CreditWatch placement, Standard & Poor's
will reassess Hitachi's earnings prospects, details of the
company's restructuring plans, and the full effects of
current business conditions on the balance sheet, the  
ratings agency said.


KAWASAKI ENTERPRISES: Group affiliate to aid in cleanup
-------------------------------------------------------
Nikkei reports Kawasaki Steel Corp. will post an
extraordinary charge of over 100 billion yen for the
current fiscal year on the cleanup of bad loans at Kawasaki
Enterprises, a troubled leasing affiliate, company sources
say.

Kawasaki Steel is likely to sustain a net loss in fiscal
1998, although it plans to sell idle land and other assets
to reduce the impact of the extraordinary losses.

Pushing to shore up its groupwide financial health, the
integrated steelmaker plans to cancel 80 billion yen in
loans to the leasing affiliate, Kawasaki Enterprises Inc.,
and provide it with additional financial aid to the tune of
tens of billions of yen.

Kawasaki Enterprises, in turn, will dispose of property
received as collateral on its lending and write off loan
losses. The unit registered over 210 billion yen in lending
assets outstanding as of March 31, the bulk of which are
believed to be loans backed by real estate.

An ongoing review of the collateral suggests that losses
may reach 100-150 billion yen.

The property collateral will be purchased initially by
Kawasaki Steel group firms at its assessed fair market
value. Eventually, the assets will be resold to buyers
outside the group. Kawasaki Steel will also shoulder the
repayment burden on roughly 450 billion yen of Kawasaki
Enterprises' borrowing from Long-Term Credit Bank of Japan
(8303) and other financial institutions.


LONG TERM CREDIT: Opposition vows to stem public fund
-----------------------------------------------------
According to a report in Kyodo News, three major opposition
forces told the Diet on Friday they are determined to block
any government move to inject public funds into the ailing
Long-Term Credit Bank of Japan (LTCB).


TOA STEEL: Offers details on liquidation
----------------------------------------               
Kyodo News reports further details of the liquidation of
Toa Steel, Japan's second-largest electric-furnace
steelmaker. The company decided Thursday to liquidate and
hand over most of its assets, operations and workers to a
company to be set up by its parent NKK Corp., Toa officials
said.

Toa approved the liquidation plan at an extraordinary board
meeting hurriedly convened Thursday night, the officials
said.

Toa made the decision in view of its large capital deficit,
they said, adding the company's total liabilities are
estimated to eclipse its combined assets by 46 billion yen
as of March 31, 1999, the end of fiscal 1998.

The extent of Toa's liabilities totals 250 billion yen, the
Toa officials said.

This would make Toa the largest manufacturer to go bankrupt
in terms of liabilities in Japan's postwar history,
exceeding that of Mita Industrial Co., a photocopier maker
that filed for court protection from creditors last month.

The officials said the timing of the liquidation was set at
March 31, 1999.

Until then, Toa will continue its production and marketing
operations under the current corporate structure, they
said.

But some facilities at Kashima Steelworks in Ibaraki
Prefecture, one of the company's main steelworks, will be
suspended by the year end, they said.

Toa Steel is expected to rack up a 25.5 billion yen pretax
loss for fiscal 1998 on an unconsolidated basis, the
officials said.

In the previous fiscal year that ended March 31 this year,
Toa marked the fourth consecutive year of unconsolidated
pretax losses. Its pretax loss of 24.03 billion yen in the
year came on sales of 131.19 billion yen.

The Toa officials said NKK is planning to establish a new
wholly owned subsidiary and have it take over part of Toa's
production facilities, workers and other assets following
its dissolution.

NKK owns 51.5% of Toa, which employs 1,400 people.

In February this year, NKK boosted its equity stake in Toa
from 36% to 51.5% to help support Toa's rehabilitation
efforts.

According to Teikoku Databank, a leading credit research
company, NKK plans to report an extraordinary loss of more
than 50 billion yen in the current fiscal year, ending
March 31, 1999, due to the liquidation of Toa.

On Thursday afternoon, the Tokyo Stock Exchange (TSE)
halted trading in the shares of Toa and NKK, both listed on
the First Section, after newspaper reports that Toa is
liquidating.

The TSE announced later Thursday it will transfer the Toa
issue to the monitoring post Friday to prepare for its
future delisting.

According to Reuters news agency, the second largest
shareholder in Toa is Marubeni Corp. Reuters also reports
Nippon Credit Bank Ltd. (NCB), Fuji Bank Ltd. and Yasuda
Trust & Banking Co. Ltd. are major creditors, as well as
shareholders, of Toa Steel. Fuji Bank said earlier it would
not suffer any losses if Toa ceased operations.


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

HANWHA ENERGY: Government announces 'Big Deal'
----------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Oil Refinery Co. will acquire Hanwha Energy Co.

The merger, one of several just announced and dubbed "big
deals" by the local press are an attempt at alleviating one
of the main problems with the economy: overcapacity. The
large conglomerates, called chaebols, have invested heavily
in industries suffering from world-wide oversupply and weak
international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.


HYUNDAI ELECTRONICS: Government announces 'Big Deal'
----------------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Electronics Industries Co. agreed in principle to merge
with LG Semicon Co. Combined, the two firms accounted for
about 15% of the world market for dynamic random access
memory chips in 1997. Many major details, such as
management control and shareholding levels, have yet to be
finalized.

The merger, one of several just announced and dubbed "big
deals" by the local press, are an attempt at alleviating
one of the main problems with the economy: overcapacity.
The large conglomerates, called chaebols, have invested
heavily in industries suffering from world-wide oversupply
and weak international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.

Yet the benefits of the mergers will only be obtained if
the chaebols are willing to cut staff and planned
investment, and perhaps even shut down current capacity.

LG Semicon lost 249.1 billion won ($185.8 million) in the
first half on revenue of 1.2 trillion won. Hyundai
Electronics posted a loss of 330.4 billion won on revenue
of 2.3 trillion won.

Among other deals announced, the Samsung, Daewoo and
Hyundai groups will merge their aerospace operations, and
the Hyundai, Daewoo and Hanjin groups will consolidate
their train-manufacturing businesses.


HYUNDAI OIL REFINERY: Government announces 'Big Deal'
-----------------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Oil Refinery Co. will acquire Hanwha Energy Co.

The merger, one of several just announced and dubbed "big
deals" by the local press, are an attempt at alleviating
one of the main problems with the economy: overcapacity.
The large conglomerates, called chaebols, have invested
heavily in industries suffering from world-wide oversupply
and weak international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.


HYUNDAI PETROCHEMICAL: Government announces 'Big Deal'
------------------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Petrochemical Co. will merge with Samsung General Chemical
Co. A Samsung spokesman says that the two companies will
have equal stakes in the joint venture, and that its
management will be independent of both business groups.

The merger, one of several just announced and dubbed "big
deals" by the local press, are an attempt at alleviating
one of the main problems with the economy: overcapacity.
The large conglomerates, called chaebols, have invested
heavily in industries suffering from world-wide oversupply
and weak international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.


HYUNDAI SEMICONDUCTOR AMERICA: Stays on CreditWatch Neg
-------------------------------------------------------
Standard & Poor's announced that its single-'B' long-term
debt rating of Hyundai Semiconductor America Inc. (HSA)
would remain on CreditWatch with negative implications,  
where it was placed on Dec. 9, 1997.

HSA's parent, Hyundai Electronics Industries Co. Ltd.,
intends to merge with unrated LG Semicon Co. as part of a
government-sponsored business recovery plan. The rating of
HSA is based on the credit quality of Hyundai Electronics,  
which holds a 76% interest in the subsidiary.

On Sept. 3, 1998, the Federation of Korean Industries, a
lobbying group for major business conglomerates (chaebol)
in Korea, announced that the Hyundai and LG groups had
agreed to meld their semiconductor businesses, forming one
of the  world's largest makers of dynamic random access
memory (DRAM) chips.

The merger may yield cost-saving economies of scale in
terms of R&D, administration, and marketing. However, the
new company would retain substantial excess capacity, and
would likely incur sizable capital expenditures over the
near to medium term to transition its plants to a common  
manufacturing process.

In resolving the CreditWatch, Standard & Poor's will assess
the details of the proposed merger as they become
available, the earnings prospects of the new company, and
general conditions in the marketplace.


KEOSUNG INDUSTRY: Trading may be suspended
------------------------------------------
The Korea language Maeil Kyungje reports that the Korea
Stock Exchange made an announcement that the Keosung
Industry Company is encountering operational difficulties
and may soon have the trade of its stock suspended.


KIA MOTORS: Main creditor considers writing off some debts
----------------------------------------------------------
The Korea Times reports that the main creditor of Kia
Motors Company and its sister bus and truck maker, the Asia
Motors Company, are considering writing off some of the
debts in a move to auction off the two companies.

The main creditor, the Korea Development Bank (KDB) was
reported to have said that it is now reviewing terms of the
international bidding effort and studying the possibility
of writing off some of two companies' debts.  

Despite confusion in earlier reports, before the first
auction that ended in failure last month, the KDB and other
creditors offered only longer loan repayment periods and
lower interest rates on loans, rather than writing off any
debts. However, all of the four companies (Samsung,
Hyundai, Daewoo, and Ford) that bid in the recent aborted
auction demanded that at least part of Kia's debts be
written off.

The KDB also stated that Kia Motor's debts amounted to 9.48
trillion won at the end of June, and its total assets stood
at 6.17 trillion won. Asia Motors had 3.36 trillion won
worth of debt and assets values at 1.5 trillion won.  

A meeting of creditors is scheduled to held next week to
finalize measures to present a more attractive offer to
participants in a second auction.  

Kia Motors became insolvent last July. Kia Motors and Asia
Motors were granted protection from creditors under court
receivership in October 1997.


LG SEMICON: Government announces 'Big Deal'
-------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Electronics Industries Co. agreed in principle to merge
with LG Semicon Co. Combined, the two firms accounted for
about 15% of the world market for dynamic random access
memory chips in 1997. Many major details, such as
management control and shareholding levels, have yet to be
finalized.

The merger, one of several just announced and dubbed "big
deals" by the local press, are an attempt at alleviating
one of the main problems with the economy: overcapacity.
The large conglomerates, called chaebols, have invested
heavily in industries suffering from world-wide oversupply
and weak international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.

LG Semicon lost 249.1 billion won ($185.8 million) in the
first half on revenue of 1.2 trillion won. Hyundai
Electronics posted a loss of 330.4 billion won on revenue
of 2.3 trillion won.

It could also be a long time before these deals are
finalized, and the hurdles are high. These companies are
entangled in a web of cross-shareholdings and debt
guarantees with other chaebol affiliates; separating them
out will be a financial challenge.

Among other deals announced, the Samsung, Daewoo and
Hyundai groups will merge their aerospace operations, and
the Hyundai, Daewoo and Hanjin groups will consolidate
their train-manufacturing businesses.


SAMSUNG GENERAL CHEMICAL: Government announces 'Big Deal'
---------------------------------------------------------
According to a report in the Wall Street Journal, Hyundai
Petrochemical Co. will merge with Samsung General Chemical
Co. A Samsung spokesman says that the two companies will
have equal stakes in the joint venture, and that its
management will be independent of both business groups.

The merger, one of several just announced and dubbed "big
deals" by the local press, are an attempt at alleviating
one of the main problems with the economy: overcapacity.
The large conglomerates, called chaebols, have invested
heavily in industries suffering from world-wide oversupply
and weak international prices, such as semiconductors.

This excessive investment, and the debts amassed to
complete the projects, are blamed in Seoul as key causes of
a debt crisis that forced the country into a $58.35 billion
International Monetary Fund-led bailout in December.


SAMYANG FOODS: Receives court protection
----------------------------------------
The Korea Herald reported that the Samyang Food Company has
been authorized to continue doing business under court
protection. Samyang is one of Korea's largest makers of
instant noodles (or ramyon). The Seoul District Court
granted the request on September 2, after the company
submitted its request in February. An official of the court
was cited as saying that Samyang Food's exports had
increased 47 percent from last year, and it has shipped
$6.6 million worth of ramyon in the first half of this
year.


SHINHWA COMPANY: Trading may be suspended
-----------------------------------------
The Korea language Maeil Kyungje reports that the Korea
Stock Exchange made an announcement that the Shinhwa
Company is encountering operational difficulties and may
soon have the trade of its stock suspended.  


TAEHEUNG LEATHER: Trading may be suspended
------------------------------------------
The Korea language Maeil Kyungje reports that the Korea
Stock Exchange made an announcement that the Taeheung
Leather Company is encountering operational difficulties
and may soon have the trade of its stock suspended.


YOUNGJIN TRADING: Trading may be suspended
------------------------------------------
The Korea language Maeil Kyungje reports that the Korea
Stock Exchange made an announcement that the Youngjin
Trading Company is encountering operational difficulties
and may soon have the trade of its stock suspended.


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

BEST WORLD LAND BHD: Unit defaults in bank payment
--------------------------------------------------
Property developer Best World Land Bhd (listed in the KLSE)
announced that its wholly-owned subsidiary, Best World Sdn
Bhd, has defaulted in its payments of bank interest and
principal sum to Sime BAnk Bhd for a total of RM184,846,450
as at end of July 1998.

Best World Land has indicated that it is not obligated to
repay the debts of its subsidiary because no corporate
guarantee was given for the loan.

The default was blamed on poor response to its property
projects and high interest rates.


BINA SATU SDN BHD: Winding-up petition
--------------------------------------
Ays Marketing Sdn Bhd on 2/7/98 petitioned for the winding-
up of Bina Satu Sdn Bhd. The petition is directed to be
heard on 6/11/98.


HZB ASSOCIATES SDN BHD: Voluntary winding-up
--------------------------------------------
The members of HZB Associates Sdn Bhd on 28/8/98 resolved
to wind-up the company voluntarily. Creditors are requested
to submit their claims before 15/9/98.l


JAMES CORNWELL & COMPANY SDN BHD: Voluntary winding-up
------------------------------------------------------
The members of James Cornwell & Company Sdn Bhd on 28/8/98
resolved to wind-up the company voluntarily. Creditors are
requested to submit their claims before 5/10/98.


KBBK ENTERPRISE SDN BHD: Voluntary winding-up
---------------------------------------------
The members of KBBK Enterprise Sdn BHd on 3/9/98 resolved
to wind-up the company voluntarily. Creditors of the
company are requested to submit their claims before
3/10/98.


KILANG PAPAN SELATAN MALAYSIA SDN BHD: Winding-up petition
----------------------------------------------------------
Primason Sdn Bhd on 28/8/98 petitioned for the winding-up
of Kilang Papan Selatan Malaysia Sdn Bhd.


KOBENA TERAS SDN BHD: Winding-up order
--------------------------------------
Kobena Teras Sdn BHd was on 20/8/98 served a winding-up
order by its official receiver.


MERAPI EMAS SDN BHD: Winding-up petition
----------------------------------------
Sime Bank Bhd on 20/8/98 petitioned for the winding-up of
Merapi Emas Sdn Bhd.


ORIENT APPAREL BHD: Winding-up petition
---------------------------------------
Arab-Malaysian Merchant Bank Bhd on 4/8/98 petitioned for
the winding-up of Orient Apparel Bhd (listed in the KLSE).
The petition is directed to be heard on 10/11/98.


PASARAYA YAHONA LOOKING GOOD: Winding-up petition
-------------------------------------------------
Ladymade Fashion (M) Sdn Bhd on 17/8/98 petitioned for the
winding-up of Pasaraya Yahona Looking Good (Kulim)(Bkt
Jambul)(Kangar) Sdn Bhd. The petition is directed to be
heard on 13/11/98.


UTAMA DEPARTMENT STORE SDN BHD: Winding-up petition
---------------------------------------------------
Ladymade Fashion (M) Sdn Bhd on 17/8/98 petitioned for the
winding-up of Utama Department Store Sdn Bhd. The petition
is directed to be heard on 13/11/98.


=====================
P H I L I P P I N E S
=====================

ALLIED BANKING: S&P lowers ratings
----------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


CHINA BANKING: S&P lowers ratings
---------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


EQUITABLE BANKING: S&P lowers ratings
-------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


PHILIPPINE NATIONAL BANK: S&P lowers ratings
--------------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


RIZAL COMMERCIAL BANKING: S&P lowers ratings
--------------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


SECURITY BANKING: S&P lowers ratings
------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


SOLIDBANK: S&P lowers ratings
-----------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


UNION BANK OF THE PHILIPPINES: S&P lowers ratings
-------------------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


UNITED COCONUT PLANTERS BANK: S&P lowers ratings
------------------------------------------------
The Asian Wall Street Journal reports that Standard &
Poor's has lowered the public information ratings on nine
Philippine banks from BBpi to Bpi.  The lower ratings were
attributable to the continuing weakening economy, which is
expected to result in a substantial deterioration in the
banks' asset quality and  profitability. The report also
cited that the peso has fallen 40 percent against the
dollar since July 1997. High interest rates and a slowdown
in the economy because of both the regional crisis and a
local severe drought have also combined to weaken the asset
quality of the Philippine banking system.


=================
S I N G A P O R E
=================

VIKAY INDUSTRIAL: Discussions with potential investors
------------------------------------------------------
Singapore BusinessTimes reports Vikay Industrial's judicial
managers are concluding talks with at least two potential
investors to save the struggling liquid crystal display
(LCD) maker.

"I think it's fair to say we're at the tail end of the
negotiation process," said Tham Sai Choy, a partner at KPMG
Peat Marwick, which is acting as judicial manager for the
firm.

In April, it was reported that at least 10 firms were
interested in rescuing the debt-laden firm. The list has
now been narrowed down to at least two parties, said Mr
Tham, who declined to give an exact number.

Mr Tham said the parties were "basically" investment
consortia, comprising several companies each. He declined
to give further details, but sources said the final
investment consortium would likely be a combination of a
financial backer with a manufacturing company that has a
possible link to the LCD industry. It is understood that
Vikay's controlling shareholder, the Tanihaha family, is a
member of one of the consortia.

The interested parties have started to embark on due
diligence efforts, which typically take four weeks to
complete, said Mr Tham.

Following this, the judicial managers will sign a sales-
and-purchase agreement with one of the parties and present
the proposal for creditors' approval. Mr Tham declined to
give a timeframe for this, but said an announcement of this
would be made after an agreement is signed.

Vikay, which was last traded at 19 cents, has been
suspended since November last year. The company, which owes
17 banks some $113.53 million, was placed under judicial
management in December.

Meanwhile, it is business as usual for Vikay and its over-
3,000 staff worldwide, said Mr Tham. "We have been
operating and completing orders, paying employees and
suppliers. We have been generating positive cash flow and
haven't needed to go out to borrow to finance operations."


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.  ISSN: 1520-9482.  

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