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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
Monday, December 14, 1998, Vol. 1, No. 206
Headlines
* C H I N A & H O N G K O N G *
DALIAN INTERNATIONAL: Tianjin says it can pay debt
GUANGZHOU INTERNATIONAL: Tianjin says it can pay debt
PACIFIC ASIA GROUP: Hoax allegation stalls winding-up
TIANJIN INTERNATIONAL: Tianjin says it can pay debt
WHEELOCK: Results prompt downgrades
* I N D O N E S I A *
BANK CENTRAL ASIA: Government sole owner of bank
* J A P A N *
LONG TERM CREDIT: Sumitomo rules out LTCB takeover
MITSUI O.S.K. LINES: To take over liner operations
NISSAN MOTOR: Nissan's debt may be too big to service
RENOWN INC: To sell head office
* K O R E A *
DAEWOO ELECTRONICS: Opposition to plan grows
KIA MOTORS: Hyundai pledges to make Kia profitable
LG IND. SYSTEMS: Two LG subsidiaries headed for merger
LG METALS: Two LG subsidiaries headed for merger
SAMSUNG MOTORS: Opposition to plan grows
* M A L A Y S I A *
BC SOLUTIONS SDN BHD: Winding-up petition
CHIN HOE COMPANY SDN BHD: Voluntary liquidation
E&O BHD: Results announcement
KEPPEL BANK: Denies foreign takeover rumours
SIME MERCHANT BANKERS: Sale by Sime Darby aborted
SYARIKAT PEMBINAAN SURIN SDN BHD: Voluntary winding-up
TELITI RAYA (M) SDN BHD: Winding-up petition
WESTMONT LAND: In default of credit facilities
* P H I L I P P I N E S *
PHILIPPINE AIRLINES: Marcos claim won't affect negotiations
* S I N G A P O R E *
ADVANCED SYSTEMS: Results announcement
ELECT & ELTEK: Seeks trading suspension
=================================
C H I N A & H O N G K O N G
=================================
DALIAN INTERNATIONAL: Tianjin says it can pay debt
--------------------------------------------------
According to the South China Morning Post, Tianjin
municipal government secretary-general Chen Hongjiang
yesterday declared its full backing for Tianjin
International Trust and Investment Corp (Titic) and said it
would be able to meet its debt obligations, but did not
divulge where the funding would come from or whether Titic
would be allowed to convert it into foreign currency amid
the prevailing tight forex controls.
The swift show of support by the Tinajin government
contrasts sharply with the slow and low-profile response of
other financially troubled international trust and
investment corporations (Itics) to investor concerns.
Unlike Tianjin, one of four municipalities directly under
state administration, the Dalian government has yet to
voice support for Dalian International Trust and Investment
Corp (Ditic). It is understood some of Ditic's creditors
are considering legal action against the firm after it
missed repayment of a US$20 million certificate of deposit
on Oct 23.
GUANGZHOU INTERNATIONAL: Tianjin says it can pay debt
-----------------------------------------------------
According to the South China Morning Post, Tianjin
municipal government secretary-general Chen Hongjiang
yesterday declared its full backing for Tianjin
International Trust and Investment Corp (Titic) and said it
would be able to meet its debt obligations, but did not
divulge where the funding would come from or whether Titic
would be allowed to convert it into foreign currency amid
the prevailing tight forex controls.
The swift show of support by the Tinajin government
contrasts sharply with the slow and low-profile response of
other financially troubled international trust and
investment corporations (Itics) to investor concerns.
Guangzhou International Trust and Investment Corp (Gzitic),
which defaulted on a payment on a US$30 million syndicated
loan in October, has been chasing loans from borrowers to
solve its liquidity crunch. Its wholly owned Guangzhou
Finance on Wednesday filed a High Court writ to seek claims
of HK$58.3 million owed by Ananda Holdings, Chan Yeuk-wai
and Chan Yeuk-pun. Gzitic was believed to have taken a 4
per cent stake in locally listed Ananda Wing On Travel
(Holdings), majority owned by the Chans, in September last
year as part of the loan repayment.
PACIFIC ASIA GROUP: Hoax allegation stalls winding-up
-----------------------------------------------------
According to the South China Morning Post, new evidence
implied that creditors of Pacific Asia Group, the subject
of a petition for winding up, had been victims of a hoax.
Pacific Asia Group director Stephen Chik Wai-wan was
accused of copying the letterhead from an accountany firm
to stick on to financial statements to persuade Sunchase
International Group (China) to invest $2 million in the
company. The new evidence prompted an adjournment of the
petition. An urgent bid for a Mareva injunction against Mr
Chik was granted a few days ago to prevent any possible
dispersion of his assets oversseas.
Pacific Asia was touted to Sunchase as a merchant banking
business specialising in Asia. It has subsequently ceased
to carry on business, sparking the winding-up petition.
TIANJIN INTERNATIONAL: Tianjin says it can pay debt
---------------------------------------------------
According to the South China Morning Post, Tianjin
municipal government secretary-general Chen Hongjiang
yesterday declared its full backing for Tianjin
International Trust and Investment Corp (Titic) and said it
would be able to meet its debt obligations, but did not
divulge where the funding would come from or whether Titic
would be allowed to convert it into foreign currency amid
the prevailing tight forex controls.
The swift show of support by the Tinajin government
contrasts sharply with the slow and low-profile response of
other financially troubled international trust and
investment corporations (Itics) to investor concerns.
With that, a foreign bank official expressed confidence in
Titic's ability to repay. However, concerns linger as it
faces another samurai bond repayment of 13 billion yen in
May.
Titic is one of the 10 major windows approved by the State
Council for raising foreign funds and a local financial
institution with the full backing from the Tianjin
municipal government.
The Hong Kong Standard also reported on the Tianjin
municipal government's pledge of Titic's ability to repay
debts. According to the paper, S&P said Titic was running
out of cash because of government-directed investments. The
situation was compounded by the recent demise of Gitic. S&P
also said that the central government prevented Gitic's
owner, the Guangdong government, from providing assistance.
WHEELOCK: Results prompt downgrades
-----------------------------------
Singapore Business Times reports disappointing interim
results at Wheelock and Co Ltd prompted analysts to
downgrade their full-year forecasts yesterday to
incorporate higher interest charges and lower investment
income. Wheelock reported on Wednesday a 71 per cent drop
in net profit for the six months to Sept 30 to HK$345.1
million (S$73.3 million). The company said it would pay an
interim dividend of HK$0.025 compared with HK$0.115 in the
same period last year.
Robert Sassoon, head of research at SG Securities said
Wheelock was paying expensive costs on its debt. Net debt
at the company amounted to about HK$17 billion, he said. SG
revised its full-year profit forecast for Wheelock down to
HK$815 million from an estimate of HK$1.1 billion. The
company reported net profit for the year to March 31 of
HK$1.45 billion. Analysts said land premium payments would
boost Wheelock's gearing level over the coming year.
=================
I N D O N E S I A
=================
BANK CENTRAL ASIA: Government sole owner of bank
------------------------------------------------
Asia Pulse reports Chairman of the National Banking
Restructuring Agency, Glenn M Yusuf, said the government
had become the sole shareholder of Bank Central Asia (BCA),
the country's largest Indonesian private bank. The banks
entire shares had been put up as collateral for liquidity
credit it had failed to repay to the central bank, he said.
BCA, which was owned by the Salim Group and Siti
Hardiajanti Rukaman and Sigit Hardjojudanto, respectively
daughter and son of former President Suharto, was taken
over by the government earlier this year for failure to
repay liquidity credit.
Yusuf said the Salim group had put up as collateral the
entire shares of BCA and a number of its subsidiaries for
the Rp48 trillion (US6.4 billion) liquidity credit from the
central bank, Bank Indonesia.
Meanwhile the Antara news agency reported that BCA had
repaid Rp12 trillion of its liquidity credit to the central
bank after it succeeded in drawing public funds. Other
banks including Bank Danamon, which have also been taken
over by the government for the same reason, have also
succeeded in repaying part of their debts, bringing the
total amount of repayments to Rp 17 trillion since the
takeover in August.
=========
J A P A N
=========
LONG TERM CREDIT: Sumitomo rules out LTCB takeover
--------------------------------------------------
Nikkei reports Sumitomo Trust & Banking Co., long touted as
the bank likely to take over Long-Term Credit Bank of
Japan, no longer intends to absorb the failed bank's
operations, president Atsushi Takahashi said Thursday. In
an exclusive interview with The Nihon Keizai Shimbun,
Takahashi said the Osaka-based bank will work out a new
management strategy that ignores such a possibility
altogether.
"Completely taking over LTCB's operations is now out of the
question. The business environment has changed so
dramatically that there is no longer any possibility to
take over the (now nationalized) long-term credit bank,"
said Takahashi.
The president also unveiled a plan to set up in January an
advisory panel composed of officials from foreign financial
institutions and computer experts to make an overall review
of bank operations, including its computer system. The
trust bank has had its eye on a merger with LTCB or taking
over its operations since June, so it has not had time to
develop a new business strategy.
MITSUI O.S.K. LINES: To take over liner operations
--------------------------------------------------
Bloomberg reports shares of Mitsui O.S.K. Lines Ltd. fell 4
yen to 193. The shipping company plans to set up a company
to take over its unprofitable liner operations, or ships
which serve regularly scheduled routes.
NISSAN MOTOR: Nissan's debt may be too big to service
-----------------------------------------------------
The Asian Wall Street Journal mentioned in a front page
article about Nissan Motor Company that the company has far
greater debt than any other auto maker in the world. The
debt of 2.5 trillion yen has, according to the article, led
American auto executives to question whether Nissan will
be able to generate enough cash flow to service the debt.
The article also mentions that Nissan has plans to retire
one trillion yen of debt by 2001 through the sale of assets
and control of inventories. Nissan is Japan's second
largest auto maker.
RENOWN INC: To sell head office
-------------------------------
Bloomberg reports shares of Renown Inc. fell 3 yen to 77 on
concern about the company's earnings and its plans to
restructure. Yesterday, the fashion apparel maker said it
will sell its head office in Tokyo by the end of next month
and use the profit to retire some of its debt.
=========
K O R E A
=========
DAEWOO ELECTRONICS: Opposition to plan grows
--------------------------------------------
Asia Pulse reports forces opposed to the exchange of Daewoo
Electronics with Samsung Motors among Daewoo Electronics
employees are growing with officers of the company deciding
to support the actions to be taken by the Emergency Action
Committee. The company's local plants have been suspended,
and these officials participated in the rallies staged by
the action committee. The emergency action committee
jointly with the company's organized workers, officers,
those at other Daewoo affiliates and cooperative firms,
held a rally Friday at the plaza of the Seoul Railroad
Station in downtown Seoul.
Asia Pulse also reports the company responsible for
evaluating the value of Samsung Motor and Daewoo
Electronics prior to their business swap will be named by
Dec 22, sources from the two companies said Friday. A five-
member steering committee preparing for the mega deal
between the two chaebol units held their first meeting on
Thursday.
The committee members are said to be leaning toward
choosing a foreign firm for the project. The two groups
agreed to present a clear vision of what they will do with
the companies they will acquire to assure workers,
subcontractors, and creditor banks of the worthiness of the
deal.
KIA MOTORS: Hyundai pledges to make Kia profitable
--------------------------------------------------
Asia Pulse reports Hyundai Motor, which recently acquired
Kia Motors Corp. said Friday that Kia would be able to turn
out 800,000 cars next year and pleged to turn the troubled
automaker into a profitable company in three years. Hyundai
and Kia would jointly run after-sales service to provide
better services to clients of both companies, Chung Mong-
koo, joint chairman of Hyundai and Kia, told a press
conference.
Hyundai plans to unify auto parts of the two companies and
stop making similiar models by 2001. It will then reduce
the number of joint models to 15 to 20 by 2005.
Hyundai will meanwhile sell Kia's unnecessary real estate
assets and seek foreign funds to lower its debt-to-equity
ratio to below 200 percent next year.
LG IND. SYSTEMS: Two LG subsidiaries headed for merger
------------------------------------------------------
Digital ChosunIlbo reports LG Ind. Systems announced Friday
that it has decided to merge with LG Metals to operate as a
single new company from May 1 next year. The merger will
increase the paid-in capital of the LG subsidiary up to
W148.1 billion and yearly sales are expected to reach W3.7
trillion. The company will see its electric power systems
and elevator divisions reinforced by the merger, a company
official said.
LG METALS: Two LG subsidiaries headed for merger
------------------------------------------------
Digital ChosunIlbo reports LG Ind. Systems announced Friday
that it has decided to merge with LG Metals to operate as a
single new company from May 1 next year. The merger will
increase the paid-in capital of the LG subsidiary up to
W148.1 billion and yearly sales are expected to reach W3.7
trillion. The company will see its electric power systems
and elevator divisions reinforced by the merger, a company
official said.
SAMSUNG MOTORS: Opposition to plan grows
----------------------------------------
Asia Pulse reports forces opposed to the exchange of Daewoo
Electronics with Samsung Motors among Daewoo Electronics
employees are growing with officers of the company deciding
to support the actions to be taken by the Emergency Action
Committee. The company's local plants have been suspended,
and these officials participated in the rallies staged by
the action committee. The emergency action committee
jointly with the company's organized workers, officers,
those at other Daewoo affiliates and cooperative firms,
held a rally Friday at the plaza of the Seoul Railroad
Station in downtown Seoul.
Asia Pulse also reports the company responsible for
evaluating the value of Samsung Motor and Daewoo
Electronics prior to their business swap will be named by
Dec 22, sources from the two companies said Friday. A five-
member steering committee preparing for the mega deal
between the two chaebol units held their first meeting on
Thursday.
The committee members are said to be leaning toward
choosing a foreign firm for the project. The two groups
agreed to present a clear vision of what they will do with
the companies they will acquire to assure workers,
subcontractors, and creditor banks of the worthiness of the
deal.
===============
M A L A Y S I A
===============
BC SOLUTIONS SDN BHD: Winding-up petition
-----------------------------------------
Applied Business Systems Sdn Bhd on 22/9/98 petitioned for
the winding-up of BC Solutions Sdn Bhd. The petition is
directed to be heard on 12/1/99.
CHIN HOE COMPANY SDN BHD: Voluntary liquidation
-----------------------------------------------
The members of Chin Hoe Company Sdn Bhd on 7/12/98 resolved
to wind-up the company voluntarily.
E&O BHD: Results announcement
-----------------------------
Asia Pulse reports E&O Bhd has reported a group pre-tax
profit of RM6.354 million, down by 72 percent for the six
months ended Sept 30, 1998 compared to RM22.7 million
(US$1:RM3.8) the previous year. Releasing its unaudited
results Thursday, the company said turnover decreased by 11
percent to RM65.440 milllion against RM73.897 million. At
company level, pre-tax profit shed nine percent to RM1.883
million from RM2.063 million but turnover rose 35 percent
to RM6.997 million from RM5.181 million. E&O said the
decline was a result of the group's focus to develop
affordable homes with lower profit margin rather than
high-end developments. No interim dividend has been
declared.
KEPPEL BANK: Denies foreign takeover rumours
--------------------------------------------
According to Singapore Business Times, Keppel Bank
yesterday denied market rumours that a foreign financial
institution may be taking a stake in the bank. "No foreign
or local investors are coming in,'' said the bank
spokeswoman. The bank is also not holding talks with
foreign or local investors at the moment, she said.
Last month, Keppel Group chairman Sim Kee Boon told
reporters that the bank had been talking to potential
foreign and local investors with a view to increasing its
capital and expertise, even if it meant giving up majority
control. Those remarks, as well as the massive
restructuring going on in the entire Keppel Group, fanned
market speculation that new investors would come onboard at
Keppel Bank.
Keppel Bank is in the final stages of sewing up its merger
with Tat Lee Bank. The merger, which will be officially
completed on Dec 26, will see Tat Lee become a subsidiary
of Keppel Bank. There are plans for the group to inject its
banking assets in India, Malaysia and the Philippines into
the new Keppel Tatlee Bank.
SIME MERCHANT BANKERS: Sale by Sime Darby aborted
-------------------------------------------------
According to Singapore Business Times, Sime Darby yesterday
said the memorandum of understanding between Sime Bank Bhd
and KAF-Seagroatt & Campbell to sell a 51 per cent stake in
Sime Merchant Bankers Bhd has lapsed. As such, the proposed
disposal of the stake in Sime Merchant Bankers has been
aborted.
SYARIKAT PEMBINAAN SURIN SDN BHD: Voluntary winding-up
------------------------------------------------------
The members of Syarikat Pembinaan Surin Sdn Bhd on 8/12/98
resolved to wind-up the company voluntarily. Creditors are
requested to submit their claims before 8/1/99.
TELITI RAYA (M) SDN BHD: Winding-up petition
--------------------------------------------
Pembinaan LNT on 21/10/98 petitioned for the winding-up of
Teliti Raya (M) Sdn Bhd. The petition is directed to be
heard on 5/2/99.
WESTMONT LAND: In default of credit facilities
----------------------------------------------
According to Singapore Business Times, Westmont Land (Asia)
yesterday said it was in default of credit facilities,
including interest payments, amounting to 118.4 million
Malaysian ringgit (S$51.3 million). However, it added that
it was confident of repaying the outstanding facilities.
=====================
P H I L I P P I N E S
=====================
PHILIPPINE AIRLINES: Marcos claim won't affect negotiations
-----------------------------------------------------------
Asia Pulse reports President Estrada said former First Lady
Imelda Marcos' ownership claim over the Philippine
Airlines will not likely affect the negotiations for a
merger between the national flag carrier and Hong Kong-
based Cathay Pacific Airways. In an ambush interview, the
President said Mrs. Marcos' claim will have to be
substantiated by documentary evidence, before it could have
any effect on the operations of PAL, including talks with a
foreign airline.
Earlier, Mrs. Marcos was reported as saying the money used
by PAL chairman Lucio Tan to acquire the majority
shareholdings in the national flag carrier, came from the
companies he held in trust for former President Ferdinand
Marcos. She said among the biggest companies held by Tan
for Marcos were Fortune Tobacco Corp., Allied Banking
Corp., Asia Brewery Inc., Foremost Farms Inc., and the
flagship company, Shareholdings Inc.
A newspaper report also indicated that the Marcos
administration gave Tan discounts on the interest of loans
he incurred from the government during martial law years,
to enable his companies to grow and employ thousands of
workers.
"Now, Tan acquired PAL using our money...I will have to
take PAL, too, especially after what he did to some 8,000
workers," Mrs. Marcos was quoted as saying. Apparently, she
was referring to the retrenchment of thousands of workers
after the flag carrier nearly collapsed allegedly due to a
series of labor strikes.
Despite Mrs. Marcos' claims, President Estrada is
determined to push the reopening of negotiations between
PAL and Cathay, firm in his stand to do all he can to keep
the flag carrier flying, but without additional government
funding support.
Asked if Mrs. Marcos' statements that she will take PAL
from Tan, will affect the negotiations with Cathay, the
President simply stated "I don't think so," hinting that
the former First Lady will have to prove her claim in
court, before she can gain control over the flag carrier.
=================
S I N G A P O R E
=================
ADVANCED SYSTEMS: Results announcement
--------------------------------------
Singapore Business Times says semiconductor equipment maker
Advanced Systems Automation (ASA) yesterday announced $2.4
million in net losses in the six months to Sept 30, blaming
low margins from new products and competitive pricing in
the automatic moulding machines market. ASA's latest
interim numbers are a far cry from $7.2 million in net
profits a year ago. In line with this, the Sesdaq-listed
group warned that results for the 12 months to next March
are not expected to be positive.
ELECT & ELTEK: Seeks trading suspension
---------------------------------------
Singapore Business Times reports Elec & Eltek International
Company yesterday asked for a suspension of trading in its
shares on the Stock Exchange of Singapore today. The
printed circuit board maker said its parent, Elec & Eltek
International Holdings, would also be suspending trading on
the Stock Exchange of Hongkong. The suspensions will remain
"pending an announcement of a notifiable transaction by the
parent company".
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.
This material is copyrighted and any commercial use,
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* * * End of Transmission * * *