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                   A S I A   P A C I F I C      

        Wednesday, December 30, 1998, Vol. 1, No. 217
  
                          Headlines

* C H I N A   &   H O N G   K O N G *

CHINA DEVELOPMENT: China Development clear of Sia Insolvency
EASYKNIT INTERNATIONAL: Company Starting to Come Undone
PEAK INTERNATIONAL: Hires DLJ to Evaluate Buyer's Proposals
PEREGRINE DERIVATIVES: Issues writ over Pacific Reward share deal

* J A P A N *

NISSHO IWAI: Restructuring Calls for 1,000 Job Cuts by March 2002                  

* K O R E A *

LG SEMICON: VP Lee Chong Minimizes Impact of Frozen Credit Lines
LG SEMICON: Arthur D. Little Defends Fairness in Evaluation

* M A L A Y S I A *

ASEANIA DEVELOPMENT: Winding-up petition
CHONGAI CORP.: Sinks deeper into the red with RM25m interim loss
LEE TAI TIMBER: Winding-up petition
LINK PROSPER: Winding-up petition
MALAYSIAN ASSURANCE: Scheme of Arrangement
MULTI-WINS: Voluntary winding-up
NEW SOUTH: Winding-up petition
SETIA TIMOR: Winding-up petition

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

PHILIPPINE AIRLINES: May tap Tokyo funding

* T H A I L A N D *

KRUNG THAI: Bank set to restructure
UNITED COMMUNICATIONS: Progress in Restructuring Debt Obligations


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

CHINA DEVELOPMENT: China Development clear of Sia Insolvency
------------------------------------------------------------
According to the South China Morning Post, executive director of
China Development, Sumitro Sukamto, said the company would not be
affected by the bankruptcy of his brother Sukamto Sia who is a
substantial shareholder holding 21 per cent shares of the company
but holds no title in the company.

Mr Sia filed for bankruptcy protection in Hawaii last month,
giving the court jurisdiction of his assets in and outside the
United States.  Mr Sukamto lost a boardroom battle for control of
the company in 1996.  Former China Development substantial
shareholder Oei Hong Leong won control of the company, but
subseqently sold his 28 per cent stake to a string of independent
investors and relinquished his chairmanship a year ago.

China Development saw its net losses widen to $277.03 million
from $22.12 million in the year to June, due largely to $228.25
million in provisions for a number of share investments. Mr
Sukamto said many of these investments were done by the former
management and the company is trying to recoup some of the losses
through litigation. China Development is suing former director
Low Tuck Kwong and former Indonesia-based associate Jaya Sumpile
Indonesia over a $250 million payment default.


EASYKNIT INTERNATIONAL: Company Starting to Come Undone
-------------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, garment manufacturer Easyknit International Holdings
yesterday posted a $356.24 million interim loss for the six
months to September 30 compared with an $60.07 million profit for
the same period last year. Total turnover fell 21 per cent to
$576.1 million during the interim period.

The SCMP said that the company blamed the loss of a customer in
the United States and sluggish retail sales for the profit fall
while the Hong Kong Standard said that the company had been badly
hit by the slumping retail sector and the downturn in the
property market.

According to the Hong Kong Standard, the company posted a $62.8
million operating loss for the six-month period, compared with an
operating profit of $66.5 million in the same period last year.
It also posted an exceptional loss of $301.8 million, including a
$181 million write-down of the value of properties under
development and held for development.  The item also included a
$77 million loss on disposal of investment properties, a $37
million loss on the disposal of lease-hold properties and a $6.8
million loss on disposal of property developments.   

In July this year, Easyknit announced the sale of properties
leading to a loss of $158.1 million, in order to raise money to
reduce its bank borrowing.  As at July 20, it had total bank
loans and other borrowings of about $1.07 billion. The company
has already posted a $543.2 million exceptional loss for the year
ended March 31, 1998.  All items were property related.

Both newspapers said that Easy Concepts International yesterday
announced a net interim loss of $39.4 million for the six-month
period to September 30, 1998, compared to net interim loss of $25
million for the period ended August 31, 1997. The scmp describes
Easy Concepts International as a sister company of Easyknit while
the Hong Kong Standard says it is a subsidiary of Easyknit.


PEAK INTERNATIONAL: Hires DLJ to Evaluate Buyer's Proposals
-----------------------------------------------------------
Peak International Limited, which has principal offices in
Austin, Texas, and Hong Kong, has hired the investment firm
Donaldson, Lufkin & Jenrette to help it consider potential
buyers.  On Nov. 18,  Peak said a company had expressed interest
in pursuing an acquisition of the Company.  Peak did not identify
the suitor.  At the same time, Chief Executive Richard Brooks
left the company.


PEREGRINE DERIVATIVES: Issues writ over Pacific Reward share deal
-----------------------------------------------------------------
According to the South China Morning Post, Peregrine Derivatives
has launched legal action over a share transaction which fell
through when the trading arm went into liquidation.  The writ
said that Pacific Reward Investments signed a contract with
Peregrine on December 18 last to buy 10 million ordinary shares
of Hung Hing Printing at a future date, with stipualation that
the appointment of a provisional liquidator would cause an early
termination of the deal. It is claimed that each party would be
obliged to provide a statement of calculations of a settlement
amount under the agreement.

Liquidators were appointed to wind up Peregrine Derivatives in
March.  Liquidators PriceWaterhouseCoopers claim Pacific Reward
has failed to provide such a statement or to pay the amount due
in respect of the transaction and the breaches had caused
Peregrine to suffer loss and damages.  It is claimed the amount
payable under the transaction came to $4.9 million on a cash
settlement basis. Subtracting amounts due to Pacific Reward,
Peregrine claimed $4.3 million. Peregrine is also seeking
interest on the sum allegedly due.


=========
J A P A N
=========

NISSHO IWAI: Restructuring Calls for 1,000 Job Cuts by March 2002                  
-----------------------------------------------------------------
Nissho Iwai Corp. announced a restructuring plan calling for
cutting 1,000 of 4,100 jobs by March 31, 2002.  The job
reduction, one of the biggest among Japan's major trading houses,
comes on the heels of a retrenchment plan unveiled last September
to slash 450 jobs under the same timetable, Kyodo News relates.  
The restructuring program also calls for reducing total group
assets by 1.6 trillion yen instead of the initially planned 1.2
trillion yen by March 31, 2002, and increasing cuts in board
member allowances to 20-50% from the earlier planned 5-20%.

Nissho Iwai, the sixth largest Japanese trading house, announced
the latest restructuring plan after it struck an agreement
earlier in the day with Sanwa Bank and seven other banks to set
up a credit line of 600 billion yen, Kyodo reports.

Nissho Iwai has said it expects a net loss of 40 billion yen for
the current business year ending March 31, 1999, due mainly to an
extraordinary loss of 161 billion yen, forcing it to forgo a
dividend payment for the first time ever.  Nissho Iwai blamed the
one-time loss on write-offs of 112 billion yen worth of claims on
loans to two non-bank financial subsidiaries and 34.5 billion yen
in unrealized losses on securities portfolios.


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

LG SEMICON: VP Lee Chong Minimizes Impact of Frozen Credit Lines
----------------------------------------------------------------
Lee Chong, vice president of LG Group's executive office for
corporate restructuring, told Reuters, after creditors of LG
Semicon cut-off new credits because of the Company's refusal to
merge with Hyundai, that the freeze on new credit was not a
burden.  "If you look at different levels of sanctions which
could have been imposed, this is sort of minor," Lee said.

The company reported a net loss of 249.1 billion won in the first
six months of 1998, compared with a profit of 16.0 billion won in
the same period a year earlier.  LG Semicon has earned monthly
net profits of 25 billion to 30 billion won ($20.7 million to
$24.8 million) since October and exports have picked up, Lee
said.  "The industry is bouncing back. If our sales meet our
expectations we'll be able to sustain our business," Lee said.


LG SEMICON: Arthur D. Little Defends Fairness in Evaluation
-----------------------------------------------------------
The Korea Times reports that Chung Tae-soo, managing director of
U.S. consulting firm Arthur D. Little's Korea operations, said
yesterday that completely unbiased methods were used to evaluate
Hyundai Electronics Industries (HEI) and LG Semicon in the
process of deciding which of the two Korean firms would get the
controlling stake in their newly-merged company. "There were two
guiding principles in the evaluations, and they were use of the
'apple-to-apple' method and impeccability.  We had to make sure
that there was not a single bit of discrepancy," Chung is quoted
as saying.

Meeting with reporters, the Times related that Chung said the
evaluation was executed under some of the most unique
circumstances, meaning that more time had to be devoted, refuting
suggestions that the decision was made hastily.  "Evaluations for
the merger of companies like Exxon and Mobil, with their combined
assets of $80 billion, take no more than four weeks.  In our
case, the circumstances were too vague," Chung said.  While the
entire media focus is on who has the controlling stake in the
joint semiconductor company, the consulting expert said more
emphasis was placed on whether or not the merger made sense.  
Chung said his analysis showed it was a viable for the companies
to merge, especially when considering the need for huge
investments and the need to establish an internationally-
competitive corporation.

Commenting on arguments from LG that the evaluations were
conducted in the absence of accurate internal materials,
especially financial papers, he said it really would not have
made any difference, according to the Times.  "When we conduct
these evaluations, we access a wide range of information from
various sources.  Whether or not we were provided with abundant
data from LG would not have affected the outcome," he said.  
Regarding ADL's qualifications to be consulted for this merger,
Chung explained that ADL itself has been engaged in advanced
research and recently provided consulting services for the
semiconductor unit of Samsung Electronics.


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

ASEANIA DEVELOPMENT: Winding-up petition
----------------------------------------
Phua Thian Sze on 29/10/98 petitioned for the winding-up of
Aseania Development Sdn Bhd.  The petition is directed to be
heard on 26/2/99.


CHONGAI CORP.: Sinks deeper into the red with RM25m interim loss
----------------------------------------------------------------
Business Times reports that Chongai Corp has sunk deeper into the
red with a group pre-tax loss of RM25.22 million for the first
six months ended September 30 1998 compared with a loss of RM9.44
million previously.  Turnover for the period was RM15.36 million
against RM18.80 million before.  The pre-tax loss was due largely
to exceptional items amounting to RM16.43 million being
provisions made for the amount owing by associated companies,  
trade debtors and writing off of goodwill in Rest & Relax Group
of RM12.29 million, RM2.53 million and RM1.61 million
respectively.  Group loss after tax and minority interest was
RM25.06 million against RM9.47 million last time. Loss per share
was 125 sen against 47 sen previously.

Chongai said the operating loss was mainly attributable to losses
before charging of depreciation and interest of RM2.20 million
suffered by Rest & Relax Group and Liaboc Group whose principal
business are mainly located in Singapore.  Business Times also
noted that there was a sharp drop in the demand for upmarket
fashionwear which were imported at a high cost in US dollars
under Liaboc.

The group is reportedly in the process of winding down the
operations of the Liaboc Group in view of the current adverse
market conditions affecting its product lines.

On October 7, the Company made an announcement that its proposed
rights issue is no longer implementable and is currently working
together with the merchant bank advisor in order to propose a
restructuring scheme.  On December 12, an announcement came that
the assistance of the Corporate Debt Restructuring Committee has
been sought and that a meeting with lenders under the auspices of
the CDRC took place on December 10.


LEE TAI TIMBER: Winding-up petition
-----------------------------------
Jimwood Sdn Bhd on 9/9/98 petitioned for the winding-up of Lee
Tai Timber Industries Sdn Bhd.  The petition is directed to be
heard on 29/1/99.


LINK PROSPER: Winding-up petition
---------------------------------
S.H. Hardware Industries (M) Sdn Bhd on 28/10/98 petitioned for
the winding-up of Link Prosper Coach Work Sdn Bhd.  The petition
is directed to be heard on 5/2/99.


MALAYSIAN ASSURANCE: Scheme of Arrangement
------------------------------------------
Malaysian Assurance Alliance Bhd (listed on the KLSE) on 22/12/98
applied to the High Court and to its shareholders for the
approval for a scheme of arrangement to be carried out on the
company.  A meeting with the shareholders is scheduled on
22/1/99.


MULTI-WINS: Voluntary winding-up
--------------------------------
The members of Multi-Wins Sdn Bhd on 23/12/98 resolved to wind-up
the company voluntarily.


NEW SOUTH: Winding-up petition
------------------------------
Chan Kay Keong on 29/10/98 petitioned for the winding-up of New
South Wales Trading Sdn Bhd.  The petition is directed to be
heard on 26/2/99.


SETIA TIMOR: Winding-up petition
--------------------------------
Sime Bank Bhd on  16/9/98 petitioned for the winding-up of Setia
Timor Credit & Leasing (Ampang) Sdn Bhd.  The petition is
directed to be heard on 7/5/99.


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

PHILIPPINE AIRLINES: May tap Tokyo funding
------------------------------------------
According to the scmp and the Hong Kong Standard, Philippine
president Joseph Estrada says he is eyeing Japan's US$30 billion-
fund for ailing Asian economies to help rehabilitate Philippine
Airlines, as an alternative to finding a strategic partner for
the airline.

According to the Hong Kong Standard, Mr Estrada said he was still
hopeful PAL could seek an agreement with Cathay Pacific Airways.  

PAL management had prepared a rehabilitation plan which calls for
an infusion of US$150 million in new money to keep PAL flying.
Some of this money is envisaged to come from a strategic partner.
With the collapse of PAL's talks with potential foreign partners,
Philippine Finance Secretary Edgardo Espiritu proposed earlier
this month that Manila seek US$150 million for the rehabilitation
of PAL from the Miyazawa fund.


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

KRUNG THAI: Bank set to restructure
-----------------------------------
According to the South China Morning Post, reports said state-run
Krung Thai Bank has adopted a sweeping restructuring plan aimed
at restoring it to financial health by the middle of next year.  
A main element of the plan was the division of the bank's
operations into seven autonomous profit centres, as reported by
the Bangkok Post which quoted chairman Meechai Viravaidya as
saying that one would be an asset-management division to handle
mounting non-performing loans.  

Krung Thai is set to become one of Thailand's main financial
organs following radical changes in the industry.  According to
the Hong Kong Standard, the asset-management division will
handle mounting non-performing loans which will be divided into
three categories: "strategic, rehabilitable and dead."  The
report said that the central Bank of Thailand and its Financial
Institutionss Development Fund had agreed to the plan, but were
still reviewing its details, according to the Bangkok Post. The
central bank in September said it would invest US$4.5 billion in
Krung Thai Bank to help rebuild the financial sector. With
restructuring and new capital, the bank will then be prepared for
sale to private investors as one of Asia's biggest commercial
banks outside Japan.


UNITED COMMUNICATIONS: Progress in Restructuring Debt Obligations
-----------------------------------------------------------------
United Communications Industry looks to completing restructuring
of its US$210 million in foreign debt in February, according to
senior executive vice-president Noppadol Thongprasert.  To date,
he said, negotiations to restructure 90% of the debt had been
completed, he said yesterday.  The remaining amount in question
was borrowed mainly from foreign banks.  This news appeared in
the Bangkok Post.

Ucom has already submitted its debt-restructuring proposals to
these 27 creditors.  Its main goal is to extend repayment periods
by five years and to adjust interest rates in line with current
market conditions.  "So far we have experienced no problems with
our creditors and the debt restructuring plan we submitted,
because what we proposed did not involve a 'haircut' but only the
extension of the repayment period," Mr Noppadol said.

Union Bank of Switzerland (UBS) and Lehman Brothers serve as
Ucom's consultants on debt restructuring.  Under the
restructuring plan, Ucom's debt:equity ratio would be reduced to
1:1 from 6:1 at present, the Post related.  Reportedly, creditors
holding baht loans approved Ucom's restructuring plan in
November, while holders of Ucom debentures gave preliminary
approval on December 2.


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, resale or
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                 * * * End of Transmission * * *