---

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, January 19, 1999, Vol. 2, No. 12

                    Headlines


* C H I N A   &   H O N G   K O N G *

CHINA OVERSEAS: Results announcement
DALIAN INTERNATIONAL: DITIC defaults on loans
FUJIAN ENTERPRISES: Hires financial advisor to restructure
GUANGDONG INTERNATIONAL: Bankruptcy officially declared
GUANGDONG INTERNATIONAL: European states may take action

GUANGDONG OVERSEAS: Goctic joins growing default list
GUANGNAN (HOLDINGS): Queries abound after clarification
GUANGZHOU INTERNATIONAL: Banks to take tough stance
GUANGZHOU INTERNATIONAL: Servicing $2b debts in loans
PEREGRINE INVESTMENTS: SFC files Peregrine probe report


THEME INTERNATIONAL: Ailing chain hopes to trim losses
YIZHENG CHEMICAL: Posts loss warning


* J A P A N *

LONG TERM CREDIT: Alleged illegal dividend payments


* K O R E A *

CHO HUNG BANK: Cho Hung Bank closes four weak subsidiaries
CHUNGBUK BANK: Under pressure to raise funds
HANBO IRON & STEEL: Creditors may delay bidding on Hanbo
HANVIT BANK: To raise return on assets
HYUNDAI ELECTRONICS: Micron warns against debt write-off

KIA MOTORS: Hyundai plans more layoffs at Kia
KOREA HEAVY: 51% of Hanjung to be sold by int'l auction
KOREA TOBACCO & GINSENG: Clerk embezzles $4.4 million
LG SEMICON: Micron warns against Hyundai-LG debt write-off


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

SMELTING AND REFINING: Smelting firm's bidding set in March


* S I N G A P O R E *

SONICA: No bankers' guarantee from Fu Yu


* T H A I L A N D *

DOI KHAM: To re-focus on domestic market
JALAPRATHAN CEMENT: French backing secures future for JCC
NAKORNTHON BANK: Canadian bank to take over NTB
NAVA FINANCE: To transfer assets to Krungthai Thanakit
PHATRA THANAKIT: Seeks voluntary delisting

SIAM COMMERCIAL BANK: Denies net worth is negative
SIAM STEEL: Negotiating debt-restructuring
THAI MODERN: Appoints special auditor
THAI OIL: Restructuring $1.9bn debt causing major headaches


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

CHINA OVERSEAS: Results announcement
------------------------------------
Meanwhile China Overseas Holdings, the major shareholder in
red chip China Overseas Land and Investment (Coli), said it
had attained satisfactory business results through
adjusting business strategy, cutting costs and
strengthening its management system.

It said sales turnover for completed projects was US$12.3
billion as at the end of December 1998.

The group said infrastructure investment in the mainland
and property development in Hong Kong both reaped
satisfactory results during the year. Analysts have
expressed concern over the debt exposure of Coli, whose
gearing is thought to be about 50 per cent. Coli was highly
geared after it made aggressive land acquisitions in Hong
Kong when the property market was at its peak in 1997.
(South China Morning Post 18-Jan-1999)


DALIAN INTERNATIONAL: DITIC defaults on loans
---------------------------------------------
The Asian Wall Street Journal reported in a front page
article that the Dalian International Trust & Investment
Company (DITIC) has defaulted on millions of dollars of
loans, according to Japanese bankers. Ditic owes between
$1.81 billion to $2.42 billion, and beginning last
November, it stopped paying the principle and interest on
syndicated loans from Japan.  

The report also mentioned that the Bank of America
Corporation extended a $5 million working capital loan to
mid-January when it learned that DITIC couldn't repay the
principle. The article further claimed that Bank of America
has been told last week that DITIC would not be making any
other payments on this or other foreign loans.  

DITIC is the foreign borrowing arm of Dalian, a large port
city in China's economically troubled northeast Liaoning
Province.


FUJIAN ENTERPRISES: Hires financial advisor to restructure
----------------------------------------------------------
Fujian Enterprises (Holdings) was said yesterday to be
planning to hire its creditor bank, CICC Finance, as
financial adviser in its restructuring. It is said to
undergo a restructuring which will include asset injections
worth HK$2 billion from its owner, the Fujian provincial
government.

The firm has been under financial pressure and
has defaulted on a number of bank loans. One of them is a
US$70 million bilateral exposure that was guaranteed by
Fujian Enterprises. The firm has also provided guarantees
of HK$120 million to fellow Fujian companies Hop Kin
Engineering Development and China Fujian Engineering
(Hong Kong), which have been put under voluntary  
liquidation by their parent China Fujian Co-operation for
International Techno-Economic.


GUANGDONG INTERNATIONAL: Bankruptcy officially declared
-------------------------------------------------------
The Asian Wall Street Journal reported that the a decision
has been reached by the Guangdong High People's Court on
Saturday that Guangdong International Trust & Investment
Corporation (GITIC) was bankrupt.  The court decision gave
no details on how much the company's debt would be repaid,
or whether foreign and local creditors will receive the
same treatment. The first meeting of creditors will be held
in late April, following a three month long assessment
period by a court appointed liquidation committee.  


GUANGDONG INTERNATIONAL: European states may take action
--------------------------------------------------------
According to the Hong Kong Standard, various European
governments might consider taking diplomatic action and
other moves to try to persuade Beijing into finding a
satisfactory resolution to the liquidation of Guangdong
International Trust and Investment Corp because their
exposure on the mainland was larger than those of American
and Asian banks.

With no satisfactory outcome in sight and considering the
weaknesses in China's legal system, foreign banks were not
optimistic about getting back much of their exposure in
Gitic and other mainland enterprises.

In a related development, Gitic trustees are expected to
hold a press briefing this morning to provide an update on
the Gitic bankruptcy proceedings, a Guangdong Foreign
Affairs Bureau official said yesterday.

Gitic's trustee committee said the collapsed coglomerate
had total debts of 36.17 billion yuan and assets of 21.47
billion yuan. Another banker said an update on Gitic's
liquidation was welcome, but he did not expect creditor
banks to be given the chance to express their views and
grievances.


GUANGDONG OVERSEAS: Goctic joins growing default list
-----------------------------------------------------
According to the South China Morning Post, Guangdong
Overseas Chinese Trust and Investment Corp (Goctic) has
been targeted by foreign banks for possible legal action
aimed at recovering overdue loans.

Creditor banks were set to declare a default on a US$50
million syndicated loan extended to Goctic and were
studying what legal action could be taken to retrieve the
Barclays Capital-arranged loan, according to sources.

A Goctic official yesterday said the firm had not yet
received a default notification from banks. He said the
company had only temporarily failed to meet debt obligation
and if it is forced into liquidation, the banks may not get
all their money back. With the company staying afloat, he
said, the banks can at least receive the interest.

In October, Goctic denied a report that it was facing
bankruptcy. It said then that it and its Hong Kong arms had
outstanding foreign debts of three billion yuan and had
asked for a cash infusion of more than one billion yuan
from its owner, the Guangdong provincial government, to
meet its debt obligations. He said it would be clearer by
next month whether Goctic would be merged with Guangdong
Finance Trust and Investment Corp under a revamp of the
debt-ridden financing arms in Guangdong that was expected
to be done by the end of next month.


GUANGNAN (HOLDINGS): Queries abound after clarification
-------------------------------------------------------
According to the South China Morning Post, Guangnan
(Holdings) failed yesterday to satisfy analysts' concern
about the extent of its debt. Last night, it rejected
suggestions that its total consolidated debt at the end of
last year was significantly higher than the previous year.
The company's chairman, Sun Guan said the company's
consolidated debt stood at US$391 million as of December
31, compared with $399 million in the previous year.

Last year's figures included total banking and other debt,
including bills payable and trust receipts, which amounted
to about $287 million. The remainder was other debt
securities issued by the group. Mr Sun said Guangnan had
not provided any guarantees in respect of the obligations
of third parties, including members of its debt-ridden
parent Guangdong Enterprises (Holdings) (GDE).

Analysts questioned why the company had cash of only about
$13.7 million after it had raised about $37 million in a
share placement last November.

Net debt was $377.31 million last year from $342 million in
1997. Mr Sun said KPMG would provide a report to creditors
on the financial condition and obligations of each member
of the GDE group including Guangnan.


GUANGZHOU INTERNATIONAL: Banks to take tough stance
---------------------------------------------------
According to the South China Morning Post, Guangzhou
International Trust and Investment Corp (Gzitic) might be
forced into bankruptcy. Sources said banks had decided to
declare a default on a US$35 million syndicated loan
guaranteed by Gzitic.

The syndicated loan, arranged by French bank SocGen Asia,
was to Guangzhou's biggest investment failure, Guangzhou
Ethylene. The company was a debt-laden industrial concern
which failed to meet the first repayment of about US$5.6
million in October last year and stopped operations in
November 1997 soon after starting. Gzitic said it was
short of cash to repay foreign debts, with more than US$200
million due last month alone.

Creditor banks are seeking legal advice on the next course
of action.

Once a default is declared, the total amount will become
due immediately. With grim chance for payment by borrower
and guarantor, banks might file a petition for winding up
the companies.


GUANGZHOU INTERNATIONAL: Servicing $2b debts in loans
-----------------------------------------------------
According to the Hong Kong Standard, more than a dozen
foreign banks may find it hard to get repayments from
Guangzhou International Trust and Investment Corp (Gzitic)
for about $2.1 billion in loans which mature before 2004, a
banker said yesterday, amidst financial difficulties faced
by Gzitic, coupled with most banks' refusal to refinance
the loans of mainland firms.

Gzitic's maturing debts are in addition to the more than
US$200 million in loans which fell due last month.

The decision by a syndicate of foreign banks to declare a
default on a US$35 million loan to Guangzhou Ethylene that
was guanranteed by Gzitic.  

Data from the financial newsletter Basis Point show Gzitic
has 10 syndicated loans that will fall due between 1999 and
2004. The biggest exposure is a US$70 million loan
guaranteed to Guangdong New Century Building Material
Industrial Co and Maoming Times Building Materials
Industrial Co by a syndicate of banks which included
Barclays, Hanil International Finance, Hyundai
International Merchant Bank and Korea Development Bank. The
loan has been guaranteed by Gzitic.

A loan of US$48 million was granted to Gzitic by a
syndicate which included DKB Hong Kong, Fuji Bank Hong Kong
and Industrial Bank of Japan Asia.


PEREGRINE INVESTMENTS: SFC files Peregrine probe report
-------------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, Securities and Futures Commission (SFC) submitted
the report on the investigation of Peregrine to the
Financial Services Bureau yesterday, and the bureau had
passed the report to the Department of Justice for legal
advice on the case.

Sources said the legal department would review whether
there was sufficient evidence to merit a full-scale
investigation, and whether the commission should be the
independent investigator in the Peregrine case.

It is said the investigation would focus on the reasons for
the investment bank's collapse and whether the directors
had given misleading information to the market before the
company went bust. In a public statement in October 1997,
Peregrine denied it had any financial difficulties and then
collapsed in January last year. A year after the collapse,
a government spokesman said some form of investigation into
Peregrine would be inevitable.

Possible options on how to proceed with the investigation
include a full-scale investigation conducted by an
independent investigator to be appointed by the financial
secretary, which would be costly and timely.

Another option would be a smaller probe conducted by the
commission.

In June last year, the SFC recommended a comprehensive
investigation of the bank's demise by an independent
investigator. However the cost of such an investigation
could be more than $50 million and take more than a year to
complete, so the government considered a smaller
investigation conducted by the SFC.


THEME INTERNATIONAL: Ailing chain hopes to trim losses
------------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, Theme International Holdings suffered a $106.05
million net loss for the six months to September. The
figure grew from a $19.8 million net loss in the same
period the previous year. Sales tumbled 66 per cent to
$161.24 million while operating losses rose to $106.15
million from $36.8 million.

The company's financial controller said there would be a
significant improvement on net losses in the second half to
March after a large-scale shutdown of outlets in August.

Theme is undergoing a debt restructuring. It said it had
reduced bank borrowings by $35 million to $282 million as
at December 31.


YIZHENG CHEMICAL: Posts loss warning
------------------------------------
H share Yizheng Chemical Fibre and China Overseas Holdings,
the major shareholder in red chip China Overseas Land and
Investment (Coli), yesterday joined mainland-related
companies issuing trading performance updates amid market
concern about their financial health.

Yizheng, the fourth-largest polyester maker in the world,
warned that it might incur a loss in the year to last
December, caused by low gross-profit margins and imbalance
between demand and supply of polyester products.

It expects to report its year-end results before or during
April.

The company reported a first-half loss of 183.56 million
yuan (about HK$170.83 million), hit by the down cycle in
the polyester industry and the negative impact of the Asian
financial crisis.

The announcement by Yizheng yesterday did not reveal its
debt exposure but said business had seen an improvement in
the second half. (South China Morning Post 18-Jan-1999)


=========
J A P A N  
=========

LONG TERM CREDIT: Alleged illegal dividend payments
---------------------------------------------------
Collapsed Long-Term Credit Bank of Japan is alleged to have
paid 7.1 billion yen in term-end dividend in the business
year to March 1998 despite its knowledge that the bank had
no profits to fund the payout, it was learned Saturday.

Executives of the bank were informed at a meeting of its
board of directors on Dec. 25, 1997, that a substantial
portion of LTCB's loans, including those to affiliates, and
assets totaling 5 trillion yen had turned nonperforming,
sources familiar with the situation said.

Of the 5 trillion yen, the soured loans extended by LTCB,
now under temporary state control for rehabilitation,
amounted to some 3.8 trillion yen and other nonperforming
assets 1.2 trillion yen.

The then LTCB executives became aware of the real picture
regarding the seriousness of its bad loan woes at the
meeting, the sources said.

Although it recognized its serious financial conditions,
LTCB, at a general shareholders' meeting on June 25, 1998,
proposed a plan to pay 3 yen in per-share dividend for a
total of 7.1 billion yen for the second-half period of the  
March 1998 business year.

The Financial Supervisory Agency, Japan's powerful banking
regulator set up last June, found in its inspection of
LTCB's financial conditions in July that the bank's bad
loans were 1,461.2 billion yen more than its self-assessed  
amount as of March 31, 1998.

The FSA also concluded that LTCB's loan-loss reserves
should have been 274.7 billion yen more that it actually
built up.

If those sums were listed in LTCB's accounting books for
the March 1998 year, the bank would have had no profits to
finance the term-end dividend payments, the sources said.

The Metropolitan Police Department is investigating LTCB's
suspected illegal dividend payments, while the Tokyo
District Public Prosecutors Office is looking into the
possibility of accusing then board members of the bank of
aggravated breach-of-trust charges under the Commercial
Code.

The Securities and Exchange Surveillance Commission is also
conducting its probe on the case, which may amount to a
violation of the Securities and Exchange Law due to a false
accounting report. (Jiji Press English News 16-Jan-1999)


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

CHO HUNG BANK: Cho Hung Bank closes four weak subsidiaries
----------------------------------------------------------
The Korea Herald reported that Cho Hung Bank will close
four financially weak subsidiaries as part of its
management normalization plan. According to the Financial
Supervisory Commission (FSC), Korea's financial watchdog
institution, the four units to be closed are:

Cho Hung Securities Company, Cho Hung Leasing Company,
Cho Hung Mutual Savings and Finance Company, and Cho Hung
Factoring and Finance Company.  

Cho Hung's self rescue plan will also include reducing the
number of the bank's branches from 435 to 368.  

Last year, the FSC established an evaluating committee to
diagnose 12 commercial banks which failed to meet the
minimum 8 percent capital adequacy requirements set by the
Bank for International Settlements (BIS). It then issues
closure orders for five banks in late June, and has asked 7
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.


CHUNGBUK BANK: Under pressure to raise funds
--------------------------------------------
The South China Morning Post reports on Wednesday the head
of ailing Chungbuk Bank resigned to assume responsibility
for delays in attracting foreign capital. The bank is
under pressure to raise rehabilitation funds or face a
merger. Chungbuk has rejected an offer to combine with Cho
Hung Bank, arguing it could stand alone. It hopes to boost
its equity by 120 billion won through a rights offering.


HANBO IRON & STEEL: Creditors may delay bidding on Hanbo
--------------------------------------------------------
The Korea Herald reported that the creditors of the
bankrupt Hanbo Iron & Steel Company are likely to delay the
process of selling the steel maker as additional bidders
have shown interest in the auction. The article stated that
officials with Bankers Trust Company (BTC) of the US, which
has been commissioned to organize the sale of Hanbo, report
that five companies have so far presented letters of intent
to acquire Hanbo, and two or three others have also
indicated interest by requesting details on Hanbo's
financial and managerial status. Creditor representatives
stated that as they agreed to provide the requested data,
it may take a little longer to complete the entire process.  

Hanbo, once Korea's second largest steel maker, produced 3
million tons of steel products per year, but collapsed on
January 23, 1997 under bank debts estimated at 8 trillion
won. The value of the assets at Hanbo have been evaluated
at 3.4 trillion won, although the construction of some
facilities is still not complete.  


HANVIT BANK: To raise return on assets
--------------------------------------
Hanvit Bank has tentatively agreed to improve its
profitability and asset quality sharply in return for a
3.2-trillion-won capital injection by the government.
The Korea Herald says the bank is scheduled to sign a
memorandum of understanding (MOU) with the government this
week on the public fund injection and management
normalization programs.

The MOU will call on Hanvit to raise its return on assets
(ROA) to over 1 percent and return of equity (ROA) to more
than 15 percent by the end of 2000.

The Financial Supervisory Commission (FSC) and Hanvit Bank
are expected to finalize the terms of MOU so that the MOU
can be signed this week. The government invested 3.26
trillion won in Hanvit, which was newly created on Jan. 4
through a merger between two ailing banks -- Hanil Bank and
Commercial Bank of Korea (CBK).

The government now holds a 94.75-percent stake in the bank.
(Korea Herald 18-Jan-1999)


HYUNDAI ELECTRONICS: Micron warns against debt write-off
--------------------------------------------------------
Micron, the largest DRAM maker in the United States and the
second largest worldwide next to NEC, held a vaguely
threatening stance in their announcement that the company
will not stand by idly if the Korean government proceeds to
write off the loans of Hyundai Electronics and LG Semicon
during the process of their merger.

In the EE Times, an American economic weekly, Micron is
quoted as saying that if a loan write-off is pursued by the
Korean government, Micron will exert pressure on the US
government to block them. A Micron spokesman stated that
any government action in helping to write off private
business loans will deal a severe blow to the global DRAM
industry, and that Micron is dead set against it. The
magazine reported that the two companies have combined
loans of US$9 billion, and that the newly-merged company
will have a debt-to-equity ratio of more than 600%.
(Digital ChosunIlbo 14-Jan-1999)


KIA MOTORS: Hyundai plans more layoffs at Kia
---------------------------------------------
Hyundai and Kia Motors are expected to start large-scale
layoffs within the year. One high-ranking official at the
two motor firms which are undergoing the fine points of the
merger, said Monday that if the manpower at Kia is fully
utilized, the company is capable of producing 1.05 million
units. If Kia plans to produce 800,000 units in the future,
then 20% of the manpower would be in surplus.

At its successful bid at an international auction for the
sale of Kia Motors, Hyundai committed itself to maintaining
employment levels which existed in June 1998 through to
2000. Moreover, Chung Mong-ku, the newly-appointed chairman
of Hyundai-Kia Motors, had at one point told reporters that
he would maintain the employment situation at Kia. However,
Hyundai has already initiated a 30% layoff of its
management staff.

Commenting on ways of reinforcing the financial status of
the Hyundai Business Group, the official said that there is
no current negotiation occurring to attract foreign capital
to the Hyundai-Kia Motors. But he said that the seat
manufacturing plant of Hyundai Motor was sold off and
various other measures to reinforce the financial standing
of Hyundai and Kia are underway. Therefore, the debt-to-
equity ratio of Hyundai Motor is expected to go down to
199.7% before the end of this year. (Digital ChosunIlbo 14-
Jan-1999)


KOREA HEAVY: 51% of Hanjung to be sold by int'l auction
-------------------------------------------------------
In order to prevent an onset of international speculation,
the government has decided to undertake an open bidding
process to sell off a 51% stake of Korea Heavy Industries
and Construction Corp. (Hanjung). The highest bidder, or
consortium of bidders, without any conditional terms will
be declared the successful bidder of the sale. The Ministry
of Commerce, Industry and Energy will issue a formal
bidding notification at the end of February.

In order to participate in the auction, letters of intent
should be submitted. From these letters of intent, the
bidders for the auction will be chosen through a
government-designated prequalification process. Only those
prequalified bidders will be allowed to participate in the
bidding.

Among expected prospective bidders are the Hyundai and
Samsung Business Groups, General Electric of the U.S.,
Siemens of Germany, and ABB, a multi-national firm. It is
reported that GE, in particular, had expressed interest to
take over 20% of Hanjung shares and had wanted to purchase
the gas-turbine sector of the company.

Currently, Hanjung has a paid-in capital of W1.6 trillion,
and loans amount to W2.1 trillion. 43.8% of the shares are
owned by Korea Development Bank, 40.5% by Korea Electric
Power Corp., and 15.7% by the Korea Exchange Bank. (Digital
ChosunIlbo 14-Jan-1999)


KOREA TOBACCO & GINSENG: Clerk embezzles $4.4 million
-----------------------------------------------------
The Korea Herald reports that an accounting clerk at the
Hong Kong branch of the state run Korea Tobacco & Ginseng
Corporation is suspected of stealing checks and cash
amounting to $4.4 million. The money embezzled January 8,
and was deposited into various accounts in Korea and
France.

The suspect is believed to have fled to France, and Korea
authorities are working with Interpol to capture the
fugitive.


LG SEMICON: Micron warns against Hyundai-LG debt write-off
----------------------------------------------------------
Micron, the largest DRAM maker in the United States and the
second largest worldwide next to NEC, held a vaguely
threatening stance in their announcement that the company
will not stand by idly if the Korean government proceeds to
write off the loans of Hyundai Electronics and LG Semicon
during the process of their merger.

In the EE Times, an American economic weekly, Micron is
quoted as saying that if a loan write-off is pursued by the
Korean government, Micron will exert pressure on the US
government to block them. A Micron spokesman stated that
any government action in helping to write off private
business loans will deal a severe blow to the global DRAM
industry, and that Micron is dead set against it. The
magazine reported that the two companies have combined
loans of US$9 billion, and that the newly-merged company
will have a debt-to-equity ratio of more than 600%.
(Digital ChosunIlbo 14-Jan-1999)


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

SMELTING AND REFINING: Smelting firm's bidding set in March
-----------------------------------------------------------
The government has set the bidding for debt-ridden
Philippine Associated Smelting and Refining Co. (PASAR) on
March 25. National Development Co. (NDC) general-manager
Dakila Fonacier said: "It's a judgement call," adding "it
is hemorrhaging and the plant is not getting any younger.
It is more than 50 years old." NDC the government's
controlling agency for PASAR.

In an ambush interview, Mr. Fonacier said NDC "had already
gotten in touch with CoA (Commission on Audit) and it is
expected in 20 days or at least 10 days to act immediately
on the privatization. We could bid out by March 25." NDC
owns 42% of PASAR while Japanese trading firms have a
combined stake of 31%. The firm produces 172,500 tons of
copper cathode a year. Recent studies indicate the
government needs about $20 million to make its operations
at par with international standards. The firm's assets is
estimated at 15 billion Philippine pesos (PhP) while its
capital deficit has been placed at PhP19 billion.
(BusinessWorld 19-Jan-1999)


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

SONICA: No bankers' guarantee from Fu Yu
----------------------------------------
The Fu Yu Manufacturing-Sonica Industries legal drama has
taken another twist, with Fu Yu proving unable to provide
Sonica with the $8.2 million bankers' guarantee by the Jan
15 deadline as set out in a High Court order issued on 28
Dec last year. Also, Fu Yu's application to extend this
deadline to the time when its appeal is to be heard has
been rejected. It has been given until this Thursday to
come up with the bankers' guarantee.

Computer monitor maker Sonica sued Fu Yu in November for
damages, claiming Fu Yu's failure to fulfill contractual
obligations cost Sonica $8 million in lost profit. Plastic
injection mould maker Fu Yu has denied the claim and has
said it will pursue counterclaims of its own. However, the
High Court in December ordered it to provide Sonica with a
bankers' guarantee for the full amount of the claim plus
costs.

In a statement to the Stock Exchange of Singapore this
month, Fu Yu said it was "dissatisfied" with this order and
would be filing an appeal. The company said it believes it
has a "strong defence" and "substantial counterclaim"
against Sonica. (Singapore Business Times 18-Jan-1999)


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

DOI KHAM: To re-focus on domestic market
----------------------------------------
Amid intense competition in the export market, the Crown
Property Bureau's subsidiary Doi Kham Food Products Co, a
canned food producer, will re-focus on the domestic market,
managing director Ruangrit Vadabukkana said. The new
marketing strategies are expected to return the company to
profit after three years of losses.

However, Ruangrit said that Doi Kham Products stands by its
policy to help develop the agro-industry rather than making
profits.


JALAPRATHAN CEMENT: French backing secures future for JCC
---------------------------------------------------------
Although it is already part of the world's fourth largest
cement-maker Italcementi, Jalaprathan Cement Plc plans to
remain a niche player in the Thai market. Following 11
months of talks, JCC signed an agreement with Italcementi's
wholly owned subsidiary Ciments Francais on Nov 30 for the
French company to take a 54-per-cent stake in JCC.

JCC was expected to return to profitability within five
years.

Ciments Francais will send five executives to manage JCC,
including a co-managing director, a head of finance, a
technical manager and two engineers. The French company
will also have more seats on JCC's board. Currently it has
one.

Because of his alleged involvement in the Bangkok Bank of
Commerce scandal, controversial politician Suchart
Tonjaroen is now the second largest shareholder of JCC
after Ciments Francais, his stake having fallen to 13 per
cent from 20 per cent. JCC invested in BBC despite banking
being a different world from the cement businesses.

Ciments Francais' participation brought immediate benefit
to JCC, lowering its financing costs by Bt300 million per
annum. Seeing the potential of JCC with participation by
the World's top cement player, JCC creditors agreed to
restructure debts. The 12 creditors of JCC's total debts of
Bt3.38 billion agreed to charge no interest for the first
four years and extended the total payment period to 12
years. For remaining debts, interest rates have been
lowered to MLR plus 1.25 per cent from 18 per cent, with a
five-year grace period for the principal payment.

The success of JCC's debt restructuring was due to Ciments
Francais' offering real help to the company and the
restructuring also gave an "up-front benefit" to the
creditors. Proceeds from Ciments Francais' purchase of JCC
stock were used to reduce the company's debts. (The Nation
16-Jan-1999)


NAKORNTHON BANK: Canadian bank to take over NTB
-----------------------------------------------
Nakornthon Bank will soon announce a share sale that would
give majority control to the Bank of Nova Scotia, according
to industry sources Details were still being negotiated
yesterday with the Canadian bank.

Nakornthon would become the third local commercial bank to
come under foreign control since the Bank of Thailand eased
shareholding restrictions two years ago.

A Nakornthon Bank executive said the deal would provide
enough capital to fully meet regulatory requirements, and
that no state assistance would be necessary.

Sources said Nakornthon Bank had been in negotiations with
several institutions, including Citibank and Standard
Chartered Bank, up until last week.

Another source said existing shareholders would likely see
their holdings heavily diluted once the deal was finalised.
"This deal is sure to have a significant dilution [effect]
on the minority shareholders, and the current shareholders
may have to see a large portion of their investments being
written off, with Scotiabank taking a majority stake," he
said.

Nakornthon Bank has net assets of 77.074 billion baht and
liabilities of 75.566 billion baht. Paid-up capital is
2.016 billion baht.

At the end of the third quarter last year, the bank
announced losses of 3.485 billion baht against revenues of
6.958 billion baht. (Bangkok Post 16-Jan-1999)


NAVA FINANCE: To transfer assets to Krungthai Thanakit
------------------------------------------------------
Nava Finance Public Company Limited has asked approved a
plan which will transfer all assets anddebts of the company
to Krungthai Thanakit Public Company Limited. (Stock
Exchange of Thailand 18-Jan-1999)


PHATRA THANAKIT: Seeks voluntary delisting
------------------------------------------
Phatra Thanakit Pcl has requested delisting the company 's
ordinary shares from the Stock Exchange of Thailand in
order to classify and dispose of good and distressed
assets, and bad asset mainly will gradually be managed down
through debt restructuring in order to dispose to investor
including enforcement securities and implementing legal
actions. Therefore, the Company has no further on going
business which is no need to raise fund from public through
the Stock Exchange of Thailand as a listed company.

At present, Thai Farmers Bank Public Company Limited is a
major shareholder of the Company with 94.43% of paid-up
capital share holding as a result of the Tender Offer. In
accordance to account the above reason, there is no
necessity for the Company to maintain its listing status
and therefore, the Company deems appropriated to
voluntarily delist its shares from the Stock Exchange
of Thailand. (Stock Exchange of Thailand 15-Jan-1999)


SIAM COMMERCIAL BANK: Denies net worth is negative
--------------------------------------------------
Siam Commercial Bank said yesterday that after setting
provisions for loan losses, it will still have a
shareholders' equity of Bt14.786 billion or Bt25.11 a share
and not a negative net worth as reported by The Nation.
It said since it was seeking a tier-1 capital increase
under the government's Aug 14 Financial Restructuring
Programme, it will be required to set provisions as of Sept
30, 1998, which will result in its need to allocate another
Bt21.966 billion.

Since the bank had Bt36.75 billion in reserves, it would
still have Bt14.78 billion left in equity.

Overall, SCB is required to set total provisions of Bt50.44
billion as required by the Bank of Thailand of which
Bt28.47 billion has already been allocated. This amount,
the bank added, represents 56.5 per cent -- the highest
level among big banks. (The Nation 16-Jan-1999)


SIAM STEEL: Negotiating debt-restructuring
------------------------------------------
Siam Steel Group International Plc is negotiating a debt-
restructuring with 24 local and international banks, but it
has no problem in servicing its commitment to its traders
and suppliers, the group's executive said.

Thaweesak Karuchit, assistant vice president of Siam Steel
Group, said that pending debt-restructuring talks, Siam
Steel Group International Plc (SIAM) has stopped its debt
payment to creditor banks which have lent it a total of
Bt2.6 billion.

The creditors' steering committee, set up to negotiate the
debt restructuring, includes representatives from five
financial institutions, namely Hongkong & Shanghai Bank,
Bangkok branch, Credit Agricole, Sakura Bank, Arab Banking
Corp (Singapore), and the Industrial Finance Corp of
Thailand.

Sixty per cent of the total debts are US-dollar-dominated
loans worth $50 million and the remaining are in Thai baht.
Thaweesak said SIAM and Siam Chitose Co went into operation
yesterday after they shut down their factories a day
earlier due to a protest by their workers. However, the
Siam Ogamura Steel Co plant remained closed as the
management felt the protest was not in compliance with the
labour law.

About 340 workers including 160 SIAM temporary employees
who did not join in the protest returned to their jobs
yesterday, allowing the firm to partially operate the
factory. The company has 1,100 employees. (The Nation 16-
Jan-1999)


THAI MODERN: Appoints special auditor
-------------------------------------
Thai Modern Plastic Industry Pcl's planners, South Sathorn
Planners has appointed Khun Suwannee Kasemsrithanawat as
auditor to conduct a special audit for financial statements
for the year 1997 and audit the financial statement for the
second and third quarter of 1998 to comply with the SET
requlations. The report is expected to submit to SET within
60 days from the end of financial period. In addition, Thai
Modern reported the rehabilitation plan was incomplete and
has asked for extending of submission for 30 days. (Stock
Exchange of Thailand 18-Jan-1999)


THAI OIL: Restructuring $1.9bn debt causing major headaches
-----------------------------------------------------------
Creditors of Thai Oil agree that restructuring the firm's
$1.9-billion debt will be an uphill battle, given the
reluctance of shareholders to raise new capital. The
company's debt-to-equity ratio has jumped to more than five
times. In November, Thai Oil suspended payments to its 120
creditors, after declining profit margins and depressed oil
prices left the firm in its worst financial crisis in its
40-year history.

One Bangkok Bank executive said no progress had been made
yet on Thai Oil's debt restructuring.

Foreign creditors, accounting for over half of the total
creditors, felt Thai Oil's shareholders should take
responsibility for the company's ailing position and inject
new capital in the company.

Thai Oil is 49% held by the Petroleum Authority of Thailand
and 2% by the Crown Property Bureau. Foreign banks have
argued that many had extended unsecured loans on the basis
of its strong shareholders' ties to the government,
considering Thai Oil nearly akin to a state enterprise.

Coastal Petroleum, a US firm, has proposed purchasing a
refinery from Thai Oil, but only after the company raises
new capital and restructures its debt.

Bankers said Thai Oil's debt would likely have to be
rescheduled, with a moratorium on principal payments until
the company is able to sell some assets.

Creditors would also reluctantly accept a debt-for-equity
swap, sources said.

Thai Oil has yet to present a concrete restructuring plan
to creditors, although the company's advisers are expected
to finalise a plan within the next several months. (Bangkok
Post 18-Jan-1999)


S U B S C R I P T I O N   I N F O R M A T I O N

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