TCRAP_Public/990122.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      

      Friday, January 22, 1999, Vol. 2, No. 15


* C H I N A   &   H O N G   K O N G *

CHONGQING IRON GROUP: Chongqing in stake disposal
GITIC ENTERPRISES: Gitic arm seeks deal on loans
GUANGDONG ENTERPRISES: Creditors form steering committee
KUNMING MACHINE: Kunming warns of losses
PEREGRINE INVESTMENTS: Peregrine's Swiss operations sold

SING TAO HOLDINGS: Aw approved plan to inflate figures
SWIRE PACIFIC: Swire suffers as offices stay empty

* K O R E A *

DAEWOO CORPORATION: Announces plan to improve finances
HANBO IRON & STEEL: More bidders to tour Hanbo facilities
TAEHAN TUNGSTEN: Applies for liquidation

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

PHILIPPINE AIRLINES: PAL chief 'quitting to save airline'

* T H A I L A N D *

ALPHATEC: Panel to study revised plan
DHANA SIAM FINANCE: Results announcement
RADANASIN BANK: Results announcement
THAI DANU BANK: Results announcement

THAI LUBE BASE: To delay loan principal repayment chase
UNITED BROADCASTING: Shinawatra to sell entire UBC stake

C H I N A   &   H O N G   K O N G

CHONGQING IRON GROUP: Chongqing in stake disposal
State-owned Chongqing Iron & Steel Group, days after
revealing it had pledged its entire holding in H share
Chongqing Iron & Steel to the group's bank, yesterday
disclosed it was selling other assets. Chongqing's biggest
state enterprise said in a filing to the Shenzhen stock
exchange it would relinquish part of its stake in Shenzhen-
listed Dongyuan Steel for 139.03 million yuan (about
HK$129.4 million). Officials of the Chongqing group claimed
it was selling 72.04 million shares -- or 35 per cent of
Dongyuan -- to rationalise operations, rather than because
it needed to raise funds. The Chongqing group will retain a
29.19 per cent stake in Dongyuan.

"The whole idea is to focus on principal businesses like H
share Chongqing Iron and Steel and move away from non-core
assets as the restructuring moves ahead," an official said.

Like other mainland steel manufacturers, Chongqing group is
burdened by growing inventories and slack consumption in a
deteriorating domestic market. It has a debt-to-equity
ratio of about 70 per cent, based on assets of about nine
billion yuan. Despite the tough conditions, the group said
it would still be able to report a profit for last year.

Ding Shuchen, the company secretary of the H share, said
yesterday the pledging of the parent's entire stake of 61.1
per cent in the H share had been at the request of the
group's bank, the Industrial and Commercial Bank of China.
The bank requested the collateral from the group in July
for loans which had been made a year earlier. When the H
share was spun off in 1997, the parent handed over loans of
840 million yuan taken out with ICBC as well as assets. Mr
Ding said that about 510 million yuan of the loans had been
repaid, leaving another 330 million yuan. The belated
pledging of the collateral gives access to up to 650
million yuan in new loans from ICBC. Of that, 330 million
yuan is likely to be used to retire the old loans and 120
million yuan used for working capital. (South China Morning
Post 21-Jan-1999)

GITIC ENTERPRISES: Gitic arm seeks deal on loans
Gitic Enterprises, the Hong Kong-listed offshoot of failed
Guangdong International Trust and Investment Corp (Gitic),
is in talks with banks on the refinancing of HK$84.6
million in borrowings. Company secretary Tse Sau-wai said
discussions were proceeding satisfactorily and should be
finalised shortly. Controlling shareholder Gitic HK
(Holdings) has guaranteed a loan facility of up to US$2
million provided by a bank to one of Gitic Enterprises'
wholly owned subsidiaries. The outstanding amount was
US$900,000 as of yesterday.

Ms Tse said the liquidation of Gitic HK and forced
bankruptcy of ultimate parent Gitic had "no serious impact"
on the firm.

"The company is presently operating normally and has
sufficient working capital to maintain current operations
assuming the continuing support of its bankers," she said.

Trading in Gitic Enterprises has been suspended since the
news of Gitic's closure broke on October 7 and will remain
suspended until further notice. (South China Morning Post

GUANGDONG ENTERPRISES: Creditors form steering committee
The Asian Wall Street Journal reports that a steering
committee of eight banks has been appointed to represent
the creditors of Guangdong Enterprises (Holdings) Ltd. in
negotiations with this company and its financial advisor,
Goldman Sachs. According to a banker on this committee, the
membership of this group was not decided by which banks had
the largest exposure, but rather who had the most
experience in working out similar situations. The steering
committee met Tuesday and Thursday of this week.

This article also reported that Guangdong Enterprises has
asked for a moratorium on debt principal payments while it
pursues comprehensive restructuring.  

Guangdong Enterprises is the Guangdong provincial
government's investment arm.

KUNMING MACHINE: Kunming warns of losses
H share Kunming Machine Tool has become the latest state-
owned company to warn investors it would plunge into the
red for the last full year amid a deteriorating domestic
operating environment. The loss will be Kunming's first
full-year loss since its 1993 listing. The machine-tool
company, based in the Yunnan city of Kunming, blamed slack
demand, falling consumption and keen competition for the

Kunming had net profit of 1.2 million yuan (about HK$1.11
million) in 1997, down from 2.09 million yuan in 1996.
(South China Morning Post 21-Jan-1999)

PEREGRINE INVESTMENTS: Peregrine's Swiss operations sold
The Asian Wall Street Journal Reports that the liquidators
of Peregrine Investments Holdings Ltd. sold its equity
interest in its Swiss operation to its managing director.  
Terms of this sale of Peregrine Securities (Switzerland) AG
were not disclosed.  

Peregrine Investments failed January 1998 largely due to a
bad $256 million loan made by Peregrine Fix Income to the
Indonesian taxi operator PT Steady Safe. Approximately half
of the Peregrine Investments Holdings were held through
Peregrine Fixed Income.  

SING TAO HOLDINGS: Aw approved plan to inflate figures
Sing Tao Holdings' Sally Aw told the ICAC she gave her
staff the green light to go ahead with plans to inflate
circulation figures of the Hong Kong Standard by printing
more newspapers, according to a statement seen by the South
China Morning Post. Ms Aw is the subject of a bankruptcy
petition aimed at her holdings in Sing Tao.

Ms Aw said: "I just wanted to raise the circulation
figures. It was just as simple as that." She added: "This
was a commercial decision, that is to get more
advertisers." But she denied any knowledge the plot
involved fraud and deception and said she had left details
to her staff. Asked whether she agreed the scheme had
deceived the Audit Bureau of Circulations (ABC), she said:
"I find it difficult to say. I agree [sic] to it, but I did
not do it, because it was done by them. That is, they did
it in the company."

An ICAC officer suggested during the interview that extra
newspapers printed each day were purchased by a company
called Mornstar, owned by the Standard, and fake figures
submitted to the ABC for certification. Her comments were
made during a videotaped interview on June 4, 1997.

Ms Aw said she did not know how much was paid to the
distributor for the disposal of "surplus newspapers".
The judge said yesterday that the cost of printing the
extra copies was $51 million. Ms Aw told the ICAC that
inflating circulation was a short-term measure and they did
not have a target in mind. (South China Morning Post 21-

SWIRE PACIFIC: Swire suffers as offices stay empty
The property arm of conglomerate Swire Pacific is facing
increasingly difficult trading conditions as a rash of new
office space comes on stream while the economy contracts.
The firm told analysts last week that rents had continued
their downward trend and take-up of Swire's new office
buildings had been extremely slow.

Swire has established an investment stronghold on the
eastern end of Hong Kong island, where it has been
redeveloping the North Point to Taikoo Shing strip into
high-end residential and commercial office space. Even
given the recession, the analysts were taken by surprise at
the low occupancy rates Swire disclosed for several of its
new office buildings. (South China Morning Post 21-Jan-


DAEWOO CORPORATION: Announces plan to improve finances
Daewoo Corporation, the Daewoo Group's flagship subsidiary,
yesterday announced an ambitious plan to secure about 3
trillion won to improve its financial status. Daewoo said
it plans to garner 2.883 trillion won by attracting foreign
capital, selling assets and separating business divisions.

The company is seeking to secure 1.512 trillion won through
sell-offs of its stakes to foreign enterprises and the
early withdrawal of overseas loans and sales of bonds for
overseas construction projects.

Daewoo has scrapped a plan for construction of a 102-story
building in Pusan and plans for the development of Suyoung
Bay in Pusan on a 43,000 pyong (one pyong is 3.3 square
meters) area. It has also decided to sell off 30 pieces of
real estate to secure 307.6 billion won. The company will
spin off Daewoo Cinema Network, a cable TV cinema channel,
and the division which operates the Cine House theaters in
the Kangnam area. Its department in Masan and
telecommunications marketing division and construction
design division will also be subject to spin offs. "Through
the spin-offs, we will be able to secure about 447.3
trillion won in total," a Daewoo spokesman said.

Daewoo has also decided to turn its convertible bond issues
in overseas markets into securities.

Daewoo Corporation will pay off 198.2 trillion won in debts
this year and abolish cross payment guarantees with
Daewoo's other subsidiaries.

"In order to fortify managerial transparency, we will
introduce board directors from outside Korea and set up
intra-company information networks for the compilation of
consolidated financial statements," the spokesman said.

He said Daewoo Corporation's overseas branches will come up
with plans to introduce foreign capital as soon as they see
tangible results in ongoing negotiations.

"Plans will be announced for joint-venture ties with
foreign enterprises," the official said.

Daewoo Corporation will focus on trade and construction.

In the meantime, Daewoo has garnered 1.363 billion won for
the improvement of its financial situation so far, through,
for instance, sell-offs of stakes and bonds possessed by
its overseas lines like Kazakh Telecom and a steel mill in
Russia. (Korea Times 21-Jan-1999)

HANBO IRON & STEEL: More bidders to tour Hanbo facilities
The Korea Times reported that the creditors of the bankrupt
Hanbo Iron & Steel Company have decided to allow several
foreign companies extra time to complete their appraisals
of the financial and managerial status of the steel making
facilities to be sold. Representatives from these overseas
firms are scheduled to make an on-sight inspection of the
Tangjin steel mill, and will probably complete their
evaluations in about one month.  

Officials from the creditor banks admitted that they were
planning to complete the selection of a purchaser by the
end of January, but foreign companies have decided to take
part in the bidding. These firms reportedly requested a
delay in the deliberations for selecting a buyer, and
offered to cover expenses arising from their requested

Last year, Dongkuk Steel Mill Company was the sole bidder
and offered 1.72 trillion won to take over Hanbo in the
first round of international bidding for the steel maker.  
However, creditors banks reportedly aborted bidding on
Hanbo because Dongkuk's offering price won failed to meet
their expectations. Dongkuk has criticized the creditor
banks saying that the bidding has been manipulated against
them with a view of getting as much money out of the sale
as possible.

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 has been evaluated
at 3.4 trillion won, although the construction of some
facilities is still not complete.  

Creditor banks prefer to sell off Hanbo's two main plants
as a package, but they could be sold off in separate parts
contingent on buyer interest. Hanbo's main facility is its
Tanjin Steelworks which includes a mill producing 1.8
million tons of crude steel a year for hot coils and steel
rods, as well as a cold-rolled steel plate plant that
suspended operations this last July. The other part of the
company comprises uncompleted facilities (whose
construction was stopped last year) that were slated to
become a 2.1 million ton hot coil mill and a 2 million ton
cold-rolled sheet plate plant.

TAEHAN TUNGSTEN: Applies for liquidation
According to the Korean language Maeil Kyungje's Business
Brief section, the Taehan Tungsten Company submitted their
liquidation plan to the Taegu District Court.  


PHILIPPINE AIRLINES: PAL chief 'quitting to save airline'
The chief of debt-ridden Philippine Airlines (PAL) plans to
step down in the next few weeks in a bid to save the flag
carrier from foreclosure, a leading Asian magazine reported
yesterday. Lucio Tan is trying to placate creditors
demanding a $60 million payment on the airline's debts of
$1.2 billion by offering to surrender management control,
the Far Eastern Economic Review said. Tan, who controls 70
percent of PAL, has offered to turn over the airline's
chairmanship to Juan Luis Virata, the head of investment
bank Jardine Fleming Exchange Capital, the magazine
reported in its latest issue.

It quoted sources as saying creditors had told Tan they
would reject PAL's latest rehabilitation plan if it fails
to meet their repayment deadline.

The Philippine Securities and Exchange Commission (SEC) on
Tuesday demanded that PAL prove its proposed $150 million
rehabilitation plan is sufficient to turn it around.

An SEC task force also said the airline must set a time
frame for the entry of a foreign partner which should be
required to deposit part of its investment in an escrow
account as a sign of goodwill. (Agence France-Presse and
Business Day [Thailand] 21-Jan-1999)


ALPHATEC: Panel to study revised plan
The creditor steering committee of Alphatec Electronics plc
will meet today to review the amended rehabilitation plan
of the company from PriceWaterhouseCoopers ahead of the Jan
27 vote. The vote will take place against a backdrop of
uncertainty at Krung Thai Bank (KTB), the largest creditor
with a decisive vote.

KTB board of directors will also meet today to determine
its position on the plan in which the state-owned bank will
face a Bt3.4 billion loss on a loan of Bt4.2 billion
extended to Alphatec. Creditors of Alphatec are trying to
rehabilitate the firm under court supervision.

The earlier rehabilitation plan was rejected by KTB, which
alone holds 26 per cent of the total debt of US$362 million
(about Bt13 billion). PriceWaterhouseCoopers was asked to
amend the plan before the creditors vote on Jan 27.
Amendments of the plan include more benefits from the
creditors in reviving the firm and the right to seek
recourse on alleged frauds. However, the creditors will
still face a loss of 80 per cent on the loans on average.

In the amended plan, new investors will still inject $40
million into the company. However, financial creditors will
be given 33 per cent of equity of the firm, up from 20 per
cent, while the new investors will take 67 per cent of
equity holding, down from 80 per cent in the earlier plan.
Another amendment is the right of financial creditors to
hold shares in holding companies which will be set up for
rehabilitation so that they retain the right to pursue
legal recourse against alleged fraudulent acts by former
company officials and personal guarantors.

Embezzlement of Bt5 billion was alleged to have been
committed by former company officials.

Sources familiar with the amended plan said that the new
investors, led by AIG Group and Investor AB of Sweden,
insisted that the "haircut" or sharing of loan loss has to
be 80 per cent, despite KTB's request for a smaller loss,
because Alphatec's value, when assets are disposed of in
the liquidation process, would be less than $30 million.
The investors were interested in customers and management
personnel of the firm, but other assets were of less value,
they said.

By law, the court-supervised rehabilitation plan needs
approval from creditors with at least 75 per cent of the

A source at Bangkok Bank, another major creditor of
Alphatec, said the bank, which holds Bt1.47 billion debt
owed by Alphatec, has supported the plan from the beginning
because the firm is still viable to continue business with
its existing customers. Rehabilitation is better than
liquidation which will result in less recovery of the loan
extended by banks, he said. (The Nation 21-Jan-1999)

Bangkok Metropolitan Bank reports unreviewed/unaudited
annual financial statements as a net loss of Bt55.89bn for
the period ending December 31, 1998. This compares with a
loss of Bt23.6bn for the corresponding 1997 period. (Stock
Exchange of Thailand 21-Jan-1999)

DHANA SIAM FINANCE: Results announcement
Dhana Siam Finance Pcl reports unreviewed/unaudited annual
financial statements as a net loss of Bt13.06bn for the
period ending December 31, 1998. This compares with a loss
of Bt4.99bn for the corresponding 1997 period. (Stock
Exchange of Thailand 21-Jan-1999)

RADANASIN BANK: Results announcement
Radanasin Bank Pcl reports unaudited annual financial
statements as a net loss of Bt16.86bn for the period ending
December 31, 1998. This compares with a loss of Bt891m for
the corresponding 1997 period. (Stock Exchange of Thailand

THAI DANU BANK: Results announcement
Thai Danu Bank Pcl reports unaudited annual financial
statements as a loss of Bt649m for the period ending
December 31, 1998. This compares to a loss of Bt8.08bn for
the corresponding 1997 period. (Stock Exchange of Thailand

THAI LUBE BASE: To delay loan principal repayment chase
Thai Lube Base, a subsidiary of Thai Oil, will from this
March delay for two years payment of principal on its
US$195 million syndicated loan, though it will continue to
pay interest, managing director Somkuan Wattakeekul said.
He said the company had assigned Chase Manhattan, its
financial advisor, to conduct a feasibility study on its
financial restructuring plan.

The company had been granted a $195 million syndicated
loan, comprised $155 million in offshore loans and $40
million in domestic loans from Siam Commercial Bank (SCB),
Krung Thai Bank (KTB) and Thai Farmers Bank (TFB).
The syndicated loan is considered long-term with a 12-year
maturity. The company began paying interest in mid-1997 and
is obligated to pay principal at $20 million per annum.

"However, the company's plan to delay principal repayment
by an additional two years has yet to receive approval from
creditors but there is a strong chance that local creditors
will endorse the plan. The company has a good interest
payment record and is considered a good client," Somkuan
said. The company's financial restructuring plan consists
of an increase in revolving funds, a delay in principal
repayment, and the seeking of potential partners.

Regarding the shareholding structure, Petroleum Authority
of Thailand (PTT) and Thai Oil plan to reduce combined
equity holding in Thai Lube Base to 40 percent, from the
current ratio of 30 and 38 percent, respectively.
Malaysia's Petronas is another international firm
interested in buying equity in Thai Lube Base, after
Saudiaram dropped out.

At present, Thai Oil's main shareholding structure
comprises 49 percent held by PTT, 25 percent by Chao
Khwanyuen group, 15.05 percent by Shell Petroleum, 4.5
percent by Caltex Trading, and 2 percent by the Crown
Property Bureau. (Business Day [Thailand] 21-Jan-1999)

UNITED BROADCASTING: Shinawatra to sell entire UBC stake
Shinawatra Group plans to sell all of its 14 per cent stake
in United Broadcasting Corp (UBC) for Bt10 to Bt13 a share
to major shareholders later this week, sources told The
Nation. The sale, part of the group's re-organisation
plans, gives Shinawatra a graceful exit from the loss-
making operation to focus only on its telecom operations.

Shinawatra's move has been long planned. In 1995, it
attracted Grammy Entertainment and Bangkok Broadcasting
Television (the Channel 7 operator) to share the risk. Two
years later, MIH, one of the world's largest cable
television operators, became its prime partner.

When the competition reached its peak, Shinawatra managed
to merge its IBC Cable television with rival UTV to form
UBC, allowing the latter to become the largest shareholder.
Shinawatra's chairman Boonklee Plangsiri declined to
elaborate, but admitted that the UBC shareholding structure
was undergoing significant negotiations.

Telecom Holding (TH), which currently holds 36 per cent in
UBC, would take up 10 per cent, and MIH, which has 26.3 per
cent, would buy 4 per cent more. The final price is yet to
be agreed upon, sources said.

Shinawatra Group announced its plan to streamline
businesses late last year. The most crucial cut was when
Shinawatra International, the worst loss-making unit,
practically shut down. Some 100 employees were also laid-

Although UBC is still in the red, its cash reserves are
huge. The middle of last year saw a sharp rise in its
registered capital to Bt7.3 billion from Bt4.8 billion
through the issue of new shares for existing shareholders.
Last year, UBC predicted it would break-even by 2001 when
its subscribers reach 430,000. However last year, it failed
to meet the target of having at least 300,000 customers.
(The Nation 21-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

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 1999.  All rights reserved.  ISSN: 1520-9482.  

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