TCRAP_Public/990126.MBX T R O U B L E D   C O M P A N Y   R E P O R T E R     
  
             A S I A   P A C I F I C      

      Tuesday, January 26, 1999, Vol. 2, No. 17

                    Headlines


* C H I N A   &   H O N G   K O N G *

CA PACIFIC SECURITIES: CA Pacific payout blow
GANG AO INTERNATIONAL: Has stopped payments on loans
GUANGDONG INTERNATIONAL: Japan lenders to seek repayment
GUANGZHOU INVESTMENT: GZI debt rating worsens
HWA KAY THAI: Satisfies creditors on $60m repayment plan

SEMI-TECH (GLOBAL): Raises $46m in restructuring plan


* J A P A N *

DAI-ICHI KANGYO: Moody's cuts ratings
INDUSTRIAL BANK OF JAPAN: Moody's cuts ratings
JAPAN LEASING: GE unit to pay 800b yen for assets
LONG TERM CREDIT: Tax officials made LTCB buy bad loans
NED: Yasuda Fire, Yasuda Mutual Life to buy LTCB unit


* K O R E A *

DONG AH CONSTRUCTION: Creditors in debt-for-equity swap
HOUSING & COMMERCIAL: Foreign investors control ownership
MIDOPA: Curbs phone use by employees
SANGMA TRANSPORTATION: Starts creditor reconciliation


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

PHILIPPINE AIRLINES: New team puts together PAL plan


* S I N G A P O R E *

PERTAMA: Closing outlet at Marina Square


* T H A I L A N D *

BANK OF AYUDHYA: To raise US$2.5b in bonds, stock
THAI AIRWAYS: Close to picking sale advisors
THAI PETROLEUM PIPELINE: Creditors agree to restructure
UNITED COMMUNICATION: Set to sign restructuring agreement


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

CA PACIFIC SECURITIES: CA Pacific payout blow
---------------------------------------------
According to the South China Morning Post, less than a
quarter of claims resulting from the collapse of failed CA
Pacific Securities have so far been processed due to the
complexity in processing. Sources said the stock exchange
was likely to be able to process only about 200 claims a
month because of the complexity of analysing some accounts.
At such speed, it could take several years before the more
than 5,212 claims seeking about $2.4 billion are processed.
The Securities and Futures Commission is understood to have
urged the exchange to devote more resources to processing
the claims.


GANG AO INTERNATIONAL: Has stopped payments on loans
----------------------------------------------------
An front page story in the Asian Wall Street Journal
regarding the danger of accelerating defaults in China
mentioned that there are unconfirmed reports that Gang Ao
International Holdings Co., which is controlled by the Bank
of China and the Hong Kong branch of the China's official
Xinhua news agency, has stopped paying both principal and
interest on several syndicated loans.


GUANGDONG INTERNATIONAL: Japan lenders to seek repayment
--------------------------------------------------------
Japanese banks that lent to failed Guangdong International
Trust & Investment Corp (Gitic) have split with their
European and United States counterparts and set up their
own organisation to seek repayment.

Japan is one of Gitic's largest lenders.

The move comes a week after Hong Kong-based banks said they
had formed a 10-member steering committee to lobby Beijing
for full repayment of Gitic's debts.

One Japanese banker said Hong Kong-based Japanese creditor
banks of Gitic had reached a consensus that the liaison
with mainland authorities on Gitic would now be taken care
of by the banks' respective headquarters.

The Japanese banks wanted to raise their profile in the
lobbying process and use domestic organisations such as the
Japanese Banks Association to add weight to their claims.

Gitic's foreign creditors are owed 15.95 billion yuan
(about HK$14.84 billion) in liabilities and 14.7 billion
yuan in liability guarantees. Credit from foreign
institutions accounted for the vast majority of Gitic's
36.17 billion yuan debts, against 21.47 billion yuan in
assets. (South China Morning Post 23-Jan-1999)


GUANGZHOU INVESTMENT: GZI debt rating worsens
---------------------------------------------
The South China Morning Post says that Guangzhou Investment
(GZI) and its parent face the task of meeting an estimated
debt obligation of more than HK$3.2 billion this year amid
growing financial stress on Guangzhou firms, according to
the latest Salomon Smith Barney research report.

Of GZI's debt of 3.2  billion, 1.2 billion was due this
year.

GZI's creditor banks have threatened to put Gzitic into
liquidation as its has defaulted on some loans and had
difficulties repaying others.

The US investment bank downgraded its rating on GZI from
neutral and high risk (3H) to underperform and high risk
(4H), citing the possible spillover effect from the
financial troubles at Guangzhou International Trust and
Investment Corp (Gzitic) which might be as big as that of
Guangdong International Trust and Investment Corp on
Guangdong Investment and Guangnan Holdings, although Gzitic
has no direct relationship with GZI.

Salomon also anticipated the mainland's tougher than  
expected stance on the clean-up of Itics and other mainland
entities would aggravate the credit crunch for red chips
and their highly geared parents over the next few months.
This would put many red chips on a debt-restructuring
program as they faced a peak debt repayment period this
year and next.

The subsequent impact might include a capital-expenditure
slowdown, higher refunding costs, share dilution, reduced
dividends and asset reshuffling, the report said. It also
said parents often had debts two to four times those of
listed subsidiaries. Parents of GZI, Shanghai Industrial
Holdings, Cosco Pacific and Guangdong Investment had
relatively large debt positions.

The report said GZI had HK$967 million cash and a net debt
to equity at 27.7 per cent last year and an interest cove
of 5.2 times.

Salomon put parent Yue Xiu's debts at two to three times
GZI's -- HK$6 to HK$9 billion. It was estimated to have net
debt to equity ratio of 160 to 250 per cent.

The report also said restructuring financially troubled
Guangdong Enterprises (Holdings) basically implied a
rescheduling of debt, as cash and quality assets were hard
to find.

Shanghai Industrial Holdings was financially strong but
would come under pressure of uncertainty over its parent.
Parent Shanghai Industrial Investment (Holdings) had
HK$10.6 billion debt. It had a net debt to equity of 160
per cent as of September and total debt to equity of 3.25
times as of December 1997.

The report said the management of the parent claimed that
all debt obligations this year, estimated at HK$3.5
billion, had been pre-arranged. Its chief near-term
obligations was a US$250 million loan due in July. The
report also said the generally low transparency at the
parent company level adds to the group's overall risk
profile.


HWA KAY THAI: Satisfies creditors on $60m repayment plan
--------------------------------------------------------
According to the South China Morning Post, troubled Hwa Kay
Thai Holdings announced arrangements involving repayment of
loans worth $255 million.

The company said it intended to dispose of collateralised
properties to repay $19 million in debt.

It said it and its subsidiaries also owed $236 million to
creditors including principal bankers and Puma AG Rudolf
Dassler Sport. Those loans were lent without using any
property as collateral. The company some creditors have
agreed to waive repayments totalling $130 million, and the
balance would be repaid by cash, an issue of new shares and
convertible notes.

After restructuring, its principal bankers will own 10 per
cent of the company and Puma will have 9.8 per cent.


SEMI-TECH (GLOBAL): Raises $46m in restructuring plan
-----------------------------------------------------
According to the South China Morning Post, audio visual
appliance-maker Semi-Tech (Global) is to raise about $46
million by selling a wholly-owned subsidiary to an indirect
subsidiary as part of the group's rationalisation.

Semi-tech (Turku) Oy, which is a loss-making television-
manufacturer based in Finland, will be sold to Kong Wah
Holdings at a price temporarily fixed at 4191 per share.
Kong Wah is entirely owned by Akai Electric in which Semi-
tech holds 70.8 per cent.


=========
J A P A N  
=========

DAI-ICHI KANGYO: Moody's cuts ratings
-------------------------------------
The Asian Wall Street Journal report Moody's Investors
Service Inc. has downgraded the ratings on Dai-Ichi Kangyo
Bank, Ltd. Dai-Ichi had its long-term deposit rating
reduced from A3 to Baa1, long-term senior unsecured debt
rating reduced from A3 to Baa2, financial strength rating
reduced from D to E+, subordinated-debt ratings reduced
from Baa1 to Baa3, issuer rating reduced from A3 to Baa1,
and junior subordinated-debt ratings reduced from Baa2 to
Ba1.

Moody's reported that the downgrade of Dai-Ichi reflects
profound asset quality problems and prospective credit
costs that will likely absorb pre-provisioned profits. The
bank also has sizable exposure to certain risky borrowers.


INDUSTRIAL BANK OF JAPAN: Moody's cuts ratings
----------------------------------------------
The Asian Wall Street Journal reported that Moody's
Investors Service Inc. has downgraded the ratings on the
Industrial Bank of Japan, Ltd. IBJ had its long-term
deposit rating reduced from A3 to Baa1, senior debt rating
reduced from A3 to Baa2, subordinated-debt ratings reduced
from Baa1 to Baa3, issuer rating reduced from A3 to Baa1,
and junior subordinated-debt ratings reduced from Baa2 to
Ba1.

The downgrade of the Industry Bank reflects deterioration
of the bank's asset quality and economic capital, as well
as increased exposure to certain troubled borrowers.


JAPAN LEASING: GE unit to pay 800b yen for assets
-------------------------------------------------
General Electric Co's finance subsidiary said it will buy
the leasing assets of bankrupt Japan Leasing Corp, its
third major acquisition in Japan since March.

GE Capital Services Corp, the world's largest non-bank
finance company, will pay 800 billion yen (S$11.8 billion)
for the businesses, Nikkei English News reported, citing
unidentified sources. The price, which GE declined to
comment on, would make it the biggest ever acquisition
involving a Japanese firm.

The move follows plans by GE to slow the pace of its stock
buybacks so it can spend as much as US$40 billion (S$67
billion) on acquisitions in Asia, according to analysts'
estimates. Under terms of the acquisition, GE Capital
acquires Japan Leasing's equipment leasing contracts,
valued at 641.3 billion yen, along with instalment credit
agreements valued at 146.5 billion yen as at end November.

It also gets 100 per cent of the shares outstanding in
Japan Leasing affiliate Japan Lease Auto, which has assets
of 130 billion yen and paid-in capital of 300 million yen.
Japan Leasing's business infrastructure, including the
operating assets of affiliates Japan Leasing Information
System and Japan Leasing Business Service will also come
under GE's control.

Stamford, Connecticut-based GE Capital will become the
second- or third-largest company in Japan's leasing
industry, analysts estimate. Orix Corp, Japan's largest
leasing company, had leasing assets of 2.58 trillion yen at
the end of September.

Japan Leasing collapsed last September in Japan's biggest
bankruptcy and has been in discussions with GE for several
months. The acquisition gives GE a share of Japan's US$64
billion leasing business. By entering the market in the
world's second-largest economy now, GE Capital can take
advantage of a financial system weakened by the country's
deepest recession since World War II to buy near the bottom
price. (Bloomberg and Singapore Business Times 25-Jan-1999)


LONG TERM CREDIT: Tax officials made LTCB buy bad loans
-------------------------------------------------------
Failed Long-Term Credit Bank of Japan (LTCB) lost money to
make tax-free write-offs of bad loans after tax authorities
had it buy back affiliates' soured loans that had been
passed on to dummy companies, LTCB sources said Sunday.

On the tax officials' advice, LTCB disposed of 140 billion
yen in bad loans by the end of fiscal 1997. The tax
authorities saw a problem in suspected transfers of bad
debts by four LTCB nonbank financial firms to a number of
dummy firms, the sources said.

LTCB had to give up the loans, writing the losses off on
its taxes, in order to move ahead with the rehabilitation
of the four affiliates -- Japan Leasing Corp., Japan Landic
Corp., Nippon Enterprise Development Corp. and LTCB Leasing
Corp.

LTCB appears to have followed in the footsteps of some
major commercial banks, which in March 1993 started
disposing of bad loans held by their nonbank affiliates,
which are believed to have also transferred debts to
conceal them.

According to the sources, the Finance Ministry at the time
had urged lending institutions to deal quickly with bad
loans by affiliate nonbanks out of concern over the impact
the problem could have on Japanese banking.

LTCB thereupon considered assisting Nippon Enterprise and
LTCB Leasing in 1993, Japan Leasing in 1994 and Japan
Landic in 1996.

It then disclosed the records of its loans to the four
firms, which largely depended on it for their lending
resources, to the Tokyo Regional Taxation Bureau in order
to write off the nonbanks' bad debts, which it had already
abandoned, the sources said.

The authorities cited as a problem the fact that LTCB had
made the dummy firms purchase the bad loans at book value
even though the loans had become difficult to recover after
their real estate collateral declined in value.

The bad loans were extended by the nonbank lenders mostly
to real estate firms, which had mortgaged real estate
during the bubble-economy years of inflated assets.

LTCB was reportedly told by the authorities that the dummy
firms would in effect be making donations in paying
inflated prices for the real estate, resulting in taxation
problems.

The authorities added the debt burden should not be passed
on to companies that are not really in operation, the
sources said.

Following this advice, LTCB made the four affiliates buy
the real estate back from the dummy firms at the prices for
which the four had sold it, with LTCB in turn buying the
real estate at book value.

Afterward, the failed long-term bank sold the real estate
to the Cooperative Credit Purchasing Co. (CPPC) at market
prices based on appraisals by the credit purchasing firm.

The bank absorbed as a loss the difference between its
sales price and the book value, writing the loss off its
taxes on an annual basis.

Bad-loan disposal write-offs amounted to around 63.8
billion yen at the end of fiscal 1994 for Nippon
Development and LTCB Leasing, 62.6 billion yen in fiscal
1995 for Japan Leasing and 13.2 billion yen in fiscal 1997
for Japan Landic.

A senior LTCB official said LTCB had little choice but to
dispose of the loans because of concerns crime syndicates
might illegally occupy the real estate. (Kyodo News
24-Jan-1999)


NED: Yasuda Fire, Yasuda Mutual Life to buy LTCB unit
-----------------------------------------------------
Yasuda Fire and Marine Insurance Co. and Yasuda Mutual Life
Insurance Co. are negotiating to buy the venture capital
business of a nonbank financial institution affiliated with
the nationalized Long-Term Credit Bank of Japan (LTCB),
industry sources said Monday.

The Yasuda firms plan to use the venture capital business
of the LTCB subsidiary, NED, for their investment of
pension funds in high-risk and high-return unlisted shares
because NED has the know-how on such investment, the
sources said.

NED operates two business divisions -- the venture capital
division for investment in unlisted shares and a loan
division. It has extended some 400 billion yen in loans,
but most of them turned out irrecoverable.

The buyout is subject to approval by the Financial
Reconstruction Commission, a government panel charged with
rebuilding the bad loan-saddled banking system that has the
final say in what to do with LTCB. The commission is
preparing to allow NED to file for bankruptcy because of
its massive bad loans, the sources said. (Kyodo News
24-Jan-1999)


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

DONG AH CONSTRUCTION: Creditors in debt-for-equity swap
-------------------------------------------------------
Creditors of Dong Ah Construction Industrial have decided
to convert their loans to the troubled construction firm to
equity capital next month. A source close to the creditors
said yesterday that creditor financial institutions have
reached agreement to turn Dong Ah's debt, worth 80.2
billion won, into equity by as early as Feb. 12.

It will be the first time that creditors have swapped their
loans to a troubled firm into equity since the nation was
battered by the Asian currency turmoil in late 1997.

Dong Ah plunged into crisis last year due to a snowballing
debt of 4.1 trillion won amid a slumping construction
market. The firm is expected to trim its debt ratio to less
than 200 percent with the help of the debt-equity swap.

A group of creditor banks and nonbank financial
institutions had earlier planned to convert 83 billion won
worth of debt owed by Dong Ah into equity capital under a
corporate revival plan.

But creditors had to cut the original amount to 80.2
billion won due to the financial problems of some of the
institutions.

If the debt-equity swap becomes a reality, creditor
financial institutions will have a 53.5 stake in Dong Ah,
which gained fame for engineering the Great Man-Made
River Project in Libya.

The troubled construction firm reduced its capital by
incorporating four shares into one this month.

Dong Ah is expected to benefit greatly from the debt-equity
conversion if its interest payment burden is cut sharply.

However, the firm will have to be put under the direct
control of its prime creditor bank, Seoul Bank.

In the meantime, Dong Ah plans to auction off its
transportation subsidiary, Korean Express, in order to
raise the capital needed to normalize its operation by
the end of March.

It has also pledged to sell its reclaimed land in Inchon
City to the state-run Korea Asset Management Corp. (KAMCO)
in a desperate attempt to overcome its financial
difficulties. (Korea Times 25-Jan-1999)


HOUSING & COMMERCIAL: Foreign investors control ownership
---------------------------------------------------------
Foreign investors now hold a controlling stake in Housing &
Commercial Bank (H&CB), marking the first time that foreign
ownership of a Korean financial institution has exceeded
the 50 percent mark. According to the Korea Stock Exchange
(KSE), the foreign stake in H&CB rose to 51.73 percent on
Friday, as foreign stock investors controlled 46.16 million
of the bank's total of 89.23 million shares.

The 51.73-percent stake is four times higher than the
average foreign share of 11.54 percent in local banks.

The surging foreign shareholding in the bank is attributed
to expectations that the bank will make a huge profit this
year after it set aside far more than the 100 percent loan-
loss provisioning requirement.

Thus, the bank reported a net loss of 45 billion won last
year. It intends to enjoy a substantial net profit this
year due to the accumulation of large funds for loan-loss
provisioning.

A securities firm recently forecast that H&CB will post a
net profit of more than 200 billion won in 1999. (Korea
Times 25-Jan-1999)


MIDOPA: Curbs phone use by employees
------------------------------------
Midopa Department Store has introduced a "real name system"
for telephone use. If employees exceed a certain fixed
monthly amount, they must submit written documentation
explaining why they exceeded the limit.

"Since the company is under court receivership, employees
are accepting the inconvenience," explained a public
relations officer. "Since the telephone real name system
was established three months ago, the December telephone
bill was 30 percent lower than the year before," he added.
(Korea Times 25-Jan-1999)


SANGMA TRANSPORTATION: Starts creditor reconciliation
-----------------------------------------------------
The Seoul District Court advertised in the Korean language
Maeil Kyungje that the Sangma Transportation Company
started its creditor reconciliation procedure. The
creditors' meeting will be held on March 19th, 1999. The
company's address is 678-3 Sillim 7-dong, Kwanak-gu, Seoul
and the president is Mr. Pang Hyung-jo.


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

PHILIPPINE AIRLINES: New team puts together PAL plan
----------------------------------------------------
According to the South China Morning Post, new management
and moves by creditors to resume rehabilitation talks have
given Philippine Airlines (PAL) new hopes for survival.

A team of former senior executives of Hong Kong's Cathay
Pacific Airways took over PAL management this month after
majority owner, Lucio Tan, agreed to take a back seat.

Also boosting optimism was a meeting in Hong Kong on
Wednesday of Philippine Securities and Exchange Commission
chairman Perfecto Yasay with creditor institutions. Mr
Yasay, who has the final say on any PAL rehabilitation plan
said they all agreed that PAL can still be rehabilitated.

Turning the company around would depend on how much
authority the new management team had to make strategic
decisions. These could include a possible cutback of PAL's
unionised workforce of about 9,000, a move likely to spark
protest, given a pledge by Philippine President Joseph
Estrada that no staff cuts would be made.

The Asian Wall Street Journal reports PAL has requested
that the Philippine Securities Exchange Commission (SEC)
not to lift its order that is preventing aircraft lessors
from repossessing a leased jet. Pacer Aviation Ltd. and
Credit Agricicole Indosuez SA have appealed to the SEC
asking an order be lifted so they can repossess an Airbus
A330-300 jet.  

The article mentioned that the aircraft in question was
purchased by PAL using finance facilities provided by
European credit agencies. Pacer was formed, according to
this report, to hold the title of this jet from the
credit agencies until PAL paid off its loans.  Credit
Agricole acts on the behalf of the creditors involved with
this aircraft.  

The article stated that PAL has said if this SEC order is
lifted, claims could be filed for other jets which would
then render the airline's rehabilitation plan useless.  


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

PERTAMA: Closing outlet at Marina Square
----------------------------------------
Pertama Holdings is closing its Marina Square store, one of
its oldest outlets, amid the escalating competition in the       
electricals retailing market since the entry of British
powerhouse Kingfisher.

The closure of the 5,000 sq ft Marina Square outlet --
which has been there since 1987 -- ends a two-year
rationalisation exercise which saw two other stores at
Plaza Singapura and Ngee Ann City cease operations,
Pertama's chairman Peter Pak told BT. On the closure of the
three stores, Mr Pak said: "We don't want to keep them and
keep losing money.

For now, the consolidation efforts of Pertama appear to
have had some effect as the losses of Pertama
Merchandising, its retail arm, have fallen significantly.  
According to Registry of Companies & Businesses figures,
for the year ended March 1998, Pertama Merchandising's pre-
tax losses were shaved to $550,000, only about 13 per cent
of the previous year's $4.1 million. Retail operations make
up more than one-fifth of Pertama Holdings' turnover, with
the rest made up of wholesale activities. (Singapore
Business Times 25-Jan-1999)


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

BANK OF AYUDHYA: To raise US$2.5b in bonds, stock
------------------------------------------------
Bank of Ayudhya, facing mounting loan defaults, plans to       
raise as much as US$2.5 billion (S$4.2 billion) by selling       
bonds and shares. Thailand's fifth largest bank said its
plan to sell subordinated bonds attached to preferred
shares was approved by the central bank. The programme
would dilute existing shareholder equity by a fraction of
one per cent. It must still be approved by shareholders and
the Securities and Exchange Commission.

Bank of Ayudhya will use most of the proceeds as loan-loss
reserves, as defaults are mounting amid Thailand's deepest
recession since the 1960s.

Bank of Ayudhya last week announced a 1998 loss of 9.2
billion baht, from a two billion baht profit a year
earlier. (Bloomberg and Singapore Business Times 25-Jan-
1999)


THAI AIRWAYS: Close to picking sale advisors
--------------------------------------------
Thai Airways International (THAI) said a group led by
Credit Suisse, First Boston and Dresdner Kleinwort Benson
was the front-runner to advise the company on its share
sale this year. Asia's sixth largest carrier has not yet
reached a final decision, said a Thai Airways spokesman,
adding that Credit Lyonnais, which advised the company on
the leasing of its Airbus' delivered last month, had not
been chosen.

THAI Chairman Mahidol Chantrangkurn, meanwhile, said
yesterday the French bank had been chosen.

Six groups have applied to assist with the sale of about
one quarter of the airline. CSFB, the New York-based
investment banking unit of Switzerland's second-biggest
bank, Dresdner; the securities unit of Germany's second-
largest bank, Asset Plus, and Jardine Fleming Thanakom
Securities proposal "get the highest score," he said.

The government currently owns 93 percent of THAI.

Thailand pledged to divest part of its stake as part of its
terms concerning the $17.2 billion aid program arranged in
1997 by the International Monetary Fund. The sale will
probably happen in the final quarter of this year, as the
advisors will need two months to put forward their
recommendations, while THAI will need six to nine more
months to prepare the sale, the spokesman said. (Business
Day [Thailand] 25-Jan-1999)


THAI PETROLEUM PIPELINE: Creditors agree to restructure
-------------------------------------------------------
Thai Petroleum Pipeline's (Thappline) creditors have agreed
in principle over the 9-billion-baht debt restructuring
plan, including conversion of 25 percent debt into equity
and the injection of more capital. Thappline Director and
Acting Managing Director Komol Phithaksphong said
negotiations regarding the debt restructuring plan are
nearly complete, now awaiting only approval by major
shareholders.

The state-owned Krung Thai Bank (KTB) is Thappline's
largest shareholder with Merrill Lynch Phatra Securities
and Tisco Securities acting as its financial advisors.

Under Thappline's financial restructuring, around 25
percent of its debt would be converted to debenture with
maturity of 11-14 years. The major portion of debt (75
percent) would be rolled over for an additional 5 years
from its original schedule in 2006.

"Following its financial restructure, the organization will
be able cope with the existing petroleum consumption in
Thailand," said he, before adding that the company will
also have sufficient liquidity to proceed with its
investment projects where these projects would begin to
generate revenues for the company, such as extension of
pipelines to refineries belonging to Rayong Refinery and
Star Petroleum Refining.

Thappline last year recorded revenue of 1.1 billion baht, a
decrease of 10 percent over 1997, however, the company
managed to cut its expenses by 20 percent or 80 million
baht. (Business Day [Thailand] 25-Jan-1999)


UNITED COMMUNICATION: Set to sign restructuring agreement
---------------------------------------------------------
United Communication Industry (UCOM) is set to sign a
restructuring agreement of its $400 million debt in foreign
currencies early next month after about 60 foreign
creditors have already agreed in principle with the group's
plan, UCOM Chief Executive Officer and President Boonchai
Bencharongkul said.

Despite refusing to reveal much detail about the plan,
Boonchai said the debt would have an extended repayment
period of five years. The creditors also agreed with the
buy-back conditions since the debt restructuring would
cause a dilution of the existing UCOM's shareholding
structure.

If the restructuring plan is signed, UCOM will become the
first telecommunication group to extend its loan payment
period. The group's mobile phone subsidiary, Total Access
Communication (TAC), was granted approval from creditors
for its $537 million debt restructuring since August last
year.

Boonchai said after the debt restructuring plan was
concluded, UCOM would look for strategic partners to
strengthen its businesses. The restructuring will create
confidence in foreign investors over becoming equity
partners.

"We have to stabilize our debt situation before holding
[discussions] with potential partners. If we are still
unable to control our debt burden, no new partners would
agree to inject fresh capital into the company," he said.
(Business Day [Thailand] 25-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
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