---

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, February 2, 1999, Vol. 2, No. 22

                    Headlines


* C H I N A   &   H O N G   K O N G *

ASEAN RESOURCES: Loans' total equal to 27pc of assets
AVIATION INDUSTRIES: China to split state airplane maker
EAST RIVER POWER: Defaults on bond payment
FOREGROUND SECURITIES: Clients get payouts
FOSHAN FENJIANG: Defaults on bond payment

FUJIAN INTERNATIONAL: Banks cut credit to Chinese trust
FUNG SHUN INVESTMENT: In members' voluntary liquidation
GANG AO INTERNATIONAL: Foreign lenders call in loans
GUANGDONG ENTERPRISES: Probe into GDE investments
GUANGDONG INTERNATIONAL: Fraud played part in bankruptcy

GUANGDONG INTERNATIONAL: Half of foreign debt not filed
GUANGDONG INTERNATIONAL (HK): Criminal activity suspected
GUANGNAN (HOLDINGS): Guangdong to bail out ailing red chip
GUANGNAN (HOLDINGS): Guangnan executive jumps bail -- ICAC
GUANGXIN ENTERPRISES: Criminal activity suspected  

HUIZHOU YINSHAN: Defaults on bond payment
JETHOUSE INVESTMENT: Winding up petition
KOSONIC INTERNATIONAL: Restructuring plan to pay $465m debt
MAOMING QINGHUA: Defaults on bond, may be declared bankrupt
NEW CHINA HONG KONG GROUP: Announces voluntary winding-up

SEA HOLDINGS: Seeks more time for circular
WU HUA MEISHAN CEMENT: Defaults on bond payment
YANJIANG HI-TECH: Defaults on bond payment


* J A P A N *

CHIGIN-SEIHO: Sumitomo Bank agrees to Y3bn settlement
JYUSO INC: Sumitomo Bank agrees to Y3bn settlement
NIPPON CREDIT: Gave BOJ underestimated bad-loan report
TESCON: Results announcement


* K O R E A *

CHO HUNG BANK: Secures $75 million loan from CSFB
DAEWOO GROUP: Credit ratings downgraded
HYUNDAI: Details Hyundai credit ratings downgrade
JINRO DISTRIBUTION: Starts company liquidation
KUMHO PETROCHEMICAL: Receives money for Carbon Black unit

LG SEMICON: Likely to sign with Hyundai next week
NK ELECTRIC LINE: Starts creditor reconciliation
SANGWOON CONSTRUCTION: Completes creditor reconciliation   


* M A L A Y S I A *


MBF HOLDINGS: Unveils scheme to restructure RM1.3b of debts


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

ORIENT BANK: PDIC wants to rehabilitate bank
PHILIPPINE AIRLINES: PAL gets new lease on life
PILIPINO TELEPHONE: First Pacific due diligence inadequate


* T H A I L A N D *

GSS ARRAY: Results announcement
SUNSHINE PCL: Faces possible delisting
THAI CAPITAL: Six former executives charged      
TPI POLENE: Appointment of the financial advisor                         


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

ASEAN RESOURCES: Loans' total equal to 27pc of assets
-----------------------------------------------------
According to the South China Morning Post, Asean Resources
Holdings said its lendings and guarantee on loans for its
subsidiaries amounted to $1.03 billion as of the end of
last November. This represented 27.33 per cent of the
company's net asset value and the announcement was made in
line with the exchange requirement regarding loan exposures
exceeding more than 25 per cent of company assets.


AVIATION INDUSTRIES: China to split state airplane maker
--------------------------------------------------------
China plans to split its state-run airplane maker into
two companies to inject competition into the tightly
controlled industry, the official China Daily reported
Sunday. A blueprint for the breakup of Aviation Industries
of China, or Avic, has been submitted to the Cabinet and
follows similar restructuring in the oil and chemical
industries, China Daily said in its Business Weekly
editions.

The two companies to emerge from Avic will make both
commercial and military aircraft and other products, the
newspaper said. It added that Avic's administrative
functions will be handed over to a government commission
that oversees defense-related industries.

China Daily gave no timetable for the breakup and cited
unnamed analysts as concerned over layoffs of unneeded
workers and the division of Avic's money-losing units.
Avic oversees 100 enterprises, 30 research centers and
seven key government laboratories and employs 500,000
people, even after laying off 34,000 people last year,
China Daily said.

In trying to revive the inefficient, debt-ridden state
sector, Chinese leaders over the past year have sought to
introduce competition by restructuring powerful monopolies
once protected by central planning. (AP Online 31-Jan-1999)


EAST RIVER POWER: Defaults on bond payment
------------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the East River Power Corporation has
defaulted on a domestic bond. This company is owned by a
local government in the province of Guangdong.  


FOREGROUND SECURITIES: Clients get payouts
------------------------------------------
According to the South China Morning Post, the first batch
of compensation payments, totalling $5.49 million were made
yesterday to 58 clients of collapsed brokerage Foreground
Securities. Two applications were rejected by the stock
exchange while one is awaiting approval.

Of the 58 claims, 32 for amounts less than $150,000 were
awarded full repayment. The other 26, with higher claims,
each received $150,000. They will be eligible for further
payments at a later stage, subject to a combined total of
$8 million for all claims. They may also file claims with
the brokerage's liquidators.

The stock exchange suspended Foreground's membership last
March after it failed to meet financial requirements.


FOSHAN FENJIANG: Defaults on bond payment
-----------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the Foshan Fejiang Industrial Company
has defaulted on a domestic bond. This company is owned by
a local government in the province of Guangdong.  


FUJIAN INTERNATIONAL: Banks cut credit to Chinese trust
-------------------------------------------------------
Foreign banks have cancelled provisional credit lines worth
$100m to a leading Chinese trust and investment company,
underlining the severity of the credit squeeze facing
corporate China's overseas borrowers.

Fujian International Trust and Investment Corporation
(Fitic) has been forced to renegotiate payment schedules on
three international bank debts, as foreign lenders have
withdrawn loan quotas and caused a "relatively difficult
liquidity situation", according to a senior company
official.

China's international trust and investment companies --
known as Itics -- have been starved of credit since the
closure of Gunagdong International Trust and Investment
Corporation (Gitic), a provincial government-backed
investment agency with debts of $4.37bn, sent foreign banks
into retreat from corporate Chinese risk.

In an interview, Xin Shimin, vice chairman of Fitic, the
investment arm of the Fujian government, said foreign
banker's fears of further Itic closures would make it
impossible for the company, as well as any other provincial
Itics, to borrow abroad this year and possibly next.

Fitic, which has assets of RMB11bn ($1.3bn), has two
outstanding global bond issues -- a $100m Yankee bond due
2007 and a Y14bn Samurai bond due 2006 -- as well as
foreign bank debt of $280m, of which $30m is short-term.
Restructuring has already made more than RMB400m in funds
available, so "there will be no difficulty in making
payments on foreign loans," Mr Xin said. (The Financial
Times 01-Feb-1999)


FUNG SHUN INVESTMENT: In members' voluntary liquidation
-------------------------------------------------------
The creditors of Fung Shun Investment Company Limited,
which is being voluntarily wound up, are required on or
before Mar 31 to send in their names, addresses and
particulars of their debts or claims to the Liquidator(s)
of the said company, and if so required by notice in
writing from the liquidator(s), are personally or by their
solicitors to come in and prove their debts or claims at
such time and place specified in such notice, or in default
thereof, they will be excluded from the benefit of any
distribution before such debts are proved.


GANG AO INTERNATIONAL: Foreign lenders call in loans
----------------------------------------------------
According to the South China Morning Post, foreign banks
have asked Gang Ao International (Holdings), which has the
Bank of China as a 22 per cent shareholder, to repay a loan
originally scheduled to mature in April.

Gang Ao is being investigated by the Hong Kong Monetary
Authority for alleged unauthorised deposit-taking
activities by its subsidiary Hong Kong-Macau International
Finance. It has called in shareholders, including the Bank
of China, to help with the investigation.

Banking sources said Gang Ao made a prepayment last week on
a US$15 million syndicated loan arranged by Banque
Nationale de Paris (BNP) Hong Kong, originally due to
mature in April.

Bankers said the payment would serve to reassure them of
the financial viability of the company but would not stop
bankers from calling in loans in advance from other
companies deemed to be in financial difficulty.

It was revealed only 10 days ago that Gang Ao was having
difficulty meeting billions of dollars in debt obligations
due to allegedly reckless investments in Hainan. A project
manager at debt-paper databank Basisfied said Gang Ao had
outstanding foreign loans of $15 million, far lower than
the rumored amount of billions.

Gang Ao was founded in 1984 to cement ties between Hong
Kong-based mainland conglomerates and Hong Kong
businessmen, to maintain stability and unity amid
uncertainty prior to the handover in 1997.


GUANGDONG ENTERPRISES: Probe into GDE investments
-------------------------------------------------
According to the Hong Kong Standard, Guangdong Enterprises
(GDE)'s four units in Hong Kong issued on Friday night a
joint statement denying any misappropriation of funds
alleged by Zhu Senlin, chief of the Guangdong People's
Congress.

Executives of Guangnan (Holdings) said an investigation was
being conducted into assertions that funds it had raised
had been used by its parent company, Guangdong Enterprises
(Holdings) for speculative investments in the stock market.


GUANGDONG INTERNATIONAL: Fraud played part in bankruptcy
--------------------------------------------------------
The Asian Wall Street Journal reported that the deputy
director of the Guangdong Information Department has
released details that indicate that fraud may have played a
role in the financial problems of the Guangdong
International Trust & Investment Corporation (GITIC).  

GITIC reportedly had unregistered debts that totaled to
$419 million. It was also reported that the liquidator's
audit has revealed that the GITIC's debt equity ratio is
168 percent, a value that is 70 percent higher than
previous reported.

Other irregularities noted was the establishment of 137
unreported subsidiaries and the offering of interest rates
on deposits above central bank mandated levels. The numbers
released in this report are part of the initial result of
the Bank of China liquidation team handling the GITIC
matter.

GITIC was the official investment arm of the Guangdong
government, and the second largest such institution in
China. GITIC obtained loans and issued bonds overseas to
finance local projects, but also used its funds in stock
and property deals that went bad. It was closed by the
Chinese government on October 6, after it was able to meet
obligations on both its foreign and domestic debt.


GUANGDONG INTERNATIONAL: Half of foreign debt not filed
-------------------------------------------------------
According to the South China Morning Post, it was revealed
yesterday that about half of Guangdong International Trust
and Investment Corp's foreign debt of US$1.93 billion were
not registered.

Guangdong government spokesman Li Shoujin said the
liquidity crunch unleashed by the Asian financial crisis
had exposed internal problems at the firm. These included
chaotic management, significantly bigger liabilities than
assets and inability to repay debts.

The muddled management was typified by the firm's non-
compliance with rules and regulations in raising foreign
debts. For instance, four overseas issues of floating-rate
notes that raised about $419 million were not properly
sanctioned. The arbitrary issue of letters of credit to
raise funds was another problem that heightened risks at
the firm.

Mismanagement also led to a huge loss of assets. About 9.62
billion yuan of loans, leased assets and other investments
could not be recovered.

Gitic's domestic firms accounted for about 8.15 billion
yuan of the total negative net worth of 14.69 billion yuan.
Gitic and three subsidiaries undergoing bankruptcy
proceedings accounted for about 89.6 per cent of the
domestic firms' negative net worth.

Gitic's assets were put at 21.47 billion yuan as of January
6, against debts of 35.14 billion yuan.

Mr Li said the incident would help Guangdong establish a
better credit standing in the long term. Enterprises would
learn to establish their own credit standing. It would also
stop the government from using administrative measures to
provide guarantees in raising loans.


GUANGDONG INTERNATIONAL (HK): Criminal activity suspected
---------------------------------------------------------
The Asian Wall Street Journal reported that Chinese
authorities have uncovered suspected criminal activities by
officials of the Guangdong International Trust & Investment
Corporation Hong Kong (Holdings) Ltd. (GITIC Hong Kong),
which shut down last October.

GITIC Hong Kong was controlled by Guangdong International
Trust & Investment Corporation, an official investment arm
of the Guangdong provincial government, that was shut down
on October 6 because of its inability to pay maturing debt
obligations. GITIC was the second largest of China's trust
and investment companies, and has now formally been
declared bankrupt.


GUANGNAN (HOLDINGS): Guangdong to bail out ailing red chip
----------------------------------------------------------
According to the South China Morning Post, cash-strapped
red chip Guangnan (Holdings) attempted yesterday to
reassure its bankers by confirming long-term rumors that
the Guangdong provincial government was prepared to bail it
out.

In a specially prepared statement released at the request
of the stock exchange, the company said it had been
informed by the Guangdong provincial government that it
intended to make available a facility to assist it to pay
its trade creditors and continue its normal operations,
and to provide financing to enable Guangnan to continue
making interest payments to its financial creditors.

Guangnan owes creditors US$391 million while its parent,
beleaguered Guangdong Enterprises (GDE), owes creditors
more than US$2.94 billion.


GUANGNAN (HOLDINGS): Guangnan executive jumps bail -- ICAC
----------------------------------------------------------
According to the Hong Kong Standard, the assistant general
manager of Guangnan (Holdings), Li Ruihua, has jumped bail
and is wanted by Hong Kong authorities. Mr Li was arrested
by the Independent Commission Against Corruption on
December 10 for allegedly offering advantages and
conspiracy to defraud in relation to application for
letters of credit from banks. Guangnan's auditors are
conducting an internal investigation into Mr Li's conduct
and has hired multinational accountant KPMG to prepare a
report on its financial position.


GUANGXIN ENTERPRISES: Criminal activity suspected  
-------------------------------------------------
The Asian Wall Street Journal reported that Chinese
authorities have uncovered suspected criminal activities by
officials of Guangxin Enterprises.

Guangxin Enterprises was a Hong Kong based branch of
Guangdong International Trust & Investment Corporation, an
official investment arm of the Guangdong provincial
government, that was shut down on October 6 because of its
inability to pay maturing debt obligations. GITIC was the
second largest of China's trust and investment companies,
and has now formally been declared bankrupt.


HUIZHOU YINSHAN: Defaults on bond payment
-----------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the Huizhou Yinshan Development
Company has defaulted on a domestic bond. This company is
owned by a local government in the province of Guangdong.  


JETHOUSE INVESTMENT: Winding up petition
----------------------------------------
A petition for the winding up of Jethouse Investment
Limited was presented to the High Court on Jan 20 by Pang
Ping Wah of Room 1805, Shek Fai House, Chun Shek Estate,
Shatin, New Territories, and the said petition is directed
to be heard before the court at 9:30 a.m. on Mar 31, and
any creditor or contributory of the said company desirous
to support or oppose the making of an order on the said
petition may appear at the time of hearing by himself or
his counsel for that purpose, and a copy of the petition
will be furnished to any creditor or contributory of the
said company requiring the same by Helen Law for Director
of Legal Aid, 27th Floor, Queensway Government Offices, 66
Queensway, Hong Kong, on payment of the regulated charges
for the same.


KOSONIC INTERNATIONAL: Restructuring plan to pay $465m debt
-----------------------------------------------------------
According to the South China Morning Post, debt-ridden
audio-products maker Kosonic International Holdings
announced its debt restructuring plan yesterday which would
use new shares and cash to repay no more than $465 million
debt. Every $1 debt would be repaid five cents cash and the
rest would be repaid by new shares issued by the company.
The court hearing of the company's liquidation application
is to be postponed from today to March 26. The company said
its debt restructuring plan had not yet been implemented.


MAOMING QINGHUA: Defaults on bond, may be declared bankrupt
-----------------------------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the Maoming Qinghua Company has
defaulted on a domestic bond. This firm is an acrylic-fiber
maker, reportedly owned by the city of Maoming in the
southern Guangdong province.  

The three year bond, underwritten by Guangdong Securities
Company, was worth more than 100 million yuan.  It was
originally approved by the Guangdong branch of the People's
Bank of China, the nation's central bank. However,
restructuring has recently removed the authority of this
branch to make such approvals.  

The city government of Moaming has reportedly stated that
the company doesn't have the resources to pay investors,
and the city can't help out either. A source from Guangdong
Securities Company also said that the city has organized a
special working group to consider putting the company into
bankruptcy.


NEW CHINA HONG KONG GROUP: Announces voluntary winding-up
---------------------------------------------------------
According to the South China Morning Post, Tsui Tsin-tong's
New China Hong Kong group of companies announced the group
had entered into a voluntary wind-up. The announcement
indicated the group's creditor banks had failed to reach
agreements on restructuring of the group's debts. Amounts
claimed by creditors who have filed court writs have
already reached a total of more than $100 million.


SEA HOLDINGS: Seeks more time for circular
------------------------------------------
According to the South China Morning Post, SEA Holdings has
applied to the stock exchange for additional time to
prepare a circular dealing with a connected transaction
announced last December. Originally the company was looking
for an extension to Jan 5, but now it needs the extension
until Feb 25.


WU HUA MEISHAN CEMENT: Defaults on bond payment
-----------------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the Wu Hua Meshan Cement Factory has
defaulted on a domestic bond. This company is owned by a
local government in the province of Guangdong.  


YANJIANG HI-TECH: Defaults on bond payment
------------------------------------------
The Asian Wall Street Journal mentioned in an article about
Guangdong firms that the Yanjiang Hi-tech Base Construction
Development Corporation has defaulted on a domestic bond.  
This company is owned by a local government in the province
of Guangdong.  

The article mentioned that Guangdong Securities Company has
posted a notices that this corporation's repayment of
principal on its 5 million yuan one year bond will be
postponed for a year. Interest payments will be postponed
for three months.  


=========
J A P A N  
=========

CHIGIN-SEIHO: Sumitomo Bank agrees to Y3bn settlement
-----------------------------------------------------
Sumitomo Bank agreed Monday to pay 3 billion yen in
compensation to a government-backed loan recovery body in a
court-sanctioned settlement for introducing problem
borrowers to two "jusen" housing loan companies.

The settlement, reached before the Tokyo District Court,
requires that the bank pays the money to the Housing Loan
Administration Corp. (HLAC) covering 73 claims, including
five filed by the HLAC in a lawsuit last year. The claims
totaled some 5 billion yen.

The bank also admitted to overstepping the bounds of its
duties and expressed remorse for introducing unscrupulous
corporate borrowers to the jusen firms -- Chigin-Seiho
Housing Loan Co. and Jyuso Inc.

The HLAC, established in 1996 to collect debts left by
seven failed housing loan companies, claimed that Sumitomo
Bank had knowingly introduced to the two firms problem
borrowers with no capability to repay loans. Sumitomo was
also accused of allegedly fabricating finance documents on
its borrower to make its income look bigger and to water
its assets. The resulting loans then became irrecoverable,
according to HLAC. (Kyodo News 01-Feb-1999)


JYUSO INC: Sumitomo Bank agrees to Y3bn settlement
--------------------------------------------------
Sumitomo Bank agreed Monday to pay 3 billion yen in
compensation to a government-backed loan recovery body in a
court-sanctioned settlement for introducing problem
borrowers to two "jusen" housing loan companies.

The settlement, reached before the Tokyo District Court,
requires that the bank pays the money to the Housing Loan
Administration Corp. (HLAC) covering 73 claims, including
five filed by the HLAC in a lawsuit last year. The claims
totaled some 5 billion yen.

The bank also admitted to overstepping the bounds of its
duties and expressed remorse for introducing unscrupulous
corporate borrowers to the jusen firms -- Chigin-Seiho
Housing Loan Co. and Jyuso Inc.

The HLAC, established in 1996 to collect debts left by
seven failed housing loan companies, claimed that Sumitomo
Bank had knowingly introduced to the two firms problem
borrowers with no capability to repay loans. Sumitomo was
also accused of allegedly fabricating finance documents on
its borrower to make its income look bigger and to water
its assets. The resulting loans then became irrecoverable,
according to HLAC. (Kyodo News 01-Feb-1999)


NIPPON CREDIT: Gave BOJ underestimated bad-loan report
------------------------------------------------------
Nippon Credit Bank (NCB), a major bank that collapsed last
year, gave the Bank of Japan (BOJ) in 1997 a report stating
its amount of bad loans to be more than 420 billion yen
smaller than an estimate by the Finance Ministry, it was
disclosed Monday. The disclosure about NCB, which has been
under temporary state control since December, was made by
government and BOJ officials at the House of
Representatives Budget Committee.

At the Budget Committee meeting Monday morning, BOJ
Governor Masaru Hayami said Togo on Sept. 19, 1997 reported
that the bank had 700 billion yen in the so-called Type III
category of bad loans -- or loans that require careful
monitoring in collection.

At the same meeting, Masaharu Hino, commissioner of the
Financial Supervisory Agency, said the Finance Ministry
told NCB just eight days earlier, on Sept. 11, 1997, that
the bank's Type III loans totaled 1, 121.2 billion yen.
(Kyodo News 31-Jan-1999)


TESCON: Results announcement
----------------------------
Tescon Co. fell 6 yen to 34. The innovator of in-circuit
testers reported a parent net loss of 4.407 billion yen for
the half-year ended Nov. 30, compared with a profit of 174  
million yen in the year-ago period. That's worse than Toyo
Keizai's forecast of a 170 million yen loss.


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

CHO HUNG BANK: Secures $75 million loan from CSFB
-------------------------------------------------
Cho Hung Bank has succeeded in borrowing $75 million from
Credit Suisse First Boston (CSFB), a bank spokesman said
yesterday. The loan will carry an annual interest rate of
1.8 percent over the Libor (London interbank offered rate).
The spokesman said that the bank could get the loans on
favorable terms as the nation's credit ratings were
upgraded to investment grade by Fitch IBCA and Standard &
Poor's. He also said that a planned merger between Cho
Hung, Kangwon Bank and Hyundai International Merchant Bank
boosted international confidence in the Korean bank.

Cho Hung is set to be reborn as a strong bank next month
upon the completion of the three-way merger.

The bank plans to use the loan from the CSFB to provide
financial support for export firms.
(Korea Times 01-Feb-1999)


DAEWOO GROUP: Credit ratings downgraded
---------------------------------------
The Korea Times reported that the Korea Investors Services
has downgraded the ratings several Daewoo subsidiaries.  
The article cited concerns about Daewoo's continued
business activities overseas, and the fact that Daewoo
has been securing more loans while other large
conglomerates are striving to reduce their outstanding
debts.  

Daewoo Electronics had its bond ratings lowered from A- to
BBB, and its commercial paper lowered from A2- to A3-,

Daewoo Corporation (the trading and construction division
of the Daewoo Group) had its ratings on its bonds and
commercial paper lowered by three notches (actual rating
grades were not mentioned),

Daewoo Telecom had its bond ratings lowered from BBB to
BB+, and commercial paper lowered from A3 to B+, and

Daewoo Heavy Industries had its ratings lowered (actual
rating grades were not mentioned).


HYUNDAI: Details Hyundai credit ratings downgrade
-------------------------------------------------
The Korea Times reported additional details on the
downgrade by Korea Investors Services Inc. (KISI) of the
credit ratings for corporate bonds and commercial papers
floated by subsidiaries of the Hyundai Group. KISI
cited poor sales amid Korea's protracted recession, rising
financial costs resulting from large facility investments
made with borrowed money, and dependency on investments
made into sister subsidiaries.

Hyundai Motors Company had its corporate bond rating
lowered from A+ to BBB+,

Hyundai Motor Service Company had its corporate bond rating
lowered from A+ to BBB+, and commercial paper lowered from
A2 to A3 (Hyundai Motor Service Co. is scheduled to merge
with Hyundai Motors this April),

Hyundai Precision Metal and Industry Company had its
corporate bond rating lowered from A- to BBB+, and its
commercial paper lowered from A2 to A3,

Hyundai Merchant Marine Company had its commercial paper
rating lowered from A2+ to A2,

Hyundai Heavy Industries Company had its corporate bond
rating lowered from A+ to A, and its commercial paper
lowered from A2+ to A2,

Inchon Iron and Steel Company had its commercial paper
lowered from A2 to A3+,

Hyundai Mipo Shipyard had its ratings lowered by one notch
(actual rating grades were not mentioned), and

Hyundai Elevator had its ratings lowered by one notch
(actual rating grades were not mentioned).


JINRO DISTRIBUTION: Starts company liquidation
----------------------------------------------
According to the Korean language Maeil Kyungje's Business
Brief section, the Jinro Distribution Company was allowed
to start its liquidation procedure.


KUMHO PETROCHEMICAL: Receives money for Carbon Black unit
---------------------------------------------------------
Kumho Petrochemical Co. received $91 million (approximately
110 billion won) for its carbon black business unit that it
sold to Columbian International Chemicals Co. of the United
States in a delivery ceremony here yesterday. Kumho is able
to lower its debt-equity ratio from 257 percent to 152
percent with the money, while securing liquidity worth some
90 billion won, an official said. (Korea Times 01-Feb-1999)


LG SEMICON: Likely to sign with Hyundai next week
-------------------------------------------------
Hyundai Electronics Co. is expected to sign the contract on
acquiring stock from LG Semicon next week, having neared
agreement on job guarantees for LG Semicon employees after
the takeover and layoff compensation, a Hyundai executive
said yesterday. The Hyundai senior executive, requesting
anonymity, said he will meet LG Semicon officials today and
start negotiating stock purchase price. They plan to wrap
up the deal before next Wednesday, the Hyundai source said.
When it's a done deal this month, Hyundai will take over LG
Group's full equity in its semiconductor unit in April and
complete the union by July. (Korea Herald 02-Feb-1999)


NK ELECTRIC LINE: Starts creditor reconciliation
------------------------------------------------
According to the Korean language Maeil Kyungje's Business
Brief section, the NK Electric Line Company was allowed to
start its creditor reconciliation procedure by the Suwon
District Court.


SANGWOON CONSTRUCTION: Completes creditor reconciliation   
--------------------------------------------------------
The Seoul District Court advertised in the Korean language
Maeil Kyungje that the Sangwoon Construction Company
completed its creditor reconciliation procedure. The
company's address is 52-1 Banpo 4-dong, Seocho-gu, Seoul
and the president is Mr. Yi Kil-woong.


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

MBF HOLDINGS: Unveils scheme to restructure RM1.3b of debts
-----------------------------------------------------------
Malaysia's MBf Holdings Bhd said yesterday it plans to
restructure debts totalling 1.328 billion Malaysian ringgit
(S$590 million) in a scheme which would also involve a
capital reduction and two acquisitions of subsidiaries.

The financial services and property firm, in a statement
issued by its merchant bankers, divided the debt-
restructuring scheme into two parts -- one involving its
Malaysian units and the other its Hongkong operations.

Local debts to be restructured amounted to RM378 million,
while offshore debts totalled RM950 million equivalent of
US dollar borrowings.

MBf Holdings said it planned to reduce by half its issued
and paid-up capital to RM287.73 million.

"The reduction of 25 sen for every existing ordinary share
of 50 sen each would give rise to a credit of RM287,727,500
which would be utilised to reduce MBf Holdings' audited
accumulated losses as at Dec 31, 1998," the statement said.

Of the RM378 million of local debts, RM252 million was owed
to secured creditors and the rest to unsecured creditors.

Features of the local restructuring include allowing
secured creditors to redeem all MBf Capital Bhd shares held
as security, or convert at market value the MBf Capital
shares into MBf Holdings shares and non-interest bearing
short-term loan of two-year tenor against the MBf Capital
shares.

MBf Holdings controls 30.93 per cent equity in financial
services firm MBf Capital.

Another feature is the transfer of all marketable
securities of MBf Holdings firms involved in the
restructuring, other than MBf Capital securities, to the
scheme creditors.

In the proposed offshore debt restructuring, MBf Holdings
will acquire MBf Carpenters Ltd of Australia for RM157
million, and Malaysia-based MBf Card Services Sdn Bhd for
RM59.84 million. The two firms will be bought from two
other MBf Holdings subsidiaries and will be paid by the
issue of new MBf Holdings shares after the planned capital
reduction.

Three of MBf Holdings' subsidiaries in Hongkong will
concurrently implement exercises to restructure and resolve
its dollar-denominated loans which are substantially
guaranteed by MBf Holdings. (Reuters and Singapore Business
Times 01-Feb-1999)


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

ORIENT BANK: PDIC wants to rehabilitate bank
--------------------------------------------
The Philippine Deposit Insurance Corporation (PDIC)
today said it is keen on rehabilitating the cash-strapped
Orient Bank in the midst of its discovery of some more bad
loans now totalling at least P7 billion pesos.

PDIC Vice President for Liquidation Group Maurine Baldos
told PNA that the government is expected to determine the
final figures of the bank's assets next week so that PDIC
is able to tell as to whether its assets are sufficient to
cover the bad loans or not.

As of this writing, Orient Bank depositors have bonded
themselves to represent their financial interests and also
to work out the possibility of retrieving whatever insured
deposits they had with the Go family-owned savings bank.

Earlier, PDIC reported that the total liabilities of Orient
Bank amounted to P6.1 billion. Baldos said that once PDIC
is able to determine its total assets it will have no
choice but to discuss the possibility of rehabilitating
the bank with interested parties.

The bad loans are just one component of the issue. But she
believes that the bank's assets are small compared to its
bad loans, adding the idea of putting the bank under
receivership is great.

In fact, PDIC already discussed a buy-out offer with
Equitable Bank, not to mention its request from the Bangko
Sentral ng Pilipinas to financially help put back the
bank's operation on course.

As this developed, PDIC Executive Vice President Ricardo
Tan told SNN that it now discussing with possible takers so
that things can be put in the right perspective. Tan denied
reports that the new discovery of bad loans amounting to
more than a billion pesos will endanger the proposed
rehabilitation plan that is in the offing. Instead, he
claimed that the discovery of additional bad loans is
the result of a preliminary evaluation conducted by the
PDIC and more review of the records are still to be
conducted by the staff. Furthermore, he said that the P7
billion maximum bad loans included accrued interests
payable to the bank. (PNA and RP-Business News 31-Jan-1999)


PHILIPPINE AIRLINES: PAL gets new lease on life
-----------------------------------------------
According to the Hong Kong Standard, Philippine Airlines
(PAL) said it has met yesterday's deadline on partial
payment to its secured creditors.

The payment of US$37.9 million is expected to give PAL a
new lease on life. It was also a condition for the
continuation of talks between PAL and its creditors over a
new rehabilitation plan for PAL.

The airline's executive vice president Jaime Bautista said
PAL had raised the payment amount from operational
revenues, which he called an indication of its improving
cash flow positions.

However, it remains a question whether the creditors, who
demanded payment of between US$50 million and US$100
million would accept only a fraction of that.


PILIPINO TELEPHONE: First Pacific due diligence inadequate
----------------------------------------------------------
According to the Hong Kong Standard, the First Pacific
Group has acknowledged the due diligence it conducted on
Pilipino Telephone (Piltel) was based only on all publicly
available documents, and no review of internal documents
was done.

Philippine's Finance Secretary Edgardo Espiritu said First
Pacific needs to do proper due diligence now which was not
done in the first place. He said there's assurance from
First Pacific managing director Manuel Pangilinan that
First Pacific would not allow Piltel to fail.

First Pacific also yesterday announced that Philippine Long
Distance Telephone (PLDT) has signed loan agreements worth
US$75 million with Germany's Kreditanstalt fur Wiederaufbau
and the Export-Import Bank of Japan allowing PLDT to
provide much-needed financing for Piltel.

Mr Espiritu said the major concern is the Maguindanao
project which was contracted by Marubeni and is 95 per cent
completed. He said the only issue is that Mr Pangilinan did
not sign the loan agreement with Jexim of Japan because the
funds are there for release. According to him, the deadline
for Piltel to pay Marubeni is Friday (yesterday), and it is
just a question of signing the document and Jexim is ready
to release the money. Mr Espiritu said other than that
issue, the only remaining issue would be the other debts
that according to his understanding were to be
restructured. He said he was sure that PLDT as the majority
owner would honor its commitment with regard to Piltel.


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

GSS ARRAY: Results announcement
-------------------------------             
GSS Array Technology Pcl reports consolidated revenues for
the fiscal year ended 24th November 1998 as reported in
baht were 9,879 million baht up from 7,819 million baht in
the prior fiscal year, but in US dollars, the company's
functional currency, sales declined from 260 million US
dollars to 231 million US dollars. The company reported
a net after tax loss of 1,112 million baht compared to a
net after tax loss of 138 million baht in fiscal 1997.

The majority of the loss in fiscal 1998 stems from the
companys decision to write off 405 million baht of goodwill
associated with the purchase of its California subsidiary,
Array Technology Inc., and a 100% reserve against accounts
receivable and inventory in the amount of 434 million baht
held for a customer, Aura Systems Inc. Aura is a publicly
traded company with a substantial net worth. GSS is
actively pursuing all remedies to recover these amounts.  
As the amount and timing of a recovery cannot be predicted
at this time, the company has conservatively elected to
fully reserve these obligations. (Stock Exchange of
Thailand 01-Feb-1999)


SUNSHINE PCL: Faces possible delisting
--------------------------------------
The Stock Exchange of Thailand had posted an "SP"
(Suspension) sign on Sunshine Public Company Limited (SS)
effective from 30 October 1998 onward as the company had
not been able to appoint independent directors within the
deadline, specified by the SET's Notification.

Since SS has passed the January 29 deadline and still has
not been able to appoint the independent director, the
Exchange must publicly announce the possible delisting
of the firm. Finally, if after three months or by 30 April
1999, the company still has not appointed the independent
director, the SET will delist the company's securities.
(Stock Exchange of Thailand 01-Feb-1999)


THAI CAPITAL: Six former executives charged      
-------------------------------------------
The Asian Wall Street Journal reported that six former
executives of the Thai Capital Finance & Securities Company
have had charges filed against them by the central bank for
extending loans without proper collateral.  

According to the report, between November 25 and December
12, 1996, these executives approved 600 million baht in
loans to five other companies, some of whose board members
sat on the board of Thai Capital Finance.

Furthermore, the loans were released and guaranteed, even
though Thai Capital Finance only received stock from these
five companies as collateral, a violation of Thai
securities law.  

Thai Capital Finance also allowed board directors of the
five companies sitting on the Thai Capital Finance board to
personally guarantee the loans.  

If found guilty, the Thai Capital Finance executives could
face a five year jail term and a fine of up to 500,000 baht
each.  

Executive of Thai Capital Finance have also been accused of
reporting false financial statements in seeking a capital
injection from the Thai central bank's Financial
Institutions Development Fund.


TPI POLENE: Appointment of the financial advisor                         
------------------------------------------------
TPI Polene Public Company Limited has appointed
Blanckaert, Missorten, Spaenhoven & Co. as the Company's
financial advisor for debt restructuring, effective from  
February 1, 1999. Blankaert, Missorten, Spaenhoven & Co is
a member firm of Horwath International. (Stock Exchange of
Thailand 01-Feb-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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