TCRAP_Public/990212.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, February 6, 1999, Vol. 2, No. 30

                    Headlines


* J A P A N *

ASAHI BANK: Banks may limit operations
HINO MOTORS: To merge with Toyota Motor Oct. 1
JAPAN LEASING AUTO CORP: Rehabilitation plan OK with court
NISSAN MOTOR: To close truck plant
NOMURA SECURITIES: Shares fall on financial concerns

PENTA-OCEAN CONSTRUCTION: Moody's may cut long-term rating
TOKAI BANK: Banks may limit operations
TOWA REAL ESTATE: FRC to nix debt forgiveness to firms


* K O R E A *

CHUNGBUK BANK: May announce merger With Cho Hung tomorrow
DAEWOO GROUP: Creditors demand new restructuring plans
HYUNDAI MOTOR: Turns in record loss
KOOKMIN LIFE: Registers negative cash flow
KOREA FIRST: Banks hit by 370 pc rise of net losses

LG ENERGY: PowerGen signs Korean deal
SEOULBANK: Banks hit by 370 pc rise of net losses
SK GROUP: Creditors demand new restructuring plans


* M A L A Y S I A *

RENONG: Postpones creditor meeting
SISTEM TELEVISYEN: TV3 to sell assets, seek rescheduling
WESTMONT LAND (ASIA) LTD.: Westmont Land defaults


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

PHILIPPINE AIRLINES: PAL creditors barred from aircraft
PHILIPPINE AIRLINES: To hire consultants to work out rescue
TRANS-PHILIPPINES: Applies for debt relief with SEC


* S I N G A P O R E *

KEPPEL GROUP: Keppel group firms to sell off cross-holdings


* T H A I L A N D *

ADVANCE AGRO: S&P downgrades paper firm to speculative
GOLDEN LAND: B2bn in fresh funds available for investment
THAI PETROCHEMICAL: TPI seeks repayment delay


=========
J A P A N  
=========

ASAHI BANK: Banks may limit operations
--------------------------------------
Japan's financial authorities have asked two major banks to  
withdraw completely from overseas operations as a
precondition to receiving public funds, a newspaper
reported Wednesday. The Tokai and Asahi banks announced
large stock losses in their midterm results, prompting the
Financial Restructuring Committee to request them to  
restrict their activities to the domestic market, the
Sankei Shimbun said.

Tokai and Asahi are among a number of debt-ridden Japanese
banks that are requesting money from a public fund created
last year to strengthen the ailing financial system.

The two banks said they have no intention to withdraw
completely from overseas operations, even if authorities
ask them to do so. (AP Online 10-Feb-1999)


HINO MOTORS: To merge with Toyota Motor Oct. 1
----------------------------------------------
Toyota Motor plans to absorb its 40%-owned sales affiliate,
Hino Motor Sales Ltd. in October. The two companies decided
on the merger partly to lay the groundwork for Toyota Motor
Corp.'s planned increase in its equity stake in Hino Motors
from 20.1 pct to over 50 pct, industry sources said.

Toyota, Japan's biggest auto maker, was demanding
restructuring in the Hino Motors group as a precondition
for making Hino Motors a Toyota subsidiary, the sources
said.

Hino Motor Sales expects to suffer an after-tax loss for
the current fiscal year to March, the first red ink since
its founding in 1948, affected by weak domestic demand for
trucks.

Hino Motor Sales has about 110 billion yen in interest-
bearing debt on its own. Combining the amount, new Hino
Motors will have a total of 250 billion yen in interest-
bearing debt. The merged company will pay no dividend for
the year to March 2000. (Jiji Press English News
10-Feb-1999)


JAPAN LEASING AUTO CORP: Rehabilitation plan OK with court
----------------------------------------------------------
The Asian Wall Street Journal reported that the Japan
Leasing Auto Corporation's rehabilitation plan has been
approved by creditors and the Tokyo District Court. Under
the plan, GE Capital Company will acquire full ownership
and will pay off the obligations of the firm.  

Japan Leasing Auto Corp. is a subsidiary of Japan Leasing
Corporation. The repayment of Japan Leasing Auto's 107.73
billion yen in debts will take the company out of the
rehabilitation process and launch it as a unit of GE
Capital.


NISSAN MOTOR: To close truck plant
----------------------------------
An ailing truck-making subsidiary of Nissan Motor Co. will
shut down an assembly plant in northern Japan and cut about
25 percent of its work force in a stepped-up restructuring
drive, a major Japanese newspaper said Thursday.

Nissan Diesel Motor Co. will close its Gunma plant in
fiscal 1999, and release about 3,000 employees from its
group work force, higher than the 2,500 previously
announced, the Nihon Keizai financial daily said.

The newspaper said more aggressive retrenching at Nissan
Diesel is expected to put struggling Nissan Motor in a
stronger position in ongoing negotiations with
DaimlerChrysler AG over a possible capital alliance.

DaimlerChrysler has also been reported to have plans to buy
a stake in Nissan Diesel, nearly 40 percent of which is
owned by Nissan Motor, Japan's second-largest auto maker.

Nissan is struggling to survive under a debt load totaling
an estimated $22.2 billion. The company has lost money in
five of the past six years. (AP Online 10-Feb-1999)


NOMURA SECURITIES: Shares fall on financial concerns
----------------------------------------------------
Shares of Nomura Securities Co. fell 41 yen to 900, the
second most active stock on the exchange with 16 million
shares traded, as reports in the media, including the
Bungei Shunju magazine, revived concern about the financial
health of Japan's largest brokerage. Also, the Yomiuri
newspaper yesterday reported that its affiliate, Nomura
Finance, asked for financial assistance worth 200 billion
yen, in addition to the 371 billion yen already provided.
(Bloomberg 11-Feb-1999)


PENTA-OCEAN CONSTRUCTION: Moody's may cut long-term rating
----------------------------------------------------------
Shares of Penta-Ocean Construction Co. fell 3 yen to 190.
The contractor's "Ba2" long-term debt rating may be cut by
Moody's Investors Service, on the news that its asset
write-offs will result in a major net loss for the year
ending March 1999. (Bloomberg 11-Feb-1999)


TOKAI BANK: Banks may limit operations
--------------------------------------
Japan's financial authorities have asked two major banks to  
withdraw completely from overseas operations as a
precondition to receiving public funds, a newspaper
reported Wednesday. The Tokai and Asahi banks announced
large stock losses in their midterm results, prompting the
Financial Restructuring Committee to request them to  
restrict their activities to the domestic market, the
Sankei Shimbun said.

Tokai and Asahi are among a number of debt-ridden Japanese
banks that are requesting money from a public fund created
last year to strengthen the ailing financial system.

The two banks said they have no intention to withdraw
completely from overseas operations, even if authorities
ask them to do so. (AP Online 10-Feb-1999)


TOWA REAL ESTATE: FRC to nix debt forgiveness to firms
------------------------------------------------------
The Financial Reconstruction Commission (FRC) plans not to
allow the nationalized Long-Term Credit Bank of Japan
(LTCB) and Nippon Credit Bank (NCB) to waive claims on debt
owed by financially troubled construction firms and real
estate companies, commission sources said Thursday.

It would not be appropriate for banks operating with public
support to forgive debt owed by private concerns, because
it would be tantamount to a public bailout of private
business, they said.

The commission is a five-member government panel charged
with dealing with failed banks and overseeing the injection
of public money from a 25 trillion yen bank
recapitalization fund.

It plans to permit LTCB and NCB to waive claims on
corporate clients only if the debtors would go under
otherwise, they said.

The commission will direct LTCB and NCB to reject a request
by Towa Real Estate Development Co. to forgive 15 billion
yen in loans to the condominium developer, because the
combined claims represent a small portion of Towa's total
debt, the sources said.

Under a restructuring plan unveiled last week, Towa asked
its creditor banks, including its main creditor bank, Tokai
Bank, to waive a total of 300 billion yen in claims.

The commission believes that Towa could restructure even if
LTCB and NCB do not forgive their claims, the sources said.

The commission is in the process of screening outstanding
loans held by LTCB so as to determine which loans are
nonperforming and should be moved to a Japanese version of
the U.S. Resolution Trust Corp. to be created in April.

The government put LTCB and NCB under temporary state
control last year under new banking legislation aimed at
fixing the ailing banking sector. (Kyodo News 10-Feb-1999)


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

CHUNGBUK BANK: May announce merger With Cho Hung tomorrow
---------------------------------------------------------
Cho Hung Bank is positively considering a merger offer from
debt-stricken Chungbuk Bank, a Cho Hung spokesman said
yesterday. The two banks will report their merger plans to
the Financial Supervisory Service (FSS) tomorrow, the
spokesman said. Cash-strapped Chungbuk Bank, headquartered
in Chongju, North Chungchong Province, was ordered by the
financial watchdog to submit a plan to merge with a Seoul-
based bank by tomorrow. If all goes well, Cho Hung Bank is
expected to proceed with the merger after its general
shareholders' meeting scheduled for March 10, the spokesman
said.

At the meeting, shareholders are to approve Cho Hung's plan
to merge with two other financial institutions -- Kangwon
Bank and Hyundai International Merchant Bank.

Chungbuk, which was rumored to be in merger talks with Cho
Hung Bank on and off since late last year, suffered a net
loss of 242.6 billion won last year.
(Korea Herald 12-Feb-1999)


DAEWOO GROUP: Creditors demand new restructuring plans
------------------------------------------------------
The Daewoo and SK groups must submit revised restructuring
plans to their creditor banks by tomorrow, banking sources
said yesterday. The decision was made in a meeting of
creditor banks of the nation's top five conglomerates.

Under agreements with the government and creditor banks,
the nation's top five conglomerates -- Hyundai, Samsung,
LG, Daewoo and SK -- presented their respective quarterly
recapitalization programs for 1999 to their major creditor
banks Jan. 15. The programs, aimed at improving their
capital structures, included specific quarterly pledges for
capital increases, rights offerings and foreign capital
introduction and asset sales.

After reviewing the recapitalization programs of Daewoo and
SK groups, Korea First Bank, the major creditor bank of the
two conglomerates, said their programs were insufficient
and urged them to present a more plausible plans.

"In their quarterly recapitalization programs of Daewoo and
SK groups, the two groups promise that they will sell off
their assets and introduce foreign funds mostly in the
latter half of this year, but from our bank' perspectives,
we want them to advance their schedules to the first half
and evenly spread over four quarters," said a Korea First
Bank spokesman. (Korea Herald 12-Feb-1999)


HYUNDAI MOTOR: Turns in record loss
-----------------------------------
Hyundai Motor Co, South Korea's largest car maker, said         
yesterday that it suffered a record loss in 1998 as the         
nation's most severe recession in nearly half a decade just  
about destroyed domestic demand. Losses blew out in the
second half, producing a net loss of 33 billion won (S$47.4
million) for the full year, its biggest since its founding
in 1967, said a Hyundai finance official who asked not to  
be named. Earnings will be officially announced around Feb
26.

In the first six months of last year, Hyundai Motor's net
loss was only 1.2 billion won. (Bloomberg and Singapore
Business Times 11-Feb-1999)


KOOKMIN LIFE: Registers negative cash flow
------------------------------------------
The Korea Herald provided statistics on a few of Korea's 33
life insurance companies in an article that reported that
thirty (30) of these firms recorded negative cash flows
over the six month period from April to November last year.  
The article stated that a negative cash flow means that
premiums did not equal or exceed claims paid and payments
made for surrendered policies.

The article also mentioned that Kookmin Life Insurance
registered a negative cash flow of 475.9 billion won over
that period of time. Kookmin Life is one of the eight weak
insurers whose owners were recently stripped of their
management rights by the Financial Supervisor Commission.  

Kookmin also has a reported insurance payment reserve ratio
of minus 19.9 percent. A negative insurance payment reserve
ratio means that liabilities of an insurance company exceed
its total assets.


KOREA FIRST: Banks hit by 370 pc rise of net losses
---------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, South Korea's Financial Supervisory Commission
(FSC) said yesterday the country's crisis-hit banks
registered a record net loss of 14.48 trillion won last
year, amid mounting provisions for bad debts. This
represented a 370 per cent increase from the previous
year's loss of 3.88 trillion won.

Net losses at five large banks -- Seoulbank, Cho Hung,
Hanvit, Korea First, and Korea Exchange banks -- accounted
for 76 per cent of the 1oss.

The South China Morning Post reported that Korea First,
which was sold to a United States-led consortium in
December, suffered a net loss of 2.6 trillion won last
year, up from a loss of 1.6 trillion won in 1997.

The sale of Korea First and Seoulbank had been a key
condition of the International Monetary Fund's US$60
billion bailout in 1997, which prompted a sweeping drive to
tidy up the banking sector.


LG ENERGY: PowerGen signs Korean deal
-------------------------------------
Powergen has entered the South Korean electricity market
with an equity and loan agreement involving an outlay of
almost pounds 130m. The British generator is paying pounds
38m for a 49.9pc stake in LG Energy and guarantee pounds
91m of the company's debt for an interim period. LG
Energy is part of South Korea's fourth-biggest industrial
conglomerate that has put microchip investment in South
Wales on hold but has pushed ahead with its electronics
project.

The deal is conditional on LG's renegotiating on more
favourable terms a 20-year agreement for selling
electricity to the state power business and making
the project internationally bankable. PowerGen can sell
back its shares to LG Energy if the conditions are not met  
or it can buy out its South Korean partner.
(Daily Telegraph London 10-Feb-1999)


SEOULBANK: Banks hit by 370 pc rise of net losses
-------------------------------------------------
According to the South China Morning Post and the Hong Kong
Standard, South Korea's Financial Supervisory Commission
(FSC) said yesterday the country's crisis-hit banks
registered a record net loss of 14.48 trillion won last
year, amid mounting provisions for bad debts. This
represented a 370 per cent increase from the previous
year's loss of 3.88 trillion won.

Net losses at five large banks -- Seoulbank, Cho Hung,
Hanvit, Korea First, and Korea Exchange banks -- accounted
for 76 per cent of the 1oss.

The South China Morning Post reported losses at Seoulbank,
which has yet to find a foreign owner, jumped to 2.24
trillion won last year from the previous year's 916 billion
won.

The sale of Korea First and Seoulbank had been a key
condition of the International Monetary Fund's US$60
billion bailout in 1997, which prompted a sweeping drive to
tidy up the banking sector.


SK GROUP: Creditors demand new restructuring plans
--------------------------------------------------
The Daewoo and SK groups must submit revised restructuring
plans to their creditor banks by tomorrow, banking sources
said yesterday. The decision was made in a meeting of
creditor banks of the nation's top five conglomerates.

Under agreements with the government and creditor banks,
the nation's top five conglomerates -- Hyundai, Samsung,
LG, Daewoo and SK -- presented their respective quarterly
recapitalization programs for 1999 to their major creditor
banks Jan. 15. The programs, aimed at improving their
capital structures, included specific quarterly pledges for
capital increases, rights offerings and foreign capital
introduction and asset sales.

After reviewing the recapitalization programs of Daewoo and
SK groups, Korea First Bank, the major creditor bank of the
two conglomerates, said their programs were insufficient
and urged them to present a more plausible plans.

"In their quarterly recapitalization programs of Daewoo and
SK groups, the two groups promise that they will sell off
their assets and introduce foreign funds mostly in the
latter half of this year, but from our bank' perspectives,
we want them to advance their schedules to the first half
and evenly spread over four quarters," said a Korea First
Bank spokesman. (Korea Herald 12-Feb-1999)


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

RENONG: Postpones creditor meeting
----------------------------------
Renong Bhd, Malaysia's biggest industrial group, postponed        
a meeting with its creditors aimed at presenting its debt        
restructuring plan, and urged them not to take action  
against the company, bankers said. Renong was to have
scheduled a meeting with its creditors this week. However,
in a letter faxed to creditors on Tuesday, the company said
it was postponing the meeting, the bankers said. Renong did
not give them a reason for the delay.

On Tuesday, Renong met eurobond holders, including Warburg  
Dillon Read, to discuss the company's financial position.
It urged them not to exercise their right to force the
company to redeem the bonds since a plan to restructure its
debts was being drawn up, a bondholder who attended the
meeting said. That was its first meeting with a creditor
group since it failed to repay some of its debt.

Renong failed to pay its eurobond holders interest on the
bonds that were due on Jan 15. Renong sold US$225 million
(S$381.2 million) 10-year unsecured euro-convertible bonds
in 1994 and US$175 million similar bonds in 1995. The bonds
are traded on the Luxembourg Stock Exchange. A debt plan is
crucial to Renong as it struggles to repay about 20 billion
Malaysian ringgit (S$8.9 billion), or 5 per cent of loans
in Malaysia's banking industry.

The company is expected to present to creditors a plan
under which its cash-rich toll road unit will sell a record
RM8.5 billion in bonds to help bail out the parent company.
(Bloomberg and Singapore Business Times 11-Feb-1999)


SISTEM TELEVISYEN: TV3 to sell assets, seek rescheduling
--------------------------------------------------------
Sistem Televisyen Malaysia Bhd, the nation's biggest
private television station, is seeking to reschedule its
loans and sell assets as it looks to cut its mounting debt.

The unprofitable company, also known as TV3, plans to sell  
certain subsidiaries which have incurred substantial
losses. It didn't name the companies.

TV3's ability to operate is dependent on the financial
support from the bankers and creditors and the successful
implementation of the restructuring, said Coopers &
Lybrand, its accountant, in the company's annual report.

TV3 has total borrowings of 521.7 million Malaysian ringgit  
(S$232 million), of which RM425.7 million are short term
loans. It swung to a loss of RM170.4 million in the year
ended Aug 31, 1998, from a profit of RM14.2 million a year
ago. (Bloomberg and Singapore Business Times 11-Feb-1999)


WESTMONT LAND (ASIA) LTD.: Westmont Land defaults
-------------------------------------------------
The Asian Wall Street Journal reported that Westmont Land
(Asia) Ltd. has defaulted on the payment of principal and
interest on credit facilities from various financial
institutions totaling 122.6 million ringgit. Westmont is a
property investment company.  


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

PHILIPPINE AIRLINES: PAL creditors barred from aircraft
-------------------------------------------------------
According to the Hong Kong Standard, the Philippine
Securities and Exchange Commission (SEC) said yesterday it
would not allow creditors of PAL to seize leased aircraft
until all means to draw up a viable rehabilitation plan
have been exhausted. The SEC order said that the Commission
shall not allow the re-delivery of the aircraft unless it
is convinced that the European credit agencies,
Kreditanstalt Fuer Wiederaufbau and/or Eximbank had
proceeded or acted in good faith with respect to the
drawing up of a viable rehabilitation plan for PAL, but
such rehabilitation does not appear to be feasible.


PHILIPPINE AIRLINES: To hire consultants to work out rescue
-----------------------------------------------------------
The Asian Wall Street Journal reported that the Philippine
Securities Exchange Commission (SEC) has approved
Philippine Airlines' (PAL) decision to hire Chase Manhattan
Asia Ltd. and LEK/Alcar Consulting Group as advisors on its
rehabilitation plan. PAL has agreed with its major
creditors to submit a new rehabilitation plan by March 15.  


TRANS-PHILIPPINES: Applies for debt relief with SEC
---------------------------------------------------
Holding firm Trans-Philippines Investment Corp. -- parent  
firm of listed AGP Industrial (AGPI) Corp. -- is applying
for a debt relief at the Securities and Exchange Commission
(SEC) as it was unable to meet its maturing liabilities. As  
of end-December, the firm's total debts stood at 450
million Philippine pesos (PhP).

Based on the firm's petition, the SEC granted a 30-day
reprieve from debt payments from February 9.

In the order, the SEC also ordered Trans-Philippines not to
dispose its assets.

Given that one of its affiliates is a listed firm, the SEC
also ordered Trans-Philippines to disclose all information
concerning its relief plea to the Philippine Stock
Exchange.

Aside from AGPI, Trans-Philippines is also the parent
company of Amalgamated Securities Corp., Global Mining
Resources, Inc., and Filmag Holdings, Inc. It also has an
export trading business being undertaken by an
unincorporated trading division called Trans-Philippines
Exporters. (BusinessWorld 11-Feb-1999)


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

KEPPEL GROUP: Keppel group firms to sell off cross-holdings
-----------------------------------------------------------
The Keppel group of companies plan to dispose of their
extensive cross-holdings, in a streamlining exercise that
could result in some 300 million shares currently worth
$454 million being put on the market. The shares would be
sold "when the prices are good" but all of them could be
sold within this year, Keppel said yesterday.

It could also lead to a significant ownership change in one
of the five Keppel companies involved -- Keppel TatLee
Bank, formed last year when Keppel Bank took over the
troubled Tat Lee Bank.

The other four are the fledgling telecoms concern Keppel
Telecommunications and Transportation (T&T), property-based
Keppel Land, and two marine-based companies -- Keppel
Marine Industries and Keppel Integrated Engineering (KIE).

That the Keppel group would sell shares in the five
companies was announced last November by chairman Sim Kee
Boon, but it was assumed the shares would be taken up by
other Keppel companies, including parent Keppel Corp.

At a briefing yesterday on the financial performance of
some of its companies, two of Keppel's top executives --
group finance director Teo Soon Hoe and Kepland chairman
Lim Chee Onn -- made clear that the shares would instead be
sold to outsiders. This would help the vendors -- Kepland,
Keppel Fels and Keppel Marine -- to raise fund and reduce
their borrowings. Kepland alone is expected to rake in a
much-needed $200 million to meet its obligations.
(Singapore Business Times 11-Feb-1999)


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

ADVANCE AGRO: S&P downgrades paper firm to speculative
------------------------------------------------------
Thailand's pulp and paper industry was dealt a blow        
yesterday when Standard & Poor's downgraded Advance        
Agro Public Co Ltd to speculative grade, underscoring a  
strong possibility of its defaulting on its loans. Major
pulp and paper producer Advance Agro's rating was dropped
from the highly speculative B- to the predominantly  
speculative CCC category. Moreover, the rating on the
company's US$111.35 million (S$188.2 million) notes due in
2007 was downgraded from CCC to the extremely speculative
CC category with a high risk of default.

The rating agency said the downgrade reflected the
company's continuing liquidity problems and its reliance on
foreign funds to meet near-term debt obligations. The
ratings remain on credit-watch, with negative implications,
since September last year.

Advance Agro needs at least US$50 million in new funds to
meet its huge debt and interest payments. This year several
repayments come due -- US$9.5 million in March, US$17.8
million in May, US$20.4 million in July, US$9.3 million in
September and US$17.6 million in November.

The ability of its majority shareholder, the Sun Hua Seng
Group, to come to its rescue has also been stretched.

Advance Agro is seeking to tap a further US$10 million in
existing bank credit lines with Thai banks, and is also
looking for additional funds from foreign banks. It has set
up a US$40 million special purpose facility to fund its
exports to Europe, whose draw-down is linked to sales of
its product in that market. Advance Agro's downgrade
reflected the high operational risk of bringing new pulp  
and paper capacity into production, and its limited
financial flexibility on account of a huge burden of short-
term commitments to service its debt, S&P said.

Advance Agro reported a profit of 3 billion baht (S$136.8
million) in the first nine months of last year, after a
huge loss of more than 7 billion baht in 1997. It ran up a
loss of 912 million baht in 1996, after a loss of 95
million baht in 1995. (Singapore Business Times
11-Feb-1999)


GOLDEN LAND: B2bn in fresh funds available for investment
---------------------------------------------------------
Armed with fresh capital from strategic investors, Golden
Land Property Development Plc said yesterday it would spend
more than two billion baht buying distressed properties and
non-performing loans in Thailand, while also exploring
opportunities overseas.

The company's new foreign partners are the Quantum Fund,
linked to financier George Soros, along with the New World
Group, Morgan Stanley and the Sloan Robinson Fund. All
told, Golden Land raised 2.8 billion baht through a share
sale to local and foreign investors.

Golden Land is the first listed developer to have
successfully restructured its debts, in this case three
billion baht owed to six major creditors including Siam
Commercial Bank, Bangkok Bank, Bank of Ayudhya and Tisco.

Golden Land sold 259.05 million shares through private
placements to institutional investors for 2.835 billion
baht. Its registered capital has increased to 3.585 billion
baht from 750 million.

Under the debt-restructuring plan, the company said an 800-
million-baht repayment would be made on December 30, 2000.
Its total assets are now 7.01 billion baht and liabilities
are 3.266 billion baht.
(Bangkok Post 11-Feb-1999)


THAI PETROCHEMICAL: TPI seeks repayment delay
---------------------------------------------
A division of Thai Petrochemical Industries Plc (TPI)
yesterday requested that creditors waive the company's loan
repayments this year and extend its total repayment period
to 10 years. TPI Polene Plc told the Stock Exchange of
Thailand (SET) that it had asked creditors to allow it to
repay its estimated $US1.3 billion debt between 2000-2008,
with 1999 to be considered a grace year.

The company said it was in the process of seeking approval
of all its creditors for its restructuring proposals, which
it hoped to accomplish by the end of this month.

The parent company is also struggling to appease creditors,
particularly the International Finance Corp and the
Commonwealth Bank of Australia, over its restructuring
package covering more than $US3 billion in debt.

An announcement on whether TPI's 148 local and foreign
creditors will accept the terms of the planned debt-for-
equity swap has been delayed.

Some creditors are understood to be prolonging the process
until the passage of new bankruptcy laws and other
financial bills currently before parliament, analysts say.

"The chance of TPI Polene's success in restructuring its
debt depends on the successful debt restructuring of its
parent company," Thai Sakura Finance and Securities analyst
Somchai Prasertsilp said.

Restructuring of Thailand's massive private sector debts is
essential for the country's economic recovery, but analysts
claim current bankruptcy and foreclosure rules are delaying
the process.

TPI Polene sharply refuted reports yesterday that a
creditor had threatened legal action to force the pace of
its debt restructuring. The company said it would contact
investment bank Warburg Dillon Read Singapore, a division
of Union Bank of Switzerland, to clarify reports that the
bank was about to sue over delays in debt restructuring.

The Bangkok Post, however, confirmed the threat made by
Alfred Mitchell, managing director of credit risk
management of Warburg Dillon Read, part of the SBC Warburg
investment banking group.

The Post says Warburg, which had lent $20 million to TPI
Polene, could not accept the restructuring plan, Mr
Mitchell said during a creditors' meeting organised by the
Financial Sector Restructuring Authority.

"We see no future for the firm. The resolution would be to
file for bankruptcy. We plan to take over and restructure
it," he said. (The Nation 11-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

Troubled Company Reporter -- Asia Pacific is a daily
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DC USA.  Debra Brennan and Lexy Mueller, Editors.

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

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