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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      

      Wednesday, March 31, 1999, Vol. 2, No. 63

                    Headlines


* C H I N A   &   H O N G   K O N G *

ALBATRONICS: Ailing Albatronics hit by legal action
CDL HOTELS: Prospects forecast bright for CDL Hotels
              
GUANGDONG INTERNATIONAL: Liquidator fears Gitic debt may top $14b
GUANGDONG INVESTMENT: Adviser protests Japanese creditor's writ


* I N D O N E S I A *

ASTRA INTERNATIONAL: Proposes June for deal on US$1.9b debts


* J A P A N *

LONG TERM CREDIT: Moody's to review subordinated debt rating


* K O R E A *

DAEWOO GROUP: Daewoo Group to merge four subsidiaries
KIA MOTORS: Hyundai Group completes acquisition of Kia
KOOKMIN LIFE: New York Life top contender for Kookmin
KOREA FIRST BANK: Korea First Bank takeover talks in trouble


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

PHILIPPINE LONG DISTANCE: To merge with Smart


* T H A I L A N D *

BANK OF AYUDHYA: Moody's cuts bank's rating
GOVERNMENT HOUSING BANK: Moody's cuts bank's rating
RAJADAMRI HOTEL: Goldman Sachs disputes Royal Garden claims


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

ALBATRONICS: Ailing Albatronics hit by legal action
---------------------------------------------------
According to the South China Morning Post, Albatronics (Far East)
has been pushed closer to liquidation as it is sued by its
majority shareholder for breach of contract.

The company said yesterday it was continuing talks with creditors
and majority shareholder Nam Tai Electronics and was seeking a
solution to stay in business, but added that winding-up was an
alternative.

Its outstanding debts were $825 million at the end of last month.

Albatronic's majority shareholder, Nam Tai Electronics, filed a
writ on Friday claiming compensation from Albatronics over a
contract signed on September 11 last year. In the contract,
chairman Wakaki Kaizo and managing director Nakahara Fukumori
severally undertook not to offload any of their shares in the
company during the 12 months to December 1, 1999.

The undertaking was part of a share placement and subscription,
which saw Nam Tai subscribe 200 million new Albatronics shares
for $70 million.

The litigation arose from Albatronics' revelation that Mr
Nakahara's 10.87 per cent stake was trimmed by a creditor to 8.02
per cent last month.

Almost all of Mr Nakahara's stake was pledged to an unnamed
financial institution for personal loans. However the financial
institution promised it would not dump further shares as Mr
Nakahara had agreed to settle unpaid loans.


CDL HOTELS: Prospects forecast bright for CDL Hotels
              
----------------------------------------------------
Some brokers are touting CDL Hotels International as having
plenty of upside  this year as the company is expected to go
through a restructuring programme to enhance shareholder value.
The recommendation is based on an expected simplification of its
complex corporate structure.

The company's sprawling global assets are held in a labyrinth of
four listed subsidiaries in London, Singapore, Auckland and
Manila.

CDL's main earnings come from the London listed arm, Millennium &
Copthorne,  while its parent is another Singapore-listed company,
City Developments.

Any restructuring may include putting the group's Asian operation
under one investment vehicle.

Goldman Sachs believes the firm could go even further and fold
its main global operations into one company with the three most
likely listing posts London, Wall Street or Singapore.

Restructuring of the group could bring CDL in line with the
higher valuations of Western hotels because of its exposure to
Europe.

CDL has a high debt level which could give potential investors
cause  for concern. The ratio of net debt to equity stands at 57
per cent, compared with 43 per cent for other Asian-listed
hotels.

The debt grew on the back of an expansion programme that added
rooms and conference facilities at Millennium & Copthorne hotels
over the past three years. Once the expansion is complete the
company should be in a position to further enhance cash flow.
(South China Morning Post 29-Mar-1999)


GUANGDONG INTERNATIONAL: Liquidator fears Gitic debt may top $14b
-----------------------------------------------------------------
According to the Hong Kong Standard, a partner of the liquidator
KPMG Peat Marwick Huazhen said yesterday a closer investigation
of Gitic under the process of liquidation was revealing new
debts.

He predicted the excess of debts over assets could well top the
previous 14.6 billion yuan estimate but declined to provide a
more up-to-date figure saying the information available is
inaccurate and incomplete. He said more information was being
collected.

There are more than 300 claimants, with the largest single claims
amounting to several hundred million US dollars, while some are
in thousands of dollars.

The liquidator said his firm had notified all debtors to repay
and had started to collect some of the debts. The slow progress
in liquidation was attributed to the complicated and messy
management of Gitic's operations.

The liquidator had decided to continue the operations of Gitic's
securities trading division to try to enhance its value. It is
considering restructuring the businesses of Gitic as a good
alternative to get a higher recovery, but so far no firm
restructuring proposals have been made.

The liquidator said his firm will have completed an initial
report on asset recovery by the time of the first creditors'
meeting next month. The amount of valid claims has not been
confirmed yet.

Among the liquidation working groups are KPMG and two of
Guangdong's private partnership law firms -- Johnson Stokes &
Master and Kingson Law Firm.


GUANGDONG INVESTMENT: Adviser protests Japanese creditor's writ
---------------------------------------------------------------
According to the scmp, GDI's financial adviser -- Meocre Li Kwok-
wing, chief executive at ICEA Capital, which is advising on GDI
on its restructuring plan -- described legal action taken by the
Bank of Tokyo-Mitsubishi (BOTM) as unco-operative, ill-
intentioned and jeopardising the success of GDI's restructuring.
He said the action has been timed to affect the business of the
tour company in the run-up to the Easter holidays.

GDI and its insolvent parent, Guangdong Enterprises (Holdings),
the Hong Kong investment arm of the Guangdong provincial
government, have an informal arrangement with creditor banks to
suspend repayment of loan principal as they work out a
restructuring plan.

GDI and its advisers, ICEA and KPMG, will today meet the bank in
the presence of officials from HSBC, the liaison bank of the
steering committee of GDI's creditor banks. They will seek to
convince BOTM to stop the legal action, based on the reason that
its legal rights under the loan agreement would not be affected
by GDI's standstill plan. The property held as collateral was
valued at $100 million as of December, which was more than enough
to cover the amount due to BOTM, Mr Li said.

Sources said they will take the case to the Hong Kong Monetary
Authority or contest the case in court if necessary.

Mr Li said Guangdong (HK) Tours was healthy. It has net asset
value of $60 million as of December, after the write-down of
property value.

Although it made a loss last year due to the write-down, it still
made an operating profit of $18 million in the period and has
about $20 million cash.

Mr Li said GDI had a positive net worth of about $6 billion,
which means all creditors should be able to get back their money
in case of liquidation.

He said a standstill on repayment was necessary or it would face
trouble if banks accelerated repayment.


=================
I N D O N E S I A
=================

ASTRA INTERNATIONAL: Proposes June for deal on US$1.9b debts
------------------------------------------------------------
According to the South China Morning Post, Astra International,
Indonesia's largest car-maker, expects to have an agreement with
its creditors by June on restructuring its US$1.9 billion debt.
President Rini Soewandi said Astra also planned to resume payment
of interest on $1.1 billion of the debt, starting in July. Money
for the payments will come from $38.5 million Astra has in cash.


=========
J A P A N  
=========

LONG TERM CREDIT: Moody's to review subordinated debt rating
------------------------------------------------------------
Moody's Investors Service has placed the Long-Term Credit Bank of
Japan's Caa1 subordinated debt rating on review for possible
upgrade, the U.S. credit rating agency said Monday.

The review will focus on the systematic support that may possibly
be extended to holders of LTCB's subordinated obligations,
including both senior and junior subordinated obligations, it
said.

LTCB was officially recognized as insolvent and placed under
temporary state control last October.

The analytical and practical issues to be reviewed also include
the nature and form of potential systematic support during the
process of LTCB's acquisition by other institutions through
various forms including business transfer, the legal rationale
employed for the potential support for subordinated debt holders,
and the long-term sustainability and reliability of this support
up to and beyond March 2001, Moody's said. (Kyodo News
28-Mar-1999)


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

DAEWOO GROUP: Daewoo Group to merge four subsidiaries
-----------------------------------------------------
Daewoo Group's four subsidiaries, Daewoo Telecom, Daewoo
Precision Ind., Kyungnam Metal Co. and Koram Plastic Co., will
merge into one company with a total equity of over 3 trillion
won.

According to a senior Daewoo Group official yesterday, Daewoo
Telecom will take in three subsidiaries next month as part of its
effort to cut down the number of the chaebol's subsidiaries
presently totaling 36.

After the merge, the number of Daewoo Group's subsidiaries will
be lowered to 33.

The four have been operating in a similar business area in that
they all produce either hardware or software components for
Daewoo Motor.

Daewoo Telecom, established in 1967, has posted a total equity
value of 1.9 trillion won at the end of December 1998.

Daewoo Telecom signed a letter of intent last month with
Newbridge Capital, the new owner of the Korea First Bank, for
receiving a 300 billion won worth of a financial assistance
package.

The two parties decided to be on equal footing in their
shareholdings with Daewoo retaining the management right.

Daewoo Precision was set up in 1981 and registered 890 billion
won total equity at the end of last year.

The total equity value of Kyungnam Metal, established in 1973,
stood at 120 billion won at the end of December 1998.

Daewoo Group's foreign joint venture company Koram Plastic was
launched in 1985 and its total company resource amounted to 74
billion won at the end of last year.

"The four companies will be amalgamated after today's board
meeting. The implementation plan has already been prepared," the
senior Daewoo Group official told The Korea Times yesterday.

Daewoo Group is preparing to submit its plan to the government
and creditor banks within this week, said the official.

The third largest chaebol in Korea posted a debt to equity ratio
of 385.82 percent last year, with a total sum of bank credits
reaching 13.8 trillion won. (Korea Times 29-Mar-1999)


KIA MOTORS: Hyundai Group completes acquisition of Kia
------------------------------------------------------
Hyundai Group has completed the legal acquisition of Kia
Motors Corp. by buying a 51-per cent stake for 1,178.1 billion
won (US$960 million). Hyundai Motor paid 60 percent of the bill,
Hyundai Capital, 20 percent and Inchon Iron & Steel, 20 percent.
The acquisition makes Hyundai the ninth largest car maker in the
world, with a production capacity of 2.88 million units,
including Kia's 1.08 million. Kia plans to sell about 800,000
cars a year, including exports of 500,000 units.


KOOKMIN LIFE: New York Life top contender for Kookmin
-----------------------------------------------------
The financially-strapped Kookmin Life Insurance Co. will likely
be sold to New York Life Insurance Co. of the United States,
according to sources at the Financial Supervisory Commission
(FSC). "We have just started negotiations with New York Life,"
said an official at the financial watchdog. "We will first
negotiate with New York Life, then contact others."

The official, who asked not to be named, said that New York Life
has emerged as the most likely buyer of Kookmin Life as it
expressed the strongest desire in its recent proposal submitted
to the FSC.

Several foreign companies and one local firm presented their
proposals to the FSC by the March 25 deadline to buy Kookmin
Life. The FSC became the official negotiation channel as public
money should be funneled into the financially troubled life
insurer to sell it off. In negotiations, the financial watchdog
is expected to focus mostly on ways to share Kookmin's net debts,
according to the official. Recent asset evaluations showed the
company's liabilities exceeded assets by about 400 billion won
($327 million). Kookmin Life and New York Life have been in talks
for the U.S. firm's equity participation since last April, but
have made little progress. (Korea Herald 30-Mar-1999)


KOREA FIRST BANK: Korea First Bank takeover talks in trouble
------------------------------------------------------------
According to the South China Morning Post, US investment firm
Newbridge Capital's proposed takeover of Korea First Bank (KFB)
showed signs of trouble arising from the two parties' big
differences in how to handle the nationalised South Korean bank's
loan portfolio.

Newbridge Capital signed a memorandum of understanding with the
government last December to take over the bank.

Kim Byong-sok, banking analyst at Hannuri Investment Securities,
said Newbridge Capital was asking too much and it is better if
the government pulls out from the deal.

South Korea agreed to give the US consortium a one-year put
option to sell back any purchased assets that turned bad.

But Newbridge is also demanding that some potential precautionary
loans in KFB portfolio be regarded as non-performing loans, even
though the borrower has yet to default on interest payments. It
demanded loan-loss provisions with state bonds. Indicating
international practice, Newbridge said it wanted loans classified
as paid interest through fresh borrowings rather than from
operating income.


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

PHILIPPINE LONG DISTANCE: To merge with Smart
---------------------------------------------
The market this week is expected to get a big boost from the
planned merger of Philippine Long Distance Telephone Co. (PLDT)
and Smart Communications Inc., analysts said.

Pilipino Telephone Corp. (Piltel), the heavily indebted mobile
phone unit of PLDT, will have an operational merger with Smart
after PLDT acquires a controlling interest in Smart. The telecom
giant owns 51 percent of Piltel while Metro Pacific Corp., the
local flagship of First Pacific Co. of Hong Kong, holds a
minority share in Smart. First Pacific took over the PLDT
management after acquiring last year ownership control of the
telephone company.

Standard and Poor last week said it would downgrade PLDT's credit
rating unless the company sells new shares to raise funds for its
$400 million debts maturing within the year. (Manila Times
29-Mar-1999)


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

BANK OF AYUDHYA: Moody's cuts bank's rating
-------------------------------------------
The Asian Wall Street Journal reported that Moody's Investors
Services Inc. has lowered its bank financial strength rating of
the Bank of Ayudhya from E+ to E.  The downgrade reportedly
reflects continuing pressures on the capital and asset quality of
Thai banks.


GOVERNMENT HOUSING BANK: Moody's cuts bank's rating
---------------------------------------------------
The Asian Wall Street Journal reported that Moody's Investors
Services Housing Bank from D+ to E+.  The downgrade reportedly
reflects continuing pressures on the capital and asset quality of
Thai banks.


RAJADAMRI HOTEL: Goldman Sachs disputes Royal Garden claims
-----------------------------------------------------------
A battle to take over the much sought after Rajadamri Hotel
     
intensified as Goldman Sachs yesterday disputed a claim that its
          
rival had reached a deal to acquire a big stake in Rajadamri.

The U.S. investment bank said it was not aware that its rival in
          
the tender offer - Royal Garden Resort - had reached an agreement
with Mitsubishi Trust to buy a 32.3 percent stake.

"It is our understanding that there is no agreement with anyone
         
to purchase (the stake)...and that these shareholders and all
       
other shareholders are free to accept any offer they find
   
attractive," said Henry Cornell, managing director of Goldman
       
Sachs (Asia).

RGR executives said on Friday the company had reached a deal
      
on March 16 to buy the 32.3 percent stake from Mitsubishi Trust
         
that manages it. RGR currently owns around 24.7 percent of
    
Rajadamri and has said it planned to boost its stake to 57
    
percent Goldman Sachs and its Thai joint venture are proceeding
with a tender offer for a minimum of 26 percent and up to 100
percent of Rajadamri shares at 38 baht per share. The offer
represented a 52 percent premium over that offered by RGR.

Rajadamri owns 100 percent of the profitable five-star Regent
       
Bangkok hotel.

"Negotiations do not constitute agreement. If an agreement had
        
been made, the purchaser would have been required to disclose
       
this under Thailand's tender offer regulations. No such
disclosure has been made by Royal Garden Resort," Cornell said.

Goldman Sachs is a leading investor in the hotel industry
   
worldwide. Its assets include a stake in Starwood Hotels and
      
Resorts, the owner and operator of the Westin and Sheraton
    
group of hotels.

In Thailand, the company holds a 30 percent interest in the Dusit
           
Group , a major hotel group which operates more than 25
properties around the region.

Analysts said the fact Rajadamri was being chased by major
    
investors signified a return of investor confidence in Thailand.
          
(Reuters and Business Day [Thailand] 29-Mar-1999)


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            * * * End of Transmission * * *